Portland Real Estate Blog

We’re down here in Marin this week. It is where I grew up so there is a certain affinity to it. It has changed but is still the same. Property prices are still crazy and the house listed for $1.095M down the street sold for $1.2M. At the same time the 6 o’clock news reports over 100,000 houses in default since January in the Bay Area. A comment in a past post pointed out that Marin may not be the best indicator of the Bay Area as a whole but I do find the following interesting.

My mom had marked an article in Marin Magazine: Tim Porter’s Four R’s (Reading, ‘Riting, ‘Rithmetic & Real Estate). He places much of the property value in southern Marin’s school system. A private school starts at $20,000 a year in the Bay Area and if you can put your kid into a public school that rates as high as the private schools.

Does it apply to Portland’s high price neighborhoods? Dunthorpe and the Riverdale school system come immediately to mind. Ainsworth and Chapman Elementary are in high dollar neighborhoods and are always highly rated.

Rob Lee, executive vice president of California Mortgage Advisors in San Rafael, crunches the numbers: a family who spends $20,000 a year on private school tuition could use that $1,600 a month to finance an additional $240,000 home loan. At $30,000 in tuition, the mortgage capacity grows by $400,000.

We’re in the Bay Area this week. On Wednesday, I am a part of a panel discussion on blogging in real estate for the Innman News Real Estate Connect San Francisco. My portion is part of Bloggers Connect on Wednesday.

We’ll do some scoping today and report back. I grew up down here and during what became a 12 hours, 625 mile, drive yesterday I was struck by the change even since our last trip down. Four dollars to cross the Richmond/San Rafael Bridge (was $3 last time we did it but I remember crossing for a buck for years). Lots of traffic on four lanes of I80 even at 10:30PM. It was also a frgid 59 degrees at the toll plaza! Got to love Bay Area fog which is now buring off beckoning for us to explore.

ABR, Accredited Buyer Representative.

REBAC (Real Estate Buyer’s Agent Council)

ABRM, Accredited Buyer Representative Manager

REBAC (Real Estate Buyer’s Agent Council)    

ALC, Accredited Land Consultant    

CCIM, Certified Commercial Investment Member®

CIPS, Certified International Property Specialist

CPM, CERTIFIED PROPERTY MANAGER®

Institute of Real Estate Management (IREM)

CRB, Certified Real Estate Brokerage Manager

CRS®, Certified Residential Specialist®.

CRE, Counselor of Real Estate

GAA, General Accredited Appraiser

GRI Graduate REALTOR Institute

PMN, Performance Management Network

RCE, REALTOR® association Certified Executive.

Residential Accredited Appraiser

SRES®, Senior Real Estate Specialist

SIOR, Society of Industrial and Office REALTORS®

NAR Family Certifications

At Home with Diversity Certification

e-PRO®

REPAs, Real Estate Professional Assistants

Resort & Second-Home Markets Certification

We spend a lot of time with relocation clients. One of the most common questions is, “why live here. Why did you leave the Bay Area (almost 15 years ago)?” We can ignore the CA v. Oregon debate. This is where I live; but why? A partial list:

We can snow and water ski in the same day (not that we ever have)
Snow or ocean is about an hour and a half away (last year it snowed at the ocean).
The food scene is good (I went to Western Culinary in ‘97)
The beer scene is good (International Brewfest last week, Brewfest next week, and all those local breweries)
The wine scene is good (Think pinot but we have some pretty other local stuff too)
We walked into the Pearl District and found closed of streets with a craft fair going on
When I attended my 10 year high school reunion, we owned five houses. No one living within 50 miles of my high school owned one.

People will start camping out on Monday for the grand opening of Portland’s newest big box store, Ikea! They open Wednesday; two days off work to buy furniture that comes in a flat box that could have been bought less than three hours away isn’t my cup of tea. Is this another sign that Portland is a major market? We’ve got a Crate and Barrel too. What’s next? An NBA championship?

Why do you live here?

From the “I heard it so it must be true” file, I was under the impression that Oregon mortgage rates were usually lower than the national average. I did a search on www.bankrate.com for a 30 year mortgage, zero points, 20% down. I used the APR as the rate as that should allow for the most equal comparison of loans (correct me if I am wrong).

Portland: 6.148%
NYC, NY: 6.241%
San Diego: 6.148%
Dallas, TX: 6.148%

So we can probably consider this myth “Busted.”

All the 6.148% loans are through American Interbanc Mortgage, LLC. Equally interesting is their bold print homepage:

NOTICE TO OUR COMPETITORS:

I sent the following email to KGW last night after I had written last night’s post. The first two graphics are from June’s and May’s 2007 RMLS Action Report. The third is clipped from the news story last night. I got no reply:

Can you explain your graphic below?  Appears pretty clear where the $295,000 in your graphic came from (though June is reported as May) but how do you get a May/June ‘06 number that is so different than the June ‘06 number reported?  I had already blogged www.PortlandRealEstateBlog.com about the data and your story before I put two and two together and figured something didn’t read right to me. 

Not looking to pick a fight.  I spend enough time getting beat up on my blog for that! 

Charles

I’m going to leave to poll up for a little longer to see if we can get enough numbers to have more meaningful results. Right now, 70% think that dual agency in resale real estate should not be legal (I am one of those votes).

I received my emailed copy of RMLS Action yesterday and don’t really know what to make of it. It looks like the appreciation numbers (8.9%) in the last twelve months are starting to make more sense. The effect of really strong months a year or more ago are getting dropped and I expect that by then end of the year we will settle into a number between five and six percent for 2007 but that is just one Realtor’s opinion. Annual appreciation numbers work in a consistent market but not so well in a shifting market. Shorter term stats, three or six months, would be more revealing.

Inventory has increased to 5.0 months. That’s higher than we are used to but probably the sign of a healthier market. I don’t think there should be a lot of concern if the market settles in to an inventory level in the four to six months range. Of course it isn’t what sellers want to see but it is good for buyers and the market itself. If we move much above six months, things might get tough.

I wrote the above portion of this post this morning. Now KGW’s 6PM news has just finished including a clip from business reporter, Joe Smith, on our real estate market. I recorded the clip but I am not the video editing expert so will look into how to convert it from a 102mb mpeg into something viewable here. Through the typical media doom and gloom there is a discussion of the danger of over pricing (previous post on overpricing) and the fact that the median home price has dropped from 12 months ago for the first time. That means one house sold above and one sold below the median price.

Overpricing is still a major factor in our market. I was asked for comments on a listing yesterday that is now 30% below its original listing price. It looks to be a steal now because it was so overpriced then. Realtors (probably including us) are equally to blame. It’s easy to tell a seller that you agree with their pricing. It’s what they want to hear so collecting the listing and then beating them up later will probably result in a commission once reality sets in. I know we have lost listings over pricing. Nobody wanted to admit the market was changing and the industry moved too slowly to educate their sellers. There are always the outliers, we had a listing that just baffled us to as why it wasn’t getting the expected results (of course it comes down to price in the end).

Sherwood is the best place in Oregon to live (#18 and gets mention on this morning’s NBC Today Show. Lake Oswego is the 32nd best place to live in the country according to Money Magazine for cities with populations between 7,500 to 50,000. They also have a list of other Oregon cities that they looked at for the ratings but did not rank; the list is alphabetical. Cities were either ranked in the top 100 or they were lumped togther in the rest of the list.

There is some great demographic information, including Portland, on the site.

If you are buying real estate in Portland and you are not an experienced contractor, odds are you’re going to have a professional inspection on the property you are purchasing. If you are a seller, it is almost guaranteed that even though the sale is “as-is,” you are going to see a repair request during the inspection period from the inspections that the buyer conducted. The request is usually made up of actual repairs, credits towards closing costs or reducing the sale price. The seller is under no obligation to make any concession but the buyer is within their right to walk away from the transaction (and get their earnest money back) during the inspection period. If the buyer does nothing during the inspection period, the period ends and the buyer loses that contingency in the sales agreement.

This is an antidotal list of what we see the most often on inspection reports. Sellers might be advised to check through these prior to listing a property so that they don’t get a laundry list of repairs. They are generally easy things to take care of:

Soil touching siding/wood stacked against siding
Furnace needs cleaning/servicing
Rain gutters clogged/not sloping towards downspouts
Hot water heater not seismically strapped to anything
Wood debris in crawl spaces (usually left by builder)
Moss on roof. This can lead to moisture penetration even though the roof is not leaking. Attics and moisture can equal mold.

This list is by no way exhaustive on the topic but are the things that we see called out frequently on inspection reports.