Real Estate Information Archive

Fixing up your home is a great way to improve your property's resale value as well as make it just the way you and your family want it. However, home renovation projects can quickly get out of hand and cost more than expected if you're not careful. Below are a few ideas to keep your home remodeling efforts from breaking the family budget.

1. Add 20 percent for contingencies. "This Old House" magazine advises homeowners to budget an extra 20 percent over and what they think their remodeling project will cost. This allows for contractors underestimating the time or supplies needed, additional renovation needed that wasn't anticipated before you started, and price increases on supplies, just to name a few items that could happen on a remodeling project.

2. Be realistic about what you can do yourself. Doing a lot of the labor yourself can save you a considerable amount of money, but it's important to be realistic. If you've never put down tile or hung cabinets, you don't want to learn on your own home project. You'll have to live with the results for years. Plus, no matter how skilled you are at DIY projects, it's wise to hire licensed professionals for wiring, plumbing and HVAC work. How does this save money? You don't want to have to hire a professional to redo your work when you realize you're in over your head.

3. Don't discount salvage stores. If you own a Victorian or other distinctive period home, make sure to scour the salvage stores for unique and affordable building items like doors, woodwork, moldings and more. You'll save money, you'll be keeping these items from America's landfills and, best of all, you'll be adding a vintage piece of American craftsmanship in your home.

4. Do your own delivery. You can save quite a bit of money on delivery charges plus make sure that your building materials are where you need them when you need them by picking them up yourself.

Home remodeling projects can be fun and exciting. With a little careful planning, they can also stay within the budget.

The U.S. Census Bureau estimates that the population of Portland and its surrounding metro area suburbs in July 2012 was 2,289,800, a 1.3 percent increase from 2011 and nearly a 3 percent rise from the census in 2010.

This upwardly mobile trend found its way into several larger Oregon counties, with Clackamas, Deschutes, Multnomah, Wasco and Washington counties all recording a population jump of 1 percent or more over the past year. With the lone exception of Deschutes County, all of these counties are in or very near the Portland metro area.

These are particularly telling statistics in and of themselves; however, they take on even more significance when we leave the bright lights and varied amenities of the big city and venture out to the hinterlands to the eastern and southern areas of Oregon.

Curry, Lake, Grant, Wallowa and Harney counties all posted a population decrease of more than 1 percent over the past year - the state's largest population losers, so to speak. More people left those counties - either by passing away or moving away - than those born or moving into the counties.

Curry County is located in the extreme southwestern corner of the state, with its southern border separating Oregon from California. Wallowa County sits exactly opposite of Curry County - in the extreme northeastern corner of the state, with its eastern border separating Oregon from Idaho, and sharing its northern border with southern Washington.

When we broaden our horizons to include the entire state of Oregon as a whole, we are informed by the census bureau that as of July 1, 2012, there were 3,899,353 permanent residents (officially) of the entire state.

Risa Proehl, a research associate at the Population Research Center at Portland State University, told the Oregonian in March that the drop in population in the state's outlying counties was due primarily to young adults vacating these rural areas where job opportunities are relatively scarce.

So, taking all of its counties and the Portland metro area into consideration, Oregon has enjoyed a population increase each year since 2010. There was a 0.8 percent rise last year, which was a 1.8 percent leap from 2010.

What a difference a year makes! Housing prices in the Rose City are on the rise according to a major housing industry data source.

Portland – like a number of other major U.S. cities – saw home prices rise in February according to the Standard & Poor's/Case-Shiller home price index. In fact, the home-price index witnessed its biggest annual gain since 2006, recording a boost of 9.3 percent in February in the 20 major U.S. metro areas that were surveyed. This is the largest yearly change rate since May 2006.

From 2012 to 2013, Portland prices increased 9.4 percent, and from January to February of this year, home prices in Portland measured an increase of 0.7 percent.

David M. Blitzer, chairman of S&P's index committee noted that, "Home prices continue to show solid increases across all 20 cities."  The fastest home price growth rate occurred in Phoenix where home prices rose 23 percent from 2012 to 2013. San Francisco had an 18.9 percent gain, while Las Vegas registered a rise of 17.6 percent during the same time period. Ten of the 20 cities showed double-digit increases compared to last year.

Back in February 2012, Case-Shiller reported an overall post-recession low, with home prices down at that point just over 35 percent from their high mark. Locally, Portland’s low-price moment came in March of 2012, with home prices down 28.7 percent from their peak.

Now, just over a year later, home prices have recovered at an impressive rate, in part because home inventories are low. The inventory situation stems from the fact that many homeowners are still carrying mortgage debt that prevents them from selling; at the same time, new construction has slowed significantly. A goodly number of homes continue to work their way through the foreclosure process, or are simply sitting in lenders' portfolios.

What is the impact of small home inventories? Well, for one thing, limited inventories have propelled buyers who want to take advantage of low interest rates and prices into bidding wars – and this in turn has pushed prices upwards. As traditional home sales have increased, the percentage of foreclosures in terms of overall transaction volume has declined, and this also plays a role in rising home prices.

Of course, talking about “the housing market in Portland” is too broad, and like all larger cities, the market is comprised of sub-markets. Homes in the lowest price ranges have recorded the biggest gains. The Rose City’s least expensive one-third of residential properties have gained 15 percent in price over 2012. Homes in the middle price range have risen by 11 percent, and the most expensive one-third of homes have increased by only 7 percent. Homes in the highest-priced segment really struggled through the recession and failed to recover as much ground compared with other segments.

A recent article in the Oregonian turned to Portland real estate veteran Rob Levy for insight. "The exciting thing we're seeing is that some of the most expensive homes are starting to sell. The starter homes are selling, and the homeowners are buying the middle homes, and they're buying the luxury homes. That's the piece that was missing until now."

The rapid rate of home price increases have left certain economists and real estate professionals concerned that bubble conditions could be starting again. However, there are conditions that may keep home prices from increasing too quickly. For instance, the Federal Reserve is expected to keep interest rates low until the national employment numbers improve measurably – but when rates rise, demand is likely to decrease. Also, as prices rise, more homeowners will realize equity gains that will allow them to sell, so homebuilding activity should gather steam.

Many housing economists anticipate that home-price gains will begin to cool in coming months. The Oregonian article once again turned to Rob Levy, who said appreciation settled at an annual rate of 4 percent would be a welcome change. "Four percent is a good number, a good, steady, stable number," he said. That's always been the safe number. It's not nuts."

All in all, the news is good for the Portland home market. Fears of a new bubble appear unfounded, and a reasonable rate of increase in home prices indicates, hopefully, a fairly healthy housing market overall for Portland.

Check out my new chart below, I am now showing average and median sales price changes.  All areas of real estate activity are positive when comparing July 2012 with July 2011. There were 2,372 accepted offers, 23% more than the 1,928 reported in July 2011 although down slightly (-2.6%) from last month. The 1,973 closed sales represent a 15.4% increase over the same month last year, when 1,709 were recorded. This represents the highest numberof closed sales in the month of July since 2009.

New listings rose 7.5% from 2,942 to 3,162 when comparing July 2011 to July 2012 but were down slightly (-1.4%) from the previous month.  Overall real estate activity is positive when comparing July 2012 to the same month last year but down slightly from the previous month. We’ve seen a similar pattern in prior years with activity dropping in July from June highs.The unsold inventory in months ticked up slightly from 3.9 in June to 4.6 in July and is lower than any July since 2006. It would take only 4.6 months to sell the 9,041 active listings at the July rate of sales.

Home sale price measures were all positive in July. The median sales price rose 7.8% when comparing July 2012 with the same month in 2011 and 1.2% when comparing it to the previous month. When comparing the percent change of the last 12 months with the previous 12 months we see a 0.7% gain in the median price.

That's right, Travel and Leisure Magazine has voted Portland, Oregon "America's Greenest City" in it's latest issue.   This is mostly to do with the huge amount of trees and parks, but also because of our transit system, electric charging stations, bike routes and more.  Check out the article America's Greenest City

In a major decision for future land use and zoning in the Portland area, the regional Metro council voted on October 20 to expand the urban growth boundary (UGB) by 1,985 acres. All of the expanded growth areas are in Washington County. Except for 330 acres, all the expansion will be dedicated to residential development. This is a smaller expansion than has been done in the past. This decision now goes to the Oregon Land Conservation and Development Commission for final approval, which is expected in February. The decision is not without controversy, as the land use group 1000 Friends of Oregon intoned against expansion of the UGB, while the Westside Economic Alliance believes the decision was “timid, underachieving and uninspired,” and wanted more land to be included within the growth boundary.

Urban sprawl has been a major issue facing cities for decades. In response to this problem many states such as Washington and Oregon have created Urban Growth Boundaries (UGB) to limit urban sprawl by restricting growth beyond its boundaries. It allows for better management of future expansion with a focus on ‘in-fill’ of under-developed land within its borders. Several large U.S cities have adopted a UGB but none have gone as far as Portland, Oregon.

Not only does Portland have a UGB, it is unique in the U.S. for having a directly elected metropolitan planning group, called Metro. This organization is responsible for controlling growth not only in Portland but in the surrounding cites which border it spanning three counties.

Metro’s prime focus is on managing land development inside the UGB and dealing with transportation concerns. Dealing with traffic issues is usually one of the most important aspects in any UGB since the higher population density makes urban traffic problems worse. Metro is famous nationally for its promotion of light rail and trolley service through the regional transit company TriMet.

Expanding the UGB is not done lightly but in response to Metro’s mandate to keep a certain amount of population density projected out in 20-year cycles. The most recent expansion of the UGB by 1,985 acres was in direct response to the projected future need for jobs and housing. In addition to this expansion, Metro has moved to acquire land to allow a new East-West light rail line connecting the eastern edge of the UGB whose topography limits auto access.

To minimize the amount of times the UGB has to be expanded, Metro has land use laws which promote houses on smaller lots where the emphasis is on building up rather than out. For example, a plot which held in the past held two older single family homes would now be replaced with four dwellings.

Metro also works with the city governments under its umbrella to help create viable neighborhoods which have the businesses needed to limit travel for entertainment or shopping. This neighborhood emphasis has created a vibrant culture where different parts within the Metro UGB each have their own unique flavor. Metro works to balance the need for growth with the desire protect many of the natural areas which make the Portland area so desirable.

As the US comes out of the recession, it seems some areas are doing better than others and Kipplinger this week gave some encouraging news when it picked the top 11 cites in the USA to make a comeback, it listed Portland, Oregon as one of them.   The full article can be READ BY CLICKING HERE

Also good news for the Pacific Northwest is Seattle was also on the list.   The Portland area is prime for a comeback according to Kipplinger due to the investment in clean energy, and the high tech field.  There have been many solar power companies putting facilities here, and Intel (the states largest private employer) announced it is bringing 1000 new jobs too.  These jobs tend to be well paying, and bring in an educated workforce.

Portland's location as a city of about 2.25m people and next to a state of 37m people (California) seems poised for more growth once the economy improves, and this is a great step in the right direction.

Metro, the regional government for the Portland, Oregon metropolitan area recently released their projections for population growth in the area for both 2030 and for 2060.

Given the population from the 2000 census being at 1.93 Million, projections are there is a 90% chance that in the year 2030 (only 21 years from today) the population could be as much as 3.2 Million (between 2.9m and 3.2m), and in 2060 between 3.61 & 4.38 Million.

The forecasts are for the seven county area of the Portland-Vancouver(WA)-Beaverton MSA and include the counties of Multnomah, Clackamas, Washington, Yamhill & Columbia in Oregon and Clark and Scamania in Washington.

With our urban growth boundary, the question remains... Where do we put them all ?  But the bigger question from Portland's top Prudential Realtor's point of veiw is what do I tell my clients when they ask me to look inside my crystal ball and predict where prices will go in the next several years.  Clearly with our land use restrictions, booming population and UGB (urban growth boundary) our prices have no place to go but up in the long run.  In fact even in our slower market, the last 8 weeks have been very busy for us on the Rob Levy team to the extent we just hired a new assistant / office manager to keep up with all the sales.

Clearly in my mind, both from my personal and professional experience, there has not been a better time to invest in the future of Portland.  Prices are down,rates are down, inventory is high and we know the future is bright.

That really is the million dollar question.  Should I buy a house now, or should I wait and see if prices fall ?  But what if interest rates go up (per Bernanke's 60 Minutes interview in March, 09) then where do I stand ?   This chart REALLY shows the benefits of buying a home now vs waiting.

For more information or to find some homes that really make sense to buy now, give us a call.  As Portland's top selling Prudential Real Estate team for two years running and with over 20 years experience.