In 2015, Amazon bought out Portland’s Elemental Technologies. At that point, the Portland Business Journal began speculations that the purchase could signal a much bigger Amazon presence in Portland in the coming years. They were talking potential Intel sized expansion with multiple campuses since Intel began with just one campus all those many years ago. There are few businesses with the financial capability to support multiple campuses, but Amazon is definitely one of those businesses.
There is no confirmation from Amazon yet, but apparently the word around town; according to Portland Business Journal reporter Malia Spencer is that Amazon is recruiting developers for a Portland office. Rumor has it that interviews will begin in July and positions could be filled as early as August this year.
What does a big Amazon presence in Portland mean for our housing market?
More jobs for those in the higher income levels means more competition for a housing market that can’t keep up with demand already. This generally signals that our housing prices will continue to rise. We’ll just have to watch to see how this all pans out this summer and beyond.
I know, this sounds like a “tree hugger” article waiting to happen. Well, it is, and it’s not.
If you’re not familiar with Friends of Trees, please allow me to introduce this great non-profit organization whose only mission is to bring people together to plant and care for city trees and green spaces in Pacific Northwest communities; including trees for your own property.
Through their Neighborhood Trees program, homeowners buy trees at a great discount to plant with their neighbors at weekend plantings. For $35-$75, you’ll receive a healthy 8-12′ tree, delivery, hole digging, planting assistance, mulch, stakes, and follow-up maintenance checks: a $200 value! They also offer scholarships to people who can’t afford a tree, and if you need a permit to plant trees in your mowing strip, they’ll even help you with the permitting process (which is free).
Through the Green Space Program, trained crew leaders guide volunteers at weekend events to restore green spaces.
Since Friends of Trees was founded by Richard Seidman in 1989, they have planted nearly half a million trees and native plants in the Portland – Vancouver and Eugene-Springfield metro areas. This year they have also expanded into the Salem metro area as well.
Street trees add value to every house in your neighborhood
IF you’ve been thinking about planting a fruit tree in your yard, or a towering Douglas Fir (Oregon’s state tree), Friends of Trees is currently giving away several fruit tree varieties and lots of evergreen trees too. They can even tell you which trees would be best for your mowing strip, if you’d like to get your neighborhood involved in planting great street trees that will not only look great, but will also increase the value of every home in your neighborhood by as much as 8-10%. Sure property values are soaring around here anyway, but who wouldn’t like to see their property value increase another 8-10% as these trees grow and create that inviting ambiance so many of us are drawn to when we drive down tree lined streets.
OR – you might share your hammock with a bear?
More benefits of planting trees in your front and back yards
Trees help clean the air of pollutants.
Trees provide shade during the hottest weather which will lower your utility bills.
Trees make a great hammock support. Why not plant 2 trees at hammock distance apart in your yard? Can you picture yourself sitting back on a hot day, under the shade of your trees, reading a book, drinking an Oregon craft beer or one of our local wines, and just relaxing? Does it get any better than this?
And in case you missed it, trees add value to your home.
If you’re looking for an opportunity to give back to the community, Friends of Trees is always looking for volunteers. You can find more information about volunteer opportunities and needs by visiting their website. Personally I’ve just signed up to pour beer on July 2nd at the Portland Craft Beer Festival in the Friends of Trees booth. Sounds like fun, a great way to meet new people, and give back while enjoying the day. (And you thought you might have to plant a tree? They could use help with workers who plant trees too and if you’re working with some great people, that can be a lot of fun too).
Convinced yet? Check out the trees that are currently available in your neighborhood and sign up to get started today. The selection will vary so you don’t have to actually choose your tree today. In fact, volunteer planting season runs from October – May, so their assistance in getting a tree into your yard is over for the season, but you can always choose a tree to plant yourself.
Home buying has become an exasperating experience for buyers across the nation. With high demand and ever increasing prices, the fear is that before buyers can find a house that suits their needs and budgets they will be priced out of the market.
Leading economist and Nobel prize winner Robert Shiller of the S & P Case-Shiller housing price index recently wrote a column for the NY times about this very subject.
According to Shiller, unless you are trying to purchase a home in Portland or San Francisco, your fears are perhaps a little overblown. “There is reason to believe that double-digit increases won’t continue for long in individual cities,” Shiller writes. “Short-term variations abound, but for the most part, the differences in long-term home price increases in individual cities are about plus or minus one percentage point annually.”
Shiller went on to add that San Francisco and Portland are notable exceptions to the above where home prices have grown almost two percentage points above average annually since 1987. According to Shiller, the primary reason for Portland’s explosive increases in home values is the incredible population growth which demographers project will continue at least until 2050!
Migrants are NOT the only ones buying homes in Portland
Compounding the problem of too few homes for the growing population in Portland is the fact that huge investment companies are not only buying the big multi-family properties, they are also investing in single family homes too, and have found that east Portland is especially attractive because of the lower prices relative to those in the rest of the metro area.
Unlike years ago, where big investors, such as Hedge funds, insurance companies, pension funds, and the Berkshire Hathaway scale of investors were interested only in commercial properties and multi-family buildings of 100 units or more.
Big institutional investors are buying up Portland because our property values are relatively low and there are no other safe havens for the type of money they have to invest. The stock market is too rocky while bonds offer little to no returns. These investors are parking their funds where they see growth above average growth potential, and Portland is one of those markets.
“A series of reports by the nonprofit Investigate West found that Wall Street was scooping up single-family rentals in Portland by the hundreds. And where did one of the investors – Blackstone, a multinational private equity firm – raise some of its capital? Oregon’s own Public Employees Retirement System, or PERS. (Investigate West found that Blackstone had invested in more than 45,000 single-family rentals in 14 areas around the country, but not in Oregon. Another company, American Homes 4 Rent, pursued a similar strategy in Portland.)” When investors buy single family homes, they usually buy in bulk and pay cash, and so are directly competing with the average Portland home buyer.
The recent rent hikes in both housing and commercial buildings may be only the beginning of the hikes to come as these investors see current leases expiring.
According to Standard & Poor’s Case-Shiller home price index, Portland again had the fastest increasing home values in the country for the 6th straight month. Of the 20 metro areas that Case-Shiller watches most closely, there were only three cities that have shown double digit increases in home values over the last year. Seattle and Denver rounded out the top three.
According to Case-Shiller spokesperson, the Pacific Northwest has been the hottest region in the country, with no slow down in sight. It’s the law of supply and demand, and with 500 migrants moving to the Portland metro area weekly, there is a real shortage of housing that cannot be overcome over the short term.
Portland average home values inch above $400,000 for the first time ever
The average price of a house sold as of the end of May was $402,500 while the median price hit $354,500! Listing prices have increased as well, with the average price of properties currently on the market now at $383,000; up 11.8% from this time last year.
Portland inventory held steady from April at 1.4 months (the number of months all homes would be sold if no new homes are listed), but that’s a long ways from 6 months which signals a balanced market where inflation in values drops back to a normal pace of approximately 3% annually.
Across the country, housing prices have increased a more normal 5.8% average. The big builders should be dancing in the street if they weren’t being forced to pay so much for land, and jump through so many hoops to get approvals for new developments.
How high can prices go?
At some point, this rapid increase in prices and values will have to slow. Wages are simply not keeping pace with this pricing inflation causing more
buyers to be priced out of the market everyday. But for now, forget the lotto – owning a home is raising the net worth of home owners throughout the Pacific Northwest. And Portland is still the lowest priced big city on the West Coast.