Will You Pay Off Your Mortgage?

A new survey shows that more than three-quarters of Americans expect to pay off their mortgages before they retire, but that it’s also unlikely.

There is a way to cut years of a 30-year-mortgage which I’ll share in a second.

But first the survey which was conducted by the Consumer Federation of America…. Among all households surveyed, 27 percent had household income greater than $75,000; 33 percent had income between $35,000 and $75,000; and 30 percent had incomes below $35,000.

Of the high-income group, 81 percent report saving at least 5 percent of their incomes, but only 34 percent of the lower-income groups were able to do that….

Now back to the mortgage trimmer…. If you make one extra mortgage payment a year (13 instead of 12) and apply it to the principal only, a 30-year-mortgage can be paid of, on average, in 22 years.

That’s a big savings!

Oregon 24th In Foreclosure Rate

Oregon ranks 24th in the nation in foreclosure rate. Our state is also experiencing a higher than average rate which up to this point has been rare.

According to RealtyTrac, the number of homes facing foreclosure nationwide rose 57 percent in January 2008 compared to a year ago. Meanwhile, Oregon experienced a foreclosure increase of 96.26% covering the same time span.

Here are the states with the highest foreclosure rate:

1. Nevada
2. California
3. Florida
4. Arizona
5. Colorado
6. Massachusetts
7. Georgia
8. Connecticut
9. Ohio
10. Michigan
24. Oregon

County Comparison of Home Prices

Final 2007 housing data continues to trickle in from the RMLS…

Here are the average sales prices and appreciation rates for the counties making up Portland metro:

County = Sale Price = Appreciation

Clackamas = $400,800 = 3% appreciation
Multnomah = $336,300 = 9% appreciation
Washington = $333,900 = 6% appreciation
Yamhill = $284,400 = 6% appreciation

It's Not As Affordable As It Used To Be

The average Portland family only had 99% of the income needed to purchase a median priced home ($276,500) in the Portland metro area in December 2007. This is according to a formula used by the National Association of Realtors (NAR).

A family making the median annual income ($63,800 according to HUD) would pay $1360.46 a month for this home with a 20% down payment and a 30-year fixed rate mortgage with an interest rate of 6.1% (per Freddie Mac).

Real Estate Appreciation In Portland

Real estate appreciation in Portland and the ‘burbs isn’t what it used to be, but as a homeowner myself, I’ll take it compared to how the rest of the country has fared.

Here are the appreciation rates for the metro area as provided by the RMLS. And as I’ve said on this blog before, this is one of many ways to determine appreciation rates (such as Moody’s and the S&P Case-Shiller Index), albeit the highest:

Rate = Area

8.3% = North Portland
7.5% = Lake Oswego, West Linn
7.3% = Northeast Portland
6.7% = Southeast Portland
6.3% = Northwest Washington County
4.8% = Tigard, Tualatin, Sherwood, Wilsonville
4.6% = West Portland
4.4% = Gresham, Troutdale
4.2% = Hillsboro, Forest Grove
3.2% = Beaverton, Aloha
1.1% = Oregon City, Canby
-6.4% = Milwaukie, Clackamas, Happy Valley

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

Average Market TimeTo Sell Increases

It’s been a while, but for the first time in a long time one area of Portland metro has an average market time of more than 100 days.

Which area? Oregon City. The average market time to sell a home is 103 days.

Here are the average market times, days on market (DOM) to sell a Portland area home:

DOM = Area

103 = Oregon City, Canby
93 = Milwaukie, Clackamas, Happy Valley
93 = Hillsboro, Forest Grove
89 = West Portland
81 = Tigard, Tualatin, Sherwood, Wilsonville
81 = Northeast Portland
80 = Gresham, Troutdale
78 = Northwest Washington County
77 = Lake Oswego, West Linn
76 = North Portland
69 = Southeast Portland
67 = Beaverton, Aloha

Greenest, But Now Fittest Too? Almost

Portland’s active. It really is. And people tell me that’s a reason for moving here.

So how “on the go” is Portland? It’s the 5th fittest city in the U.S., according to Men’s Fitness Magazine. The Rose City moved up four slots in 2008 from its’ 9th place ranking in 2007.

Here are the top 10 fittest cities in the U.S.:

1. Colorado Springs
2. Minneapolis
3. Albuquerque
4. Denver
5. Portland
6. Virginia
7. Beach
8. Seattle
9. Honolulu
10. San Francisco

Las Vegas, meanwhile, was ranked the fattest city in the U.S. for the second straight year.

Current Home Prices In Portland

What are homes selling for in Portland in 2008? It’s very early, but here are some initial numbers:

Average & Median = Area

$588,800 & $449,000 = Lake Oswego, West Linn
$503,100 & $399,000 = West Portland
$418,300 & $384,600 = Northwest Washington County
$377,700 & $350,000 = Tigard, Tualatin, Sherwood, Wilsonville
$369,000 & $320,000 = Milwaukie, Clackamas, Happy Valley
$329,900 & $265,000 = Northeast Portland
$319,300 & $295,000 = Oregon City, Canby
$280,600 & $259,900 = Hillsboro, Forest Grove
$279,600 & $245,900 = Southeast Portland
$268,100 & $250,200 = North Portland
$257,100 & $245,300 = Beaverton, Aloha
$249,600 & $238,000 = Gresham, Troutdale

These numbers reflect only one complete month of home sales. I would expect these figures to move as 2008 evolves.

The Greenest City In America

Popular Science Magazine has ranked Portland the greenest city in America.

Why? Per the magazine, “America’s top green city has it all: Half its power comes from renewable sources, a quarter of the workforce commutes by bike, carpool or public transportation, and it has 35 buildings certified by the U.S. Green Building Council.”

Here are the top 10 greenest cities in the U.S.:

1. Portland
2. San Francisco
3. Boston
4. Oakland
5. Euguene
6. Cambridge
7. Berkeley, CA
8. Seattle
9. Chicago
10. Austin, TX

Growth In Sales of New Portland Homes

New homes in Portland sold better in 2007 than in 2006.

Sales were up 6% for the metro area with 5370 new properties sold in 2007 compared to 5045 properties in 2006.

Prices were also up.

The average sales price of a new Portland home rose 6% from $356,600 in 2006 to $387,200 in 2007.

The median sales price of a new Portland home rose 6% as well- from $300,000 in 2006 to $318,600 in 2007.

Data provided by RMLS.

Portland Housing Inventory Shatters Old Record

I was astonished.

I’m still a bit in disbelief.

The number of homes for sale in Portland is not just at an all-time record; it’s lapping historical benchmarks with plenty to spare.

Yes, housing inventory (reflecting January) in Portland is now 12.8 months. This means that if no other homes were listed for sale, the supply would dry up in 12.8 months.

This figure is the highest on record for the Regional Multiple Listing Service (RMLS). The previous high was 10.1 months in January 2000.

I’m not surprised inventory is very high. Historically speaking, January is the month of the year where inventory is at the highest of the year. But in December 2007, inventory was 8.5 months- a fairly high rate. So to leap from a rate of 8.5 to 12.8 in one month is eye-opening to say the least.

For comparison’s sake, housing inventory in Portland was less than half in January 2007 (6.2 months) & just a blip in January 2006 (3.2 months).

So now that I’ve spelled out the data, what’s this mean?

It’s a great time to be a homebuyer in the Portland metro area. Buyers have choices. They have leverage. They have opportunity.

And while there are deals to be made, home values have held up considering the dramatic rise in inventory (and compared to nationwide trends).

The average sales price of a Portland home in January 2008 was $342,900. In January 2007, the average sales price was $322,900.

The median sales price of a Portland home in January 2008 was $280,000. In January 2007, the median sales price was $275,000.

Currently, the average market time to sell a home is 83 days on the market. This is an increase from the 65 day average in 2007.

I should make it clear that I’m not yelling out that the sky is falling. 2007 was the third highest year for real estate sales in Portland in terms of sales volume. And I also expect inventory to start dropping soon, by how much I don’t know, because it historically does during the spring “buying season.”

I'll have more on individual areas of inner city Portland and the suburbs in terms of appreciation rates, home values, market times, etc. in the coming days.

Lights, Camera, Portland! Another Top Ranking

Books, not movies, usually come to mind when thinking of Portland. Yet, the Rose City ranked 8th in the U.S. for best movie making cities.

According to Movie Maker, Portland is the 8th best city for movie making in 2008.

There were several factors used to come up with the list, including this explanation, "Cities that give indies a bigger bang for their buck by offering a variety of different looks or access to low-cost studio facilities are always great for the indie crowd. Innovation was another factor. At a time when energy prices are at an all-time high, areas that make special considerations for the environment scored some additional points with us, too."

Here are the top ten cities:

1) Austin, TX
2) Albuquerque, NM
3) Shreveport, LA
4) New York, NY
5) Philadelphia, PA
6) Wilmington, NC
7) Seattle, WA
8) Portland, OR
9) Baltimore, MD
10) Memphis, TN

Portland Ranks 74th For Foreclosure Percentage

Foreclosures surged nationwide in 2007 with Detroit, Michigan, ranking worst in the country for percentage of households in foreclosure, according to RealtyTrac. The Portland, Oregon area ranked fairly low on the list ranking 74th in the country.

In 2007, .602% of Portland area properties filed for foreclosure. In comparison, Detroit had almost 5% of its households enter foreclosure.

The .602% for Portland resulted in 5834 properties filing for foreclosure in 2007- an increase of 24.18% from 2006.

Here are the 10 worst cities for foreclosure rate in 2007:

1. Detroit, MI
2. Stockton, CA
3. Las Vegas, NV
4. Riverside, CA
5. Sacramento, CA
6. Cleveland, OH
7. Bakersfield, CA
8. Miami, FL
9. Denver, CO
10. Fort Lauderdale, FL

74. Portland, OR

Portland Named Top Destination

Visit Portland.

That's the message from the National Trust for Historic Preservation which has chosen 12 vacation destinations that "offer an authentic visitor experience by combining dynamic downtowns, cultural diversity, attractive architecture, cultural landscapes and a strong commitment to historic preservation and revitalization."

Portland received many kind words as part of this selection; here are some excerpts:

Featuring both the charm of a small town community and the urban vitality of a big city, Portland, Oregon, is a dynamic destination that offers an alluring mix of natural beauty, lively downtown entertainment and landmark historic attractions. Effortlessly accessed by bike, an award-winning transit system or on foot, the city exudes a genuine, unaffected personality with its diverse neighborhoods, historic core and sustainable lifestyle…

…Whether in the city's downtown area, trendy Pearl district or Old Town/Chinatown quarter, Portland offers the best of the Pacific Northwest's heritage. Oregon's Urban Growth Boundary legislation, which forbids city sprawl, has encouraged the preservation and re-use of many historic areas in Portland. One of the most stunning examples of re-purposed land is the city's Pearl District. What was once a decaying industrial warehouse area has been transformed into a chic urban neighborhood filled with a continually emerging collection of gourmet restaurants, cozy coffeehouses, eclectic boutiques and dynamic public art spaces…

…The metro area is home to 37,000 acres of open space, including the 5,156 acres within Forest Park. The short, 200-foot city blocks combined with fountains, gardens and a scenic waterfront foster long casual strolls through the downtown area. Walking tours showcasing the best of the city's art and architecture are also available."

Misery Loves Company, But Not Portland

Here’s a list Portland’s happy to avoid: The 10 most miserable cities in the U.S.

Kind of strange? Yes. But Forbes Magazine constructed the list based on a variety of factors such as unemployment, personal tax rates, commute times, weather, crime and toxic waste dump.

Three California cities made the list, including Los Angelest. While it has great city, LA scored poorly in commute times, taxes, and Superfund sites.

Here are the top 10 most miserable cities:

1. Detroit, MI
2. Stockton, CA
3. Flint, MI
4. New York ,NY
5. Philadelphia, PA
6. Chicago, Il
7. Los Angeles, CA
8. Modesto, CA
9. Charlotte, NC
10. Providence, RI

Protect yourself from mortgage fraud in any language

Pay any attention to the national news (and some Portland too) and the terms “foreclosure” or “mortgage crisis” or “mortgage fraud” are sure to come up.

Right now, the mortgage industry is definitely turbulent.

So with that, Freddie Mac has put together a video to help homeowners protect themselves from mortgage fraud. For 2008, the video is on the bland side, but the message is on point. Substance over style.

Below is the video in both English and Spanish. The video explains in both languages how swindlers get copies of foreclosure notices at city hall and use the information in them to persuade distressed borrowers to give up their deeds. The video shows how the crook uses the deed to secure new financing in his own name, lets the loan go into foreclosure and then the homeowners lose their homes.

Freddie Mac decided to produce the anti-fraud videos when a new survey of delinquent borrowers found 25 percent turn to the Internet first for information about avoiding foreclosure.

The English version:



The Spanish version:

Low Mortgage Offered By Home Builder During Special

How badly do home builders in the Portland area want to sell?

As part of a Valentine’s promotion, a large national builder is offering homebuyers a 4.875% 30-year fixed mortgage with no closing costs. To that point, the same builder is offering buyers' agents an increased commission.

Of course, there is small fine print which includes language about owner-occupied homes, select homes, in select communities… etc. It’s a marketing ploy, but certainly worth taking note.

If you'd like more information, please send me an email.

Portland Schools Rank High In New Study

Here’s an eyebrow raiser.

Portland has the third best public school system in the U.S. for cities with a population of more than 1 million. That’s according to Expansion Management Magazine.

I’m sure Portland public schools will take the high compliment. Maybe it’s true, but if anything, it’s surprising considering the consistent news about funding issues.

So what is Expansion Management and how did it figure this out? The magazine says it covers economic development, business climate, business relocation, etc. and that factors such as public education should be analyzed when searching locations of future operations.

“Using the results from our 2007 Education QuotientTM ranking of every school district in the U.S. with at least 3,300 students (the article, “Today’s Schools Are Shaping Tomorrow’s Work Force”, can be found on the Expansion Management website under RESEARCH STUDIES), we grouped school districts according to their particular MSA, and weighted each district’s scores according to its total enrollment as a percentage of the metro-wide total student enrollment.”

Here are the top ten cities:

Washington, D.C.
Phoenix, AZ
Portland, OR
Austin, TX
Baltimore, MD
Rochester, NY
Pittsburgh, PA
Richmond, VA
Kansas City, MO
Minneapolis, MN

Here’s a link to the rankings, and the report.

Portland Ranks Third For Real Estate Appreciation

That’s according to the S&P/Case-Shiller Home Price Indices which measures U.S. home prices.

Portland’s 1.3% real estate appreciation ranks it third in the country for growth. Nationally, home prices fell 7.7%- the strongest decline since the study has been in place. The time period covered during this study was from November 2006 to November 2007.

Here are the appreciation and depreciation rates the top 20 cities, listed from highest to lowest:

City Rate

2.9% = Charlotte
1.8% = Seattle
1.3% = Portland

-1.2% = Dallas
-2.0% = Atlanta
-3.0% = Boston
-3.1% = Denver
-3.9% = Chicago
-4.8% = New York
-5.8% = Cleveland
-6.6% = Minneapolis
-7.8% = Washington
-8.6% = San Francisco
-11.9% = Los Angeles
-12.6% = Tampa
-12.9% = Phoenix
-13.0% = Detroit
-13.2% = Las Vegas
-13.4% = San Diego
-15.1% = Miami

Portland’s Pedal Power Pays Off

Maybe I shouldn’t be surprised anymore. Another couple relocating to Portland tells me they want to be live somewhere in the city where they can easily ride their bike. It’s important to them.

I keep hearing this. I’ve hearing this. I’d say it’s a trend, but maybe it’s just plain old established fact.

And again, Portland’s reputation for being bike friend has garnered some national attention- from public radio.

Here’s an excerpt to the beginning of the story.

“According to Bicycling Magazine, Portland, Ore., has the highest number of bike commuters in the country. Ethan Lindsey reports on the industry that's grown up around all those riders.”

If you’re interested, here’s a link to the rest of the transcript and broadcast.

Is Your Home Worth Fixing? Stats Say...

In December, I posted a summary of the 2007 Cost vs. Value Report for Portland. I’ve been asked since then for more information and there is some available, but it deals with values for the Pacific Northwest as a whole and not just Portland.

Here’s a link to the report. I think readers who are considering remodels of their homes will find this useful. You’ll find information for major kitchen remodels, attic bedroom remodels, basement remodels, deck additions, master suite additions, siding replacement, window replacement, you get the picture….

Appreciation Rates For Portland, Per RMLS

To no surprise, North Portland remains at or near the top of the areas in Portland metro in terms of real estate appreciation.

Here are the appreciation rates for inner city Portland and the suburbs:

Rate = Area

8.4% = North Portland
7.8% = Lake Oswego, West Linn
7.1% = Southeast Portland
6.4% = Northeast Portland
6.3% = Gresham, Fairview, Troutdale
5.5% = Hillsboro, Forest Grove
5.4% = Northwest Washington County
5.3% = Tigard, Tualatin, Sherwood, Wilsonville
3.6% = West Portland
3.4% = Beaverton, Aloha
1.2% = Oregon City, Canby
-5.4% = Milwaukie, Clackamas, Happy Valley

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