Oregon Home Price Appreciation Leads Nation

CNN/Money reports that Oregon’s three largest metropolitan real estate markets, Salem, Portland, and Eugene, all easily outperformed national averages for 1-year appreciation gains. In fact, Salem tops the nation with a gaudy 24.7% increase over Q3 of 2005, according to the National Association of Realtors study.

Portland and Eugene ranked 15th and 16th respectively, hovering in the mid-12 percent range. Seattle and Spokane also registered healthy gains for the period.

Across the U.S. home appreciation is down 1.2% over Q3 of 2005. The Northeast really took it in the shorts at -4.8%. The Western U.S. was down about a point. Interestingly, of 148 major metro areas, 102 actually had price gains, while only 45 had decreases.

Detroit, other rust-belt markets and a handful of Florida communities registered 9 and 10 percent losses over 2005.

Below are the 3rd quarter numbers for the top 25 metro markets, including median home price in thousands and appreciation gains, as compiled by the National Association of Realtors.

Technorati Tags: home, price, appreciation, NAR, Realtors, median

Photo by webel. Used under Creative Commons license.

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3 comments November 28th, 2006

A Forecast for Portland’s Cloudy Real Estate Market

It’s only fitting that with our rainfall of near-Biblical proportions earlier this November, that we touch on prophetic matters concerning Portland’s real estate market.

Local economist Jerry Johnson began his end-of-year prognosticating tour, recently addressing a roomful of furrow-browed real estate brokers. Johnson is a principal at Johnson Gardner LLC, a Northwest-based consulting firm specializing in real estate development and land use economics. Johnson Gardner’s clients include developers, municipalities, and investment groups.

Johnson’s analysis includes broad trends of GDP growth, employment and wages, and population trends as well as local economic, land use, and development results.

So, should we be building an ark for a long, wet trip in the Portland real estate market, or are the clouds parting?

1. National economy is doing remarkably well — Despite being at war, and experiencing out-of-sight oil prices and political uncertainty, the nation’s economy continues to show slow, but solid growth. Interest rates continue to range historically low. The big threat facing the housing market is inflation, and for now appears to be under control.
2. Portland’s fundamentals are strong — Portland continues to be the most affordable West Coast city for home prices. Unemployment rates continue to shrink. Job growth is steady and broad-based. Portland continues to grow through in-migration, and many move to Portland for lifestyle reasons. Johnson commented that people “want to live in Portland, but don’t have to live in Portland.”
3. Portland’s homeownership rate is at the top — Due to ‘exotic’ financing options that enabled many to qualify for first-time buyer loans, according to Johnson, the Portland market is at historical heights of homeownership. Around 68% of area residents own their homes, the highest rate since 1991. Johnson is mildly concerned with the amount of leverage (debt) and the corresponding threat of foreclosures.
4. Metro land costs create ‘exurban’ communities — Johnson states that land costs inside the metro area force new construction homes to be priced above $300,000 for non-attached (i.e. not condo or townhome) properties. Developing much of the new land brought into the Urban Growth Boundary (UGB) is proving to be financially nonviable, therefore, areas such as Molalla, Newberg, Lafayette, and other peripheral communities have become the new, affordable suburbs, despite the fact they are 45+ minutes away from downtown.
5. Rents in Portland could rise as much as 20% — For the first time in 10 years, the rental market is getting an uplift in pricing. New inventory is not likely to be built until rents rise to the point of supporting new construction on increasingly expensive land. In the meantime, inventory will shrink and create upward pressure on pricing.
6. Condo market has turned to buyer’s market — The increased supply of units is reducing pricing power and cooling the condo craze. Johnson says this is probably a short term issue. He warns that we’re looking at $600-650 per square foot for future Pearl condo projects to provide return on investment.
7. The market could undergo a 6-to-9 month breather — Based on media reports of national housing bubbles and new construction slowdowns, Johnson says local home buyers and sellers are deferring their decisions in the short-term. But with continued economic growth and livability factors, the Portland market has the fundamentals (unlike many other areas nationwide) to overcome its slowdown over the next several months.

You can view the slides from his presentation here: http://johnson-gardner.com/file/Ticor_2006.pdf

Photo by mharrsch. Used under Creative Commons license.

Technorati Tags: Portland, Oregon, real estate, market, trends, forecast, prognostication, results, economist, Johnson Gardner, Jerry Johnson

1 comment November 27th, 2006

Week Links - November 24, 2006

The holiday season has arrived in Portland. I hope you’ve enjoyed Thanksgiving as much as I have.

Here’s a small collection of recent Portland and national real estate stories.

Oregon’s wine grape regions maturing — The Oregonian
Sharp-eyed consumers already are seeing new geographical place names on Oregon wine labels.

How to Check Your Credit Score Before Applying for a Mortgage — The Wall St. Journal

Portland real estate goes own way - up — The Oregonian

Economists Say Worst of Housing Bust is Over — The Wall St. Journal

Prairie Breeze — The Oregonian
Almost a century ago, architect William Gray Purcell subtly blended the Midwest plains and woodsy Northwest in his timeless Portland home

Technorati Tags: Portland, Oregon, real, estate, stories, media, reports

Photo by dietpoison. Used under Creative Commons license.

1 comment November 24th, 2006

Portland Real Estate Market Performance, November 2006

Here are Portland-area communities’ average and median sale prices (year-to-date), plus a comparison of 12-month appreciation rates as of November 1, 2006. For a full commentary, read my previous market activity post, or my Market Activity page at ronares.com.

Technorati Tags: Portland, Oregon, real estate, market, average, median, home, prices, appreciation

3 comments November 22nd, 2006

Dartmouth St. Listing in Oregonian Home Section

Warning: Shameless self-promotion ahead.

The front page of the November 19 Sunday Oregonian Homes Section features my listing at 425 W Dartmouth in Gladstone.

I wish I could say the feature is due to my superior marketing skills, but alas, this week the Home section highlights properties that have undergone thorough remodels, and the writer happened to bump into my listing through the multiple listing service.

In this case, the home at 425 W. Dartmouth was redone from the studs out, including new plumbing, wiring, sheetrock, kitchen, windows, bathrooms, flooring, and paint.

At $279,000, it features 2,063 sq. ft, 3 bedrooms, 2 bathrooms, a 8,750 sq. ft. lot and a huge (365 sq. ft.) master bedroom with fireplace.

I will be holding the home open on Sunday, November 19 between 1 and 4 pm. Come visit. Here’s a map.

Technorati Tags: remodel, home, house, Oregonian, open, Gladstone, article

Add comment November 18th, 2006

Portland Area Market Activity - November 2006

The fall in Portland typically signals the start of the seasonal slowdown in the local real estate market. This year, in concert with a balkier market than in recent times, you might think indicators would be more cataclysmic.

In reality, the market is showing good balance, with its inventory gains flattening out and sales velocity consistent from last month.

At the end of October, new listings were up about over 20% and closed sales have fallen 14% compared to last year. The resulting inventory is now up to 11,533 listings in the Portland metro area, about double what was available at this time last year. At the current pace of sales, the inventory would run out in just under 5 months, roughly defined as a balanced buyer/seller market.

Average and Median Prices
The average sale price year-to-date in the market is now $318,200 (vs. $276,600 for 10/2004 through 11/2005). Half the homes in the metro area sold for more or less than the median price of $267,900 (up from $230,500 last year).

Appreciation
Over the past 12 months, Portland-area properties averaged 15% appreciation. Milwaukie/Clackamas and North Portland now have the highest 12-month appreciation gains at 21.2% and 19.7% respectively. Average sale price appreciation in West Portland and NW Washington County has softened dramatically to 11.4% and 10.7%. The median price is up 16.2% over last year.

Inventory
New listings are up over 20% compared to September 2005, but pending and closed sales were down 14.3%. and 12.6% respectively. At the current rate of listings to closed sales, the current level of homes would sell out in 4.6 months. The average time on the market for active properties in October was 47 days, versus 36 days this time last year.

Coming soon: I will post the year-to-date average sale prices and appreciation for the Portland metropolitan area through October 2006, sorted by community and average sale price.

Technorati Tags: Portland, Oregon, real estate, market, activity, home, housing, prices, appreciation, average, median

Photo by Portland Ground: Pictures of Portland Oregon. Used under Creative Commons license.

2 comments November 17th, 2006

Flipper Nation - Real Estate Investing Meets ‘The Office’

I’ll admit to a guilty pleasure in watching those ‘Flip That/This House’ shows. And while I haven’t tried it myself, I do admire the efforts of rehabbers and the stress they endure.

Now comes the mockumentary, Flipper Nation, documenting an investment group striving to make a million dollars flipping houses. It’s sort of a real estate investing expose given The Office treatment.

Here’s Episode 1, The First Flip.

Thanks Tom at therealestatebloggers.com

Technorati Tags: flipping, houses, investing, real estate, comedy, mockumentary

2 comments November 15th, 2006

Week Links - November 10, 2006

A weekly list of national and local housing news, commentary, and opinion.

All Housing Markets Are Local, Except When They’re Not — NY Times
Portland expected to fare better than most U.S. communities

Metro and home builders’ group construct a new alliance — The Oregonian
After years of confrontation, regulators and developers collaborate to put on a “green” conference

Housing Consumers Suffering Information Glut – Realty Times
Housing consumers getting conflicting information, deferring decisions

In Face of Housing Slowdown, Homeowners Remain Optimistic – The Wall St. Journal
Despite news that the market is slipping just 6% of those surveyed in August said they think their home’s value will decline in the next 12 months.

A real estate reckoning — The Oregonian
The southwest suburbs’ framework of a housing slowdown lays a foundation for a more normal market

Lake Grove gets a little love — The Oregonian
Merchants, residents and the city are ready to renovate the area — now they just have to agree on a plan

Revenge of the second tiers — The Portland Business Journal
Portland among fastest appreciating markets, according to Zillow.com

Technorati Tags: real estate, news, links, reports, commentary, Portland, Oregon

Photo by Barb. Used under Creative Commons license.

1 comment November 10th, 2006

Keep Your Lender Local

A recent conversation with Larry Morris, a mortgage broker with Integrity Lending and fellow blogger, led to a discussion about how we can best serve our clients in this Internet-charged, competitive real estate environment.

I think we both agreed that while consumers are becoming more informed than ever, and that while the Internet is a great enabler of information, it isn’t so hot at cultivating trust or providing individual, personalized attention.

From Larry’s recent post at www.pdx-mortgage.blogspot.com:

The Internet is a great source of information and the savvy consumer can get a great deal in many cases–often, at prices that your local business cannot compete against.

This is especially true with commodities, like consumer electronics, books, and clothes…

But what about mortgages? Are they really just a commodity? Is one mortgage just like another? Is the final product really all that matters? Is rate really the most important component? Can a company out of Texas provide just as good of a product or service as a local one? The answers to all of these are….maybe.

But not all mortgages are alike and not all mortgage brokers are alike. The wrong mortgage at the best rate can cost you a fortune. A good mortgage broker can show you why. An average one doesn’t even know what I’m talking about.

Despite the apparent ease-of-use of online mortgage programs, I counsel all buyers I talk with to work with a local mortgage professional. Many home buyers I talk to use the Internet-based lenders because they are convenient…. but only to a point.

Then issues like time-zone differences, inexperience with the local Portland real estate market, and timely communication become REAL issues…and, therefore, not very convenient. The personal relationships developed between a local real estate agent and lender can really keep a transaction together and on time.

Another value to having local lender, according to Larry:

After reviewing my business, I’ve decided to take it even further by making a commitment to my local clients to be at the closing whenever possible. Why should I put the burden on the Realtor or title officer to answer questions about the financing?

Right. As a real estate agent, it’s no fun explaining the lender’s fee structure to the client at the closing table.

But what about those great rates posted on the Internet, or the mantra, “Everyone wins when banks compete”? Most of the sites on the Internet that advertise mortgages are nothing more than lead generation companies. If you complete a form to have someone contact you, expect to be bombarded by lenders who pay anywhere from $150 for a live transfer to $5 for a 180 day old lead. Other sites post rates from different lenders who are paying a fee to get in front of you. They will often post rates that are inaccurate just for the hopes that you will contact them.

My advice. Use to Internet to educate yourself, and to get an idea of what you want. (But remember that what you have spent a few hours, days or weeks learning, a good mortgage broker has spent years doing.) Then ask around for a recommendation from your family, friends or co-workers. Or try your Realtor, insurance agent, CPA, financial planner, minister or other professional.

You need to weigh the cost of initial convenience with what will serve you best between what happens between loan application and closing.

If you’re a Portland-area buyer, contact Larry Morris at Integrity Lending by calling (503) 924-1438. At least you know you can bang on his office door if you need to. It’s hard to do that when your lender is only available by email or 800-number.

Technorati Tags: mortgages, loans, housing, local, referral, lender, broker, officer

Photo by Askance. Used under Creative Commons license.

1 comment November 9th, 2006

Paint Chips, Web 2.0 style (beta)

From the productivity-maven LifeHacker (motto: Don’t live to geek; geek to live) comes this handy, online paint color selector application for Behr paint. Called ColorSmart, it’s a nifty example of a Web 2.0, consumer-friendly interactive site.

While you can always find printed color-chip guides at the home center or paint store, with ColorSmart you can click and pick swatches from the comfort of your own chair. Choose one of Behr’s pre-configured palettes, or if you’re creatively inclined, make up your own body+trim+accent selection.

If you’re selling your house soon, my advice is: go with the pros’ color selections. Trust me, very few will really like your ‘artistic’ turquoise exteriors or lavender interiors.

You can save your color choices for later review, and print out chip codes to get your paint ordered. With ColorSmart, you can buy an 8 oz. trial size to check your colors first. If you choose a paint that doesn’t sell samples in small amounts, then go ahead and buy a quart. I recently painted my home’s exterior, and my first choice….well, let’s just say that the $9.00 I spent on the tester quart was an excellent investment. We went with choice number 2.

One reviewer of the Behr site mentioned Sherwin Williams’ version, the Color Visualizer, which I thought was cool because they actually simulate different rooms and architecture styles with your color choices. Just drag-n-drop the color on the walls. You can even preview different faux finish techniques.

Technorati Tags: remodel, paint, web 2.0, sherwin-williams, behr, home, improvement

1 comment November 8th, 2006