House Hunting In Portland? Be Advised

"Am I forgetting anything? What do I need to know?"

These are two common questions that homebuyers ask, even those that have plenty of experience in real estate. And since I've always stressed that real estate is local, there's a great resource available to you if you're in the market to buy a home in Portland.

The Oregon Real Estate Agency created The Oregon Buyer Advisory. It's a publication designed to help buyers better understand the scope of their relationship with real estate agents.

It's also a source for information on environmental hazards, title insurance, underground oil storage tanks, etc. This is also helpful if you're relocating to Portland because it may include issues that are relevant to buying real estate in Portland that don't exist where you live today.

Here is a link to the Oregon Buyer Advisory.

Portland, A Top Five City To Live & Retire

Portland’s quality of life has once again resulted in another accolade. This time AARP Magazine ranks Portland as one of the top five cities in the country to live and retire.

Regarding Portland, the magazine says “European charm meets environmental nirvana in this environmentally progressive city. 50-plus residents love the miles of safe bike lanes and the revitalized Pearl District.”

The selections were based on specific criteria for what makes a community livable: new urbanism, smart growth, mixed-use development, and easy-living standards.

"The places we chose are ahead of the curve in providing services for empty nesters, active retirees, and everyone in between and we're thrilled to recognize them for their efforts," said Steve Slon, editor of AARP The Magazine. "City living may cost a bit more, but urban communities also deliver peak value in the form of culture, work options, mass transit and fitness opportunities, and this year's selections really cover the spectrum."

The top five cites in the study are:

Portland, Oregon
Atlanta, Georgia
Beacon Hill in Boston, MA
Chandler, AZ
Milwaukee, WI

Portland Homes Sales, 2007 vs. 2006

Year-to-date in 2007, there have been roughly 15,000 home sales in the Portland metro area. That’s a decrease of nearly 1,300 sales compared to this time in 2006.

Here are the actual number of closed sales for Portland and the suburbs:

2010 – Southeast Portland
1754 – West Portland
1612 – Northeast Portland
1490 – Beaverton, Aloha
1164 – Tigard, Tualatin, Sherwood, Wilsonville
1103 – Hillsboro, Forest Grove
984 – Milwaukie, Clackamas, Happy Valley, Damascus
932 – Gresham, Troutdale
747 – Lake Oswego, West Linn
724 – North Portland
664 – Oregon City, Canby
659 – Northwest Washington County

Get A Better Loan By Improving Your Credit Score

Home sales in Portland have slowed because less people are buying. There are less people buying, in one respect, because first time home buyers are sitting on the sidelines. But why?

Home prices are up, true. Then again, so are interest rates. And that’s one factor buyers can control, sort of.

You see, buyers can raise their credit scores which can equate to better loan terms and lower interest rates.

Chris Martin, a local mortgage broker in Portland with the U.S. Funding Group, provides these tips for how homebuyers can improve their credit score:

* Keep Credit Card balances below 30% of the Max Limits

* Only check your credit when it’s necessary or sign-up for the silent pulls directly from Experian, Equifax and Transunion. They won’t lower your scores for the inquiries.

* Paying off old collections is ideal, but it will lower your score right off the bat with recent updates to these old accounts. In the long run, however, your score will improve more than leaving it alone.

* Pay all bills on time

* Use your credit cards and then try to pay them off or down every month. This will show tremendous credit worthiness.

* Don’t open up accounts/credit cards that you don’t need. The more available credit that you have and don’t use can also be a red flag down the road by possibly creating the opportunity to put yourself in a bad situation by charging more than you can handle.

Any Volunteers? In Portland, Yes

One of the great things about Portland is that the people here are active. They’re on their bikes, walking the dog, running, exercising, protesting, keeping “Portland weird.”

And we didn’t need a study to point it out, but all of this activeness isn’t self-centered. In fact, Portland ranks sixth in the country for percentage of residents who volunteer. According to a federally funded report by the Corporation for National and Community Service (I must confess I’ve never heard of this group), 36% of Portland residents volunteer.

The report says that four factors encourage high volunteer rates: attachment of a community (such as high levels of home ownership), low commute times to and from work, high education levels among the population and the presence of nonprofit organizations in a community.

Here are the cities with the highest percentage of volunteers.

1. Minneapolis, MN
2. Salt Lake City, UT
3. Austin, TX
4. Omaha, NE
5. Seattle, WA
6. Portland, OR

As for Portland, the study, which was reported on in Forbes Magazine, says this about Portland: “In Portland, Ore., 87% of the population above age 25 has a high school diploma. That city has the sixth-best volunteer rate in the country, 36%.... Contrary to the national trend, most of Portland's volunteers live in the city itself rather than in the suburbs. About a third of all volunteer work done in the Portland area--which also includes Beaverton, Ore., and Vancouver, Wash.—is done through an educational or youth service organization… ”

Here is a link to the article and to the section on Portland.

Current 2007 Appreciation Rates For Portland

How much has real estate in Portland appreciated over the last 12 months? That depends on where you live because some areas more than triple the least performing communities.

Here are the appreciation rates for Portland and the suburbs year-to-date in 2007:

Rate - Area

13.4% - Gresham, Fairview, Troutdale
12.6% - Lake Oswego, West Linn
11.7% - Hillsboro, Forest Grove
10.6% - Southeast Portland
10.4% - North Portland
10.3% - Milwaukie, Clackamas, Happy Valley, Damascus
7.7% - Northeast Portland
6.5% - Oregon City, Canby
4.5% - Northwest Washington County
4.3% - West Portland
4.2% - Beaverton, Aloha
3.9% - Tigard, Tualatin, Sherwood, Wilsonville

Per RMLS, appreciation percents are based on a comparison of average price for the last 12 months with 12 months before.

Sewer Scope Outcomes Differ In Portland, Beaverton

My blog readers know I’m a big fan of sewer scopes. In my opinion, they’re well worth the $100 or so homebuyers in the Portland area spend.

I’ll get to two examples that highlight their importance. But first, what is a sewer scope? It’s the examination of a home’s sewer line conducted by sending a camera from a home’s clean-out all the way to the city main. The scope searches for root intrusions, gaps in line, problems that wouldn’t be found in a typical home inspection.

Now back to those examples.

I recently had homebuyers in the Sellwood neighborhood of SE Portland buy a home. At the same time, I had homebuyers go under contract for a home in Beaverton. Both conducted sewer scopes during their inspection period, but the negotiated outcomes were quite different.

For the house in Sellwood, the sewer scope showed that the sewer line was fine on the property itself. However, there were huge holes on the city portion leading up to the main; so much so that the inspector called the city on the spot. In Portland, a sewer line problem existing on the street to the main is the city’s responsibility. The city will make the repairs at no cost.

For the house in Beaverton, the sewer line pooled with too much standing water just before the line reached the curb and street. However, the pooling extended into the street another 12 feet via the lateral. Unlike Portland, in Beaverton the homeowner is responsible for maintenance of the lateral… and in this case it extended all the way across the street. In the end, it was negotiated that the seller/homeowner would repair the sewer line.

Both scenarios meant costly repairs. In one case, the city was responsible. In another case, it was the homeowner’s. But neither problem would have been discovered without the $100 sewer scope.

Landscaping Soon? You May Need A License

Did you know that landscape construction work is regulated in the State of Oregon and law requires this work to be done by licensed landscape businesses?

Not to be confused with landscape maintenance, construction work includes: the installation of lawns, trees, shrubs, and other nursery stock; plus the installation of irrigation and drainage systems for landscape plantings.

The construction and installation of decks, fences, arbors, walkways, driveways, patios, landscape edging, retaining walls, and water features can be cone by either a licensed landscaping business (LCB) or a licensed construction contractor (CCB).

Source: Oregon Real Estate News-Journal

Average Days On The Market In Portland

Lake Oswego, the area of Portland where home prices are the most expensive, is tops for longest average time on the market.

Meanwhile, North Portland, the area of Portland where homes are the most affordable or least expensive, is where homes are selling fastest in the metro area right now in 2007.

Here are the current average market times, days on the market, for home sales in Portland and the suburbs. They are listed from shortest DOM to longest:

DOM - Area

34 – North Portland
45 – Southeast Portland
46 – Northeast Portland
48 – West Portland
49 – Northwest Washington County
52 – Beaverton, Aloha
56 – Hillsboro, Forest Grove
58 – Milwaukie, Clackamas
58 – Oregon City, Canby
62 – Gresham, Troutdale
68 – Tigard, Tualatin, Sherwood, Wilsonville
79 – Lake Oswego, West Linn

Two Portland Suburbs Named Best Places To Live

The suburbs of Sherwood and Lake Oswego have made Money Magazine’s 2007 list of “Best Places To Live.”

Sherwood ranked 18th out of the top 100, while Lake Oswego ranked 32nd.

This year, Money Magazine said it focused on “smaller places that offered the best combination of economic opportunity, good schools, safe streets, things to do and a real sense of community.”

As for Sherwood, here’s what the magazine said, “Like much of the Northwest, Sherwood is home to an array of beautiful parks and natural beauty. But the quickly growing commercial sites of Sherwood offer true insight into the town's character: a juxtaposition of old and new, with reverence toward both the city's historic past and its bright, expanding future. The community events calendar is always full and the town's location makes for a fairly easy commute to nearby Portland.” Click on the link for Sherwood’s snapshot.

Lake Oswego, meanwhile, is well know for its’ schools, but Money never mentioned them. Strange. Here’s what they published, “One of the major attractions of this Portland suburb is the 405-acre artificial lake whose banks it sits on. Waterfront properties are highly sought, and many residents take advantage of the lake, either by boating on the weekends or hanging out at one of the parks on its shores. Another big appeal is shopping and dining. Lake Oswego is full of many one-of-a-kind boutiques and unique restaurants. And for arts lovers, the Lakewood Center offers top-notch instruction at its dance studio along with fantastic shows put on by its theater company.” Here is a snapshot of Lake Oswego.

Home Prices In Portland, Oregon

I received a call from a homeowner in Dallas,Texas, the other day. He wanted to talk about what his money would buy in Portland. Unfortunately, I knew I was about to be the bearer of bad news.

Reason being is that Portland’s real estate market tends to give people a good old case of sticker shock unless their used to west coast or east coast prices. Californians, people from Seattle, people from New York and Boston think Portland’s great and affordable. In my experience, however, people relocating from other parts of the country tend to be disappointed with what their dollar will buy.

This caller was living in a 2200 square foot home which was only two years old, upgraded, upscale, and purchased in the $200k price range. So he wanted to know if that was possible in Portland. I said, “No, I wish. That would be great. If you want what you have, think $400,000 and up.”

I don’t think he’ll be moving to Portland. But for those of you who are, here are the current average and median sales prices of homes in Portland (new and old):

Average - Median = Area

$564,900 - $470,000 = Lake Oswego, West Linn
$467,100 - $378,500 = West Portland
$405,000 - $375,000 = Northwest Washington County
$378,000 - $340,000 = Tigard, Tualatin, Sherwood, Wilsonville
$344,700 - $305,600 = Milwaukie, Clackamas, Happy Valley, Damascus
$323,400 - $300,000 = Oregon City, Canby
$314,500 - $277,300 = Northeast Portland
$297,200 - $270,000 = Hillsboro, Forest Grove
$287,400 - $260,000 = Beaverton, Aloha
$285,100 - $250,000 = Southeast Portland
$281,800 - $260,000 = Gresham, Fairview, Troutdale
$263,700 - $249,900 = North Portland

Portland Home Sales Lose Their Sizzle

At a time of the year when both the heat and home sales tend to heat up, the Portland real estate market has lost its’ sizzle.

Housing inventory has now reached 5.0 months, which according to the National Association of Realtors, is the perfect balance between buyers and sellers. This means that if no other properties were listed for sale, the supply of homes in Portland metro would dry up in 5.0 months.

The trend, however, favors homebuyers. The current inventory rate is an increase from the previous month’s supply of 4.5 months. Furthermore, the increase is taking place during the Portland’s summertime when inventory is historically at its’ lowest point of the year.

For comparison purposes, inventory at this time in 2006 was only 2.6 months. And in 2005, during Portland’s record breaking year, inventory was at an all time low of 1.5 months. In other words, the number of homes for sale in Portland and the suburbs has doubled and tripled in the last couple of years.

Home sales are down and new listings are up regardless of month-to-month or year-to-year comparisons.

Comparing June 2007 to June 2006, home sales have dropped 18.5%. Year-to-year, homes sales have fallen 8%.

What about prices? Everyone’s favorite question. Prices have gone up.

Year-to-date in 2007, the average sales price of a Portland area home is now $340,400. At this time in 2006, the average sales price was $318,000.

Year-to-date in 2007, the median sales price of a Portland area home is now $288,900. At this time in 2006, the median sales price was $267,900.

The average market time for a home to sell today in 2007 is now 59 days on the market compared to 42 days in 2006.

Keep in mind everything mentioned above is an average. There are many home that still sell as soon as they hit the market, while others languish in a sea of for sale signs.

Bottom line: Buyers have more selection and leverage. Sellers need to be realistic.

Former Fixer Now A Remodeled Ranch In North Portland

You might recall that several months ago I interviewed a client of mine who purchased a fixer in North Portland with intentions of flipping the house. Well, it's been almost five months of blood, sweat, and tears, but the house hit the market today for resale.

It’s a ranch home in North Portland’s Portsmouth neighborhood. As the listing agent, of course I’m going to say nice things about the house, but the homeowner, Dustin, really did a great job. I say this because too often I see people flip houses and take shortcuts. Dustin didn’t do that.

Instead, he used high quality materials to upgrade the home. This included solid-surface Corian countertops and new tile flooring in the kitchen. Flippers who flip cheap often use laminate countertops and vinyl flooring, not that there’s anything wrong with that. They’re just not “upgrades.”

The house utilized electric zonal heat which was in good working order. However, the homeowner installed a central heating system which meant the installation of air ducts and a brand new gas furnace. I could go on and on, but I know my blog readers don’t read this blog to get pitched.

I’ll just say that it’s nice to see a job well done. And I’ll have a second interview with Dustin soon so that he can explain the triumphs and problems in flipping this house.

Here’s a RMLS link for more information on the house. I’ve also included a video tour (not virtual tour) of the property.

Portland Noted For Investment, Vacation Home Market

Overall, the sale of investment properties and vacation homes is down across the nation. But as Entrepreneur Magazine points out, that gives real estate investors more choices.

Of note, Portland is mentioned in an article about this subject matter. One advisor urges buyers to be patient, observant and prepared in real estate markets with job and population growth. “Hotbed areas today… include Albuquerque, New Mexico; Raleigh, North Carolina; and Portland, Oregon, all of which boast robust rental communities as well.”

Here’s the story.

Percentage Of Home-Based Workers High In Portland

“Drive until you qualify.”

Some clients of mine who relocated to Portland from California told me it’s a slogan to describe the pricey real estate market south of us. In other words, keep driving until you can afford to buy a home. Plain and simple, long commutes are norm.

Thankfully, Portland isn’t quite the same.

In fact, Portland has one of the highest percentage of home-based workers in the country. Nationally, 3.6% of employees work from home, but Portland has a higher rate of 5.3%. Here are some other leading cities:

Rate - City

6.3% - San Francisco
5.3% - Portland
5.1% - Seattle
5.0% - Austin, TX
4.9% - Colorado Springs, CO
3.6% - National Average

Portland's Broker Open Houses Multiply

Whew! There were 102 broker’s opens this past Tuesday. That is a lot! And that’s just Portland’s eastside.

A broker’s open is an open house that a listing agent hosts to attract primarily other real estate agents. It’s the listing agent’s opportunity to meet other agents in person and receive feedback in terms of pricing and how well a home shows.

Anyway, broker’s opens are held on Tuesdays in Portland. When Portland was in a strong seller’s market, there may have been 30-45 open houses on the eastside tour. Generally speaking, the real estate market has been pretty balanced, but 102 open houses sure seems like an awful lot.

Reality Bites In North Portland

I’m going to list a home in North Portland at the end of this week. The homeowner is a loyal client of mine so I’ve known for a couple of months that he’s been on the verge of selling it.

To prepare, I started visiting comps about two months ago just to see what was out there. I figured some of these houses would close by the time it was ready to market my client’s home.

And since then I’ve been consistent about visiting active homes for sale that are similar in North Portland. There are some nice homes out there, but there are also some crazy prices for ugly homes!

In St. John’s, I saw a “remodeled” ranch home listed between $250,000-$300,000. For this price, you’d expect a knock-out of a house. But this property had old shag carpet, a bad paint job, and outdated kitchens and bathrooms. I was in and out of this house in less than 15 seconds and a buyer probably would have high-tailed it out of there even faster.

On the flip side, I did see some homes that were quite nice and comparable to one that will be for sale Friday. For instance, there was a smaller 3 bedroom, 1 bathroom home that showed very well and had many updates similar to my client’s home. It was priced higher than many of the comps, but sold within two weeks.

I guess what I’m saying is that the old fashioned principles to selling real estate are holding true in Portland’s market. It’s a well balanced market, generally speaking, between buyers and sellers. And homes priced right, that show well still tend to sell in good time. While those like the “remodeled” ranch that are overpriced for their condition still sit, sit, sit… even in hot neighborhoods like St. John’s.

Home Prices in Portland, The Last 15 Years

I guess I’ve been fortunate enough to establish a loyal following to my blog.

It seems readers come in all forms. Recently, a reporter from Money Magazine called me to discuss the type of real estate market Portland is experiencing. And just last week, a reporter from the Willamette Week called because he was writing a story on real estate appreciation in the Boise-Eliot neighborhood.

Both wanted to know how real estate has appreciated in Portland. Which got me thinking… maybe they’re not the only ones wondering how much home prices have risen over the years.

Here are the average sale prices and median sales prices of homes in the Portland, Oregon metro area spanning back to 1992:

Year = Average & Median Prices

2006 = $322,600 & $270,500
2005 = $282,900 & $237,500
2004 = $246,000 & $204,500
2003 = $222,500 & $185,500
2002 = $210,700 & $176,900
2001 = $201,000 & $169,900
2000 = $198,600 & $166,000
1999 = $188,600 & $160,200
1998 = $181,000 & $156,900
1997 = $173,000 & $150,000
1996 = $158,900 & $139,900
1995 = $145,700 & $128,000
1994 = $134,200 & $117,000
1993 = $123,400 & $107,000
1992 = $116,300 & $97,000

Most Expensive Home in U.S. & Portland

I guess it’s a dream house- for billionaires!

The most expensive property for sale in the U.S is Hala Ranch, located near Aspen, Colorado. And to see the property, you must be a billionaire. So far, there have been 11 showings out of 1,000 requests.

The price tag is $135 million and for that you get a main house of 56,000 square feet, 15 bedrooms and 16 bathrooms on 95 acres. Did I mention the barbershop, car wash, and dedicated wastewater treatment plant? You can check out the property here.

While not $135 million, the most expensive property in the Portland metro area does have its’ own private art gallery. Yes, in West Linn you’ll get more than 11,000 square feet on 11 acres, six bedrooms, six and a half bathrooms, and an eight car garage. The cost? It's $7,750,000.

Average Rainfall Amounts In Portland

It rains in Portland?

Ok, not funny. It does and thankfully by this time of the year, the sunshine has arrived. Knock on wood, but there's no rain in any 7-day forecast right now. I do, however, get asked about the rain by people relocating to Portland.

But not all rain, or at least rainfall, is the same. Here are 30-year average rainfall amounts for Portland, some suburbs, & outer areas:

Inches - Area

59 – Estacada
49 – Vernonia
46 – Oregon City
45 – St. Helens
45 – Troutdale
42 – McMinville
40 – Beaverton
38 – Hillsboro
37 – Portland

Source: Portland Monthly

Magazine Says Portland Rental Market Improving

A new Money Magazine article titled “Investors Strike Gold,” highlights what’s happening here in Portland. Some of the key points are the improving rental market as well as the influx of newcomers to Portland.

Personally speaking, I agree with the magazine’s statement that people who end up moving to Portland do so not necessarily for employment, but for lifestyle. Over and over again, I hear clients who relocate to Portland tell me they wanted a better quality of life.

Here are some excerpts from the article:

“A dynamic turnaround in the Portland multifamily market is shaping up for the second half of this decade. While the rest of the West Coast took off in the first years of this decade, Portland's market was stuck in first gear.

During this time, Portland had the highest unemployment among the nation's largest urban areas (8.8 percent in June 2003), but the population still grew an average of 1 percent annually, due largely to in-migration of echo boomers, also known as the "creative class."

This group has been moving to Portland from all over the U.S. not in search of jobs but of a lifestyle. In Portland, they've found a West Coast city with cultural identity, public transit and housing that is relatively affordable compared to San Francisco and Seattle. Moreover, with unemployment now down to 5.1 percent, they are finding jobs.

This growth has set the stage for apartment fundamentals to take off. After several years of virtually no rent growth, rents are rising. According to a recent survey, apartment vacancy is less than 3.4 percent citywide. Average rent was up 6 percent in 2006 and, according to Jerry Johnson, a principal with Johnson Gardner, average rent will be up 8.5 percent in 2007 and another 6 percent in 2008. Hendricks & Partners Research Division is also forecasting strong rent gains, albeit more conservative, averaging more than 4 percent annually for 2007 and 2008. This would normally attract developers, but Portland's urban growth boundary makes development time consuming and expensive. In fact, fewer than 1,000 rental units annually are expected to come online in the next two years.

Investors are coming back. The tipping point came in December 2006 when Hendricks & Partners sold the 156-unit City Heights to a San Francisco buyer for a record $256,000 per unit—nearly four times the overall average price per unit ($70,623). Since then, one of three Harrison tower condo conversions reverted back to apartments and a planned Ladd high-rise became a rental project.

Four of the last five apartment buildings on the market in 2007 sold above their listing prices. The most aggressive buyers are entrepreneurial real estate companies partnering with institutional money, looking for value-added units to upgrade. Larger properties are trading at a premium. In general, Portland area sellers are getting top dollar.”

Here’s the complete article.

New Studies Rank Oregon Life Spans, More

A new longevity report ranks Oregon 7th for “Highest Calculated Age” in the country. In other words, Oregon is 7th for predicted life span.

The top ten states are listed:

Hawaii
Colorado
New Mexico
California
Arizona
Vermont
Oregon
Washington
Idaho
Minnesota


Here are other categories where Oregon ranks in the top ten:

Best attitude on aging
Fewest hours spent at work
Most likely to engage in brain activity
Most dieters
Most likely to snack on vegetables
Lowest consumption of red meat
Higest intake of supplements
Least likely to screen for cancer
Lowest frequency of doctors’ visits

Here are all of the rankings.