Portland metro housing market recap for 12 months period ending January 31, 2018

According to the housing states just released by RMLS, the housing market is robust again this year. 

“The Portland metro area saw plenty of pending sales and new listings this January. Pending sales, at 2,311, outpaced January 2017 (1,990) by 16.1% and December 2017 (1,757) by 31.5%. It was the strongest January for pending listings in the metro area since 2007, when 2,544 offers were accepted in January. In fact, inventory finally rose to 2.2 months. 
New listings, at 2,486, outpaced January 2017 (2,212) by 12.4% and December 2017 (1,617) by 53.7%.”

Average and Median Sale Prices in Portland metro
“Comparing the average price of homes sold in the twelve months ending January 31st of this year ($430,100) with the average price of homes in the twelve months ending January 2017 ($399,600) shows an increase of 7.6%. In the same comparison, the median has increased 8.6% from $350,000 to $380,000.”

The Mt Hood area led the pack with price increases slightly above 16%. Gresham area, Yamhill County and Columbia Counties all showed price increases above 10%. However, the West Linn/Lake Oswego neighborhoods lagged the rest of the metro area with price increases just above 5% for the last 12 months. 

Of course it’s important to remember that these more local statistics vary from month to month depending on the buyers out there, the number of listings available, etc. There have been plenty of months recently where Lake Oswego/West Linn topped the charts. 

What’s going on with the stock market and mortgage rates?

DOW chart for the last year

If you’ve been paying attention recently, you have surely noticed that the stock market has been crazy for the last 5 trading days or so. If you are invested in the market, odds are you’ve lost some money. Why is this happening?

There is some consensus about exactly what caused the drastic stock market pull back over the last several days.

Theories are:

  • This is just an overdue pull back and perhaps the market was over priced.
  • Others are pointing to the fact that the $1.5 trillion dollar cost of the recent tax cut will hit U.S. books sooner than anticipated, and that debt has to be repaid at increasingly higher rates.
  • Bond yields were and are rising very quickly which made lots of investors have concerns about inflation. 
  • Still others are talking about the change of Federal Reserve Chairman as the new chairman Jerome Powell was sworn in yesterday. We know that Janet Yellen kept rates low to unwind the big recession, but the economy is looking healthy now and we don’t know what Powell will do. The forecast is that there will be 3-4 rate increases this year. Yellen was very conservative about raising rates; but Powell historically is not nearly as dovish about how to handle the economy; so we’ll have to watch how his views and actions affect the markets. 

Was the stock market over priced given the very extended bull market we’ve seen over the last couple years? Probably. Is the stock market pull back over? We don’t know yet but it closed up more than 500 points. Hopefully that’s a signal that the worst is over.

But what are the repercussions for mortgage rates?

Look at how quickly and dramatically mortgage rates are rising?

The last rate increase coupled with the end of quantitative easing late last year DID what we expected. Rates started to rise immediately and mortgage rates increased as well, even before the end of 2017.

If you look back at our September article “Are you ready for mortgage rate increases beginning in October? hopefully you were forewarned that all signs pointed to rates going up. And that has happened. The days of mortgage rates below 4% are pretty much over. Here in Portland average 30 year fixed rates for best qualified buyers are running at 4.125% and up. 

If in fact we see a robust economy, the Feds are likely to continue with quarterly bank overnight rate increases this year, which will impact yields on the 10 year Treasury note and mortgage bond rates (which are up about .5% this year already); and this is why mortgage rates are rising. 

IF you are thinking about buying a home this year, you might seriously think about getting going with that purchase sooner rather than later. Rising rates will impact you with higher monthly payments.

Will rising rates hurt the housing market?

Rising rates will hurt most buyers, and depending on price range and amount of rate increases can ultimately price some buyers out of the market. We’ve seen that happen over the last seven years or so, and it will continue.

On the flip side, housing inventory remains way too low for the number of buyers out there looking, especially for homes priced below $400,000 here in Portland; so prices are more likely to continue to rise. But if you can get into a home, keep in mind that the average person or family that has owned a home over the last 7-8 years, your value has increased almost 60% (more for lower priced homes) and is likely to continue to rise.

Check out the attached home values heat map to see how your area has done over the last several years. 

We do expect to see home value inflation to slow this year due to rate increases and the new tax laws. But it’s only January. 

Stay tuned. We’ll keep you posted as news breaks.  

Portland housing market wrap 2017

RMLS has just released a wrap of the Portland housing market for 2017.

The actual numbers may surprise some of you since affordability in this area has shown a remarkable rise as compared to just a few years ago. The biggest factor affecting rising prices has been low inventory, and that has not changed for several years. We have a very low inventory of distressed properties and almost no short sales on the market anymore; so those bargains have all but disappeared.

We closed out 2017 with an inventory in the metro area of only 1.6 months (the number of months it would take to sell all homes on the market if there were no new listings.)

Average home prices rose 8.5% during the period from December 2016 – December 2017 from $395,000 to $428,700. In the same comparison, the median sale price rose 9.5% from $347,000 to $379,900. Please check out the graph below (courtesy of RMLS) that shows how prices have risen since 2009.

Average and median sales prices December 2017

It is important to note that average price increases are just that. There are neighborhoods where values rose more, and even a few higher priced neighborhoods where values have stabilized with very little increase over the last year. For the most part the fastest rising valuations are in lower cost neighborhoods.

Forecast for 2018 Portland metro area housing market

The consensus is that housing prices will continue to rise in 2018, but the rate of inflation is forecast to slow. As long as Portland remains one of the fastest growing cities in the country and is the second most popular area for re-locations, we are likely to continue to have a higher rate of inflation than most of the country.

Unfortunately, as can be seen by average and median prices, finding a home priced below $200,000 is extremely rare; and when found is most likely either a tiny house or a major fixer. Additionally buyers should know that if and when these homes can be found, they are at best small outdated 2 bedroom, 1 bath houses. Buyers should expect to pay closer to $300,000 and up for a starter home.

Portland named as one of top nine real estate markets to watch for 2018

Portland Oregon hottest housing market in the USAccording to an article in Curbed Portland has been named one of the 9 real estate markets most likely to be active in 2018. According to author Patrick Sisson, “Curbed consulted a number of experts—representing the Urban Land Institute (ULI), RCLCO Real Estate Advisors, Zillow, Trulia, and Realtor.com—to find markets tapped to be fast-growing and most dynamic in 2018. It’s notable that many traditionally top markets, especially in the Northeast, didn’t make the cut. While each city has different strengths and upsides, they all present unique opportunities.” Portland was included in the list due to major expansion and development of our beautiful waterfront where plans are to construct 2,200 residential units, 1.5 million square feet of office space, three parks, and a public plaza and waterfront by 2020.


What’s new in Oregon and Portland? Laws and regulation changes for 2018

Happy New Year!

As we ring in 2018, there are some new laws and regulations that you might like to know about as well as some tidbits of news you might find interesting.

Oregon state birds


Western Meadowlark


*SCR 18 Designates the osprey as the official state raptor and the western meadowlark as official state songbird.

Is Oregon the only state that hadn’t already designated a state bird prior to 2017?


*Oregon state energy tax credits

As of December 31, 2017, all Oregon state energy tax credits were sunset. aints, the state of Oregon had to sunset all tax credits for home owners. However, if you check out Energy Trust of Oregon, you will find there are still rebates available for some energy improvements that include updated appliances, replacement windows and insulation, etc.

*Home energy audits required in Portland

As we have previously announced all sellers within the Portland city limits in Multnomah County are now required to have a home energy audit done on their properties PRIOR to listing their home for sale. This also applies to those selling their homes without a realtor if the home owner plans to advertise the sale via any medium. If you’d like more details, please read Home energy audit will be require for all Portland home sellers beginning January 2018. 

Audit scores will be available for all homes that have had audits performed. The report and score can be found at the Green Building Registry and will also be available on MLS listings for all properties listed on or after January 1, 2018. Homes will be scored from 1-5. The higher the score, the more efficient the home is.

For home owners, this audit can be a big plus because studies have shown that homes with high energy scores generally sell for 2-3% higher prices. It turns out buyers are definitely looking for greener homes and are willing to spend more to save cash on utility bills later on. NOTE: any home listed after January 1 will have an RMLS number starting with 18.

*Mortgage rates have risen slightly since the Feds raised overnight lending rates to banks in December. It is forecast that the Feds will raise rates up to 4 times in 2018 and mortgage rates will rise to 4.6% by the end of 2018. While rates are tied to the mortgage bond, it appears that they are again tracking the yield on the 10 year Treasury bond which hit 2.5% today for the first time in years.

*Core-Logic Case Schiller predict that the housing market will take off with a bang this year throughout the country. This is nothing new for the Portland market where new buyers have been out in force every January for the last several years.

Housing market brief wrap for 2017

Across the country Core Logic reports that housing prices rose an average of 7%. Here in Portland, those numbers ring true as we did experience a bit of a slowdown in our markets beginning late summer. This slowdown lasted throughout the rest of the year in most areas. Lucky buyers out during the end of last year found that there was little competition facing them while sellers were more disappointed to find their homes often selling at or even below list. The houses in the lower price ranges (priced below $350,000 – now considered first time home buyer range) did see more increase in value than more expensive homes and inventory is considerably lower than in higher price ranges.

*Portland slipped out of 1st place for fastest rising home prices in 2017. We were over-taken by Seattle last year but remain among the top five in the US. We had held the 1st place position for about 5 years as the rate of migration into the state was almost more than we could accommodate. We currently rank as the second most popular area for relocations nationwide. 

Here’s a great vegan sweet breakfast treat recipe for you. What a great way to start your day!

Vegan cranberry orange bread – go ahead and indulge with only 153 calories per serving

Total Time: 50m
Yield: 10-12 slices


  • 2 cups spelt, oat, or all-purpose flour
  • 2/3 cup sugar, unrefined if desired
  • 1/4 cup additional sugar OR stevia baking blend
  • 2 tsp baking powder
  • 3/4 tsp salt
  • 1/2 tsp baking soda
  • 2 cups cranberries, chopped (fresh or frozen-thawed)
  • 1 cup orange juice
  • 3 1/2 tbsp oil (see note for fat-free sub)
  • 2 tsp pure vanilla extract
  • 1 tbsp orange zest


*The orange zest is important here for best flavor. The cranberries can be subbed with raspberries if needed. I can’t vouch for the taste if subbing applesauce for oil or using a flour not listed here, but multiple readers have said they liked the results of subbing applesauce for the oil, so feel free to experiment. Oat flour will yield a denser bread, which is still delicious in its own right.

Preheat oven to 350 F. Grease a 9×5 loaf pan, and line the bottom with parchment. In a large bowl, stir first six ingredients. Stir in all remaining to form a batter. Pour into the loaf pan. Bake on the oven center rack 50-55 minutes, or until bread has risen and a toothpick comes out mostly clean. Let cool completely. If you can wait, the taste and texture are so much better the next day! Leftovers can be sliced and frozen if desired. My favorite way to eat this bread is glazed with coconut butter. The glaze in the photos is 1/4 cup powdered sugar mixed with 1 tsp orange juice, which is also delicious.


New Federal tax law will impact some home owners and buyers in 2018

Now that Congress has passed and President Trump has signed the new tax law, some home owners, buyers and sellers will be impacted by the SALT (state and local tax limits) provisions of the new law. The $10,000 limit includes property tax, state income tax and sales taxes combined. Fortunately Portland property taxes are relatively low as compared to those paid in California or New York for instance. However the Oregon state income tax is third highest in the country at approximately 9%. On the upside, Oregonians pay NO sales tax which is a huge savings to the majority of residents.

Mortgage interest will still be deductible but will be capped at loans at or less than $750,000 beginning this year. IF you owned your home prior to 2018, the cap was $1,000,000, and that $1,000,000 mortgage amount has been grandfathered in for as long as you own your home.

Property taxes are assessed at the county level and are based on purchase price, square footage, lot size, etc. Special assessments for schools, infrastructure, etc are added to tax bills which can result in considerably different property tax bills in adjacent neighborhoods.

As the Portland metro area has grown and housing values have sky rocketed, there are now more expensive homes and more high income buyers in Oregon than just a few years ago. The end result is that we don’t know just how much the new tax laws will affect our housing market beginning this year.

If you’re contemplating buying a new house, it might make sense to check with your CPA to see how the new tax laws will affect you.




Veterans beware! Some mortgage lenders are trying to take advantage of you

veteransUS government agency Ginnie Mae  and the VA have developed a task force to investigate the more than 1800 complaints about lender harassment of veterans trying to get them to refinance their current mortgages. There are several lenders that are suspected of participating in attempts to “churn” veterans; in some cases as early as only 6 months and 1 day after their initial home purchase closed. (Churning is defined as excessive trading by a broker in a client’s account largely to generate commissions. Churning is an illegal and unethical practice that violates SEC rules and securities laws.)

In addition to mortgagors calling prior clients directly, you’ve probably seen the commercials urging veterans to refinance their current mortgages with lures like “Cash out the equity in your home and get up to 100% of the current value.” Clearly the commercials don’t tell you that every time you refinance your mortgage, it costs potentially thousands of dollars in closing costs, and could increase your mortgage rate as well. This is only a good deal for you IF you really need that cash equity right now. Odds are your mortgage rate is lower than current rates, and that you are not aware that those closing costs will be added to your new loan balance. But for the lender, this is another commission; so all too often the calls are coming from the mortgage company that financed your initial purchase.

It has been reported that these lenders are very aggressive in their marketing tactics to veterans and active military families  sometimes calling often even if you have already declined their intial offer. If you have received any such calls, or begin to receive such calls, please contact the Consumer Financial Protection Bureau so the task force has a record of which lenders are engaged in this practice.

If you don’t really need the money, please be tough and tell the lender to not call again. A refinance will raise your monthly payments and will add a couple thousand dollars or more to your mortgage. Also, the longer you pay on your mortgage, the greater the amount of the payment that is going towards paying down the loan. Each time you refinance, you’re starting that clock all over again.

It’s important for every home owner to remember that the housing market is cyclical, just like the stock market. Values will drop at some point. What if you max out your financing to the current value and then need to sell when your home value is under water?

Currently anyone who has owned their home a couple years or so are sitting on equity; potentially a lot of equity depending on where you live. That’s money in the bank for you when and if you need it at a later date.

Generally we recommend that you refinance your mortgage only if you need to take cash out or if you are able to reduce your monthly payments or if there has been a change in ownership (such as due to a divorce or an inheritance, or transfer of ownership among family members). Otherwise, leave that equity where it is working for you.


Forbes ranks Portland top city for business and careers

aerial view of Portland ORRecent college grads continue to move to Portland for the outdoor recreation opportunities and also because they are attracted to the political and environmental stance of this great area. “Portland now has the ninth-highest concentration of highly educated millennials based on data from Experian.”

Why are educated millenials moving in such big numbers to Portland?

Educated millenials are moving to areas where good paying jobs are available. Portland’s unemployment rate was at 3.9% as of July 2017; well below the national average. If you couple that statistic with the wealth of potential STEM (science, technology, engineering and math) jobs here, Portland seems like a logical choice for both highly educated millenials and Gen Xers. Did you know that Portland is now often referred to as “Silicon Forest” because STEM businesses currently account for 7.2% of all jobs in the metro area, well above the national average of 5.8%.

Currently there are few businesses in the metro area in Oregon with a net worth of $3 billion or more, such as Nike and Intel; but multiple well known big businesses have recently opened offices here including tech giants Google, Microsoft, Ebay, Salesforce.com, Uber, Airbnb, and Amazon. In addition there have been multiple STEM start ups who have opened their doors in the in the last few years. 

Other cities on the top five list on Forbes include Raleigh, Seattle, Denver and Des Moines.

Home energy audits to be required for all Portland home sellers beginning January 2018


HOme energy score report

Sample home energy audit report

Thinking about selling your house? As of January 1, 2018, *all home owners will be required to have a home energy audit PRIOR to listing your home. (Listing means using any form of public advertising including signs, RMLS, Internet ads or postings on public listing sites, etc). This new regulation applies only to homes within the Multnomah County/Portland city limits.

Before you get too excited or upset about “another regulation”, you should know that this is a relatively painless and inexpensive new regulation. Home energy audits will be conducted by licensed contractors who have been qualified as a Portland Home Energy Score program assessor. The estimated cost for an audit lasting about 1 1/2 hours will be only $150-$250. But remember, your home cannot be listed until you’ve had the audit so you will need to plan ahead.

The assessor will evaluate your home based on how energy efficient your home actually is based on type of heat, insulation, windows, etc. It will also include an estimate of the home’s greenhouse gas emissions (based on the Home Energy Score estimate of the home’s energy use, fuel types, and emission factors, provided by ODOE (Oregon Department of Energy). Assessors will NOT use your recent and current utility bills, but instead will use average use numbers as compiled by ODOE for homes comparable to yours. This is important because obviously a vacant home will use considerably less fuel than one occupied by a family or a family deliberately keeping the thermostat turned down to save money.

Once the audit is completed you will be given a report with a score from 1-10; the higher the score the more efficient it is. The report will include the following information:

  • An estimate of the total annual energy used in the home
  • An estimate of the total annual energy generated by on-site solar electric, wind electric, hydroelectric, and solar water heating systems in retail units of energy
  • An estimate of the total annual cost of energy purchased for use in the home in dollars, based on the current residential energy price of the utility servicing the building and the average annual energy prices of non-regulated fuels, as provided by ODOE.
  • The current average annual utility retail residential energy price in dollars, by fuel type and the average annual energy prices of non-regulated rules
  • An estimate of the home’s greenhouse gas emissions based on the Home Energy Score estimate of the home’s energy use, full types, and emission factors, provided by ODOE
  • The name, contact info, and CCB license number of the Assessor who performed the assessment
  • The date the assessment was performed
  • The expiration date for the Home Energy Performance Report
  • The address, year built, and heated square footage of the home

Why is Portland requiring home energy audits?

Would you buy a car before knowing the estimated mileage? Or food without nutrition and calorie counts? As a realtor, I’ve seen first hand that most home buyers want more energy efficient homes. Utility costs are definitely an important factor in affordability; and as someone who recently replaced a low efficiency furnace with a very high efficiency heat pump, I can tell you that my heating and cooling bills dropped more than 50%. I no longer feel the need to keep my thermostat low during the winter months, or uncomfortably high during the hot days of the summer. 

The audit is an additional soon to be required seller disclosure to potential buyers. As mentioned above, your recent utility bills are not the true measure of how efficient your home is. Unfortunately with ever rising utility bills many home owners sacrifice real comfort for lower bills. In addition a home with a high score could save a family up to $1000/year on their utility bills as compared to a similar lower scored home. 

Home energy audits are already required in Austin, Texas; Berkeley, California; San Francisco, California is also just adding this audit; Santa Fe, New Mexico; Kansas City, Missouri; and Boulder, Colorado. Internationally, residential disclosure policies are in effect in the United Kingdom, Denmark and Australia. Austin was the first city to implement this policy all the way back in 2009. Portland was able to model our audit program after cities that already have this policy in effect. Other cities have reported that this program does in fact reduce greenhouse gas emissions.

In Portland we take pride in being a very green oriented city, and Portland and does have a master plan to reduce greenhouse gasses by 30% by 2030. We have already been rated the fourth greenest city in the country. But besides the plan, most of us have to admit that we appreciate our clear blue skies and clean air (fire and smoke aside). We’re an outdoorsy population so this is important to all of us. 

Low cost financing available for energy efficient improvements

In 2010, the City established Clean Energy Works, now known as Enhabit, to provide access to low-cost financing for energy upgrades. Enhabit’s activity in the energy upgrade financing market has resulted in local banks and credit unions offering specialized financing products for energy efficient homes.

How efficient is your home?Energy Trust of Oregon, in partnership with non-profit lender Craft3, now offers a moderate income energy upgrade financing program. There are also new specialized energy efficiency mortgage products available exclusively to buyers of homes that have a U.S. Department of Energy Home Energy Score.

An added benefit to sellers is that homes that are energy efficient generally sell for more money than comparable homes; significantly more money than the cost of a home energy audit.

Global warming is real. All but 4 countries in the world (including the recent US entry onto this list) have signed the Paris Climate Accord. Portland has just taken another step to maintaining our commitment to the Paris Climate Accord along with most states and cities in the country.

*There are some exemptions to this ruling such as homes in foreclosure or short sale. For more rules, exceptions and exemptions, click here.  Low income sellers may qualify for assistance with the cost. 


Oregon Residential Energy Tax Credits Expire Dec 31, 2017

solar panelsIf you’re an Oregon home owner thinking about remodeling or updating your house to be more energy efficient, you need to keep your eye on the calendar. Just about all residential energy tax credits will expire at the end of 2017. It is unknown if the state legislature will re-instate any of those credits next year.

There are some great tax credits still available ranging from installing a solar system for your whole house, to installing a system just to heat your pool or hot tub. OR, installing an energy efficient gas fire place or pellet stove and a whole lot more.

To qualify, you must purchase the equipment by the end of the year; it must be installed by April 1, 2018; and all application paperwork to the state must be submitted by June 1, 2018. (Usually the installer will complete paperwork for you.)

To see all the current Oregon energy tax credits (dollar for dollar credit from the tax you owe), please click here Current RETC Rates for Oregon.

Installation of a whole house solar energy system is the only remaining Federal Energy Star tax credit still available. You can recoup up to 30% of the cost of the system through the end of 2017, but that percentage will decrease after this year.

Home buyers are back out in force in Portland

sold - sale pending signsAfter the usual slow down in property viewings for the last month or so, potential buyers are back out in huge numbers here in Portland. RMLS reports that home views increased almost 20% last week in the Portland metro area. This home buying frenzy is likely to continue until the Thanksgiving holidays if this year is like the last few years. Between Thanksgiving and and the end of the year holidays, the number of “I’m not in a hurry” home viewers tends to decline, while serious buyers continue to seriously search for that perfect home.

To make matters even more urgent for prospective home buyers, it is anticipated that mortgage rates will begin to rise beginning in October 2017 as the Feds begin selling off their $4.6 trillion inventory of Mortgage Backed Securities and Treasury bonds. The rates are expected to increase monthly through 2018 because the number of bonds being released by the Feds will increase monthly for at least a year. Rising interest rates will price many buyers out of the market as prices continue to rise.

Unfortunately the low inventory numbers of homes for sale continues to weigh on home prices in Portland. The median sales price for homes sold in August climbed to $385,000, up 9.1% from a year earlier but $10,000 less than the median price in July.

home prices increase againAverage home prices climbed above $420,000 in July for the first time in Portland’s recorded history, and with an ever growing population, this trend is likely to continue. Prices are rising faster in the Pacific NW than in any other area in the country. Portland ranks 2nd only behind Seattle for fastest rising prices.


All these statistics are a bit slanted though because the truth is that home prices have stabilized in homes valued at $500,000 and up, while homes valued below $500,000 are really rising faster than 9.1% year over year. There are so many buyers almost desperate to lock in a home purchase priced under $300,000 that unfortunately we have seen the return of the “lipstick on a pig” type home flippers. These flippers will purchase those properties that are in really poor condition; slap some paint on the interior and exterior, perhaps update the kitchen with new but inexpensive cabinets and appliances and raise the price to at or just below $300,000 to cash in on huge profits. However, a lot of essential repairs are left undone.

Since the under $300,000 price range is where most buyers are becoming more disheartened and a little bit desperate, it is critical to do your own limited home inspection to make sure that you are not risking your limited funds on a home that has too many problems to even qualify for financing. Issues such as dry rot, appliances and furnaces, water heaters etc. that are unsafe, roofs that cannot be certifiable for at least 2-3 years life, windows throughout the house that do not open or lock, and so much more can often be detected by the prospective home buyer.

While your earnest money deposit should not be at risk during the early stages of the purchase IF you purchased through a realtor with all the buyer protections written into the contract, you could lose valuable time searching for a better investment. Please read Tips to avoid buying a money pit to help you do your own quick inspection of any home you are considering making an offer on.

Finally, buyers should always be working with their own realtor, rather than the listing agent to make sure that their realtor is working for them, NOT the seller.


Good luck out there.

Are you ready for mortgage rate increases beginning in October 2017?

Federal Reserve BldgWhile we have all been watching hurricanes, fires, earthquakes, North Korea threats, and so much more, the Feds rather quietly held their usual monthly meeting just about a week ago on September 20, 2017 where they unanimously decided it’s time for them to begin to unwind Quantitative Easing (QE).

Most recently we’ve grown accustomed to news that the Feds met and little changed. The benchmarks the Feds were looking for to signal economic health were not happening. But anyone watching the Feds knew that the news was bound to change soon; and it seems that soon means now.

Per the news conference held after the meeting, the FOMC (Federal Open Market Committee) chaired by Janet Yellen announced that they finally feel that the US economy is now healthy enough to begin to unravel QE  and let the market find its own way.

As a reminder, QE (quantitative easing was implemented just after the bank bailouts and housing market crash about 10 years ago in order to stabilize the economy as much as possible. The over night lending rate for banks and large financial institutions was dropped to zero while the Fed began buying up federal and mortgage bonds in astronomical numbers. They began unwinding that policy at the end of 2015 by gradually raising overnight lending rates which now stands at 1.25%.

The Fed currently holds $4.5 trillion in these security instruments. This buy and hold strategy has artificially held lending rates of all types, including mortgage rates at almost unprecedented low levels for the last 10 years.

Last Wednesday the Fed announced that the over the counter lending rate for banks will remain at 1.25% but QE has come to an end. They will begin selling off bonds beginning October 1, 2017 and will continue to sell monthly until the portfolio is gone,or until they decide that their portfolio is an appropriate size and the markets have stabilized. 

The starting rate of the sell off will begin somewhat slowly; next month they will sell $4 billion in mortgage backed securities and $6 billion in Treasury bonds. This number will increase monthly until the sell rates reach $20 billion monthly in mortgage securities and $30 billion monthly in Treasuries. It is expected that these levels will be reached in about a year. 

Once those bonds start hitting the free markets, it is forecast that all lending rates will increase incrementally, including mortgage rates, until the bonds are gone. As we have seen in the past, when banks feel they have any excuse at all to raise lending rates, they do so. Typically they test the waters with a bigger increase than the market will bear, so they pull that increase back slightly. But with billions of dollars worth of bonds hitting the free markets every month going forward for at least the next year, it’s impossible to predict just how quickly lending rates of all types will rise.

The Fed will monitor the rate of sales closely to ensure that we don’t see car loans, student loans, personal loans, credit card rates and mortgage rates rise too quickly, but rise they all will. Even the Feds expect that. 

IF you are thinking about selling or buying a home, this might be time to get going. These rate increases may seem small, but could definitely affect how much buyers are qualified to spend for a home purchase, especially those who are looking at homes priced at their current pre-approval limits.



Portland ranked second greenest city in the US


downtown Portland goes green

Going green in Portland….This photo says it all!
Portland embodies “green” with a public train,public bus and a bicycle rider all traveling down a tree lined street in downtown Portland

As reported in a recent article published in Architectural Digest this year  Listshack compiled data on cities with populations of 1 million or more residents to compile a list of the greenest cities in America. Their criteria included “five factors, or “green” data points: The number of LEED certified buildings per each 1,000 residents, the percentage of the city’s land area that is parkland, the number of miles of bike lanes per 10,000 residents, the number of farmers’ markets per 10,000 residents, and the number of electric car plug-ins per 10,000 residents. Population also played a role when determining the rankings; everything was brought to scale by looking at the factors per either 1,000 residents or 10,000 residents so the largest MSAs wouldn’t win just based on their size.”

Austin Texas topped the list, followed by Portland Oregon in the number 2 spot.  Washington D.C./Arlington/Alexandria, Virginia, area ranked 3rd, the greater Boston area 4th and the San Jose/Sunnyvale/Santa Clara area of California ranked 5th. Rounding out the top 10 spots were New York/Newark/Jersey City all the way into Pennsylvania; followed by Hartford/West Hartford/East Hartford, Connecticut; then Providence/Warwick, Rhode Island; San Francisco/Oakland/Hayward; and finally Cincinnati, Ohio, and its neighboring areas in Kentucky and Indiana. Seattle; Tucson, Arizona; San Diego; all received honorable mentions. 

Home buyers beware – tips to help avoid buying a money pit

Portland metro home

Is this your dream house? Remember to check it out before you buy it

Buying a home is more than an investment, especially for first time home buyers. It’s also a very emotional process. I can’t tell you how many times I’ve seen that look and glow in a buyers face as they find “the one.”

Hang on buyers. There’s plenty of time to fall in love with your house, but the first time you see it, before you really look it over is a little too early.

Once you find a house that you really like, it’s time to get your critical eye in gear and really look over the property as a housing inspector would; at least the portions of the house that are easily viewed. Before you spend money you could be throwing away, look for obvious signs of homeowner neglect often due to inadequate funds or concern for maintaining their home properly. 

Here’s what to look for:

  • Roof – The roof should be flat, not wavy or dipping at the edges or elsewhere.

Check for moss accumulation, usually most noticeable on the north exposure. A lot of moss doesn’t mean the roof is bad. It just means it has to be treated before it does damage to the roof.

  • Dry rot – Dry rot can be found on any wood surface, whether exposed to the elements or not 
dry rot in eaves

Dry rot in the eaves

Walk all the way around the house and look for signs of dry rot on support structures, under the eaves, on wood siding, around windows and doors, and literally anywhere you can easily see around the house. This is a fungus that eats into wood caused by excessive moisture in unsealed wood. Dry rot, if caught early enough can sometimes can be treated. But like most fungus, it spreads insidiously. Dry rot in eaves may have spread to the under support of the roof, meaning that even what appears to be a good roof, my not have proper structural support, so the entire roof will need to be replaced.


  • The foundation. It’s not all that unusual to have hairline cracks in the foundation. But if the cracks are bigger than hairline, you could have a foundation issue.
  • Check out the flooring in the house. Do the floors feel level and solid? Walk around as much of the floor space as you can without moving furniture of course. If the floor feels sort of spongy, that’s not a good sign. If you set a ball on the floor and it rolls to one corner, this could be minor settling OR you could have a bigger issue.
  • Exterior paint – is it chipping and falling away? Dry rot can get under a house in need of paint.
  • Gutters – do they appear to be lined up properly? Remember that gutters have to be installed on a slant, or they won’t drain, but where is the drain outlet? Hopefully not right next to the foundation. 
  • Does the ground slope away or towards the foundation? You NEVER want the ground to slope toward the foundation so water runs under the house during heavy rainfalls.

Inside the house – what to check for

  • Turn on faucets, run the shower or bath tub, flush the toilet

            You are checking for good water pressure. Does it seem adequate and normal to                you? Older houses with galvanized metal pipes rust. The rust accumulation slows              water flow, and replacement of these pipes throughout the house can be costly.

  • Windows – do they all open and lock?

            Are they single pane, double pane, wood, vinyl or aluminum framing? If you like                old windows that are wooden framed, and they work well, this isn’t a problem                    except that you are giving up energy efficiency for the look you prefer. That’s                    your choice to make. But be sure to notice.

            Is there mold growing in the window tracks if aluminum or vinyl? This is a sign of              moisture intrusion and poor house keeping. It could also signal that these home                owners have other deferred maintenance – so take a look around.

  • Doors and drawers – do they all open and close properly?

            Go ahead and open cabinets and closets. I know this sometimes feels like                    you’re intruding on someone’s privacy. But you’re also about to make a very                      expensive purchase. 

It’s important to remember that just about any home you look at, even brand new or just remodeled homes can have issues. Once you’ve completed your own comprehensive inspection, it’s time to hire a professional who will climb into the attic and under the house, and presumably knows a whole lot more than the average home buyer about structural integrity. Please don’t skimp here. Most realtors are not nearly as knowledgeable as property inspectors. We won’t climb up on roofs nor under the house. You’d be amazed at what can be seen in those spaces, such as signs of rodent infestation, roofs propped up with 2×2 boards, buckets filled with concrete holding up the foundation, termites, carpenter ants, MOLD, standing water, rotted support structures and so much more. Your inspector will look for anything that could cause problems and COST MONEY.

WAIT – there’s more Appraisers and Insurance Companies

And here’s the other side you perhaps haven’t thought of. If a house has too many obvious issues, your property appraiser will very likely notice as well, and could call out any issues that must be repaired or replaced before your lender will close your loan.

Beyond that, your property insurance agent will very likely send out someone to look over your purchase as well. Most insurers are doing that now, and many will refuse to issue insurance if the roof looks bad for instance, or there are other obvious structural issues.

This article is not meant to scare you. Believe it or not, most homes, unless you’re looking at fixers, will be just fine. This doesn’t mean that there’s nothing wrong. But in most cases, after an inspection your agent and the listing agent will get to work and try to negotiate what repairs you want the seller to repair, and what you are willing to take on yourself. If you’ve fallen in love with the house too early, you could get caught up in the “I can fix it later” syndrome. But when a house is advertised as “move in ready” or just remodeled and really isn’t, it just might be time to walk away. We’ve all heard of money pits.

Your realtor should help you inspect a house. Hopefully you’re working with someone who has some experience. Believe it or not, your realtor is supposed to be on your side, so pay attention please. We’d rather see you walk away than end up in a house you end up hating.

Now, if all the inspections pass, and you still want this house knowing all that could affect the integrity and value of this house – go ahead and close the deal, and now get ready to fall in love with your new house.






Did you know that 1 of every 3 home buyers nationwide purchase their properties sight unseen?

I have to admit that this was a surprise to me. It goes without saying that these  buyers are doing their research online and depending on photos and information that is readily available for anyone to see.

For those who are purchasing for investment or flippers who are ready and eager to find properties in specific neighborhoods with the cash and skills to rehab homes, this could be a great way to go.

But for people looking to buy a home to live in, it’s not a way to buy that I would recommend at all. Here’s why:

  1. Photos can lie
  2. Unfortunately sellers and their realtors are not always telling you the whole story about any given house. The truth is that neither the seller nor the Realtor may know the whole truth when the house is listed. But sellers may also deliberately try to hide flaws that they are aware of. For example, how easy is it to paint over a wall covered in mold to disguise the problem? How easy is it to disguise a wall way out of plumb with a refrigerator in that corner?
  3. Not all remodels are done up to the same standards. A home may photograph beautifully, but has it really been finished beautifully? Do the doors all close? Do drawers all open?

In my very humble, or not so humble opinion, there is no substitute for actually seeing a house and getting a real feel for how the house flows, and more importantly how a house feels to you. Sure a home inspection is supposed to disclose what the seller may or may not have known in terms of flaws; but remember that a home inspector is a person too and can make mistakes, or might not call out something that just might drive you crazy when you actually live in the house.

The home inspector is not there to advise you about a neighborhood or your potential new neighbors. He/she might find the foundation appears sound, which doesn’t mean that it hasn’t settled. Those walls that aren’t plumb can be a real inconvenience when you go to place furniture, or even just hang wall decor.

That being said, my best advice to almost all home buyers is if you’re not able to go see a house yourself prior to purchase, at least have someone you trust go see it for you. Please don’t base your decision on photos, videos and the description. What feels like “move in ready” to one person may not feel like move in ready to you.

How to win the battle of bugs and weeds around your home and garden with all natural products

It’s the battle of people versus the bugs and weeds as both try to take over our homes and gardens. Take heart, for the most part we can co-exist with most bugs without damaging the environment or killing off the good bugs. Personally I have no love for the weeds, so weeds be gone is my motto as long as I can do it without chemicals and too much work on hot summer days. 

Did you know that most bugs have a sense of smell and there are some common household items that bugs do not like the smell of?
1. Vinegar – very few bugs will tolerate and spend time around an area sprayed with vinegar, so feel free to use it liberally to deter pests. This is especially helpful to drive ants out of your house. Personally I wipe down kitchen counters almost daily with vinegar. It works.
2. Essential oils such as peppermint, lavender, tea tree, citrus or neem oils have spiders literally taking their spider webwebs elsewhere. They smell through their feet, so you don’t have to actually spray the spiders, just their webs, and they won’t even walk on them. You can make up a spray bottle with any of a combination of several of these oils, add a few drop of dish detergent, find your target and spray. Keep this on hand because the effects are not forever, so you will have to repeat as needed to keep walkways etc free of spider webs. This works equally well indoors and outside too. By the way, to keep spiders outside, trim plants about a foot away from your foundation.

3. Coffee grounds are great to keep slugs out of your garden beds. If you’re a coffee drinker you probably have plenty around to surround your veggies or favorite young plants with the used coffee grounds. Slugs don’t like that coffee grounds stick to their bellies so they move on. If you don’t drink coffee, try going to the nearest Starbucks or other cafes. They are usually thrilled to have you take coffee grounds away for them, and the plus is that coffee grounds actually nourish the soil. This is so much better than dumping slimy trays of dead slugs that have gone after your good beer in a bowl. Yes slugs love beer, but it’s a nasty mess to clean up.


Is this how big weeds look in your garden?

Weeds are a never ending battle but one that is easily won if you keep on top of it. While some people swear by Round up,  it’s highly toxic and pollutes the ground, gets into ground water, and really does not kill weeds any better than a simple mix of:
1 gallon regular 5% household vinegar
1 cup table salt
1 teaspoon dish detergent
Mix the above in a sprayer and wait for a sunny day to tackle the weeds. It’s best if you can catch the weeds before they flower and set seeds, but if not, just go at it, and repeat as necessary. You should see most weeds die off within hours and certainly within a few days. 
IMPORTANT note here though is that this mix is so effective that you need to be careful to not spray on any plants you care about directly. It will kill your plants as quickly as the weeds you were after. 
If you have weeds growing around the roots of favorite plants, sorry but your best best is to just dig them up.

If weeds have already set seed they’re ready to sprout up somewhere else, so keep vigilant and keep your garden not only looking better but healthier too. Remember those weeds compete with your plants for nutrients in the soil. 

2017 Oregon Legislative session ends saving important benefits for home owner

The 2017 Oregon legislation session ended last week. Here’s a recap of some of the laws that affect home owners.

HB 2004 – Tenants Rights – failed

Just this week, the long disputed tenants rights bill failed to pass in the Oregon legislature. This is very sad news for tenants, but a huge relief for landlords. It was a poorly written bill that would have enhanced protection for tenants, but was unfairly anti landlords. Tenants will certainly be working to protect their rights again next year, and hopefully a better bill will be written and passed.

In the meantime, renters will retain the rights they already have, which differ from city to city. Before moving, renters should check with the tenants rights groups for the city they are considering moving to so they understand what laws apply to them already, and which laws do not. 

HB 2006 – Mortgage Interest Deduction – failed

This bill would have eliminated the MID (mortgage interest deduction) for individuals making $100,000 or more ($200,000 for joint filers). HB 2006 would have also capped the amount of interest that could be deducted for those individuals making under $100,000 ($200,000 for joint filers) at $15,000 on their primary residence. In addition, the bill would have eliminated the MID for second homes. This bill didn’t get the attention from the public that it probably should have, but the OAR (Oregon Association of Realtors) fought it on home owners behalf. 

With ever increasing housing prices and mortgages, this bill would have hurt just about every home buyer who paid anything close to current average prices for property, especially in the early years of a mortgage when just about all of the principal and interest portion of the payment goes to interest. The interest rate deduction helps middle class families and should not be eliminated. 

HB 2771 – Eliminating the Deductibility of Property Taxes – failed

House Bill 2771 would have phased out the itemized deduction for real property taxes for incomes between $50,000 and $125,000 for single taxpayers and between $100,000 and $250,000 for joint taxpayers. In addition, the bill would have eliminated the ability to deduct property taxes for single tax payers making $125,000 or joint tax payers making $250,000 or more in a year.

Again OAR fought this bill on behalf of all home owners. Home owners should not be the only ones who contribute to state budget shortfalls. And tenants should be equally concerned about these laws since bills eliminating tax write offs for landlords would only serve to increase rents to help those property owners shoulder the additional costs.


Average Portland home prices soar to $423,700 while mortgage rates dip slightly

houses make you moneyNationwide, housing inventories have reached crisis proportions. There is a severe lack of available homes for sale everywhere. Home values are increasing an average of 5+% throughout the country. But here in the Pacific NW, home prices are surging faster than anywhere else in the country. Average prices in Seattle are up about 12% per year, while Portland in the #2 position is seeing average value increases of 10.7%.

Remember, these are average price and value increases. There are some neighborhoods with lower inflation rates, but there are also many with much higher rates. Currently zip code 97233 (Centennial, Rockwood and Mill Park) is leading the metro area seeing prices and values up 19.7% for 2016 and early 2017! This means that if you are currently a home owner in 97233, you’ve watched your home value increase about $2500 – $5000 every month for the last year and a half – depending on size and condition of your home and immediate neighborhood. Still closer in areas such as Tualatin, Tigard, West Hills, Hawthorne, Rose City, Alberta and more are also seeing inflation between 10-15% annually so you’re not being left behind. 

Spring and early summer months are the busiest months of the year for home purchases. 

Buyers are out in droves, so homes are selling as quickly as they hit the market; often with multiple offers and often selling for considerably more than list price.

According to RMLS, new listings for May hit their highest level in May 2017 since May 2008 but demand was so strong that inventory levels actually dropped .2 months (down from 1.7 months to 1.5 months once again.)

What does this mean for buyers?

If you are a prospective home buyer, once you make up your mind that you’re ready to get out and start looking at homes, there are a few things that you should get in order before you proceed. First and foremost, whether you’re paying cash or financing the purchase, get your finances in order.

  1. If you are going to be financing the purchase, get your pre-approval. This means you will need to get your paperwork together for that lender. 
  2. If you’re a cash buyer, be sure your funds are free to use (if you need to sell stocks or move funds from a retirement account, that shouldn’t be left until the last minute.
  3. If you need to sell a home, get it on the market. I know this could put you in a difficult position of needing to move in with friends or stay in a hotel if your house sells too quickly, but sellers need to know that you’re serious and you will need to present proof of your ability to go through with the purchase if your offer is accepted.

Many sellers won’t even allow you to view a home or consider an offer from you without the above business details being in order.

This doesn’t mean that you shouldn’t go out and take a look at a few homes just to see what’s available in your price range. But, it really doesn’t make a lot of sense to just go out looking at lots of homes until you’re a serious buyer because prices and values are moving so quickly. The home you’re viewing today at $300,000 will cost and be worth considerably more in 6 months. Still some looking around in advance will help you understand better what your dollars will buy in different neighborhoods, and that’s a good thing to know as you begin this process. 

Strike while the iron’s hot

Boom markets never last forever. The markets ebb and wane all the time. But the old adage to “strike while the iron’s hot” has never made more sense.

strike while the iron's hotMost buyers are not looking for their forever house. They just want a home of their own and the stability of knowing that their monthly payments are locked in (other than tax and insurance increases). Of course obvious. Your purchase starts making you money in the form of equity often before the transaction even closes, and of course the tax advantages can’t be overlooked either. Mortgage interest, property taxes and even mortgage insurance are all tax deductible, so your monthly income rises once you become a property owner.  


You might like to read 15 fastest selling neighborhoods in Portland as of June 13, 2017


Pacific NW cities dominate fastest rising home prices in the US

Portland skyline with Mt Hood

Seattle skyline

Portland skyline with Mt Hood








The 20 largest cities comprise the list of metro areas that most economists watch as they compile statistics about how most of the economy is functioning. Of course, the same 20 cities are those that are most watched for housing market statistics and trends. In the Pacific Northwest, the most watched cities are Seattle and Portland. AND, Seattle and Portland are #1 and #2 cities in the country with the greatest price and valuation increases for 2016 and into 2017. 

For several years since the housing recovery began Portland topped the list of 20 with the fastest rising housing prices in the country, but we’ve dropped to the #2 position as Seattle has surged ahead of us. Currently Seattle is seeing average 12% annual home price increases, while here in Portland we’re close behind at 10.7%.

Average home prices in Seattle reached $700,000 last month while Portland home average prices increased to $425,000

Like Seattle, in Portland new home construction homes are the priciest; renovated old turn of the century homes are almost as costly, while mid century homes are where the “bargains” can be found.

Developers are snapping up run down mid century homes where they can split the lot and build 3 skinny houses at a huge profit. But developers also love the high end neighborhoods and have no qualms about tearing down those beautiful old estates to cash in on the higher prices of new construction homes.



Did you know that money really does grow on trees?

Most people who live in the northwest visit parks often and appreciate the trees for their appearance, the shade they provide and the ambiance they create. We love our parks. But did you know that trees on your property really do add value to your home? Actually, most buyers are aware of the value of trees, perhaps somewhat intuitively, since homes with trees and attractive landscaping appear more inviting. Realtors know how much buyers appreciate beautiful landscaping which is why you will often see information about the landscaping, trees, etc in a property description. Now there is real scientific data to support what we all knew.

According to a study conducted by the the Pacific Northwest Research Center of the United States Forest Service planting a tree in front of your house will increase the sales value by approximately $7,130 in the Pacific Northwest. 

“Two recent studies by Geoffrey Donovan, an economist and research forester at the Pacific Northwest (PNW) Research Station, and David Butry, an economist with the National Institute of Standards and Technology, yielded specific dollar values for street and neighborhood trees in Portland, Oregon, and for yard trees that provide summer shade in Sacramento, California. This research is important to city governments, communities, and environmental organizations because it helps them make a case for publicly funded “green infrastructure,” that supports many environmental and social amenities.”

These studies have enabled scientists to develop a “benefit-calculation model” to come up with realistic valuations for absence or presence of trees and mature landscaping on a homes value. The algorithm used is similar to the methodology used by appraisers in determining the value of a 3 bedroom house vs a 2 bedroom house in the same neighborhood. 


street trees in a neighborhoodFor home owners, trees are a valuable asset, and trees in your own yard, or better yet, street trees throughout a neighborhood make the whole neighborhood appear lush and inviting and raise the values for all home owners nearby. According to a University of Washington research survey:

  • Mature trees in a yard add 2%
    • Mature trees on the street add at least 3% for all home owners on the street
    • Trees in the front yard add 3-5%
    • Mature trees in high-income neighborhoods add 10-15%. Incidentally, it has been found that higher valued neighborhoods have far more tall mature trees than more suburban neighborhoods. 

benefits of treesBut beyond the value of mature trees on the sales price of your home, trees help in many other ways that put real cash in your bank account. You’ve probably heard all this before but here goes the list:

  1. Trees add shade, which keeps your house cooler during the hot summer months. In fact, according to the Forest Service, a tree planted on the west side of your house can reduce air conditioning use by 30% in a single year. 
  2. Trees clean the air of contaminants and if you remember your science classes breathe in carbon dioxide and breathe out clean oxygen which decreases your carbon footprint while cleaning the air around you. This in turn cuts down global warming. 
  3. Mature trees are a great wind break and again can help reduce your heating costs up to 30% a year by effectively reducing a 35 mph wind to 10% during the coldest windiest months of the year. 

The city of Portland has been paying attention to how trees add value, not only to a home owner, or a neighborhood, but also to the city. As home values continue to rise, cities benefit by higher property taxes. Portland has been paying attention so as early as 2013 Portland decided to plant 33,000 trees throughout the metro area within 5 years, especially in the 55% of the city where more trees were needed. We are still in the process of competing that plan. This not only adds to the city coffers, but also is part if the city plan to keep Portland green.

Are you ready to start growing your own money trees?

You don’t have to buy fully grown trees which are expensive and much more difficult to plant. You can start with smaller plants, perhaps as small as in 1 gallon pots and watch those trees grow along with the equity in your home.

You might also want to read more about Factors that can increase the value of your home

Watch prices rise in the 10 most in demand Portland metro real estate markets

Housing prices UPIt’s human nature to want to know which neighborhood or zip code is leading the market at any given time. And the truth is those zip codes change all the time. But can you guess which zip code topped the list for the last year with almost 19% price appreciation from April 2016 through March 2017?

I can hear a lot of you now. Of course it’s Alberta or Mississippi, Multnomah Village, Orenco Station, or the Pearl? Those neighborhoods have all led the pack in prior reports, but hang onto your hats. None of them are on the list this time. Are you surprised? The truth is that most people want to be home owners whether it’s for the tax credits or just the stability of knowing approximately what your monthly payments will be. But, all of the usual areas have become too expensive for the average buyer so buyers are being forced to look elsewhere to fulfill their dreams of having a home without a landlord.

Suspense it killing you?

OK – zip code 97233 topped the list with the most homes sold. It’s true, it has been one of the most affordable areas in Portland metro forever, but little by little buyers are moving out from close in to downtown, primarily because of rising housing costs. But with 18.6% value increases in just the last year, this area is no longer quite so affordable anymore, and it’s not at the bottom of the list for average home values either. For those who own homes there in 97233, your equity positions just increased dramatically. To put those numbers into more perspective, if you purchased a house in 97233 for $200,000 just one year ago, your house is worth approximately $37,000 more than you paid for it already.

Other cities in the top ten included:

4.6% increase in value – East Mill Plain, Vancouver (98664)

10.7% increase in value – Vancouver Lake, Vancouver (98660)

16% increase in value – South Beaverton/Highland, Beaverton (97008)

9.9% increase in value – Central Gresham (97030)

8.9% increase in value – Tigard/Garden Home (97223)

13.5% increase in value – Five Corners/Vancouver Mall, Vancouver (98662)

7.4% increase in value – Milwaukie (97222)

8.2% increase in value – Central Beaverton (97005)

14% increase in value – North Hillsboro/Helvetia (97124)

Congratulations to all who live in these 10 zip codes. It is probable that more walkable neighborhoods will spring up further out from downtown Portland and Vancouver.


Whats happening in Portland Oregon last weekend of April 2017?

Rain or shine, there is always a lot happening in our great state. The forecast as of today is that this weekend will be cloudy with little to possibly no rain and will be in the upper 50s to 60s throughout the weekend. So here are a few activities that you might consider.

Portland Japanese Gardens – 611 SW Kingston Ave, Portland, OR 97205

Portland Japanese gardensIf you haven’t visited the gardens recently you’ll find that there are a lot of changes. According to an article in OregonLive “The gardens have expanded by 3.4 acres and this weekend, the cherry trees should still be blooming. But there’s more…

Thousands of trees and shrubs have been planted along zigzagging paths, and garden curator Sadafumi Uchiyama has designed three distinct, new landscapes: A moss hillside garden, bonsai terrace and chabana (tea flower) garden.

Even more dramatic is the new, hilltop Cultural Crossing Village, three steel-and-glass pavilions linked by a large courtyard near the shuttle stop to the main garden. A 185-foot-long “castle” wall made with 1,000 tons of Baker blue granite from an Eastern Oregon quarry and built using Shogun-period techniques defines the west side of the village. Anchoring another side is a tea cafe, the first food and beverage service available at the 54-year-old garden.”

If you want to add some Japanese flavor to your garden or home, the gift shop has quadrupled in size, so don’t forget to take a look at what is being offered.

Wooden shoe tulip festival – 33814 S Meridian Rd, Woodburn OR
Take in all the tulips still in bloom, learn more about wooden shoes and watch a craftsman create a pair just for you using ancient tools and skills.

tulip festival/muddy paws runAnd Saturday, April 29th, why not join the 2nd Annual Muddy Paws Fun Run/Walk in the same location as the tulip festival from 9:30am – 7pm.  Rain or shine, that should be a fun event to participate in or at least watch from the sidelines.

People’s Climate Movement: Portland Mobilization and March | Dawson Park, Speakers (more info) – just east of Legacy Emmanual Medical Center at N Stanton St and Williams Ave – Saturday April 29, from 12pm – 5pm
Looking for political action this weekend? This is an event for anyone who stands with people of color and low income people to join the movements for racial, social, and economic justice as pathways to climate action.

Gorge Artists Open Studios2017 Gorge Artists Open Studios Tour
April 28-30, 2017   10 a.m. – 5 p.m. | Free

Forty juried artists have been selected to participate in 2017. You’ll see some of the highest quality work available from the region utilizing multiple mediums and styles. According to their website, the tour is free and self-guided, with artists’ studios located throughout the Mid-Columbia from Cascade Locks to The Dalles and from Parkdale, Oregon to Trout Lake, Washington.

Astoria Seafood and Wine FestApril 28-30: Astoria-Warrenton Crab, Seafood & Wine Festival | 175 Vendors, Food, Live Music & More! (Win Tickets, $20)

If you’re looking for great food, entertainment and a great time, why not drive over to Astoria and enjoy the best seafood and wine around while you browse the 175 vendor booths. Take your wallets. There is sure to be something there that you have to take home. Remember Mothers Day, Fathers Day and graduations are just around the corner.

Mortgage Rates dip again

Mortgage rates have backed off the highs we saw right after the start of the year when the stock market went into overdrive. There were lenders quoting rates at or near 4.5% at that time. The good news is that rates appear to be below 4% again, so if you’re thinking of buying, this is still a good time. Who knows how long this will last? Just a reminder that you need to shop lenders. Rates can vary as much as 1/4% – 1/2% from lender to lender. 
The average home price in the Portland metro area has again topped $400,000. This also means tthat homes priced below $300,000 are becoming harder to find, even when they are fixers, and they sell quickly. Single family detached homes priced below $200,000 have all but disappeared now though there are still condos and town homes available from time to time. With the higher prices, we’re seeing much more home sales activity in outlying areas in NE and SE Portland. According to RMLS statistics neighborhoods east of I-205 are seeing a surge in popularity and in fact a few neighborhoods are reporting more sales in 2017 than some of the very popular close in areas like Multnomah Village, Concordia or Hawthorne. 

For those who are waiting for the inevitable slowdown in housing prices, it is forecast that we are unlikely to see that until 2020 because economists at city planning say that the Portland metro area is currently about 24,000 housing units short of demand and it will take that long for developers to catch up. 
If you are “forced” to buy a home further out from downtown, I wouldn’t fret about it. I doubt it will be long before the bellweathers that forecast that a neighborhood is great, like the opening of a New Seasons or Trader Joes always seem to follow where the population is moving, so watch for news that a new store is opening in outer NE or SE Portland.

By the way, for those of you on the west side, Forest HIlls, Bethany, Beaverton, Tigard, and HIllsboro are still right up there for number of sales as people continue to buy on the west side of town too. In fact, Forest Hills/Bethany had the most sales during the fist quarter of 2017.

FHA and VA raise loan limits in Oregon

We thought it was never going to happen, but rising home prices and values have finally caught the attention of the powers that be and both the FHA (Federal Housing Administration) and VA (Veterans Administration) have finally increased loan limits to $408,250 in the Portland metro area and in Yamhill County. That’s a pretty decent increase from $368,000. Conventional financing, (Fannie Mae and Freddie Mac) have also increased loan limits to $424,100.

If you live in other counties in Oregon, please check to find out what your current FHA loan limits are. It appears from a brief check that VA loan limits are the same as the new FHA limits in all Oregon counties.
This is no way keeps pace with the ever higher prices in our area, but it will make purchasing a home easier for many buyers, especially those who are using FHA and VA financing.

How long do hot water heaters last? Is it time to replace yours?

tags on hot water heatersDo you have any idea how old your hot water heater is? There should be a tag on the front of your water heater that looks similar to the photo. At the very least it should have the model number and serial number so you can google those numbers to find out the age. But many more labels are similar to the photo with the actual age the unit was purchased and installed in your house.

The BAD news is that most home water heaters are too old to be considered safe anymore. The average life span of a water heater that has been well maintained is only 8-10 years. After that many will develop leaks that could lead to flooding and expensive damage to your property.  The good news is that water heaters are relatively inexpensive to replace. Read more about saving money if you replace your hot water heater this year…

If you’re even thinking you might move one day, rather than purchasing another water heater that stores water, you might look into an instant on hot water source. Yes, they cost more, but:

  1. If you purchase a qualifying instant on hot water system, you will qualify for an Oregon tax credit (which can offset part of the cost of the unit).
  2. Your investment will increase the value of your house – and the more energy efficient items you have in your home, the higher the value (up to 4% more than a comparable home in the same neighborhood with a lower energy score.)

Most states offer tax credits and other forms of rebates to property owners who install energy efficient appliances. In Oregon, energy saving appliances and home improvements could qualify for both an Oregon state tax credit AND an Energy Trust of Oregon rebate for the 2017 tax year. Unfortunately, all federal tax credits for energy improvements expired in 2016, and to date there has been no discussion about extending those credits for 2017.  


Housing market takes off like a rocket in Oregon and Washington in 2017


lockbox activity end of Jan

RMLS reports showed massive increases in buyers looking at homes during the week ending January 22, 2017. Washington viewings were up 54.3% while Oregon viewings increased by 47.8%.

It is not unusual to see almost frenzied buyer activity during the month of January. We’ve seen it every year since the housing market recovery began in 2012. This year buyers are citing the added pressure to find a home as quickly as possible because we are seeing significant increases in mortgage interest rates which has many buyers scrambling to lock in a their home before rates go any higher. Buyers are very aware that banks will have free reign to start raising rates as quickly as possible this year, especially since President Trump has been saying that he will be rolling back many banking regulations via Executive order very quickly. The only thing that has kept a slight damper on massive rate hikes since Trump’s election is competition. Banks do want your business, so they can’t charge ahead and start increasing rates willy-nilly so to speak.

But in talking with mulitple mortgage lenders, I’m finding that rates are anywhere from 1/2% – 1% higher than they were just a couple months ago. Last week, lenders quoted best 30 year mortgage rates ranging from 3.8% – 4.5%!  That’s a huge range, so it definitely pays to shop around. The average rate quoted was 4.25% for all the lenders surveyed.

One of the factors that is hindering buyers in the Portland metro area is the extreme shortage of inventory. As of the end of December 2016, inventory had again dropped to almost record lows at 1.3 months (the amount of time it would take to sell all inventory if no new listings are added.)

Buyers do need to be aware that the shortage in inventory with high demand WILL push prices higher. If you couple the higher prices with higher rates, unfortunately many potential buyers could find themselves priced out of the market.

You might like to read How inflation affects your ability to buy a house ~ perhaps more than you think. 


How inflation affects your ability to buy a house ~ very likely more than you think

If you’ve been watching the news, you know that housing inflation has far outpaced the rate of inflation in the rest of the economy.

In the Portland metro area, home prices have been rising 10% – 20% annually since 2012. In 2016 the average house increased in value 11.4% and average home prices have increased from just under $350,000 at the end of 2015 to just under $400,000 as of the end of 2016. Have you managed to save for that type of inflation? If you add to that the increase in mortgage rates in just the last year, from around 3.625% at the beginning of 2016 to 4.25% as we start 2017.
how inflation affects monthly paymentsTo put this into more perspective for you, let’s assume that you first started thinking about buying a house in January 2016 with a maximum purchase price of 300,000. With inflation that house will very likely cost you 11.4% more (average value increase for 2016) so you should now expect to pay approximately $334,200 for the same or an equivalent house.

So your required minimum 5% down payment has risen from $15,000 to $16,710. That’s not too bad and certainly doable for most people. BUT… mortgage rates have risen about .625% at the same time. So check out the chart above to see what has happened to your monthly payment based on increased value and mortgage rates. It has increased from about $1300 just a year ago, to $1560.93, You are looking at an increase of $261.18 increase in your monthly payment! Do you still qualify at this new monthly payment?

Unfortunately, all too often buyers focus on how much more money they need for the down payment without taking into account how the increased purchase price will increase the mortgage amount AND if rates rise at the same time, can have a MAJOR affect on the monthly payment. This combination will cause many buyers to be priced out of the market.

The solution is one that you might not like, but IF you are already priced out of your market or the increased monthly payment feels uncomfortable for you, perhaps you might seriously rethink your “must have” list. Clearly in this type of market it is very difficult for the average home buyer to keep pace with this double whammy inflationary environment.

But, prior to this most recent environment, most first time home buyers particularly, were not thinking of forever. They just wanted to get into a house. Perhaps it’s time to return to that type of thinking and just get into a house. You’ll not only save money on your monthly payment, but also on your annual taxes. That gives you more opportunity to save at a much faster rate for that “must have” list you want in your forever house.

In Portland Oregon, we have the ideal environment for home values to continue to rise, regardless of mortgage rates.

  1. Employment is strong
  2. We are and have been one of the strongest housing markets nationwide
  3. Housing inventory is dismally low (at only 1.3 months as of December 2016)
  4. Migration into Portland is so high that our population is growing by approximately 150 people or more every single day.
  5. Our rental market is so bad that it is actually cheaper to own a house than rent.

Perhaps most importantly, competition is fierce in our market.

You might also like to read How inflation affects your ability to buy a house ~ very likely more than you think

President Trump signs executive order eliminating the 1/4% FHA mortgage rate cut just announced

A new President, a new day! But not a good day for first time home buyers nor President Trump supporters.

With one quick stroke of his pen, on day one, President Trump took back the FHA mortgage insurance rate cut that had just gone into effect on January 9, 2017. For the average home buyer using FHA financing, this will cost each of you an average of $500 per year. Here in the Portland area, this will cost you between $700 – $900 per year. Not necessarily a deal breaker for many of you, but why in the world did he do that?

FHA has the reserves now to support this rate drop. Perhaps you should ask him.

Please read the article just published yesterday about this rate cut for more information

FHA lowers mortgage insurance premium for most home buyers – maybe?

In an effort to attract more home buyers to the FHA financing option, on January 9th, FHA announced a reduction in the monthly mortgage insurance premium that most home buyers will pay by 25 basis points for new mortgages closing on or after January 27, 2017.**

FHA says that they have finally reached a stable point in their finances after the enormous losses they endured during the housing collapse. The last four years of housing growth and stability has allowed the FHA to recoup their losses and they want to pass some of these savings on to home buyers to make housing more affordable.

To put this into perspective, for a mortgage of $368,000 (the maximum allowable mortgage for the Portland metro area at this time), this would equate to a monthly savings on your payment of approximately $76.00 (an annual savings of $912).

However, it’s important to remember that mortgage rates have risen over the last several months. We are no longer seeing the low rates we had grown accustomed to over the last 4-5 years at below 4%. Average 30 year fixed rate loans as of today are around 4.25%, even for those with the best credit. So this .25% rate reduction for FHA mortgages only partly offsets the rate increases. Still, every little bit helps, and FHA is the best financing option for prospective home buyers with less than 5% down payment.

In contrast, a conventional home loan will cost the home buyer more to purchase. While there are conventional loans requiring as little as 3% down payment, these are available to only those with the best credit scores; AND the mortgage rate rises for buyers with less than 20% down. FHA rates are the same for those with low down payments  and less than perfect credit, though there is a minimum credit score requirement of at least 620-640 at this time.

**NOTE: I apologize for this footnote, but just as I hit publish on this article, the following news came across: As of yesterday, National Mortgage News reported that Trump is recommending that this reduction in mortgage insurance premiums be delayed until it can be further reviewed by his new Secretary of Housing and Urban Development Ben Carson. This is purportedly just one of the Executive orders that he intends to sign as soon as he is inaugurated.

2016 Portland housing market wrap

Final housing stats for 2016 are out. There weren’t many surprises, but there were a few.

Overall, the market was not quite as hot as 2015. Total sales were down a bit for the year, but not by much. According to RMLS, “Activity was cooler in 2016 than in 2015. Comparing all of 2016 to 2015, new listings (41,121) increased 0.7. Closed sales (32,798) decreased 1.5% and pending sales (33,234) decreased 3.9%.”

2016 housing market value increases

Housing values increased by an average of approximately 11.4% for the year for all homeowners throughout the Portland metro area. (Of course, some neighborhoods saw bigger increases while others saw a bit less. But there were no neighborhoods that saw values decrease during the year.) So, for those of you still on the fence about buying, owning a house is not only a good way to stabilize the percentage of your monthly income that goes towards putting a roof over your head; it also makes home ownership a very good investment for your future.

shopping for a houseAs of the end of 2015, the average home price was $347,000 but by the end of 2016, that number had risen to $395,000! Clearly Portland is no longer a low priced city to retire in. There has been a lot of speculation about whether or not we are soon going to be the next Seattle or San Francisco in terms of home values. That remains to be seen, but Portland is still a lot more affordable than either of those cities which in part is what is driving so many migrants to our area.

Extreme weather caused slowdown for housing market in December 2016

December 2016 experienced quite a slowdown in home purchases and listings with the extreme weather we experienced for much of the month, but that should come as little surprise to anyone. January 2017 is also off to a bit of a slow start with the recent snow storms, but is expected to pick up as the snow melts away and warmer, or at least drier weather returns.

Get your buying hats and shoes on. Housing inventory closed out 2016 at only 1.3 months (the number of months all houses would be sold if no there were no new listings.) But, we are seeing quite a lot of new listings hitting the market already this month, so we expect buyers to hit the streets as we have seen in January for the last few years. 

In case you missed it, you might want to read Seattle – Portland fastest rising home prices nationwide



Feds raise rates today – how will that affect you?

Today the Feds announced just the second rate increase since 2008. The justification for the rate increase was that the economy continues to get stronger and move closer to the 2% inflation rate that the Federal Reserve considers a solid rate of inflation for a healthy economy.

Fed speak indicated that it is anticipated there will be 3 more rate increases in 2017. 

Federal funds rates do not directly affect mortgage rates but…

Federal funds rates are the rates that banks charge each other for short term loans they need to keep their reserves at a set level to ostensibly prevent another bank melt down.

The federal funds rate can directly affect the cost of housing, rates paid on credit cards, auto and other installment loans and student loan rates.

Mortgage rates are not directly tied to federal funds rates, but banks do find ways to pass on current and anticipated future costs to consumers. With the forecast that bank short term borrowing rates are likely to increase at least three times in the next year, banks are already looking at the losses they will be incurring on the hundreds of millions of 30 year fixed rate loans with rates at and below 4% that have been funded over the last 8 years; as well as losses they will sustain on new mortgages funded now before more rate increases kick in during the coming years. 

However, to put all this in perspective, the banks have been paying basically zero per cent over the last 8 years, while the lowest mortgage rates funded during that same time period was 3.5%. Not to mention that banks have been charging fifteen to twenty percent on credit card debt. This is why most banks are not hurting at all, and in fact have been more profitable than ever over the last several years since the recession ended. 

As regard mortgages, as of today, the average rate for a 30 year fixed rate loan has risen to 4.3%, up from 3.5% available from many lenders to the most qualified buyers just a few weeks ago. 

Still on the fence about buying a house? The forecast is that rates will continue to rise which will reduce buying power for most applicants. It is possible mortgage rates could rise as much as one per cent in 2017. If you’re currently home shopping, be sure to keep in touch with your lender AND keep your pre-approval up to date so you’re aware of how much you can afford at all times. 

Seattle – Portland fastest rising home prices nationwide

sold - sale pending signsAccording to the S&P CoreLogic Case-Schiller home price index, Seattle and Portland are leading the country with the fastest rising home prices in the twenty major metropolitan areas they follow. Seattle has had year over year price increases of 11% annually through September 2016, while Portland follows right on Seattle’s heels at 10.9%. Remember, these are average prices and some neighborhoods within these metro areas have seen prices rise much more dramatically year over year. 

According to Professor Gerard Mildner at Portland State University’s Center for Real Estate, the issue is that developers are just not building enough housing to meet the demand. He added that here in the Portland metro area, “We’re building about 20 percent fewer housing units in the last three years as compared to the years between 1990 to 2007.” At the same time, our rate of growth as been explosive with as many as 150 new residents moving into Portland every single day! That number varies from report to report, but numbers I’ve seen range from as low as 112 daily to as high as 165 people migrating into Portland daily. 

Housing inventory has sat at or below 2 months (the time it would take to sell all listed homes based on current demand if there were no new listings) for the last few years, and demand is on the rise with recent rate increases. 

How much has demand risen?

Lockbox activity 12-4-2016

Just to give you some perspective on demand, check out the chart issued by RMLS that shows the amazing increase in number of home viewings the week ending December 4, 2016!

Since the election, rates have been rising at the fastest pace we’ve seen in years, so buyers are jumping off the fence and getting to work finding that new house. On average rates are up at least 1/2% in the couple weeks! 




Is Portland experiencing a housing bubble?

The general consensus is NO. 

First of all, the population and business influx that we are seeing in this decade did not exist prior to the housing collapse on 2007-2008. Sure we saw people moving to Portland from all over the country, but the jobs increases due to the movement of big industry creating satellite offices here is a relatively new phenomenon. 

We have not seen the wage increases that would support price increases continuing at the rate we’ve seen over the last 3-5 years (up 32.5% in the last 5 years), but the lending guidelines (assuming that they are not over-turned with the new administration) are so much more stringent that current home owners and buyers are not nearly as likely to default as they were during the recession. High risk banking and lending practices and loan products have all but disappeared. 

Home ownership remains an American dream

Most  people interviewed want to be home owners. There is stability in knowing what your housing payment will be from year to year (versus rapidly rising rents); and where else can you see as great a return on your investment as current home owners are seeing?

As mentioned above, until supply catches up to demand, housing prices in Portland will continue to rise. At least that is the forecast until at least 2020. To be sure, the rate of inflation in housing values will slow as supply catches up to demand. There could even be a 10% price reduction in the next 10 years, but if your home value has increased by 30% and more, that’s not devastating, especially if you know your housing payment will not increase. 

Please read more in the article published by Ettro Capital in November 2016.




Housing market forecast for 2017 – Portland Oregon

Housing prices UPHousing prices and mortgage rates have very different factors driving the direction of both. If rates rise, will housing prices drop? I’m asked this question all the time. Many people assume that rising rates should cause housing prices to drop.

The truth is that no one can say for sure what’s going to happen with the housing market in the future. We know for a fact that both prices and rates are cyclical; but that’s because of all the many outside factors that influence the two markets. And to be sure, it’s important to remember that these are two very different markets.

Mortgage rates are tied to the Mortgage bond market

When demand for mortgage bonds drop, the yield on the bonds tends to rise and mortgage rates will follow suit. The demand for bonds tend to rise when Wall Street is in a slump. This causes the price for bonds to rise, so the yield drops and rates drop too. Conversely, when the bulls take over Wall Street, as we are seeing since the recent presidential election, institutions sell bonds and buy stocks. As bond prices fall, rates rise.

It would be an over simplification to say this is always true – there are always other factors that are part of this equation, but in general, WATCH WALL STREET! There is no doubt that when the Feds stop buying mortgage bonds to keep that market stable, mortgage rates WILL rise. The 10 year Treasury bond yield, which historically mortgage rates tended to mirror has risen more than 1% since the elections, and mortgage rates have followed though not quite as quickly. Mortgage rates bottomed at around 3.5% and that rate was available as recently as a few weeks ago. As of today, average 30 year fixed rate loans are available at 4.3%.

Housing prices are tied to supply and demand

Unlike mortgage rates, the price of housing is dependent primarily on supply and demand. When inventory is very low, as we have seen in Portland since about 2012, housing prices rise until inventory catches up, or demand drops.

Here in Portland the forecast is that housing prices WILL CONTINUE TO RISE for at least the next couple years. It will take that long for there to be enough inventory to meet the demand. Though, if mortgage rates rise dramatically, many potential home buyers will be priced out of the market.

Why is housing inventory so low in the Portland metro area?

  1. Migration – there are far more people moving into Portland than out. As of 2015 migration numbered approximately 112 people moving into Portland every day! Portland’s population is now at approximately 2.5 million residents and still growing. More recently we are hearing migration numbers have increased to closer to 150 new residents every day.
  2. Jobs and the economy – Industries are moving into Portland bringing some of their own employees with them, and boosting the economy by adding jobs for local residents. Recently, Amazon announced that they will be opening a giant warehouse in Washington county that will employ approximately 1000 people! Add this to Uber, Google, Airbnb, Ebay, plus all the smaller tech start ups, and you can see that there are jobs in this area, and people migrate to areas where employment is available.
  3. Climate – Unlike California and much of the southwest, Oregon has a fabulous moderate climate. Yes, it does rain approximately 141 days of the year, but most of those days we see some sunshine too. And the temperatures are moderate. We have few days below freezing or above 90 degrees. The rain keeps Oregon green and water prices low as compared to much of the country. 141 days of rain means we rarely have water rationing. There’s plenty of water to go around, even for those who like long showers. 
  4. Competition from institutional buyers – with prices relatively low and on the rise, institutional buyers such as hedge funds find Portland a great place to invest so they buy up much of the lower priced housing; competing directly with home buyers who actually live here. Unfortunately they hold these properties as investments and drive up the rental costs along with the housing prices. 
  5. Green economy  – Travel and Leisure magazine ranked Portland the greenest city in America in 2015. 
  6. Millenials are moving to Portland in huge numbers due to all the above factors and have been choosing Portland since around 2010.

All these trends are likely to continue which will continue to contribute to ever higher housing prices.


Election is over – watch mortgage rates rise

The election is over, and whether you supported Trump or Clinton, we all have to face that we are now looking at President-elect Donald Trump. As you know, he promised when elected, during his first hundred days he would push to roll back much of what President Obama accomplished. Unfortunately for consumers, this means much of the consumer protection legislation that was passed could disappear or be seriously revised. 

Since the recession, the Feds have kept interest rates low and continued government subsidies for mortgage bonds to keep mortgage rates low. However, Fed Chairman Yellin has already signaled that an interest rate hike in December is likely and that mortgage bond subsidies will end at that time.

Mortgage rates up approximately 1/2% in last few weeks

In the meantime, mortgage rates started rising even before the elections, and have picked up speed since the results were announced. Lenders tell me that average mortgage rates are already up about 1/2% in the last few weeks. Corporate America and of course this includes banks, are thrilled about the plan to lower taxes on the corporations and the wealthy. If you couple those tax cuts with regulation roll backs, who really knows where mortgage rates could go? 

One of the potential Fed Chairmen that Trump has been talking with has said that it’s time for rates to return to a more normal level. This means we could be looking at as much as a 2% increase over the next 2 years. That would normalize our mortgage rate environment which many of you may have forgotten typically runs around 6%.

Stay tuned. This could be a very different year than the last eight years since the recession. 




Fall and early winter are best seasons for both home buyers and sellers

Fall colors

Fall colorsLate October through the end of December  are always the best months for home buyers and sellers to either get their properties listed or hit the streets in search of the perfect house. This may sound counter-intuitive, but the reason is low inventory and serious buyers.

Relatively speaking few people list their homes during the latter part of the year, especially as we move closer to the holidays. Home owners get involved in home decorating, holiday shopping and of course, all those special holiday activities. They’re busy and don’t want to be bothered with keeping their homes as clean and orderly as possible for potential buyers.

Buyers also get busy, but serious buyers are looking to take advantage of less competition, hoping to avoid bidding wars and perhaps more negotiating power with sellers. Besides, even if they cant close a sale prior to year end, moving into a new home is a great way to start a new year. 

Feds meet again in December

The Feds are scheduled to meet again in December. The elections will finally be behind us, but there has been a lot of talk about raising interest rates one last time this year. Wall Street has seen corporations reporting strong earnings for the 3rd quarter of this year which makes it even more likely that the dreaded rate hikes could be upon us sooner rather than later. 

There are even rumors that the Feds will back off on their massive purchases of mortgage bonds low which have been keeping mortgage rates so low since the recovery began in 2012. Remember, even a small increase in mortgage rates will affect your buying power.

So, whether looking to buy or sell, don’t write off the later months in the year. 

Portland ranks #1 best city to live by Bankrate

Recently Bankrate rated all the metro areas in the U.S. and determined which are the best and worst cities to live in based on multiple criteria.

Best places to live in the US

Metro differences that matter

According to Bankrate, “Based on Wachter’s advice and some of our own research, we selected factors that influence the overall cost and benefits of home ownership and set about finding the best data available to measure them. They include:

  • Property taxes.
  • Affordability.
  • Property insurance costs.
  • Foreclosure rates.
  • Maintenance costs.
  • Average monthly home energy costs.
  • Appreciation rate.
  • Rent hedging.”

Out of a possible score of 80, Portland ranked the highest with at total score of 60.58.

Unlike many similar rankings, Portland was the only west coast city among the top ten, with other west coast cities such as Seattle, San Francisco, San Jose, Los Angeles and San Diego considerably lower in the rankings.

Portland had among the lowest foreclosure rate in the country, and THE lowest costs for property insurance!

Read more: http://www.bankrate.com/finance/real-estate/best-worst-places-for-homeowners.aspx#ixzz4L12M3KY2

It’s a sellers housing market ~ where are my multiple offers?

As home buyers and sellers know, this is a sellers housing market. In fact, Portland has been consistently one of the hottest markets in the country almost every month for the last several years, and no one is anticipating any slow down in rising home prices. As a result, home sellers have come to expect multiple offers when they list their houses. Unfortunately, many sellers are not finding that to be the case. Why not?

Location, location, location AND price

Buyers know that when it comes to buying a house, their top two requirements are location and price. In some locations, just about any house that is listed, regardless of the condition, will sell with multiple offers IF it is priced properly for the neighborhood. Even fixers sell quickly in these neighborhoods.

So, why do some sellers receive so many offers regardless of location?

Homes that seem to be in the highest demand are often either priced under that buyer sweet spot of $300,000 or less, or are priced below market value.

Unlike the house buying frenzy we experienced in 2012 – 2015, home buyers this year are far more cautious, picky, and savvy. This is likely to continue, in spite of low inventory and high demand. The bottom line is when buyers are spending so much money on a house, they want what they want, and seem willing to wait for that “right house” to come along. This is likely to continue as long as home prices continue to rise. Paying $300,000 for a house, while still relatively low priced in Portland’s current housing market, is still a lot of money.

Houses must be priced right to sell quickly

Almost every home owner thinks their house is worth more than it really is. Part of this is the emotional attachment to the house, but more often, sellers expect to recoup every cent they have spent in upgrading and maintaining their home. This is not the way it works. There are almost no upgrades that will repay you fully for the actual cost. You should reasonably expect about 75% of the actual cost, while some renovations will net you slightly more, and some could actually result in lower offers because they are so personal in nature that buyers will deduct from the price in order to have that upgrade removed or replaced. You may love your renovations and upgrades, but not every buyer shares your taste. You may think it was worth it to pay $5000 for a Bosch cooktop, but your buyer may not even notice or care if cooking isn’t a really big deal. You may have spent a ton of cash on custom cabinetry in your kitchen and bath. Would you believe most buyers won’t even notice that it’s custom?

Items on buyers must have lists that may keep them away from your house

  • Gas ranges – while this is generally not a major factor in price, approximately 90% of all buyers want gas ranges, and some won’t even look at a house without one.
  • Dual sinks in master baths are must haves in master baths, and often in main bathrooms as well, depending on family size and number of baths.
  • Air conditioning is increasingly becoming a must have for many buyers, especially as we see more people moving into Portland from much hotter and/or more humid climates.
  • Attached garages.
  • Hardwood floors.
  • Curb appeal is critical. If buyers won’t even walk into your house, you may have lost a sale. Be sure you’re not advertising a yard full of weeds and at least have some attractive landscaping out front. Paint the front door and even install a new light fixture. Remember, buyers form their first impression of your house in the first 10-15 seconds. Make sure their first impression is a good one. Great curb appeal can net you up to 10% higher offers and sales prices.

What if you price your house too high?

Prior to the housing boom of the early 2000s and this sellers market, it was okay to price a house a little too high. Houses typically were on the market 30-60 days, and most buyers typically offered less than list price anyway. Those days are gone. These days, if a house isn’t under contract within 5-10 days, buyers assume there is something wrong with the house. The old adage that if a house doesn’t sell, we can always lower the price is a bad practice in this market. The longer your house is on the market, the more likely it is that offers you receive will be less than list price. You can forget about multiple offers – they are very unlikely.

While it may seem counter-intuitive, sellers who price their houses a bit below market value are far more likely to sell for more money, AND receive those coveted multiple offers. Buyers are always shopping for deals, and sometimes can’t resist making an offer on a “steal of a deal.”

Price per square foot – this is the most over-used and inaccurate statistic out there

We see this number on multiple websites, or we can compute it ourselves really easily. If you divide the sale price of a house by the square footage of the house, you arrive at what is customarily called price per square foot. While this number makes sense in a homogenous neighborhood, where all lots were purchased by the developer for the same price, it is much less accurate in more custom or older neighborhoods where even lot size and condition of homes can differ widely. This is when price per square foot becomes such a misleading number that few people really understand. The truth is that a proper sales price is determined by multiple variables including:

  • number of bedrooms (each bedroom is given a value, but a master bedroom with a walk in closet is valued higher than one with a small closet, while a master suite is the most desirable).
  • number of baths (this is further refined by whether a bath is a half bath (sink and toilet), 3 piece bath (sink, toilet, shower or tub), 4 piece bath (sink, toilet, tub and separate bath), 5 piece bath (sink, sink, toilet, shower, bathtub). The more plumbing outlets, the higher the value of the bathroom.
  • square footage of house (this should be actual living space but in fact includes unfinished basements and even storage areas) .
  • garage (single car, two car, oversized, oversized with storage, finished (sheet-rocked), attached or detached, etc.)
  • basement (finished, unfinished, partially finished, high ceilings, outside entry, walk out basement or underground basement, etc. While all basements are computed into living space, they shouldn’t be. A basement with only 5 foot ceilings is basically worthless as living space for most families, but is often cited as living space and is calculated into price per square foot. An appraiser won’t give this basement full value though, and he/she shouldn’t).
  • finished attic space versus unfinished (variables include formal stairway to attic, ceiling height, insulation, walls, number of rooms, bath in attic, fully wired, etc)
  • lot size (if your lot is dividable or just over-sized or under-sized for the neighborhood, this will definitely affect the price per square foot)
  • condition of house – don’t overlook the details because buyers won’t.
  • landscaping – and yes this definitely does matter. Buyers are more likely to pay more for a house with both hardscaping and attractive front and back yards. Landscaping, and especially hardscaping is expensive. Do you have an outdoor kitchen? Water feature? Pool? Hot tub? While some of these features add values, others can cost you. What should not be overlooked is making the landscaping attractive, because a yard full of weeds will lessen the value of the house, and some buyers won’t even walk into the front door if the “curb appeal” is missing.
  • energy efficiency of appliances, fixtures, etc. Homes with high energy scores will appraise higher and will sell for more – up to 4-5% more than homes that are not scored and don’t include that 95% efficient furnace, etc.
  • Decks are more attractive to most buyers than patios – for reasons I don’t totally understand. They are much higher maintenance, and if not up high enough off the ground to be easily accessible, can attract all manner of varmints. Stray cats, mice, rats, etc will find that low lying deck a great place to nest and shelter from bad weather.
  • Hardwood floors versus carpeting. Some buyers won’t even look at houses with carpet.

So, if you see the house down the street from you is listed for $300 per square foot, you may decide that your house should be priced the same. But what if that house is priced under $300,000, while you want to price your house at $400,000? Suddenly you’re looking at a whole new batch of prospective buyers. Yes, your house may be bigger and have more upgrades than your neighbor’s house, but there are far more people who can and will pay up to $300,000 than up to $400,000, so you’re not competing with the same buying pool. It’s very likely that your neighbor’s house is smaller than yours, and/or may be on a much bigger lot. In any event, more potential buyers will find themselves in a more competitive market for lower priced homes regardless of size or condition.

Statistics show staging your house almost always reaps more offers at higher prices

Believe it or not, only 10-30% of all home buyers can actually visualize how their furnishings will look in your house. This is why most high end homes and almost all big developers stage their homes before they go on the market.

  1. Empty homes look smaller than furnished homes, and this is especially important for bedrooms.
  2. Buyers are better able to visualize themselves in your space.
  3. Rooms with undefined uses (such as dens or bonus rooms) can now be defined.
  4. The entire house looks more finished and higher end. This is really important when prospective buyers are looking at photos online, and of course when they walk into the house.

Yes, staging is expensive, but statistics show that homes that are staged do receive higher offers.

Why do home prices continue to rise in Portland?

  1. Industries continue to move into the Portland area – many of these are industry giants like Google, Airbnb, Amazon, Uber, and more. At the same time, tech start ups find Portland attractive, and of course, it seems that just about everyone wants to at least visit Portland, and once they do, they’re hooked and ready to pack up and move here.
  2. It has been reported that as many as 160 people move into Portland every single day!
  3. Portland has been rated the #1 best city to live in by the National Association of Realtors as of September 2, 2016!
  4. Portland offers much that so many people are seeking:
    • moderate climate,
    • big city atmosphere,
    • it’s a foodie haven,
    • everything you could ask for in terms of outdoors activities all within an hours drive, and often bike riding distance
    • employment
  5. Moderate housing prices relative to most other big cities in the U.S., and especially relative to other urban areas on the west coast
  6. Housing inventory remains below 2 months (the number of months it would take to sell all the houses currently listed at the current pace of sales.
  7. We still have a huge number of institutional investors (think pension funds, banks, unions, insurance companies or real estate investment trusts)buying in Portland to capitalize on the rising housing prices and rising rents.

We could go on and on singing the praises of Portland, but unlike 20 years ago when Portland was known primarily for rain, we are now one of the most popular tourist destinations, and as mentioned above, one of the fastest growing cities in the country. (If only our transportation and housing needs could keep up with our growth.)

Should Portland home sellers be required to get a home energy score before selling?

energy star logo as seen on most appliancesThe city of Portland is proposing that all Portland city residents be required to have an energy audit and obtain a home energy score prior to listing their homes. There are approximately 160,000 single family homes in the city of Portland, but fewer than 2% of owners have an energy score. Why does this matter?

As shoppers, and we’re all shoppers, we want as much information about what we’re buying as we can get. We look for labels on food, automobiles, energy labels on appliances, etc. But home buyers want more information, and without an energy audit and score, that information is not readily available.

The framework for energy audits for houses in Portland was first established in 2009. By 2013, the training program for certifying energy scoring professionals was underway, and yet, here we are close to the end of 2016, and fewer than 600 Portland houses have had an audit done.

Portland has a Climate Action Plan that proposes that by 2050 Portland will reduce carbon emissions by 80%. But how can we achieve that goal without knowing how much carbon is emitted into the atmosphere by each house without audits? We already know that residential buildings account for approximately 50% of the total carbon being released into the atmosphere from buildings. (According to the proposal, “By April 2017, 80 percent of Portland’s commercial building square footage will be reporting energy performance.”)

More about energy audits

Before everyone panics, you should know that an energy audit takes only 45 minutes to an hour to complete, and costs only approximately $150-$250 per house. On the upside, a house with a high energy score will generally sell for up to 4% more than one with a low score, or no score at all. (With average home prices in Portland now around $400,000, you just might net a lot more money when you sell your house.) So, in spite of a lot of opposition, this is really a no brainer for both buyers and sellers alike IF the proposal is drafted property (see below for reasons to opposition). Most home owners are upgrading their homes all the time. So why not pay a little extra for more energy efficient appliances, better insulation, and regular home maintenance to improve your energy score? It makes your home more comfortable to live in and reduces your energy bills to boot.

The other upside to going energy efficient is that there are both state and federal tax credits for many of these purchases, as well as rebates issued by Energy Trust of Oregon, and sometimes even the approved contractors who install these purchases. I’ve even been told by one prior client that installing an electric heat pump instant hot water system was almost a net zero purchase with all the credits he received for the purchase. AND, of course, if you’ve ever looked at your Portland water/sewer bill, you will have noticed that the sewer portion of the bill is usually higher than the water usage portion of the bill. With instant on hot water, you’re not paying for all that water that runs down the drain while you wait for the hot water to get to your kitchen, bathrooms, and laundry room.

And one last benefit is that with a good energy score, when you sell your house, you qualify for appraisers who are certified to value your home with your energy upgrades. That is no small bonus these days when all too often homes are appraising lower than actual sales price.

How will this information be passed on to prospective buyers? Home owners can obtain a score at any time and report their scores to the city of Portland via mail, fax or online. The city will make this information available on Portlandmaps.com, and of course, listing agents will enter this information into the RMLS when the house is listed.

Why so much opposition to requiring energy audits?

According to PMAR (Portland Metro Association of Realtors), this proposal is poorly drafted.

  1. There aren’t enough certified auditors yet, and most who are certified are also selling some of the “green” products you might purchase anyway.
  2. There are multiple scoring systems. In any given metro area, the scoring model must be consistent so consumers will understand the reports and scores.
  3. We are already experiencing an appraisal crisis here in the Portland metro area. It’s not unusual for it to take 4-6 weeks and even longer in more outlying areas to get an appraisal done. Are there enough appraisers out there who are certified to value energy efficient homes?
  4. The audit must be completed prior to listing a house. For someone who is ready to list now, this could delay that transaction, perhaps for months. This could potentially be a disaster for someone who has just lost a job or is experiencing some other type of life crisis.
  5. Why are banks exempt from this disclosure?
  6. Why are rental properties exempt from this disclosure?
  7. Finally, why does this proposal apply only to homes within the Portland city limits? Does this mean that home buyers in Washington, Clackamas and Clarke counties don’t care about energy efficiency?

What other cities have passed similar policies?

Several U.S. cities have passed similar disclosure policies for their market, including Austin, Texas; Berkeley, California; Santa Fe, New Mexico; and Boulder, Colorado. Internationally, residential disclosure policies are in effect in the United Kingdom, Denmark and Australia. The reduction in carbon emissions is apparently already noticeable where audits are required.

Please read the full scope of the proposal for more information.


Is Amazon planning to open an office in Portland?

Amazon logo

Amazon logo

 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. 


Friends of Trees of Portland

snoozing in you hammock

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.

snoozing in you hammock

OR – you might share your hammock with a bear?

More benefits of planting trees in your front and back yards

  1. Trees help clean the air of pollutants.
  2. Trees provide shade during the hottest weather which will lower your utility bills.
  3. 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?
  4. 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.

You might also want to read:

Factors that can increase the value of your home


Leading economist says Portland home buyers ARE at risk of being priced out of the market

Housing prices UPHome 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

Wall StreetCompounding 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.





Portland housing value increases top the nation again – How high can we go?

Housing prices UP

Housing prices UPAccording 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. 


Portland home values soar 17% in last year ~ average home prices hit $385,000!

sold - sale pending signs

sold pendingAs of the end of the first quarter of 2016, houses within the Portland city limits have soared an almost astonishing 17% over the last year (according to Zillow). Throughout the rest of the metro area home values are up approximately 13% – not quite 17%, but still a very good return on any investment these days. In many areas of Portland, housing values have hit record new highs, and just keep rising.

To make matters even worse, inventory dropped again to almost new record lows of only1.3 months (the time it takes to sell all the houses currently listed if there are no new listings). Many buyers I work with say that trying to buy a house is almost like having a second job. It is not for the faint of heart or those who are easily discouraged. Buyers need to be ready to get out and look at new listings the day it goes active because any house could be sold in just one day, often with multiple offers. And buyers need to be ready for “rejection.” It’s not unusual for buyers to make offers on many houses before they get one accepted. This is not personal folks. Money talks.

Buyers – don’t even think about a low ball offer; not in this market (unless the house has been listed longer than a week or two.)  Sellers know this is their market and most are prepared to wait for the right offer to come along. 

Average home values in Portland metro area hit $385,000

It’s true that the averages include the prices of homes in the highest priced areas of Portland;  but this is the highest average price we have ever seen, and it’s just going higher. With big industries moving into Portland and employment on the rise, there are more buyers out there with bigger budgets helping to push prices up. 

Home buyers with lower budgets should consider the suburbs

The typical Portland suburb does NOT look like this. This is a photo of a suburb in Las Vegas.

The typical Portland suburb does NOT look like this. This is a photo of a suburb in Las Vegas.

The “dreaded suburbs” has many would be buyers thinking gloom and doom. Millennials and those with larger budgets have their eyes on being close in to down town Portland and are willing and able to pay the higher prices. Just last week in the very popular Hawthorne/Belmont district there were only 3 listings.

But the suburbs aren’t the end of the world. There are some really beautiful neighborhoods outside of the I-5 corridor. With home values up at least 13% over the last year those who move to the suburbs are still making a very respectable return on their investments! Of course, it’s always possible that many of these suburban neighborhoods will sprout little boutique shopping areas too, and in time, you might find that you actually like where you were able to buy at a lower price. You get a lot more house for the money in the suburbs. Remember that the Division shopping area didn’t appear until PokPok restaurant opened and that was only 10 years ago.

Businesses are also moving to the suburbs

It’s not new that businesses are moving out from downtown Portland. Property costs are  lower in the suburbs, so many big companies choose to build their campuses further out. Look at Intel, Nike, Columbia Sportswear, and all the high tech companies out in Beaverton and Hillsboro; or Xerox, Sysco Food Systems, Mentor Graphics and Flir Systems down in Wilsonville and you’ll find those suburbs are where the employees are moving to be closer to their jobs; and their housing markets are thriving too. As a lot of start ups are moving into Portland, we’re finding that many of them are also locating out in the suburbs. 

At some point, housing inventory will catch up to demand, and the market will slow. That 13% return on your investment will definitely help you purchase another house, perhaps in a more desirable location if you choose to. You’re certainly not going to see that kind of return paying rent (which is also increasing at unprecedented rates of 14% per year). Buyers need to remember that a house is more than just a place to live; it’s also an investment for the future. It’s not even unforeseeable that housing prices could dip again one day. It has happened many times historically, so it could happen again.

When will the housing market craziness end? Is this just another housing bubble?

We’re hearing “bubble” everywhere, but few analysts or economists think this is a bubble. Portland property values have been lagging behind all the major metro areas on the west coast forever. It is in part why 500 people are moving to Portland every week. And of course, that high rate of migration into Portland is fueling our high demand and low housing inventory. Plus approximately 25% of all home sales are cash buyers! With all these factors in place, this housing boom was predicted. Even Forbes magazine named Portland one of the housing markets most likely to outperform this year. That prediction is certainly coming true now. 

However, virtually everyone believes that the market will cool, but very likely not before 2018. It will take that long for inventory to catch up to demand. Note, that cool is the word here, not bubble bursting. Eventually the housing market will stabilize and we will retreat to more normal 3% annual home value increases. But inventory has to rise to more like 3-6 months before that will happen. For better or worse, this is our housing market now, and anyone who wants to buy a house has to play in this market. It’s quite an experience. 

What about buyers with budgets of less than $300,000?

Buyers with budgets of less than $300,000 absolutely should be looking outside the inner corridor to find a home, especially if they need a house with 3 bedrooms and 2 baths. Inside the inner corridor, few homes are priced below $300,000 and most are major fixers or tear downs and often require cash buyers. But even close in to I-205, home prices are rising almost as quickly as just across the interstate. Neighborhoods like Park Rose, Maywood and Mill Park took off last year. Others further out such as Milwaukie, Gladstone and even Gresham were among the hottest selling neighborhoods in the metro area. And on the west side, Beaverton and Hillsboro are definitely hot too. 

You may even find that you like living in the suburbs where there is less traffic and your money allowed you to buy a larger home than would have been possible closer in. And with the exception of the new housing developments, most Portland suburbs do not feature “every house looks the same” type of atmosphere. Most of our suburbs are a great mix of older homes, lots of mid-century style homes (which, by the way are definitely coming back into vogue), as well as newer infill homes. There are lots of quaint tree lined streets and evidence of pride of ownership further out. Stranger things have happened, and it could happen to you.

Alert: Hackers take aim at home buyers

hackers target home buyers

Hacker at workIf you’re a home buyer, you should be aware that you are a very popular and relatively easy target for hackers. In order to purchase a home, you have to disclose all your most closely held personal information, especially if you are financing your purchase. All this information is shared among a plethora of individuals in multiple offices around the country because there are so many moving parts and interested parties involved in the purchase of property.

And, of course, huge sums of money are being exchanged during the process. Why wouldn’t hackers target you?

There are two hacking schemes being used recently that are pretty scary, so please read on if you or anyone you know is in the process of buying a house now or in the near future.

Regardless of which scheme the hackers are using, the route to your information is either via your realtor or your lender. Once they hack into one of our email accounts, they do nothing to let us know they are in; but rather watch for information about buyers and sellers.

Scheme 1 has been around about a year now, and this one is definitely targeting your money.

As your sale closing approaches, your title company or attorney will send you instructions that includes what you need to take to your closing. In addition to a photo ID you will also be told  the amount of funds required, and where and how to wire funds to close the transaction.

At very close to the same time, the hacker will also send you what appears to be an official looking email from the “title company” with “updated instructions” on where to wire funds. (Remember that your agent and escrow officer have been communicating frequently during your purchase, so hackers have the official signatures each has been using, and these are easy enough to copy to make your email with updated escrow instructions look legit.) Some hackers may even include other information about your transaction to make the email look even more like it has come from a trusted source.
Generally speaking, this will not impact the majority of buyers who hand carry a cashiers’ check for down payments and closing costs to the title company at closing. But, for out of state buyers and cash buyers, it is not uncommon for funds required for settlement to be wired to the title company. Cash buyers, this can be hundreds of thousands of dollars that you could be wiring directly into the hacker’s bank account.

Scheme 2 is an attempt at ID theft and comes to you in the form of an email that appears to be from docusign.

hackers target home buyers

This is an actual email a home buyer received

If you’re like most buyers these days, you sign your offer to purchase documents via electronic signature. Docusign is just one of the businesses that offer this service, and so far as we know, it’s the only one that is being used in the recent hacks. Unfortunately, you might get documents to sign from either your realtor or your lender, and the emails you receive are just ambiguous enough to fool you into thinking they are official documents that you have already signed.

Here’s a sample of such an email that was recently received from a home buyer:

As you can see, this email isn’t even from docusign but from an Eden Guthrie, and apparently Google knows about this scheme because a warning is attached as well; so please do NOT click on the ACCESS DOCUMENT button.


However, Google also uses this warning on legitimate documents from other e-signature providers, so be sure to check with your lender or realtor to make sure that whatever you have received is legit.

How can you protect yourself from hackers?

  1. Make sure that your realtor, lender and title company are all taking every step possible to keep hackers out of their email. Personally my email is encrypted and I use strong passwords that I change frequently which makes watching my email much more difficult for hackers.
  2. Ask those involved in your transaction to always alert you when any document has been sent to you for electronic signature. I always send a text to make sure you’re watching for email from me or whoever the email will come from.
  3. Be aware that it is very uncommon for a real estate agent to request sensitive information from buyers, especially via email. We don’t need your bank statements (unless you are a cash buyer) or any information with your social security number. That type of information should always be handled by your lender. When we do require proof of funds for a cash transaction, buyers should always redact most of your account number (leaving only the last 4 digits), and should send proof of only enough funds required to settle the purchase. If you are able to encrypt the email, that would be even better.
  4. Before wiring funds, always double check with your title company or attorney to make sure that you have the correct wiring information for your bank.
  5. Be sure to keep and check old emails you have received from the title company to make sure you are calling or emailing the correct person, because hackers will include their contact information in case you are looking for more information.
  6. Don’t click on any links in the email, giving the hacker access to your email (if they don’t already have it).
  7. Remember that all final loan documents must be signed in person. Electronic signatures are never used.

It’s an Internet world out there, but there are always steps you can and should take to protect yourself. Unfortunately, if you’re a potential victim of scheme #1, once your bank wires funds, even if to an incorrect account, the money is gone. And if you’re a potential victim of scheme #2, once a hacker has all your most sensitive information, you become an ID theft victim and have to deal with all the hassles of getting that squared away. Your bank accounts can be locked, your credit will be flagged, and so on.

The good news is that banks, title companies, lenders and realtors are all aware of these threats and are all taking whatever steps we can take to tighten security on your behalf. But at the end of the day, responsibility for protecting your money and your ID  is still yours. So, be careful out there. Check and double check with whoever you’re working with just to make sure that whatever you are receiving is legitimate, and proceed from there.




Portland home prices hit new median highs as of end of 2015

It’s official. Throughout the Portland-Vancouver metro area, home prices have hit new median highs as of the end of 2015. All four counties have surpassed the values and prices last seen prior to the housing crash of 2007.

What’s driving all this growth? I’ll recap some of the reasons covered in the past, and add a couple new reasons that aren’t as common knowledge.

  1. Approximately five hundred new people are taking up residence in this area every week and they need a place to live.
  2. More high paying jobs are being created as technology businesses create outposts and new offices in the Portland area.
  3. The extreme volatility in the stock market has many investors re-thinking the wisdom of investing on Wall Street. Institutional investors are buying up the Portland housing market and are aggressively competing with all cash offers often at premium prices as they consider our market a better investment than Wall Street. Portland is currently the 2nd most desirable area for institutional investors in the country.
  4. Mortgage rates remain low for those still financing their purchases.
  5. Millennials have entered the housing market.
  6. Record low housing inventory has buyers driving up prices with bidding wars as new buyers try to get into the housing market. This is especially true for houses priced at or below $400,000.
  7. Builders have been very much behind the eight ball in catching up to housing demand; though big developers such as DR Horton and Lennar Homes just completed purchases of huge tracts of land. Still it will be a couple years before they are able to sell houses on those parcels because plans must be submitted to cities for approval of developments and of course the infrastructure has to be completed before they can even start building houses.

It seems that every day new articles cross my desk talking about just how hot the market is in Portland, but the prognosis for how long this housing boom will last continues to be extended. Last year the “experts” were saying that we would see a robust market at least through 2016, but now some experts say that with the unprecedented job growth, low housing inventory, and rate of migration to this area, our housing market may very well not slow down until sometime in 2018! 



Which Portland neighborhoods saw 20+% median price increases in 2015?

median price increases in Portland


Did you know that RMLS now breaks up the Portland metro area in 122 neighborhoods (primarily for statistical purposes)? While most neighborhoods throughout Portland saw median price* increases last year of 10% and more, a few just rocked the statistics with greater than 20% median value increases in 2015. Several of those areas have been rising stars for a few years now, such as Woodstock, Cully, Kerns, and Sabin, but there were some surprises east of I-205, such as Mill Park, Park Rose, and Centennial. But the biggest single median price gainer was East Columbia which saw a 42.1% increase in median prices for the year!

It’s true that a few of the neighborhoods that saw the biggest increases were lower priced areas (average home list prices below $250,000), but a few now have median prices at or above $400,000, so price was not the single factor that contributed to the gains. However price has been a factor in driving attention to those areas that have emerged over the last few years.  

How did your neighborhood fare? Check out the interactive map here, along with a chart with even more statistics by neighborhood. (Please note that the interactive map includes a second map showing neighborhoods outside Portland city limits). And if you’d like even more information about the value of your house these days, please feel free to contact me directly and I’ll be happy to do more research for  you.

Overall, real estate remains on fire throughout the Portland metro area. Bidding wars continue to be the norm, especially for homes that are basically move in ready. It’s becoming increasingly difficult to find any listings priced under $225,000 anymore as avearge and median prices continue to rise due to demand exceeding inventory. This trend is expected to continue at least through 2018, when it is hoped that new construction will catch up to demand. 


*median price = half of all homes sold were above prior median price and half were below


The average home in Portland Oregon increases in value $2.82 every hour

girl saving pennies in piggy bank

Did you know that the average price of a home in Portland has risen to $357,500 as of the end of February 2016? That’s a huge increase over the average sales price of $283,300 at the end of February in 2013. Put another way, a home owner who purchased a home in February 2013 at an average price of $283,300 has seen their value increase by $74,200! That means that home owner was actually earning $2.82 in equity every hour from the day they closed until now.

Remember this represents an average price and value increase over the last three years. In some areas of the Portland metro area, values were increasing at a much higher rate, and of course the reverse is true that many areas saw lower rates of inflation.

For those who are still waiting to buy a home, or are trying to save for the down payment, are you saving at a rate of $2.82 every hour?

Yes, this is all based on averages. Not all future potential home buyers can afford an average priced house or $357,500. If this is you, should you just give up on your dream of home ownership?

The truth is that  less than half of all home buyers can afford an average priced home in Portland anymore. These last two years in particular have seen an explosion in home values due to low inventory, low mortgage rates, and the number of competing buyers (which is being exasperated by the high migration rate to Portland. 

Many buyers are moving further out from downtown to make the dream of home ownership a reality. The end result is that prices east of I-205 and south of I-84 are now sky-rocketing too.  Yes, the hottest neighborhoods are still predominantly close in to downtown Portland, but areas way further east, such as Gresham, or southeast, such as Oregon City and SE Portland are in high demand lately, and this is likely to continue as we move through 2016 and even into 2017-2018. In the southeast, Woodstock and Milwaukie have seen almost astonishing growth. 

Where will the next hot neighborhoods be?

There is really no definite way to predict which areas will take off and become the next Alberta, Sellwood or Hawthorne, but buyers should look for anchor restaurants that see a lot of traffic. Just look at what happened on Division Street after PokPok opened just 10 years ago. Also watch for great little coffee shops to open nearby. Sure Starbucks is a good indicator, but a boutique coffee shop where residents are comfortable hanging out with laptops and tablets are even more significant. Little shops are likely to follow to hopefully cash in the traffic generated by the anchor establishments, and a new “in” neighborhood can emerge. You’ll know your area has fully emerged if a Trader Joes or New Seasons opens nearby, but that takes a while. 

In the meantime, enjoy your new home and work with neighborhoods to beautify where you live.

Your piggy bank will thank you. 




Two tips to net top dollar when you sell your home

Every home seller wants top dollar for their home, but many are going at pricing wrong, and it’s costing them money!

List your house with a realtor®

  1. Sellers think that by trying to sell their home on their own, they are saving the cost of the realtor commission. The truth is that study after study has shown that sellers who list their homes with a professional actually sell for much higher prices than those who try to go it alone.

“The median selling price for all FSBO homes was $210,000 last year. When the buyer knew the seller in FSBO sales, the number sinks to the median selling price of $151,900. However, homes that were sold with the assistance of an agent had a median selling price of $249,000 – nearly $40,000 more for the typical home sale.”

FSBOs vs listed - median sales prices

The truth is that realtors have a lot of tools to market your home that you do not have. Just listing your home on the local MLS (multiple listing service) gives your home thousands of times more exposure than the typical home owner has. 

  • Local realtors may not even know your house is for sale if it’s not listed.
  • Realtors who list a home have the capability of broadcasting your listing via email to all realtors in a given area letting them know there’s a hot new listing to show. 
  • There are more than 5,000 realtors in the Portland metro area working with buyers. How can a single home owner compete with the sheer numbers of possible real estate professionals who might show your home to their buyers?
  • You are free to go on vacation and leave the work to us. 
  • Most buyers prefer the seller NOT be home when they are viewing your home.
  • We know what our buyers are looking for, so know what features to point out that could be just the right selling point for your home.
  • Lock boxes give listing agents the capability of calling the buyers’ agent to follow up and get instant feedback from buyer viewings; and to keep those agents in the know if prices are changed, when offers are received, etc.

The MOST important reason to list your house is that most buyers prefer to work with a professional realtor. As a home owner, you are not permitted to use our state sanctioned offer forms (10 pages of legalese that protects both buyers and sellers). Most buyers want that protection, and the comfort of knowing that their realtor will watch out for them and guide them through the process.

In short, far more potential buyers will view your house when listed than when for sale by owner. The more people who view your house, the more likely you are to receive more and higher offers.

Price your house slightly below market value

Most sellers think that if they price their houses just above comparable value, they have room to negotiate with buyers. This actually makes some sense in a normal housing market. But NOT in a sellers’ market.

Look how many more people will view your house when it's priced below market value!

Look how many more people will view your house when it’s priced below market value!

The truth is that the secret to making more money on the sale of your home is to get more buyers to view it. In order to do that, we will often price your house just below actual market value so it looks like it’s a bargain.

Home buyers are pretty savvy these days. They do their research and have a pretty good idea what a house should be priced at in any given neighborhood based on size and features. But, everyone wants to pay less for a house than fair value and that will bring hoards of buyers to your home. Who can resist a house on sale?

Because the buyers think they might get a good deal, more of them are likely to “throw their hats into the ring” to try to pick up this bargain. When there are multiple offers for a house, the buyers actually end up competing with each other for your house, rather than haggling with you over the price. This is why in multiple offer situations, so many homes end up selling for considerably more than list price, making you Mr./Ms. Seller “the winner.”


You might also like to read:

Factors that can increase the value of your home

Great curb appeal can net sellers up to 10% higher prices

Staging your house for sale nets sellers higher offers


16 signs your home is seriously dated

maintained bodyHomes are a little like people. They require continual maintenance and updating to maintain their integrity, appearance, and safety. Potential buyers to your house will watch for any features that spell money to them after the purchase closes. But beyond that, failure to invest in proper maintenance and updating WILL cost sellers money, and can be dangerous to current residents.

Obvious signs that a home has not been well maintained or upgraded in a long time:

  1. Fuse boxes – especially a fuse box with only four fuses! Fuse boxes haven’t been installed in new construction in decades with good reason. They simply don’t have the safety features that new circuit breaker electrical panels have. Yes, fuses trip or burn out if over loaded, but it was too easy to bypass those safety features and create a fire hazard in doing so. In addition, there are no fuse boxes out there with enough capacity to handle new appliances, big flat screen TVs and sound systems, computers, and all the new gadgets that are being manufactured every day to safeguard your home.
  1. Old electrical panels – especially where additional panels have been wired into the original panel, or where there are signs of cobwebs, frayed wires, etc. inside. Electrical panels need to be replaced to accommodate new technology, or can also be a fire waiting to happen.
  2. No GFCI outlets – especially in any room with water access such as bathrooms and kitchens. Again, these are dangerous and should be upgraded. Electrical shock and potential electrocution are the obvious readily apparent dangers here.
  3. Aluminum wiring According to the Consumer Product Safety Commission, homes wired with old technology aluminum wire “are 55 times more likely to have one or more connections reach Fire Hazard Conditions than is a home wired with copper.” Enough said.
  4. Old furnaces that obviously have not been serviced regularly (if there are dust mites inside, this furnace needs at the very least, a good cleaning and inspection). But buyers are also looking for energy efficiency, and old furnaces were not built nearly as energy efficient as newer models. If you have an old furnace in your home, make sure it is cleaned and serviced prior to listing, and if possible get your servicer to write up a letter stating that the furnace is in good working condition.
  1. moss covered roofMoss covered roofs – If your roof is so covered in moss that you can barely see the roof, most buyers will assume this roof needs replacing. At the very least, have that roof professionally cleaned and inspected.
  2. Carpet in the bathroom – This is a definite replace it now situation. It is not only unsanitary, but mold can be hiding in and under the fibers of the carpet.



More flags that will cost home sellers in their ultimate sales price

  1. Wall to wall shag carpeting is definitely out, and if stained or has well-worn or bare patches, dollar signs are going off in your buyers’ heads.
  2. White appliances – especially if they are old. White appliances have been out of favor for a decade or more, and especially those older electric stoves with coils rather than flat surface tops. Even worse are appliances in colors such as sage green, gold or beige.
  3. Busy dated wallpaper and bold colored paint. Remove both and go neutral with your color scheme.
  4. Brass fixtures (lighting, drawer pulls and door knobs) really date your home.
  5. Linoleum
  6. Tiled counter-tops – OK – you love that electric blue tile, but it will be the very rare buyer who loves it as much as you do. And the grouting is very hard to keep clean and sanitary.
  7. Formica counter-tops – enough said.
  8. Popcorn ceilings – These are not only dated, but in a huge percentage of homes built prior to 1978 or so, contain asbestos. Popcorn ceilings definitely have to go. But be careful about doing it yourself before you have it tested for asbestos.
  9. Wood paneling – We’re not talking log cabins here or beautiful wood details such as wainscoating. We’re talking about the inexpensive wood paneling that was so in vogue half a century ago. If you can’t afford to tear those out and sheetrock the walls, at least paint them a neutral color.

Remember that home buyers have their eyes on their wallets

If there is anything in your house that seriously needs updating, sellers should always consider making those upgrades before listing. Buyers almost always over-estimate the cost and time to do those upgrades themselves and will low ball sellers to the extreme IF they make offers at all. All too often buyers won’t even want to go see a house with photos showing white appliances, popcorn ceilings, wood paneling and gold fixtures. 90% of buyers out there are looking for move in ready.

If you Mr./Ms. Seller are looking for top dollar for your house, talk to your realtor® about what not upgrading your house could cost you in real dollars and cents. Remember the more potential buyers you can attract, the more money you will make on your sale.




Portland tops the list of fastest rising home prices in US for last 3 months

home price appreciation 2015 in USAccording to a recent article in the Oregonian, Portland continues to lead the nation with the fastest rising home prices in the U.S. with prices rising more than 10% in 2015 (followed by San Francisco and Denver. Seattle and Dallas were the next runners-up with price increases above 9%). For the last couple months of 2015, and now two months into 2016, the market is screaming hot and home prices just keep rising.

For those considering buying a house, you should know that prices for starter homes are closing in on $300,000 in most of the Portland metro real estate market. To be sure, there are homes still priced in the low to mid $200,000 – $250,000 range, but with more buyers than available properties, bidding wars are the name of the game. Within hours of being listed, sellers will receive often multiple offers, resulting in a sale price 20-30% higher than list price.

I’ve heard it many times, “I’ll just wait for the market to cool off.” But the forecast is that the demand is so high most economists forecast that this condition is likely to persist well into 2018 (when it is anticipated that new construction should catch up to demand.)

Where are houses priced under $250,000 in Portland?

If your budget and pre-approval is for less than $250,000, you should be looking in SE Portland. I know, everyone wants to live as close in to downtown as possible. The “hottest” neighborhoods are moving east too. It used to be that everyone wanted to buy west of 82nd Street. Last year that barrier moved to I-205, and this year we are looking at almost anywhere between I-205 and 130th as hot neighborhoods. But there are pockets east of 130th that are getting to be equally as hot.

Currently prior overlooked neighborhoods such as Maywood, Park Rose, or Mill Park are becoming the Montevillas and Cully neighborhoods of last year.

How to spot neighborhoods on the rise

Forecasting where the new boutique areas will pop up is tough, but here are some signs to watch for:

  1. Restaurants opening to anchor a shopping area – remember that Division street started with the opening of Pok Pok and just expanded from there to be one of the hottest little neighborhoods in town.
  2. A great little café offering freshly baked pastries and more atmosphere than a Starbucks.
  3. Nearby strip malls that can easily become little boutique malls.
  4. Small boutique type shops squeezing into more commercial strip malls.

You will know the neighborhood is “on the map” if a Trader Joes or New Seasons market opens nearby. But by then, it’s already too late to get in on what has already become a trendy neighborhood.


Portland-Vancouver metro area home prices hit new highs

Housing prices UP



Housing prices UP



It’s official. Throughout the Portland-Vancouver metro area, home prices have hit new median highs as of the end of 2015. All four counties have surpassed the values and prices last seen prior to the housing crash of 2007.


There are multiple causes for this explosive growth:

  1. Five hundred new migrants are moving to this area every week and they need a place to live.
  2. More high paying jobs are being created as technology businesses create outposts and new offices in the Portland area.
  3. Investors love Portland housing

    Investors & Portland housing

    The extreme volatility in the stock market has many investors re-thinking the wisdom of investing on Wall Street. Institutional investors are buying up the Portland housing market and are aggressively competing with all cash offers often at premium prices as they consider our market a better investment than Wall Street. Portland is currently the 2nd most desirable area for institutional investors in the country.

  4. Mortgage rates remain low (for many below 4% last week for 30 year fixed rate loans.)
  5. Millennials have entered the housing market.
  6. Record low housing inventory has buyers driving up prices with bidding wars as new buyers try to get into the housing market. This is especially true for houses priced at or below $400,000.
  7. Builders have been very much behind the eight ball in catching up to housing demand; though big developers such as DR Horton and Lennar Homes just completed purchases of huge tracts of land. Still it will be a couple years before they are able to sell houses on those parcels because plans must be submitted to cities for approval of developments and of course the infrastructure has to be completed before they can even start building houses.

It seems that every day new articles cross my desk talking about just how hot the market is in Portland causing the prognosis for how long this housing boom will last continues to be extended. Last year the “experts” were saying that we would see a robust market at least through 2016, but now some experts say that with the unprecedented job growth, low housing inventory, and rate of migration to this area, our housing market will very likely not slow down until sometime in 2018!

Portland’s explosive housing market grabs more headlines

Portland Oregon hottest housing market in the US


If you’ve been watching and reading the news lately, you would have noticed that the Portland real estate is in the headlines. The state of our housing market has been featured in The Oregonian, on national news and there was even an article in CNN Money  published on February 5, 2016 asking “Who’s to blame for Portland’s soaring home prices?”

According to the report in CNN, “Everyone wants to move to Portland, Oregon. But the more popular it gets, the less affordable it becomes.” Portland was the fastest growing city in the country in 2015, and appears to be on pace to top the charts again in 2016.

Anyone currently shopping for a home in Portland already knows how crazy our housing market is. As in 2015, the normal slow-down of home buyers never happened during the holidays, and January again broke records for number of home sales. In fact, sales were up 25.9% over number of sales for January 2015, and posted the most January sales ever since RMLS began keeping records in 1992.

Sellers are still receiving multiple offers and homes are almost always selling for more than list price. Eighteen to twenty offers on a home are not uncommon.

According to KATU, in a news report last night, buyers who offer $20,000 above list price often find themselves outbid. In fact, we have seen houses sell for as much as $150,000 higher than list price in the last year or so in the most popular neighborhoods.

According to RMLS, the average price for houses in Portland as of the end of January 2016 was $355,700, up from $333,400 as of end of January 2015.

Are prices soaring everywhere in the Portland metro area?

Yes, but of course some neighborhoods are hotter than others. According to Zillow, the three hottest areas in Portland so far in 2016 are St. Johns, Woodlawn (Dekum Triangle) and Parkrose.

Other sources say that the hottest neighborhoods are St. Johns, Hawthorne, and inner NE Portland (west of I-205). 

Regardless of which neighborhoods are in fact the very hottest, what we know is buyers searching for homes anywhere west of I-205 should expect high demand and unfortunately bidding wars.  Since prices anywhere west of I-205 tend to run from $300,000 and up, buyers in lower price ranges are being forced to look further east, so homes sales anywhere west of 130th are now booming too; the closer in to downtown, the hotter the neighborhoods.

So, who’s to blame for Portland’s soaring house prices?

There are many reasons for what’s going on in this area, but following are some of the primary reasons housing prices continue to rise so quickly:

active home listings 2012- 2016

  • Supply and demand. There simply aren’t enough homes available for the number of buyers. At the end of 2015, inventory dropped to just 1.2 months (if all listed homes sold with no new listings added, the supply would be gone in 1.2 months). That number did rise to 1.8 months as of the end of January, but we’re not even into the spring months yet; typically when the majority of buyers are out shopping.
  • Migration to Portland. New migration numbers show that there are now approximately 500 new migrants arriving in Portland every week! 
  • Employment opportunities paying high wages. Many of the migrants arriving in Portland are being moved here by their employers, often at the same salaries they were being paid in areas such as San Francisco or Silicon Valley. This gives these migrants much greater buying power than the typical Portland resident. 
  • 25% of all buyers pay cash. This is especially true with migrants being moved for jobs, and those buyers coming in from California and other areas of the country with even higher housing prices. (The median price of a house in San Francisco is $1.1 million!)
  • Developers are buying properties in the most high in demand locations at premium prices. They tear down the existing homes, especially if those homes are on larger lots or are in need of updating. Then they build two, three or even more higher priced homes on the same lot. Most buyers can’t compete with the price developers are willing to pay and the developers know even if they pay more for the property, they will reap in the profits on the multiple homes they construct.
  • Low mortgage rates are enabling buyers to qualify for increasingly higher prices.

How can anyone win the bid for a house in Portland these days?

As realtors, we know how busy the market is. We try to get our buyers out to view new listings the same day they go live on our multiple listing service because sellers often receive several offers the first day. Most of us do try to stay in touch with the listing agent to determine how many offers are on the table and when the seller will be reviewing them. (Most sellers know that leaving their properties on the market for at least one weekend will maximize the number of offers and selling price.) This gives us a sense of how high offers might go on these listings, so we can better advise you when preparing your offers.

Here are some tips that might help:

  1. If at all possible, look at homes considerably lower priced than what you can afford to pay so you have room to increase your offer and still qualify. 
  2. Be prepared to look outside your preferred area to cut down on the competition. Currently virtually anywhere west of I-205 is in high demand, and prices are much higher as well.
  3. Don’t automatically reject houses that are in need of cosmetic updates. Most buyers; and especially those who can afford to bid high or who insist on the neighborhoods in highest demand will make the highest offers on “move in ready” homes.
  4. If you are willing to paint, upgrade appliances, kitchens, bathrooms and flooring, you have a much better opportunity to win the bid. AND the upside to this is you will actually pay less after updates than you would have paid for the same house if it had already been updated by the previous seller or a house flipper. New construction properties also sell at premiums relative to comparable homes, sometimes just a few years old.  

If you find yourself in a bidding war,  you might be asked to give up some of your rights:

  • It is not uncommon for winning bidders to give up the right to ask for repairs that are found during a home inspection.
  • If you want or need help with closing costs, be prepared to offer an even higher price to cover that cost for the seller.
  • Sellers may insist that if you win the bid, you give up your right to re-negotiate price if the appraisal comes in lower than your accepted offer. 

It’s a tough market out there, but not hopeless. Many buyers last year walked away from the market in frustration; hoping this year would be better. We are already hearing that many of those buyers are regretting that decision as rents continue to rise almost as fast as housing prices. Remember, those who managed to buy last year are already building equity quickly. But the market will eventually calm down, and even return to normal.  

Builders are buying up land as quickly as they can, but it takes at least two years from date of closing on land purchases to actually selling homes at those sites. At current rates of new home construction it is now estimated that our housing market should catch up to demand some time in 2017. 

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