Why people are flocking to Oregon

If it's cheaper, they will come. That thinking has been behind a major real estate boom in Oregon, as workers flee California, where housing is among the priciest in the nation. The question is, how long will Oregon, especially its largest city, be cheaper? Demand is outstripping supply, and pushing both home values and rents significantly higher.

Portland in the early fall replaced Oakland, California, as the local market with the highest annual effective rent growth among the nation's top 50 housing markets, according to Axiometrics, a real estate analytics company. Rents were 12 percent higher in the fourth quarter of 2015 compared to 2014. Sacramento, California; Seattle; and Orlando rounded out the top five.

"Job growth is really the key thing, then the lack of available units and plain demographics. Young people really like Portland," said Jay Denton, Axiometrics' senior vice president of analytics.

Oregon was the most popular moving destination of 2015, according to United Van Lines. Sixty-nine percent of moves to and from the state were inbound. Inbound migration has jumped 10 percent in the past six years. This as the Northeast experiences a moving deficit. New Jersey, New York, Connecticut and Massachusetts made the list of top 10 states people are leaving.

Portland, Oregon
JerryPDX | E+ | Getty Images
Portland, Oregon

"This year's data reflects longer-term trends of people moving to the Pacific West, where cities such as Portland and Seattle are seeing the combination of a boom in the technology and creative marketing industry, as well as a growing 'want' for outdoor activity and green space," Michael Stoll, economist, professor and chair of the Department of Public Policy at the University of California, Los Angeles, said in the United Van Lines release.

Oregon home prices are also surging, up 9 percent in November 2015, compared to November 2014, according to CoreLogic. That is far higher than the 6.3 percent price gains that housing saw nationally.

"Regionally we are beginning to see fissures, with slowdowns in some Texas and California markets, but the Northwest and Southeast remain on solid footing," said Frank Nothaft, chief economist for CoreLogic.

Portland is seeing a lot of younger millennial buyers. Home sales in November 2015, were 11 percent higher than the previous November, according to RMLS, a real estate listing company. Inventory is down to a two-month supply — six months is considered balanced. The median price of Portland homes sold in November was $353,400, higher than the national median of $220,300.

"You're lucky if you can be one of the first 15 offers in 24 hours. That's how hard it is for buyers to get a house now," said Brian Ramsay, a real estate agent with Hasson Co. Realtors in an interview last May. Back then, some thought Portland's popularity had more to do with California's lack of water than its pricey housing. The California drought is now getting a dousing of water from El Nino storms, but that is unlikely to throw cold water on Portland's hot housing market.