Portland Real Estate Blog

Once we knew we were moving we pretty much had to decide right then where we were going to live. It was a very different experience from any housing decision we had ever made as a couple. I had my house when we got together and Jenny had hers. The subsequent houses that we bought came as a side effect of being Realtors; we came across what we bought in the course of business, never having to look at a selection of options and make (or not make) a decision – NOW. It’s a position that many of our clients find themselves in but not one that we had experienced from this side.

We pretty much knew we wanted to live in the Pearl District. We had a budget that we wanted to stay in and frankly, we wanted it all for that budget! We wanted a view, two bedrooms, some outdoor space and parking for two cars. No matter what we did, coming from 5000 square feet was going to be an experience in closeness. There are two primary sources for rentals: the leasing offices and individuals on Craigslist (though the leasing offices post heavily on Craigslist). Over three days we whittled the list down to four units and discovered that to stay close to our budget we were not going to get it all:

1. A one bedroom with an AMAZING corner view. We couldn’t figure out a good sleeping arrangement with a two-year old. One of the features of many of the units in the area is a lack of a true door to sleeping spaces. There was no outdoor space but this was the least expensive of the options. Best view but lacking almost everywhere else.
2. The next unit had we figured our two-year-old would have the master and we would sleep in the living room. It had everything else we wanted sans the second bedroom. It too had a great downtown/Mt. Hood view.
3. The third unit was what a friend described as “a bar with a bedroom.” He had lived in the same floor plan previously. It had one true bedroom and a nook where we could have put our son. It was the largest space, had a good view and is located closer to what one would consider the center of the area.
4. We’re completely moved in to the fourth option. 1054 square feet with a Fremont Bridge north facing view (though right now I can barely see the edge of the balcony through the fog). The downtown/Hood views are more appealing to me but I’m not complaining about what we have. It has one true bedroom and a second bedroom where we have installed the baby gate and hung a curtain for our son’s room. Toddler-proofing is proving to be a challenge: the first night he walked out the front door into the hallway- he couldn’t open the exterior doors at our house. Child-proofing is a topic unto itself though.

We did push our budget a little but negotiated to get ourselves into a unit that we really like and will be happy in for close to what we wanted to pay. What it really boiled down to was the addition of a toddler; we couldn’t make a one bedroom work and the two bedrooms units in our budget gave up some of the features that we wanted. Two of us and the dog could have done any of these units or even something smaller and we would have liked to have saved some money but we decided that even in a temporary six month situation we weren’t going to be happy. If Jenny had written this, there was a fifth option. It had two sleeping areas with no doors. She’s heavy sleeper. It never would have worked for me.

The leasing office behaved as I believe it should have. They didn’t show us the unit when we first came in because it was out of the price range that we’d given. When we started asking, this unit came up as a possibility. I’ve always felt that it is the client’s duty to push the price range, not the Realtor.

The S&P released Case Shiller’s housing numbers for November. It comes as no surprise that it was down from the previous month and is now at 162.62, about the same level as November 2005. The peak was June 2007 at 186.51. These are Portland numbers, not the national numbers. Case Shiller reports on resale properties. You can read the Case Shiller methodology on a previous post. I expect Case Shiller numbers will continue to decline at least through the February report which will be released in May.

An unsolicited chain of events over the last couple of weeks has given us an opportunity that very few get: to downsize into a Pearl District condo without giving up our current home for a specified amount of time. Could we be happy in a condo that’s just over 20% the size of our current home? We have wondered about Pearl living and now we’re going to find out. We’ve rented our house out for six months, fully furnished. The 1902 house that we renovated in 2005 is nearly 5000 square feet and without a doubt more space than we need but it’s what we’ve got and we do love it.

We’re now living in 1054 square feet plus a balcony in the Pearl District; one happy family including a two-year-old toddler and Tasman, the 60 pound, nine-year-old, Australian cattle dog (red/blue heeler). We just spent our second night here and turn the keys over to our house at the end of the week. Our goal is not to have to go back and disturb the tenants for things we can’t live without. The move has been a much bigger chore than either of us expected. I think that’s partially due to the downsizing; picking what you think you’ll need but leaving everything else behind. We can’t just box it all up and figure it all out later. Though not a real estate transaction, the experience parallels it in an expedited manner. By the end of the two week Friday-Friday period we will have:

• Offered the opportunity
• Decided to move
• Researched condos and apartments
• Negotiated two contracts
• Decluttered as if we were listing for sale
• Bought and sold some stuff on Craigslist
• Packed
• Moved
• Assembled some Ikea furniture
• Completed (with help) a long list of “house projects” that as the owner you see every day but ignore with mild disdain. Every project we’ve done would also have needed doing if we were listing for sale.

I’ll be writing more details about what we’ve experienced with each topic above in the future along with the usual market reports and commentary. There will be a new Case Shiller report out tomorrow. I expect that the report will not be glowing and that market reports that reflect the Arctic Blast and holiday slowdown will be especially brutal. Antidotally, we’ve seen more client activity in the last three weeks of January than we saw in the last six weeks prior to that. That could mean anything in the long run but keeps us busy today.

No real surprise that Portland's 2008 real estate activity ended with a thump.  We've traditionally seen a slow down in our business during the holidays and then the Arctic Blast brought showings to an almost standstill.  One of the few showings that we did have on a listing has resulted in a pending sale.  None of our listings suffered any storm damage.

"The number of closed sales (987) hit its lowest point since February 1992 (905). Pending transactions (810) were at a record low since RMLS™ began reporting in 1992, the previous record was 845 in December 1994."

Sales volume dropped 35% to $6.3B from 2007's $9.7B.  The Turner Realtors Team was down 13.3% for the same period.  The slowdown in sales volume is universal across all RMLS reporting areas in the metro area.  The only area reporting  positive appreciation over a 12 month rolling average is West Portland's paltry 1.9%.  Every other area is in negative territory.  Overall the average sales price is down -3.7% and the median price is -4.1% (rolling average as reported by RMLS).

These numbers have always seemed a little misleading.  Whereas Case Shiller reports on previously sold units, the RMLS numbers reflect the entire pool of condos.  It wouldn't surprise me the average new construction condo in the metro area since 2004 is priced over $400,000.  Prior sale condos would almost certainly paint a different picture.

There were a few changes to RMLS last week.  It is now possible to list a house as an auction or with a price range.  Some firms (Prudential has Value Range Marketing) have a range program where the seller will respond to all offers in a range.  The idea being that getting the conversation started between a buyer and seller is better than no conversation.  An offer at the lower end of the range does not make any guarantees of acceptance or counter.  The range can now be entered into RMLS.

Last night I received an email from fiftydollarhouse.com.  The sellers were raffeling off their house providing the sell 31,000 tickets at $50 each by December 31.  They've rescheduled the auction for January 23 and lowered the number of required ticket sales to 27,000. ($1.35M)  You have until the 21st to buy tickets.  The home is in Maryland.  It's an interesting idea whether it sells or not.  Could it spawn an industry of professional house rafflers?

If last night's Blazer win against Detroit serves any educational point, it is this: you never know what's going to happen before the final buzzer.  Those that left with time left on the clock (oops) had probably written the Blazers off.  At halftime, it looked pretty bleak and the odds of a Blazer win looked unlikely.  Good coaching and good playing snatched victory from the jaws of defeat. 

Throughout any real estate transaction we always remind our clients not to believe anything in real estate until they see it in writing.  ***Editors note: may have a hard time tying these two topics together in retrospect.***  The goal of any transaction is the closing, at least at the beginning: a willing and able buyer and seller in a real estate transaction.  As each contingency passes closing looks more likely to occur but like a basket ball game, the outcome can't be assured until the deed is recorded. 

Things that could go wrong (I'm sure this list will grow via comments):

1. Buyer won't accept something in the disclosure statement from the seller
2. Buyer won't accept documentation from the HOA as acceptable to them
3. The inspections preformed on the buyer's behalf (and most likely paid by the buyer) reveals issues that the buyer and seller cannot agree on repairs
4. The buyer simply changes their mind and walks away from the transaction
5. The buyer dies (there are specific performance requirements on the seller side- seek legal advice)
6. The buyer cannot finance the property for one reason or another
7. The bank will not finance the property because it cannot get a clean pest and dry rot report
8. The property is not insurable and therefore the lender will not finance
9. The lender changes its requirements during the transaction

Constructive additions to this list appreciated. 

The odds are if the power is out, you're not reading this now.  Either that our your laptop battery might well be preserved for something else.  Regardless, what happens when the power goes out?  For some, it's an excuse to cuddle up in front of the fire and light some candles.  For others, it can become a serious and expensive matter. 

For better or worse, we have a sump pump in the basement.  When we bought the house, the basement was unfinished and it would be fair to say that a river ran through it; entering in the southwest corner and exiting through the northeast corner.  The installation of the Water Guard system stopped the flow but a sump pump is required to pump the water out. I lost my spousal battle over the additional cost of a battery backup system if the power goes out.  She rightly points out, "when was the last time the power went out?"

Regardless, its caused at least a few minutes of lost sleep thinking about how much water it ejects during a storm.  No power means no pump and we'll get back to lake basement.  That's had me thinking about generators for awhile.  Starting at $200 for around 1500 watts,  I've found whole house systems on costco.com that break the $20,000 mark!  I've figured that my sump pump probably has a peak draw around 1200 watts and that if I want to power my freezer at the same time I probably need a 3000W machine that will cost between $400-$800.  I could easily spend more.  Onan's Guide to Home Preparedness (the link goes to costco) has a long list of appliances and their peak and running energy consumptions as well as an emergency kit list.  Appliances, such as pumps and compressors found in refridgerators and freezers, draw more power when they turn on than when they are running.