I am from California and do not reside in Oregon. I purchased a home in Oregon in 2007 for $200,000. I will be selling it this year 2015 as a LOSS of $170,000.
Will I still be required to pay the real estate withholding tax ?

first of all, you need to pay real estate taxes aslongas as you keep the house and can deduct r/e taxes paid on your return aslogas you itemize deductions on Sch A of 1040. As you, as a seller, can claim a loss or zero gain on the sale by filling out CA form 593-E (Computation of Estimated Gain or Loss). Then you can claim your exemption. I guess please contact CA BOE for more info in detail

Thank you Wnhough. I know I will file under CA taxes, but was really wondering about the income tax I would have to file also for state of Oregon for 2015 year.

NOTE; Loss from the sale of property held for personal use is not deductible. But if you had a loss from the sale of real estate held for personal use for which you received a Form 1099-S, you need to report the transaction on Form 8949 and Sch D of 1040 , even though the loss is not deductible.