Portland Real Estate Blog

Case Shiller released their report for January today and I don’t think that it will be a surprise to anyone that the January 2009 Index dropped from December’s 158.5.  At 153.8, it’s about the same level reported in August of 2005.  The 20 city index is down 19% from January 2008.  Portland is down 14%.

Is that the bottom?  Maybe, maybe not.  RMLS reported lower inventory in February, it seem like lending is getting easier with lower rates, and the First Time Buyer Credit is now really a credit and not an interest free loan.  Weighing in heavily on the other side is unemployment, the uncertain fate of GM and Chrylser, war, etc.

This link was post on Realtor.org as a reposting of a Newsweek story: “Top Economists See Recovery Differently.”  Link added (1:30PM)

Here's some sales and market data for the 97214 zip code.

Keeping in mind that everyone’s situation is different and qualifications vary from buyer to buyer but if my understanding of the First Time Buyer Credit and FHA financing is correct, the government will pay qualified buyers to buy a qualified property.  A qualified buyer in this case is FHA approved, is considered a first time buyer by the IRS and meets their income requirements.  A qualified property meets the requirements for FHA financing (more on that below).  As always, verify your situation with an accountant and mortgage professional.

Assuming the purchase of a $200,000 property that qualifies for FHA financing with 3.5% down:  The qualified buyer puts down $7000 (plus closing costs, inspections etc).  IRS Form 5405 indicates that the property qualifies for the $8000 credit as it is the lesser amount of either that or 10% of the purchase price (note that Form 5405 also defines purchase price).  The simplified version indicates that the buyer is going to pocket $1000 after filing their taxes.  Realistically, closing costs and other fees will probably eat that up.  The buyer would net even more on a $100,000 purchase: $3500 down (plus costs) and the $8000 tax credit but Portland has a very limited number of properties at that price (though we did recently sell an FHA approved condo for $89,000.

The general rule is that FHA financing for a condo requires the condo to be on the list to qualify.  There are exceptions but they are few and far between but do exist.  The list of approved condos on the HUD website can be a little frustrating as it only returns results that 100% match your search.  The database is incomplete.  About 50% of the properties are listed without their zip code.  If you enter condos a certain zip code and the property in question was listed without a zip code, it won’t appear in your search.  If you search a condo name and your search does not match the way the name was inputted into the database, it will not return the property as a result.  You are more likely to find a subject property by searching just the city (127 results for Portland, OR) or the whole state (353 results).

As always: do your research, ask the appropriate questions and determine if now is the right time to buy for you.  This is not tax or legal advice.

The four graphs in this post are from our monthly Market Tracker report which is delivered to your email inbox monthly.  You can subscribe to up to ten zip codes by contacting us.  You can read our privacy policy on either the TurnerRealtors or PDXRelocations website- we do not share your information. Today's report is from 97209.  I'll alternate posting reports between the east and west sides of the River. 

In an economy where almost everyone is cutting back, local public school districts are no exception.  The Oregonian reported on Friday that Portland Public Schools has cut $9M from its $469M budget.  Most of the districts reported cuts of about 2%.  The effects of the cuts vary from school to school.  Portland is not cutting school days.

The Portland Public Schools website has a link that you can enter a property address to find which Portland schools your child will attend.

Portland Monthly published the 2007 Progress Report in December 2007 and the Oregon Department of Education’s Reports Cards (currently 2007-2008) are here.

We've swapped out all of our old neighborhood descriptions with new ones written especially for us and the PDXRelocations website.  There are 28 neighborhoods that can be accessed from the links on the left sidebar or via the interactive map.  We'll continue to add pictures (if you have good ones that represent a neighborhood, send them our way).

Each month when RMLS publishes their data in Market Action, it is broken into areas.  The areas are numbered using the same system that the Oregonian uses to separate their real estate classified ads.  I added the area numbers in the graphic above (click on it to enlarge) for clarification as often Realtor-speak simply refers to area by number or an area is described by name (where does West Portland end and Northwest Washington County begin?).  The graphic shows the median sales price for residential homes in the Portland report for February 2009.

All I can do is report the numbers.  Inventory numbers are lower but you can't definitively define why.  December's weather sucked, the holidays, economic uncertainty, what-have-you; all that was all reflected in January.  Now we still have economic uncertainty and what-have-you.     Closed sales and pending sales numbers are down from this time a year ago but both up since January (average sales price was up .4% and the median up 3.6%) .  New listings on the other hand are down from a month ago.  Click on the image above to enlarge it to a more readable version. 

While real estate may be "local" and I have been able to report in the past that at least one RMLS reporting are was in positive territory on a 12 month rolling average, that is no longer the case: all areas have dropped (in the range of -1.2 to -9.6%).

Disputes in real estate are nothing new.  Today it got taken to a violent level:

Police say the shooting was the result of a dispute over earnest money.

“Through the course of the investigation we found there was a dispute between
the victim and the suspect over earnest money. Of course, this is a realtor
office,” said Lt. Michael Belk.

Police say they first received a call from the office reporting an angry
customer. Soon afterward, they received a second call reporting the shooting.

Read the whole article here.

In a down economy the money has to come from somewhere.  One idea was taxing the 1031 Exchange which has traditionally been a nontaxable event on both state and federal taxes.  The bill would have made the Exchange a taxable event in Oregon.  The summary at the header of the bill reads:

Requires addition to taxable income for Oregon tax purposes of amounts attributable to like-kind exchanges and excluded from federal taxable income because of operation of certain federal law. Applies to tax years beginning on or after January 1, 2010.

1031 is a part of the federal tax code.  Wouldn't creating a state specific tax on it be akin to taxing a 401k (which also takes its name from federal tax code)?