Plenty of Room for Millionaires

Pittock MansionA re:PDX reader recently asked about how the Portland job environment could support the number of million dollar listings he’s been watching on the market. A great question and one I’ve wondered about, too.

For all of it’s positive reviews, Portland doesn’t exactly top the list of locales for high-paying jobs with Fortune 500 industrial, manufacturing, or headquarters companies. Perhaps there is a steady stream of Intel, Nike, and other corporate executives moving inbound. Perhaps…

My off-the-cuff reply, based almost purely on anecdotal evidence, was that the bulk of migrating buyers have scads of equity made during the recent housing run-up. Along with their yearning for a lifestyle change, they’re bringing along big downpayments. Many that I have come across are from California, which causes me some concern given the state of their housing market.

Are there enough non-Californian candidates to absorb the balance of 633 Portland-metro properties priced at $1 million or more?

That’s right. As of October 28, 633 properties topped the $1 million price level–a whopping $1.1 billion in real property. The last time I peeked, in January 2006, only 275 properties scaled the $1M tag. And that doesn’t include the 215 listings priced from $900K to $1M, or the 302 listings priced from $800K to $900K.

While not particularly useful statistics, the ‘average’ home priced over a million had 4,482 sq. ft, 4 bedrooms, and just over three bedrooms. Average list price for the group: $1,772,000. West Portland (including the city center) and Lake Oswego/West Linn led the area for highest number of $1M+ homes, together with nearly 60% of the total properties in the survey.

West Portland (downtown) includes 75 condos in the count, too. Outlying suburbs like Newberg, NW Washington County, Oregon City/Canby, etc. will typically yield acreage, barns, farmland, horses, etc.

Here’s a breakdown of active listings, sorted by the market areas’ number of properties meeting the $1M+ price level:

Area Total Properties Avg. Sq. Ft. Avg. List Price
West Portland 194 3,895 $1,626,000
Lake Oswego / West Linn 167 4,770 $1,845,000
Oregon City / Canby 54 4,634 $1,761,000
Tigard / Tualatin / Sherwood / Wilsonville 49 5,183 $2,227,000
Milwaukie / Clackamas 45 4,640 $1,526,000
Yamhill County 32 4,453 $2,007,000
Gresham / Troutdale 24 4,739 $1,621,000
NW Washington County 20 4,924 $1,704,000
Hillsboro / Forest Grove 19 4,519 $1,520,000
Southeast Portland 12 4,705 $1,301,000
Beaverton / Aloha 7 5,293 $1,674,000
Northeast Portland 6 4,507 $1,324,000
North Portland 4 2,702 $1,213,000

The most expensive listing currently on the market is a 20-acre, 9,538 sq. ft. Tuscan-style spread in Newberg/Sherwood for just under $10 million. It features 4 bedrooms(!), 5 and 2-half baths, 5 fireplaces, and an 8-stall horse barn.

And just under $8 million will get you a former Portland TrailBlazer player’s home with almost 7 acres, 14,000 sq. ft., 8 bedroms, 8+ bathrooms, and 366 feet of Willamette River frontage in West Linn.

Anyway, for those of you looking to drop $800,000 to $10,000,000 on a new home, you’ve got over 1,100 to look through. I can be available, even on short notice to drive you through some samples :)

Data from RMLS, October 28, 2007. Photo of Pittock Mansion by MissMarnie, used under Creative Commons license. The Pittock is not for sale.

[tags] Portland, Oregon, real estate, million, dollar, listings, homes, houses [/tags]

An Oregon Property Tax Primer

Tax Collector officeIt’s nearly Halloween and there’s a knock at the door. It’s not a kid in costume…it’s the tax man.

It’s property tax time in Oregon. For new and potential residents of the metro area, Oregon’s property tax methodology can seem a little bit like black magic. This post is not meant to be a definitive guide by any means, but property taxes are a common question for home buyers in Portland. For the uninitiated, Oregon property is

…taxed on its assessed value. A property’s assessed value is the lower of its real market value or its maximum assessed value. Each year, the county assessor determines the property’s real market value and calculates its maximum assessed value. You are taxed on the lesser of the two, which is called the assessed value. (From the State’s explanation of property taxes.)

In essence the real market value is what someone would pay for it under today’s market conditions. Maximum assessed value (MAV), on the other hand, is based on the assessed value of the property as determined in the mid 90′s plus 3% annual increases since then.

Controversial tax limitation measures in the late ’90′s capped the annual assessment increases to 3%, and set their basis level at 1995 valuations, less 10%. Since we haven’t had any market crashes lately with real market prices dipping below mid-90′s valuations, the MAV basis is most often used for most Portland metro residences.

(See, I told you it was black magic.)

Answers to a few questions I receive frequently:

  • Aren’t property taxes limited to a 3% increase annually? No. The increase in your property’s assessed value cannot go up more than 3%, but if your tax districts have passed revenue-generating levies and bond measures for public safety, schools, libraries, etc, it will be reflected on your bill. Multnomah County residents are taking on a healthy increase to pay for shortfalls in Portland Public School budgets. Clackamas County residents passed 11 revenue-generating measures for this tax year.
  • Are taxes reassessed when the property changes hands? No. But they can be affected by new construction or improvements. Remember, in most cases, the tax is not driven by the real market value.
  • Why is there such a disparity in property taxes from neighborhood to neighborhood, even house to house? On top of the basic property tax assessment by the county, each home is taxed according by other taxation districts, including fire, safety, schools, and more.

A few more generalizations to help homebuyers in in the Portland metro market:

  • Most homes are generally assessed by the maximum assessed value method, not the real market value method.
  • You will pay more in property taxes the closer to the city enter you get.
  • You will pay more taxes in Multnomah County than for similar properties in Washington or Clackamas counties.
  • Tax bills are due November 15, but taxes are prorated in escrow to Oregon’s July 1 tax year.
  • Property taxes are relatively predictable because of the tax limitation measures tied to the Oregon constitution.

One of Portland’s alternative newspapers recently ran a summary article on the state of our property tax system…and some of the inherent iniquities it has created. Newly reinvigorated neighborhoods are taxed at much lower rates due to those property values being set at 1995 levels, when they were low-income areas and not so desirable.

As the article points out, the taxes may not seem fair from property to property, but they are predictable from year to year. That predictability may forestall any major overhauls of tax policy if put before the voting public.

Here is the State’s official property tax overview.

[tags] Portland, Oregon, tax, property, assessed, market, value, rate, real estate [/tags]
Photo by divemasterking2000, used under Creative Commons license.

Portland Real Estate Prices and Appreciation – September 2007

As noted yesterday, the Portland metro real estate market is seeing the highest inventory levels since 2001. But the impact on pricing has been gradual, making the Portland market a rare standout nationally for appreciation.

Continued declines should be expected, but for now, using a 12-month average and median compilation of home sales and comparing it with the previous 12 months, the market is showing a 6.9% average and 7.5% median growth in appreciation.

Gresham, Hillsboro, Southeast and North Portland are still showing decent appreciation gains when compared to the previous year (in the 8.8% to 9.8% range).

However, I am watching the cumulative year-to-date sale prices decline month-to-month in Lake Oswego / West Linn, West Portland (including downtown), and the south metro suburbs of Tigard, Sherwood, Tualatin, and Wilsonville.

Below are average and median sale prices year-to-date, along with 12-month sale price appreciation by market area:

Area YTD Avg. Sale Price YTD Median Sale Price 12-Mo. Appreciation
Lake Oswego / West Linn $557,300 $465,000 3.7%
West Portland $461,800 $379,000 2.8%
NW Washington County $417,500 $385,000 1.8%
Tigard / Tualatin / Sherwood / Wilsonville $377,100 $340,000 4.6%
Milwaukie / Clackamas $338,900 $300,000 1.6%
Oregon City / Canby $330,400 $303,700 5.1%
Northeast Portland $322,500 $283,000 6.7%
Hillsboro / Forest Grove $298,900 $271,000 9.5%
Beaverton / Aloha $290,500 $262,500 3.6%
Southeast Portland $287,200 $250,000 9.8%
Gresham / Troutdale $282,000 $260,000 9.7%
Yamhill County $280,900 $250,000 8.4%
North Portland $267,100 $252,100 8.8%
Columbia County $256,200 $241,000 13.8%

Appreciation percentages are based on a comparison of average price from the last 12 months (10/01/06 – 09/30/07) with 12 months before (10/01/05 – 09/30/06). Source: RMLS, October 2007.

[tags] Portland, Oregon, real estate, home, prices, housing, average, median, sale, appreciation [/tags]

Portland Real Estate Market Activity – September 2007

Perhaps due to fewer financing options or perhaps due to general unease in the housing market, home buyers in the Portland metro market are sitting on their wallets, creating an inventory spike now reaching over 8 and a half months’ supply.

Compared to 2006, approximately 2,500 fewer homes have been sold in the metro area year-to-date, but over 4,300 more listings were marketed. With this disparity, plus lingering, unsold inventory, the market now has over 16,000 properties listed. This isn’t too far from where we were last year at this time, but with the pace of sales slowing, it is now taking 60 days on average for properties to sell (vs. 41 days last year).

RMLS (Portland’s multiple listing service) reports that the average sale price increased 6.9% to $337,700 and the median up 7.5% to $285,000. Note these figures are generated by rolling up 12 months results and comparing them to the previous 12 months.

The inventory number is the highest since 2001 and is bound to put downward pressure on pricing. Full-price offers are rare now, unless the property is exceptional or priced correctly at the outset. With the typical slow season approaching, I wonder if homeowners will let listings expire and wait for fairer conditions.

Tomorrow, I will post the average and median sale prices year-to-date for each market area, as well as 12-month appreciation figures.

Source: RMLS, September 2007 results.

[tags] Portland, Oregon, real estate, home, prices, appreciation, sales, activity [/tags]

Week Links – October 12, 2007

The Weakest Link by Darwin BellIt has been a while since I’ve done a Friday link post. Here are some updates on the local market as reported in other media outlets:

Portland neighborhoods rate as top retirement locales
Money Magazine highlights Goose Hollow and the Pearl District as top spots to retire in the U.S.

The Oregonian piles on the soft condo market

More reporting
about lingering inventory and the city’s oversupply of condos.

More Thoughts About the Condo Market
Brian Libby at Portland Architecture comments on the changing condo market and incites thoughtful comments about the Portland housing market

U.S. foreclosure rate down slightly in September, Oregon is mid-pack
RealtyTrac releases results and Oregon is #28 nationally with one in every 1,590 homes in foreclosure. The national average is 1 in 554. The U.S. foreclosure rate was down slightly (6%) from August.

Staying in your house awhile?
Then you might have remodeling on your mind. The Oregon Remodelers Association is putting on its Remodelers Home Tour – October 13 -14. They’ll feature 12 projects on display in Portland and 7 in Salem.

[tags] Portland, Oregon, real estate, links, news, articles, housing, homes, foreclosures, condos, remodeling [/tags]

Photo by Darwin Bell, used under Creative Commons license.

Takin’ It To The Streets, Google-style

We all know Google has set the standard for cataloging and searching all things Web. And now, they’ve taken their indexing moxie to our city streets by announcing their Street View coverage of Portland (as well as for Chicago, Philly, Phoenix, Tuscon, and Pittsburgh).

Google Street View map

Roving Google photographers shot footage of nearly the entire city, plus added a few suburbs to the list. Go to maps.google.com, type in a sample address, click the Street View box in upper right, and look for this guy Google Street View icon or just double-click on the glowing blue highlighted street.

A window pops up with a 360-degree interactive view of the street. ‘Drive’ up and down the street using the directional arrows. Grab the image with your mouse, hold the button down and pan left, right, up and down. Pretty cool.

For Portland real estate shoppers, this is a real boon if you’re trying to evaluate the street vibe, housing styles, or general condition of a particular neighborhood. As an agent, I can email links to Street Views of homes clients are interested in.
Street View ExampleHere’s a street view outside one of my listings (you can even see my yellow sign).

If I have a criticism, the images are a little dim, probably due to the cloudy days (imagine that in Portland!) these images were shot. Also, remember these shots aren’t live web cams or shot in real time, so the shots won’t change with the seasons or keep up with in-process construction.

On a side note, Google map fans have compiled lists of quirky Street View sightings. Who will be the first to document a Portland flasher or public urination caught on GoogleCam?

[tags] Portland, Oregon, Google, Street View, maps, photo, real estate [/tags]

Nude Gardening to be Banned in Happy Valley

If hedge-trimming in your birthday suit is a high priority, then you will likely need to search for property outside of a certain southeast Portland suburb.

Nude GardenerAt the risk of inviting prurient comment spam, I feel it is my duty to inform you that Happy Valley has cracked down on a rash of naked gardening.

The Happy Valley city council passed a resolution banning

unlawful exposure within the city of Happy Valley in all public places and places visible to the public.

in response to complaints from the neighbors of ‘naturist’ Steven Howatt.

“A lot of nudists only like going to resorts. I love nature because I like playing Adam,” Howatt said. “I can’t tell you all the reasons why it thrills my soul to be a naturist.”

Apparently, adjoining neighbors with children were a little more than shocked to find Mr. Howatt digging bulbs, picking daisies, and edging the lawn au naturel.

If the proposal passes the 2nd reading on October 16, rototilling in the buff in public will be a crime punishable by a fine of up to $1,000.

Further coverage by The Oregonian and video (suitable for family viewing) by KGW News.

FYI, home sellers, as far as I know, there is no statute requiring a seller to disclose the proximity of a nudist. Buyers, caveat emptor.

[tags] Portland, Oregon, Happy Valley, nudist, garden, real estate [/tags]

Credit Protection On The Cheap

Credit Card by Lazy LighteningWith qualifying guidelines tightening for mortgages, it should be clear by now that safeguarding your credit rating is a top priority if you want to receive the best rates and terms.

Credit protection scams, er, plans abound, offering all manners of credit monitoring at prices as high as $15+ per month. I have no experience with these programs, but have always been a little suspect of their fear-mongering and pricing policies.

Here’s an alternate monitoring method for the more frugal among you:

By federal law, you are entitled to one free credit report each 12 months from each of the three credit reporting bureaus, Experian, TransUnion, and Equifax. However, rather than requesting and reviewing them all at the same time, space your requests to one report from just one bureau per quarter. If you alternate bureaus each time, then voila, you’ve got year-round monitoring for free.

Please note:

The OFFICIAL site for the FREE credit report is www.annualcreditreport.com. Don’t let other derivative URLs that include FREE, ANNUAL, CREDIT and REPORT fool you.

Be aware, that your credit score is NOT a part of your credit report, but it can be obtained for as little as $8 using www.annualcreditreport.com.

New protections are on the way for Oregonians.

In Oregon, a new ID Theft Protection Act (Senate Bill 583) law goes into effect October 1, 2007, whereby you can ‘freeze’ your credit information. This is a common practice in 37 other states, but new for Oregon.

Under a credit freeze, only a very limited group of organizations (existing creditors, property managers, and law enforcement officials to name a few) will have access to your credit report. So, in theory, bad guys won’t be able to get new credit cards or open store accounts using your stolen identity. Note, the freeze can take up to 5 days to go into effect after you request it.

And here’s the hitch: It’ll cost you $10* to set up the freeze with each credit bureau, and then $10 each time you want to temporarily unfreeze your credit to buy a new car, furniture, etc. with a new creditor. Considering that Oregon is the 13th worst state for identity theft, the peace of mind might just be worth the expense and inconvenience.

For more information on the ID Theft Protection Act, visit http://www.dfcs.oregon.gov/id_theft.html or call (503) 947-7492.

[tags] credit, report, score, identity, theft, FICO, protection, FTC, freeze, Equifax, Experian, TransUnion, mortgage, underwriting, Oregon [/tags]

* Unless you are a victim of identity theft or have reported the theft of your personal identifying information to a law enforcement agency. Check here for details.

Image by Lazy_Lightening. Used under Creative Commons license.