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January 2008 RMLS Market Action

RMLS reports that inventory skyrocketed in January: up to 12.8 months. That means that at the current rate of sales, the number of houses that are listed (13,904) would take 12.8 months to sell out (assuming no new listings were added). This is the highest level recorded, surpassing Jan. 2000’s 10.1 months.

Days on market are up considerably too yet average prices continue to climb, albeit slowly.

87 Comments on “January 2008 RMLS Market Action

  1. I’ve been waiting for this!

    Total sales volume 2008 = $372M
    Total sales volume 2007 = $515M
    Total sales volume is down $143M, or 27.7%.

    If the average commission is 6%, then $8,559,000 less than last year was paid in commissions (down 27.7%–in other words, 1 out of every 4 agents had no income as contrasted to last year where all 4 had income!!!)

    Jan 2008 over Jan 2007:
    New listings UP 11.9%
    Pending sales DOWN 34.3%
    Closed sales DOWN 31.9%
    Average price (textbook appreciation) UP 6.2%
    Median price UP 1.8%
    Average time on Market UP 27.7%

    Inventory in months continues to DOUBLE annually–how long will this/can this continue?

    The percent change in average sale price is 3.4X the change in median sale price. What happens as this adjusts back to unity?

  2. From:
    Some Cities Are Spared the Slide in Housing

    Real estate statistics must be interpreted with caution, especially when sales volumes are declining, as they are all over the country.

    The fly in the ointment for these cities is declining sales volumes, which prompt some experts to argue that median prices are presenting an unduly rosy picture. If fewer houses sell, but the ones that do sell are at the high end of the range, that can skew median prices.

    “In the markets that are doing better, lots of people are not selling their houses, so you don’t see the prices going down because they are not selling for a lower price,” said Todd Sinai, a real estate professor at the University of Pennsylvania. “The market is doing a lot worse than what the median prices would show.”

  3. JP, I want to thank you for the book you recommended here a while back, Mortgage Ripoffs etc. by Carolyn Warren. It’s very helpful.

    Charles, how far does RMLS recorded data go back?

  4. And just think, those numbers don’t even include the 1,000+ condos w/out rmls numbers assigned to them. And I am just talking about the ones already constructed. Add another 1,000 for those that will be completes w/in the year.

  5. RMLS 2008 statistics — version 15Q7

    Appreciation Inventory (months)
    Feb 1.5% 15
    March 1.3% 18
    April 1.1% 20
    May 0.7% 23
    June 0.5% 26
    July 0.5% 30
    August 0.5% 28
    Sept 0.5% 26
    Oct 0.5% 24
    Nov 0.5% 20
    Dec 0.5% 18

  6. “It’s your money, use it when you want.” That’s the tag line to J.G. Wentworth’s commercial about converting annuity payments into “a large lump sum.”

    Let’s take note that the average sale price increased 6.8%, but this is in a market with over 12 months of inventory and total sales volume is dropping like a rock. Some homes sell faster than others, but some take well over a year. It’s a funny thing that sellers all want to sell today for (at least) their asking price. At the same time I note that supply versus sales suggests a seller can expect that it will take six months or so to sell “at fair market value.” Assuming that positive textbook appreciation is representative of changes in fair market value, the longer a home is on the market for a static price, the cheaper it appears in time. As a seller, if you have an offer today in hand, even if it is “deeply discounted,” what is the best action?

    In any event, one could discount a “fair price” by 6.8% because of the length of time it takes to sell–thus average selling prices should come under great pressure soon.

    Naysayer-

    This market begs the question: What does positive appreciation mean as total sales volume approaches zero?

    My prediction for February 2008:

    Total sales volume will be about $425M
    The number of closed sales will be down about 30% over February 2007.

    Anonymous-

    Thanks for the feedback. My personal library is quite extensive, and Warren’s book is one that I recommend for anyone who seeks to take on home debt.

    Charles-

    1. What do you think about the health of the market?

    2. By the way, I had a friend who actually took my advice. Sun Tzu suggested that part of the war is getting the troops to take the right action. He asked for a pricing versus time chart. The agent suggested that the lower he priced the home, the faster it would sell. When the agent suggested reducing the price (I personally think the agent was too aggressive in pricing (i.e. “buying the listing”)), my friend pulled out the initial evaluation, and asked: Didn’t you suggest that I could get more if I were willing to wait while you find a great buyer? I would have loved to been there, but my friend suggested that the price should be going up, as more time has passed, but the agent suggested it should be price lower to sell. It was decided that they could no longer work together, so he listed the house with another agent for a lower price.

    I would have suggested he give you a call, but he is in a different market.

    I’d love to write an article titled: “Housing prices: A Markov process!”

    There is a big question as to whether or not I could show that present market values are independent of past prices. The analysis of financial markets and existing leverage would be key. I might be able to start with automobiles and generalize to include homes, with the right assumptions.

  7. Remember a few months back I predicted skyrocketing DOM stats come the start of the year?

    Hate to say told you so but….

    Next up is continuing declining sales as mortgage lending standards continue to tighten – and increasing foreclosure rates as more people decide to just walk.

    It’s easy to predict what’s coming down the pipe here – just look at San Diego or LA and figure out what was going on there 9 months ago.

    It’s the same roller-coaster caused by a rapid degrade in lending standards – now it’s payback time.

    Cash, no debt, and perfect credit will be king.

    Portland will drop 25-35% before this credit crunch is through.

    Ignore the RMLS stats that use the sliding 12 month window – just grab the realtime month over month and year over year from any of the tracking sites to get an idea of what’s really going on now.

    The data is the same data as it’s pulled directly from the MLS – it’s just not massaged by those with a vested interest.

  8. Agreed uncle Git. Prices will decline approximately 25-35% before the crunch is over. I am advising all of my clients to sell now if possible and rent for the next 12-24 months. Then buy at the bottom of the market. It will be a buyers market for the next several years.

  9. So Mr. Mortgage Broker, can you give us heads up about the credit crunch? What are the requirements these days, credit score above 700, 20% down? Seeing numerous lenders say ‘sorry’ to potential borrowers? Curious.

  10. Raw Inventory (count) went from approximately 12,700 in December 2007 to 13,900 in January 2008, or increased about 10%.

    Closed sales, on the other hand, went from 1496 (December 2007) to 1085 (January 2008), or a reduction of about 27%.

    Yet Inventory in Months went from 8.5 to 12.8 during the same period, or an increase of over 50%. Note how sensitive Inventory in Months is to closed sales. The reduction in closed sales is affecting inventory in months far more than the increase in total number of listings. In fact, the quantity of inventory was higher a few months ago, but the months of inventory was much lower.

    At the same time Charles has suggested that the quantity of real estate agents continues to grow.

    Charles- In light of these recent historic conditions, I applaud your ability to continue to grow your business. While the industry is experiencing a bloody contraction in total sales volume, your reporting an increase in activity. You are one exceptional agent!!! It must be that the strong are getting stronger.

    I stand firm in my recommendation that people avoid entering the real estate sales industry. Since the pie continues to shrink, I would suggest that some agents should exit the industry sooner rather than later.

  11. W/ the current state of the economy and the projected decline in prices why are folks buying now? Oblivious to the market and economy? Very stable jobs thus confident they can ride out the recession? Enough $ in the bank/assets that losing 10-20% value of their home in the short term is of no concern. Afraid they might not be able to access a mortgage 6 months from now w/ the tightening of standards? Are they low balling and getting accepted offers?

    Anyone wanna give their two cents?

  12. I am talking about Portland’s market and about folks who are purchasing NOW as we speak and w/in the next couple of months. Real life incidences, not scenerios.

  13. In August 2006 I wrote, “So
    you want to be a Realtor.”  The gist was a theme I have repeated at
    other times as well: the barriers to entry into real estate are too low and
    therefore the Realtor brand is diluted (400,000 licensed real estate agents did
    not sell a home in 2007).  I’ve also questioned designations.  I’ve
    got the Realtor alphabet soup of e-PRO and GRI, my MBA and a collection of
    awards and recognitions but honestly, except for the MBA does the customer have
    any reason to care?  Lawyers have to take continuing education too but they
    don’t keep adding letters after the name to prove they did it.  There are
    many real estate designations that aren’t recognized by NAR.  That’s not to
    say that formal education should be a requirement or that NAR is the all-knowing
    God of all things real estate.  I know a very successful agent who didn’t
    graduate college.  Experience has made up for that.  Some of the
    courses that NAR doesn’t recogize are excellent.  Should ALL newly licensed
    agents be considered rookies or probationary until a certain number of
    transactions have been closed?  Should existing agents be held to a
    standard to stay above a probationary status?

  14. barelee: there are still some folks out there who are oblivious. However their ranks are thinning with every home sold. Some of ’em bought into the “prices never go down in PDX” mantra. Still, the number of buyers is off something like 30% from last year.

    It’s not realistic to think that sales will go down all the way to 0 – there will still be some folks who can pay cash, for example.

    Prices are softening. Last week saw a listing for a house in the Brooklyn neighborhood (FSBO) where the the seller was said to be “motivated”. This is inner SE PDX. House had a lot of new stuff (roof, furnace, kitchen & bathroom updates). 2BR 2BA. Over 1200 sq ft. Asking price was $269. Kept lowering the price a few thou each day. I suspect it’s sold now; not sure what the price ended up at. Inner SE @ well under $300K – that seems like softening to me.

    As far as the guy in CA with the sunset goes: he obviously sounds like someone who is “set” – meaning he likely doesn’t have to worry about losing his job to keep up the mortgage payments. Most people aren’t in that position.

  15. barelee-

    What do I need to do, give you the name and address, phone number, DNA sample, and so on of a friend who sold his home in Washington to buy one south of the border so he didn’t have to cross the Columbia?

  16. I thought maybe some realtors would have some more concrete input. But I am guessing few realtors give an honest answer when a potential buyer asks about the state of Portland housing market, might scare them off.

    Anyway, here’s an example of what I am eluding to. I just noticed that a house in my old ‘hood just sold for 40-60K OVER comps (and still needs a new kitchen). Not that unique of a house, below average location, no off street parking. Original asking price $525K (!!!), de-listed and re-listed at $499, then dropped to $475 and sold for just under that, yet way over comps. Just amazed at why it went for so much! So was the guy psyched because he got it for $50K under original asking price and his realtor didn’t tell him it was 40-60K over the comps for the ‘hood?!?!

    So a thousand houses sold in Jan 08, did they all move over from WA to avoid the commute?!

    TiP, I think you are right on. I was just hoping to hear from folks who have represented buyers in the past few months.

  17. I have been seeing open houses since two months ago. Since I don’t have realtor representing me, almost every agent I met at the open house are trying to get me “hooked” up. They all say “now it is the best time to buy”. I bet they will keep saying this while the house price and closed sale numbers keep dropping.

    I still remember that at the very first open house, I asked the agent “what do you think of the market”. She said “Oh, it is very strong, Oregon keeps appreciating”. Two months later, I just found yesterday that her listing has reduced the price from $320k to 300K….

  18. bearlee-

    One of the assumptions that I make when analyzing markets is that all buyers have a different reason to purchase. In other words, the buyers are “mutually independent.” (A rigorous definition of this is that the Probability of the finite intersection is equal to the product of of the probability of the individual events. i.e. the so-called “multiplication rule” holds.) If the buyers are not mutually independent, we will run into a whole host of problems.

    Is this assumption realistic? For many situations it is. In the specific example you provided, who really knows, even if the buyer gave what he thought was “full disclosure” how the buyer valued the home. Some people value red houses more than white houses, but others like pink houses, and on and on it goes.

    While I assume that each buyer uses a different method of pricing, if there were two buyers who used a similar method, such as color or comps, then I would also further assume that people use a different set of values for the color or “comps.” In other words, even if the two of us were going to use historic sales, we might value the historic sales differently. (For example, I might place more value on bathrooms, or possibly a fireplace, and so on.)

    If, on the other extreme, we assume that all buyers behave the same, then you can explain why each buyer purchases, but since you cannot explain one purchase, we know that not all home buyers act the same (we may, however, have pairwise independence that are not mutually independent).

    To be honest, I was just thinking about buying a book on this topic.

    R.M. Dudley. Real Analysis and Probability. Cambridge University Press, 2002, 555 pp.

    The book is geared toward developing measure theory that is needed for the foundations of probability. I will probably spend a month or two with the book.

    In summary, I would suggest that every buyer had his or her own reason for buying (the real estate market has a very finite number of buyers, and I assume a infinite set of reasons–more reasons than people, and each reason is mutually independent of all other reasons). I cannot guess what a buyer’s reasoning is, and even if I am told the basic theory, I question whether the buyer is telling a falsehood.

    I am not sure why it takes “more concrete input?” Also let me remind you that honesty is a measure of what the person believes to be true. Not only do you need to prove that the information is wrong, but you also need to prove that it was given to deceive. If I believe something to be true, then my honesty cannot be questioned–you don’t lie when you unknowingly give wrong information, you are just plain wrong. In other words, an agent could be honest when he says he thinks the market will go up, even if it turns out he was just plain wrong.

    By the way, one time I went to an automobile auction, and I began to wonder if the trunks were filled with gold ingots. I sure didn’t notice the gold bars, but every buyer sees things a little different…

  19. heth-

    1. Don’t confuse Alpha with appreciation.
    2. Don’t confuse trying to sell at a maximum price with trying to buy at a minimum price.

  20. barelee-

    We already discussed this extensively:

    In particular:

    “I have a friend who purchased a home with an ocean view in California. The purchase price was over $1M. He suggested the home would probably go down in value by about $200,000 in the next two years (over 10% but less than 20%). That reduction in value was his own estimate.

    Did it stop him? NO! Did he buy to “make money?” NO! One might ask about why he decided to buy. In one sentence he said, “Every morning I wake up to an ocean view, and every night I see the sun set over the ocean.” In other words, he is happy to view the ocean, even if the property is going down in value by ~$250 per day.”

    UPDATE: Yes, his home has gone down in value, but he continues to enjoy it.

  21. I thought maybe some realtors would have some more concrete input. I’m actually relieved that Realtors aren’t commenting on why thier buyers are buying. I don’t think any public fourm is a place to discuss a client’s personal motivations. On the otherhand, if a buyer wants to speak up, please do!

  22. This is kind of funny. Just a few years ago I heard people saying that they were buying because it was a great investment (prices only go up!) or because they were worried about being priced out. Funny how I don’t hear those ideas floating around any more.

    Now we buy because we want a roof over our heads!?!?!

    PS JP, something tells me you excelled in critical thinking/logic classes in college:O)

    So Charles, what do you tell your potential buyers when they ask about the state of our local housing market?

  23. So Charles, what do you tell your potential buyers when they ask about the state of our local housing market?

    None of us has a crystal ball. If everyone was able to buy low and sell high, there would be no market. Everyone has their own reasons for buying or not buying at any given time. Today might be right for you, next week might not.

    I don’t see the local market dropping 20+ percent. Some do. Their opinions are just like mine: opinions. Real estate, until recently, was never viewed as a short-term liquid investment. If you know where the bottom of the market is, wait!

    If you look at the market, what is your tolerance for risk? If the market does drop, can you handle that? There are a lot of indicators, some of them good and some of them bad. Real estate is an investment and there are risks attached to investments. Do you trust your advisers? If not, find new ones.

    I have no problem telling you not to buy now if what you tell me points in that direction. I’d rather hand keys to a happy client three years from now who starts referring clients to me than selling a house today to the same person who given their situation should probably wait and will ultimately be unhappy with the purchase.

  24. Great answer. In my little crystal ball I see that Charles is going to do well during this slow down and excel when things pick up. So many realtors now are just trying to survive till the summer. You can tell by all the BS one reads on CL and mls descriptions. You can gauge who the novices/unprofessional are.

  25. This is in response to “bearlee” who wanted to hear from a potential buyer’s perspective. I’m not an agent and know very little about market trends or anything. My wife and I are just trying to buy our first home, and despite the “buyer’s market” it’s been really difficult. We can only afford 3% down, so we are trying an FHA 30-yr fixed. We’ve already had two offers rejected outright just because of the type of loan we are using, and been outbid the other 2 offers we’ve made. Nice starter homes that are reasonably priced in a decent neighborhood are being snapped up very quickly and still prompting multiple bids. We’ve also seen many houses that have been sitting for months, but they were not at all what we’re looking for, so there’s a reason for that. I guess my point is, if people are getting afraid to buy at current prices, I sure haven’t seen it. Maybe it’s different at the level we’re looking at? I’d be interested to see any comments from agents or people with experience with this madness! My wife and I are completely frustrated.

  26. I emailed Jason to ask if he was under contract with another agent. His reply came back that he is “working” with another agent so even though it doesn’t sound like there is a binding written contract, I am going to respect that relationship and not comment.

  27. Jason,

    What level (price range) are you looking and do you know who outbid you? Specifically what is their state of orgin (e.g. WA, CA, OR)?

  28. Charles –
    No we don’t have a written contract with our agent but we have a good relationship and I respect your inability to comment.

    PDX Renter –
    225k-275k, and as far as I know there is no way to know who outbid us or where they are coming from, at least until the sale is final, and we haven’t followed up on them. I suppose that would be interesting to find out.

  29. We can only afford 3% down

    My prediction: upside down by the house warming party.

  30. Note: 3% of 300,000 is less than $10,000, which is less than $5,000 per person. Based on current selling prices, a “225k-275k” home is in the second quartile.

    se_renter-

    “‘We can only afford 3% down’
    My prediction: upside down by the house warming party.”

    With only 3% down, or less than $10k, upside down will start at the moment the loan is made. (This ties directly to the short sale discussion) The bigger question is how many months or years would it take before the then current market value will exceed the principal on the loan by the transactional cost. (i.e. how long will it take before the place can be sold such that the seller, jason, receives no cash but the sale is not considered short)

  31. My question to potential buyers like Jason is why buy now w/ 1) shaky economy: can you afford house payments if one of you is to lose a job during this recession 2) with falling prices how comfortable are you being really upside down like by 20-50K, say you were forced to sell because of job loss or illness 3) if you get in over your head, ie, take a loan out for more than 4X your income, how will be able to afford repairs, ie, roof, H2O heater, furnace, etc 4) do you plan on having kids? can you afford an additional $1000/month in childcare w/ a large house payment. 5)Ever wanna take a vacation without going into debt? 6) when you go to sell, do you know that you will pay 4-7% of the sales price to realtor fees?

    I don’t mean to sound like a party pooper but a lot of this is from personal experience. Granted you maybe be lucky and never suffer a layoff and maybe you have relatives provide free child care. I just think folks need to be cautious and understand this enormous purchase/responsibility of a home especially in unstable times like these.

    Foreclosures and short sales are increasing each month, do potential buyers understand how this affects prices? Look at Charles’ post today re: short sales and the comments

    So Jason, why do you want to buy a home now?

  32. 3% down is far too little to put down on a home in the current economic environment. Wait until you have at least 10%, preferably 20%. Otherwise you pay tens or even hundreds of thousands more in interest over the life of the loan – which, guess what, is all front-loaded. That’s right, whatever interest the bank is going to collect on your loan, they set it up so they collect it first and you pay off your principle later.

    Rent at least six more months, put your money in high interest savings, and save yourself a lot of money in the long run.

  33. Bearlee again, when we purchased our first home in 1999 we used a VA loan, zero down and even financed our loan fees! (Back then the term “upside down” wasn’t spoke of) The market was way different back then. We couldn’t save faster than what the market was appreciating. We road a BIG wave for 8 years and cashed out at the peak last winter. Home prices are not appreciating, do not let stats fool you. Those who outbid you are fools. Just wait. Not sure what neighborhood you are looking at but Oregon Center for Public Policy just posted stats for types of loans taken out in the past few years. Although folks with subprime loans are most likely to default, foreclosures and short sales seem to be affecting everyone. If you are looking in the St John’s area you will most likely see prices drop 20-40% given the large volume of subprime loans. Check out the blog http://www.portlandhousing.blogspot.com/ He had a recent post titled “One in Ten Subprime Loans Already Past Due” you will see the charts published by OCPP on the link. Be patient, you do have an advantage of being able to use FHA loan. Soon buyers will be required to put down at least 10% which will throw a lot of buyers out of the market and will bring down prices.

    And remember, your realtor may not have your best interests at heart. He/she is in for a slow year. Our home inspector in 1999 joked that our realtor seemed anxious to make our sale go through, he thought maybe she had a car payment coming due on her new BMW!

  34. JP- This is why I would make a crappy realtor. I would let my values get in the way and talk most folks out of buying at all or from buying too expensive of a home. I value family time, vacations, retirement funds and rainy day funds and right now a mortgage doesn’t fit into the picture with most people’s wages.

  35. bearlee-

    Finally, I have an idea of how to analyze what a person means by “being priced out of the market.” I note that you suggested that you, “couldn’t save faster than what the market was appreciating.”

    I avoid a mathematical solution, and I will offer this (concrete?) example:

    Imagine that saving for a house is similar to canoing up a river–it’s a lot of work, but as long as the current is calm, a lot of ground is being made with each stroke. However when the rains come and the current kicks into high gear (say 20% per year), it may be impossible to keep up with the current, given you only have so much effort to put forth (savings). The idea, therefore, is to reach your destination (down payment) before the rain falls (rapid appreciation).

    Again, I avoided using differential equations, but this would be a piece of cake with such. YUM!

  36. Great analogy, JP.

    One last thing for Jason to think about. Say your mortgage is for $250K at 6%, throw in taxes, insurance and utilities and you are looking at $2K/month. Do you and your spouse bring home more than $4k/month, at least? Some folks get in over their heads and justify by saying that paying a mortgage is forced savings…well, if you can’t afford it then you start charging gas, groceries, car repairs, etc on you credit cards. So what are you saving?

    I do wish you well on your house hunt. You just need to be patient and save for a few more months and get a better idea of what our market is doing. You may even have a better selection next year at lower prices!

  37. bearlee, JP, et al –

    Thanks for your responses! To briefly answer your questions, yes we can afford up to 2k monthly payments, and we both have steady professional jobs that should weather a recession. Does that mean we want to pay 2k a month for our house? No, we like having lives too, but I just thought we didn’t really have a choice in Portland. Right now we have a great apartment in one of the best neighborhoods in PDX for less than half that, but I guess we convinced ourselves “if not now, when?”. Believe me, we’re not the type of people to make rash financial decisions, and we’ve been agonizing over this for several months.

    I am not convinced that prices for starter homes will fall 20% though. You really think a 250k house will drop to 200k this year? The competition we’ve experienced tells me no way that will happen, but there’s a good chance I don’t know what I’m talking about. I can see higher priced homes and suburban tract homes coming down, because there is a glut, but nice (affordable) old portland bungalows in good neighborhoods are REALLY hard to come by. Especially if people keep moving here from out of state.

    We may take your advice and save aggressively, but it’ll take a long time to put 25k in the bank. There’s no such thing as a high-interest savings account as far as I know. I also have to convince my wife she’ll have to wait a little longer to get a dog 🙂

    Again I really appreciate your comments! We are not making this decision lightly.

  38. jason-

    “I am not convinced that prices for starter homes will fall 20% though. You really think a 250k house will drop to 200k this year?”

    I think 20% “this year” is a bit too aggressive. How about 20% over the next two to three years? Of course when I speak of 20% over the next two to three years, I am not looking at specific properties. In any down market there are individual properties that perform very well, and similarly, in an up market there are properties that don’t perform so well.

    “I also have to convince my wife she’ll have to wait a little longer to get a dog :)”

    Ultimately, isn’t this what it’s all about? While there are financial constraints and considerations, it’s not really a financial decision…

    bearlee-

    Given the market conditions you spoke about, if you would have asked me, I would have suggested appropriate investments. For example I might have suggested a REIT (Real Estate Investment Trust) for your down payment. If the real estate market goes up, then the right REIT would also realize the gain. Please don’t just select any REIT–do your homework, and check out the investment manager. I would have suggested this for two reasons: 1. It’s real estate money anyway, and 2. You consider the real estate market to be a good investment.

    Note how REITs relate to the other discussion about how the real estate market can be treated as a commodity.

  39. Jason is right about finding affordable bungalows right now. In my neck of the woods I am seeing prices on bungalows still going up in price. I am in a neighborhood that was down in the heels about 5 years ago and has been going up in value quite a lot over the last few years. I purchased my bungalow about 4 years ago for $157,00. I was interested in selling it a couple of months ago and was astonished after some research that it is worth about $270.000. It is a 3 bedroom 1 bath still intact and cute with hardwoods, built-ins, fireplace and two garages. I have been tracking homes like mine in my neighborhood and every time one in good shape hits RMLS it sells in just a couple of days. I have a friend of mine that is looking for the same house as Jason. She and her husband have been looking since Oct 2007. She said any cute bungalow under $350.000 gets sold with mulit bids on it in two days. She moved here from Hawaii and said the housing market for bungalows is crazy. My observation is Portlanders have a thing for antique houses. I know a bungalow is what I wanted when I purchased mine. These old houses always sell for a premium. Portland has a good stock of bungalows and is known as “The Bungalow Nation” because of that. Bottom line is a lot of people still want to own a bungalow. I am amazed this is happening with prices still going up. Three years ago you could of bought a huge bungalow in my neighborhood for $170.000. Now it is more like $270 to $350K.

  40. Meathead- what neighborhood do you live in? I am curious about tracking sales, foreclosures, etc over the next few years and would like to add you neighborhood to my list. Thanks a lot- bearlee

  41. “There’s no such thing as a high-interest savings account as far as I know.”

    *blink*

  42. Sometimes I wonder about people.

    Let’s start here: “She said any cute bungalow under $350.000 gets sold with mulit bids on it in two days.”

    If I own “any cute bungalow,” then it is clearly worth $350,000, or more. I wonder why so many people are pricing for such quick sales. In other words, why don’t these properties get listed at an better price for the seller?

    At the same time, from the same person, I read: “I was interested in selling it [a bungalow] a couple of months ago and was astonished after some research that it is worth about $270.000.”

    It must be that the different between the minimum price between a cute bungalow and a bungalow is about $80,000. While I don’t have specific data, it seems like $80,000 would go a long way to make a $270,000 bungalow cute…

    ?

  43. Jason,

    We’re in the same boat and know what you’re going through. As new parents the nesting instinct is strong, and as a fan of old houses (the more run down the better!) Portland is like Candyland. When the market was going up 10-20% per year it did make sense to jump in as prices were going up faster than incomes.

    Are you saving the difference between your current rent and your expected mortgage? If not, why not? We’ve made some tough choices to save up, selling one car, we bought a used TV when we moved here, we buy used toys for the kid, etc.

    Well priced houses will sell in any market, but patience will pay off. Even during the boom I know of one co-worker who got 20% off asking for their fixer bungalow.

    Median prices aren’t going anywhere but down, keep an eye on Charles’ blog, portlandhousing or my blog for more market and pricing updates. http://portlandrealestateoutsider.blogspot.com/

    Good luck, I recommend waiting, you’ll find something if you’re patient.

  44. Some more details,

    I have a medium sized (cute) 3 bedroom bungalow. The value right now is around $270K in my neighborhood. In another neighborhood the house would be worth about $350K(or more). My house is cute but in a less desirable neighborhood than say Hawthorne or South Tabor, henceforth the value difference in my post. My friend can afford to purchase in a more desirable neighborhood than I can. In my neighborhood you can find two bedroom bungalows for $200 to 220K three bedrooms for $270K and big 4 plus bungalows for $300K on up.

    The term bungalow does not denote the size of the house, I am just commenting on my own personal observations and a friend that is having the same problems purchasing a home as Jason, Her requirements being the house is a “bungalow”, in a good neighborhood and unremuddled. She offered to purchase my house, but after much thought I decided not to sell it after all. I figure I don’t want to go through the hassle of moving again.

    Since buying this house I have followed several housing blogs daily as well as RMLS. I am shocked at how housing prices have gone sky high in Portland since I have purchased my home.

    Something I have noticed is how antique houses seem to be the premium house to own. I now understand about period remodels versus the bad remuddling of old houses and how that affects value. Think of a 1970’s kitchen and bathroom remodel on a 1915 house and then add orange shag carpeting to each room. A house in this condition has potential but is not cute nor will it go for a good price. The kitchen and bath would need to be brought back to period and the carpeting would have to go. The hardwoods would need to probably be refinished. Then it would be a “cute bungalow” again and get top dollar. (Also provided it has a good foundation, roof and heating system.) If the house needs any of the above it is not in top condition and will not sell well.

    I live in the Mt Scott/Arlta neighborhood and have lived in Portland for about 30 years. 26 years of that as a renter. I remember thinking many years ago “The price of houses won’t go over 100K in Portland”. Boy was I wrong.

    Good luck Jason, in the house hunt. I must of looked at over 50 houses before I found my home.

    My advise is, you are purchasing a house to live in, not an “investment”. My goal is to pay off my house by the time I retire, if I can accomplish that goal. all is good.

    Peace

  45. Meathead said “My advise is, you are purchasing a house to live in, not an “investment”. My goal is to pay off my house by the time I retire, if I can accomplish that goal. all is good.

    Peace”

    Coulnd’t have put it better myself, and paying it off even faster is my goal.

  46. All this talk about appreciation is silly. We are near the peak in PDX appreciation. But with inventory at 13 months (and it will get much worse) there is only one way prices can go.

    The restaurant indicator is flashing red. According to the “O” restaurant closings exceeded openings. A very bad sign.

    [i]paying it off even faster is my goal[/i]

    Why in the world would you want to pay off your mortgage faster? Especially at ridiculously low rates?

    This type of logic only works if you view your house as an “involuntary” savings program. Over the long-term, residential real estate has been a worse investment than bonds, general stock indices (assuming dac), or REITS.

  47. “Oh, I don’t know – to save tens or hundreds of thousands of dollars in interest you’d be paying over 30 years instead?”

    What’s the time value of money using this philosophy?

  48. Not hundreds of thousands of dollars. The number one lesson in financial success is pay down debts. True, if you bought a home beyond your means and you’re paying half your monthly income as your mortgage payment – it’s in your best interest to build up an emergency six month savings rather than pay $500 more to your mortgage. But that’s assuming a bad purchase decision in the first place.

  49. ne_renter-

    My philosophy: Never pay down cheap debt.

    Yes, I have some debt that the cost is below 5%, and no, unless market conditions change I am not paying it off one day early. Yes, my liquidity is helped. I am sure the lender would kiss my feet for paying the debt off–not to worry, you won’t be seeing my feet kissed.

    If I could borrow $1,000,000 at 1%, I’d do it! That’s notwithstanding that I’d be paying “an extra” $10,000 in interest each year… It’s a bargain at twice the price!

    In summary: Pay off high rate debt, but keep cheap debt.

  50. I agree with JP. There is “good” debt and “bad” debt. Our student loan debt is “good” debt and we just pay what we have to. Any other debt gets paid off at the highest rate first.

  51. This talk of amortization reminds me of the day I got the ‘receipt’/tax info after about 6 months of making house payments. I only paid down maybe $500 on the principle over $6000 in interest! Very painful for a new home owner:O(

    This is like a big gift to the banking industry. Folks should keep this in mind when refi-ing. I have met people who have refi-ed 5x over the past 5 years paying around 3-5K each time just to get a lower interest rate! Doesn’t make economical sense to me.

  52. se_renter said: “Why in the world would you want to pay off your mortgage faster? Especially at ridiculously low rates?”

    because theoretically i know that the stock market earns 10% over time, it just hasn’t done it reliably recently. so i’d rather pay down debt, so i won’t be still paying off a house in 30 years.

    i’m not the typical amurikan… i don’t have any credit card debt, i don’t have car loans and never will, my only debt is student loans at 2.25%. so a 6% mortgage would be my most expensive debt, and i don’t consider it especially cheap.

  53. Charles, the 15 vs. 30 year is exactly why I advocate paying off a mortgage sooner than later. Sounds like we agree.

    JP, very few people have a mortgage under 5%.

    I agree with PDXOutsider.

  54. I am a fan of leveraging other people’s money. I would pay off my bad debt, but have no problem with mortgage debt. I’ve never touched an ARM loan. One of the finance books says “always get a 15 year mortgage but don’t.” What is says is get a 30 year mortgage and treat it as a 15. Pay at the 15 year rate but if you have a bad month or stretch, you can ratchet down to the 30 year payment and remain current.

  55. NPV? I am a nurse not an accountant. I will have to google that one unless you want to explain it in layman’s terms?

  56. Why in the world would you want to pay off your mortgage faster?

    Oh, I don’t know – to save tens or hundreds of thousands of dollars in interest you’d be paying over 30 years instead?

    Jason – if you’ve never heard of high interest savings and you have only 3% of a down payment, I’d look into how to make and save more money FIRST before you go into a house buying decision.

  57. bearlee-

    Give me a few days to think about how to ‘properly’ present this…

  58. Thanks a lot JP. A know at least a few other folks will benefit from your knowledge sharing, also. I think I can say most folks ‘in real estate’ aka home owners don’t have your background.

  59. Jp, I’m not familiar with time value of money, sorry. The only way I go into debt is if I’m getting a higher return. Your 1 million example, if I were to get a 4% return, would be worth it. Such opportunities are few, though.

    I’d never, ever pay interest to finance a vehicle, for example.

    I am a fan of leveraging other people’s money. I would pay off my bad debt, but have no problem with mortgage debt.

    I’m guessing as someone who is flipping properties you expect to have the loan paid off well before 15 or 30 years is up. Many view what you are doing as risky. But with a mortgage you do expect to pay off,

    One of the finance books says “always get a 15 year mortgage but don’t.” What is says is get a 30 year mortgage and treat it as a 15. Pay at the 15 year rate but if you have a bad month or stretch, you can ratchet down to the 30 year payment and remain current.

    That sounds nice, but the rate for a 15 year loan is lower than for a 30 year – the payments end up almost negligently different, and you are saving whopping amounts of interest. Don’t buy above your means and you’ll be able to easily cover low months. I would have to have a six month bad stretch before it would even begin to affect my stress level about making my monthly payment.

    People want to lend to you because they want to make money off you. They want you to take too long to pay it back. Always remember the odds are stacked against you.

  60. ne_renter-

    “The only way I go into debt is if I’m getting a higher return.”

    Isn’t this how it is with everyone? Why would someone pay more than something is worth?

    The time value of money is about person preference to consume today. For example if I want a new television today, then I might desire to delay paying my home debt down until the future. If my desire to consume is large enough, then what you consider to be high-rate debt is considered to be low rate debt to the debtor. Is there anything wrong with a longer duration mortgage to have a few extra bucks to spend with the kids?

    We all have different goals and objectives, and if living in a “family neighborhood” today is placed over future financial success, then what’s wrong with that? Note how the satisfaction of living in a given neighborhood is valued greater than the financial cost. Just like some people like and value red cars more than blue cars… What’s wrong with that?

    I’ll leave it here: There are many satisfied families who happily pay interest today, that you may consider to be too high, to enjoy the use of a property they consider home.

  61. Ne_renter,

    If a bank is idiotic enough to provide me with a loan at 5.5% I will pay it off as slowly as possible. Are you famliar with the concept of arbitrage?

    It took me 15 years to pay off my student loans at 2.5%. I used my student loans to pay for living expenses and used my grad school stipend to invest. This was the smartest financial decision I ever made!

    “The only way I go into debt is if I’m getting a higher return.”

    I also always pay cash for cars (depreciating assets). I personally will never buy a home unless I am virtually certain it will appreciate over the next 5-10 years. IMO, the only reason to buy a home *now* is for non-financial quality of life issues.

    – – – – – – – – – –

    PDXOutsider,
    “so i won’t be still paying off a house in 30 years.”

    Most home-owners “sell” in 5-10 years.

    Higher rates of return are not theoretical. Even a 2.5% 2 year Tbill would still have a higher rate of return than PDX housing (currently appreciating at 1.3%). TIPS US tbills have been appreciating at 10-15% for well over a year. Paying off a mortgage faster than is necessary *only* makes sense if it is an involuntary savings program. Historically, any diversified investment strategy beats the pants off of paying down a mortgage.

  62. The time value of money is about person preference to consume today. For example if I want a new television today, then I might desire to delay paying my home debt down until the future. If my desire to consume is large enough, then what you consider to be high-rate debt is considered to be low rate debt to the debtor. Is there anything wrong with a longer duration mortgage to have a few extra bucks to spend with the kids?

    This is a pro-consumerist stance I don’t subscribe to. If you have to choose between a television and making a mortgage payment at a 15 year rate and can’t comfortably accomodate both in the same month, then you are living beyond your means. The guaranteed path to financial wellbeing is living beneath your means and saving.

    This caused me to look up the price for 42″ plasma televisions, the kind I currently have, and they’re only a thousand dollars these days. I could easily fit such a purchase in precisely because I don’t buy things unless they can comfortably be afforded with no disruption.

    If a bank is idiotic enough to provide me with a loan at 5.5% I will pay it off as slowly as possible. Are you famliar with the concept of arbitrage?

    It took me 15 years to pay off my student loans at 2.5%. I used my student loans to pay for living expenses and used my grad school stipend to invest. This was the smartest financial decision I ever made!

    I don’t see how anything you wrote is anything different than what I believe. Presumably everything you used loans made to you for got you a greater rate of return than the interest you were paying.

  63. Upon rereading my comment looks namedroppy around the 42″ plasma part. It’s only to demonstrate I’m not living in a shack miserly scrimping every dime while viewing tv on a 13″ black and white. I live in a nice neighborhood and the things we do choose to buy are quality. We are also very comfortable because we have the security of not worrying about money. I also don’t have a high income. I just don’t make a lot of purchase decisions many Americans do.

    For financial tomes, The Millionaire Next Door mostly explains my way of thinking, but without living in a blue collar neighborhood with a blue collar lifestyle, if that makes sense.

  64. ne_renter-

    I have read The Millionaire Next Door, and I think it is an excellent book. Stanley lays out what he believe the actions and thoughts of those who accumulate wealth, versus those who get hung up on what I will call the appearance of “Keeping up with the Joneses.” Stanley concentrates on eliminating poor expenses, and then problems with interest should sort itself out.

    On the other hand Dave Ramsey chants “zero debt” at all cost. Ramsey chants to the point of attempting to restrict goals and ambitions in favor of a very, very low risk financial life. Since he does not recognize that there is good debt, I disagree with his philosophy. He does, however, add a heavy element of Christianity to his chantings, and see my other post about how all loans should be made interest fee (Exodus 22:24).

    Kiyosaki with his Rich Dad, Poor Dad outlines how his father attempted to provide the good things in life by working more and trying to take advantage of the mortgage tax deduction, while the father down the street arranged his finances much differently. I am a big fan of Kiyosaki’s book titled, Cashflow Quadrant: Rich Dad’s Guide to Financial Freedom.

    I think I would be remiss if I didn’t include an author with bearlee in mind.

    bearlee-

    An author that I recommend for you (as always, check the books out at the library) is Nassim Nicholas Taleb. Specifically the following two books: 1. ” The Black Swan: The Impact of the Highly Improbable,” and 2. “Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets.”

    One of the questions Taleb answers is what is worse: Losing $100 ten times, or $1,000 one time?

    Also,

    As I continue to ponder the interest situation, I realized I made an assumption about lending. There are “sum of the years digits” or “Rule of 78” loans where prepayment of the loan results in a much higher interest rate paid. SINCE RULE OF 78 /SOYD LOANS ARE BAD FOR THE BORROWER, RULE OF 78 LOANS/SOYD SHOULD GENERALLY BE AVOIDED. Fortunately such loans are generally prohibited in the mortgage industry.

    By the way, since you are a nurse, I will offer the following to ponder:

    Consider an arthroscopic surgery on a knee (think in terms of Trail Blazer Oden, for one concrete example, but there are many others). The surgery is an investment in the future, but it is at the expense of the present. There is little doubt that a person who undergoes the surgery is initially worse off after the surgery than before. Why would anyone undergo such surgery?

    The NET PRESENT VALUE (NPV) of the surgery must be positive. The net present value represents the sum of the discounted future value less the initial cost. If a person is very old, the ailment is not too serious or restrictive, or the surgery is very invasive, it does not make sense to have it done. Even if the ailment isn’t too serious and the surgery is very difficult, with a long recovery period, it could very well make sense to do it if you are young and can envision many years of perfect health after the recovery period.

    There is little difference between knees and financial markets (and my other examples)–the fundamentals are all the same.

    I hope using a medical example helps you better understand NPV. (This is constructed to avoid medical ethical issues, which is yet another topic, similar to the ethics in lending)

  65. To put it as succinctly as possible: The borrower is slave to the lender.

    Debt is slavery. Remember the old bumper sticker: “I owe, I owe so off to work I go”

    Much truth there. I don’t agree with Ramsey on everything, but I do think he’s got the antidote to a lot of our current economic problems: live a debt-free life. Our culture got enamored with crazy, insane levels of debt and all manner of leverage scheme and now that’s all blowing up in the faces of the “financial innovators”.

    Oh and google for: rich dad poor dad fraud
    and have a look at what comes up.

  66. hahah JP, I work at a teaching hospital…yes, sir, I understand that you are 89 years old but a knee replacement will do wonders for you final 2 years (if you are lucky), in fact, two will be twice as good, and my student here really needs a chance to perform one before his residency ends.

    But I get your point. Though I am perplexed by the book rec’ Black Swan. Do you think that I believe my financial situation pertains to everyone?!?! Because I do not, but I do know a lot of folks that can relate to it and I do know a lot of folks who have made really crappy house purchasing decisions, faaarrrr worse than mine. Just look at our mortgage crisis, and yes, it is a crisis.

    So what do you think about the guy who refi-ed 5x in a about 5 years?!?! Doesn’t it cost about 3-5K to refi each time? He didn’t pull any money out. He was advised by his financial ‘consultant’ that given the tax deduction for the interest on mortgage that it was well worth the expense.

  67. bearlee-

    You have made it clear that you expect prices to go down. While I do not disagree, there is always a chance that some event will happen that will suddenly change the direction or outlook. The same is true when dealing with future expectations, such as how long a person will live in a given residence. Taleb discusses such issues.

  68. And why I am so passionate about the current housing market is that if prices do not go down and folks continue to get in over their heads families, communities and the country will suffer. We all know the stats about financial stresses and divorce and now we are witnessing what happens when most of one’s $ goes to keeping a roof over one’s head: consumerism drops and the economy suffers. It’s a cascading effect.

    I recommend the books:

    Affluenza: The All-Consuming Epidemic
    by John De Graaf , David Wann, & Thomas H. Naylor

    Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence
    by Joe Dominguez & Vicki Robin

  69. Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence
    by Joe Dominguez & Vicki Robin

    I’ll second that one. One of the best financial/money books ever written.

    We all know the stats about financial stresses and divorce and now we are witnessing what happens when most of one’s $ goes to keeping a roof over one’s head: consumerism drops and the economy suffers. It’s a cascading effect.

    Yep. I’m surprised the retailers and restaurant folks aren’t out actively campaigning against the NAR drivel; they especially should be cheerleading for home price declines to save their industries.

  70. *Free MP3 Podcast*
    4:00 (four minutes) in length.

    Here is a very interesting perspective on the root cause of the repricing of risk in the mortgage industry:

    By:
    Robert Van Order
    Stephen M. Ross School of Business
    University of Michigan
    Phone: (734) 647-4606
    E-Mail: rvo@umich.edu

    http://www.ns.umich.edu/htdocs/trackclicks/clicktracker.php?pid=1378

    In summary, Van Order suggests that the current situation was precipitated by borrowers who never made a single payment toward their mortgage. Van Order suggests that historically not making a single payment is very uncommon. This caused lenders and investors to reprice risk, which set the stage for our current situation…

    Key is that Van Order claims that rate adjustments of ARM mortgages were not the precipitating culprit.

  71. Thank you for the book recommendations JP. I will check out Kyosaki’s other book – I’ve only read Rich Dad, Poor Dad, found it interesting but not really a financial guide of any sort.

    Oh and google for: rich dad poor dad fraud
    and have a look at what comes up.

    Kiyosaki certainly misrepresented himself, no doubt not expecting the book to become the phenomenon it was. (Who would?) It has an allegorical tone, so I don’t see the hubbub. It’s helped a lot of people with absolutely no knowledge of personal finance to reassess themselves. It also contains some bad advice.

    One thing you may find interesting that comes up when googling “rich dad poor dad fraud”:

    http://tim.2wgroup.com/blog/archives/000210.html


    Home ownership: This is so basic even I know it! Kiyosaki claims his book will “challenge the belief that your house is an asset” and that “most people work all their lives paying for a home they will never own.” Reed responds: “With each payment, their equity increases. Many people pay off their mortgage in full before they die. Almost all thoroughly enjoy their home both during and after the mortgage.”

    John T. Reed comes across as wrong or half-right even more often than Kiyosaki does, but with a smug, assholish moral superiority bent. He’s insufferable.

    Another one from the same page:


    Real Estate: “In real estate, I can go out and in a day come up with four or five great potential deals.” Reed counters: “Using the ratio most favorable to Kiyosaki’s claim, 50 to 1, his boast means he looks at 200 to 250 properties a day. That’s about ten properties per hour or one property every six minutes if he does not sleep or eat.

    Hell, I can go out and find great potential deals all the time, in a single hourlong car ride or perusing the MLS. I don’t have a problem with the claim – this is ridiculous nitpicking.

    There are criticisms that are accurate, however.

    Affluenza: The All-Consuming Epidemic
    by John De Graaf , David Wann, & Thomas H. Naylor

    Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence
    by Joe Dominguez & Vicki Robin

    As someone who is not obsessed with keeping up with the Joneses, nor living a highly visible debt-financed lifestyle, neither of these books had anything to say to me. They are for people who haven’t learned the very basic lesson that money and material possessions don’t equal happiness.

    Following our upsurge in mortgage rates last week, I stumbled across this bit of info:

    http://www.bankrate.com/brm/updates/ybir/ybir_state.asp?prodInit=M&produid=388

    10 year mortgage rates remain unchanged, while also being the lowest priced product. The example they give in the release is $165,000 at average rate (5.35%) would be $1,778.44 a month for the life of the loan. That equals $213,412.80 total. That’s $48,412.80 you’re paying to borrow the money. This is quite cheap compared to 30 year mortgages, of course, where the projected interest outweighs the original size of the loan.

    Incidentally, as has been pointed out in various places, ARMs can be a good option if you have capital and financial good sense to sign to it.

  72. One more thing:

    And why I am so passionate about the current housing market is that if prices do not go down and folks continue to get in over their heads families, communities and the country will suffer. We all know the stats about financial stresses and divorce and now we are witnessing what happens when most of one’s $ goes to keeping a roof over one’s head: consumerism drops and the economy suffers. It’s a cascading effect.

    This is a great point, bearlee.

  73. And to make my point more personal for Charles near NW Trendythird and anyone else living in a neighborhood w/in walking distance to cafes, shops, and grocery stores…imagine your neighborhood w/ vacant/ paper over the windows retail space. And watch your property values drrrroooooooooppp!

    BTW, while driving up Lovejoy around 5pm tonight a rental sign caught my eye on 24th and Kearney so I circled around and happened upon a drug deal on that corner in broad daylight. This got me thinking about the potential for more shady activities when there is an increase in vacancies. Just like vacant homes, maintainance ceases and the hoodlums move in. Could NW 23rd ever return to the 70’s??? I sure hope not.

  74. ne_renter-

    If you are indifferent between today and tomorrow (i.e. no time value of money–GAAP accounting income is nearly always presented this way), then you’re correct in the presentation.

    That being said, you continue to ignore the time value of money. For example relative to a 10 year mortgage, you state, “That’s $48,412.80 you’re paying to borrow the money. … This is quite cheap compared to 30 year mortgages, of course, where the projected interest outweighs the original size of the loan.”

    As I pointed out, I would love to pay that $50k in interest, if the rate was one or two percent. You make it sound like all that interest is paid in present dollars. Future dollars must be discounted to the present value. If the discount rate is the same as the interest rate, then the NPV is zero. If the discount rate is greater than the cost of the loan, then the NPV is positive->don’t pay the debt off early. If the discount rate is less than the cost of the debt, then the NPV is negative, so pay it off as soon as possible.

    It is unrealistic to expect everyone to be indifferent between the future and present (just ask someone when they want to be paid, today or in five years, and I think you will find that most people want to be paid sooner, rather than later).

  75. It is unrealistic to expect everyone to be indifferent between the future and present (just ask someone when they want to be paid, today or in five years, and I think you will find that most people want to be paid sooner, rather than later).

    Of course it is unrealistic to expect everyone to. This is why people will forego massive quantities of cash to have a much smaller lump sum of Lottery winnings paid out today. This is why companies will buy out your timed payouts and give you cash today. There are many, many people who will give up greater future earnings to have their smaller cake today. I don’t have much regard for the financial intelligence of those people.

  76. ne_renter-

    “There are many, many people who will give up greater future earnings to have their smaller cake today. I don’t have much regard for the financial intelligence of those people.”

    I am happy to give you $1,000,000! I’ll send you $1 per year for the next 1,000,000 years. …Or would you rather have $10 right now today?

  77. JP, you’re reaching. I realize you’re a lender and therefore you make more money when people borrow for longer, therefore that is the angle you promote. But you know I’m right – try a realistic example and most lotto players will take the short cut, I’ll take the 25 years of payouts. But of course, I don’t buy lotto tickets.

    Do you work for these guys?

    http://www.stonestreet.com/

  78. And to make my point more personal for Charles near NW Trendythird and anyone else living in a neighborhood w/in walking distance to cafes, shops, and grocery stores…imagine your neighborhood w/ vacant/ paper over the windows retail space. And watch your property values drrrroooooooooppp!

    Any reason to stick the knife in and twist to see if it hits anything?

    The area around NW 23rd may have wicked property prices but also one of the highest concentrations of non-owner occupied (rentals) in the City. Drug/alcohol abuse is owner/renter/rich/poor specific. There are users amongst all demographics. I’m sure if a good client living in the ‘burbs needed a litle somethig something, there are only too many dealers that would be happy to deliver.

    But now we’re off topic.

  79. I could have just as easily given my old hood as an example: 28th and East Burnside. It is even more at risk for downfall. Plus, we have the ugly Plasma Center at 27th and Ankeny, luckily not in use as one but still there as a reminder.

    I visit the old hood frequently and often the shops and resturaunts are empty of patrons:O(

  80. So Charles, do you and the wife ever shop at Mothergoose or Mako for the little tot?

  81. Too funny, no wonder you are so optimistic about Portland’s market!

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