We want to buy our next house, but yeah, we’re waiting for that lowest point to take advantage of. We missed the 1991 fallout of the real estate market in the Bay Area (we were not out of school) and all the folks five years older than us made a killing buying then, even if they had to rent out every room in their house to keep it after being laid off. It sounds horrible, but we see this as our opportunity. We bought low here, just before the market went crazy, so that felt good. I do feel for PDX’ers who are caught in that same net we felt in SF.

PITI and utilities came to $1990.00 for my $250K at 5.63% leaving $1,000/month for food, gas, car insurance, home repairs, clothes, etc. Ignore the child care expense, ignore the tuition. What do you all spend on food, gas, car insurance, incidentals per month. Would $1,000 cover it and leave a bit for savings?

Can you see why it would be quite the stretch.

I am not bitter, my priorities are well in order. We will start house hunting once the spouse is done with school. We will likely be back on the east side. We bought in Buckman with plans of no lay-offs and no plans for kids. Well, ten years later, three lay-offs later and the decision to have kids, a house was no longer in the cards. Not bitter, just a little shuffling of the cards.

The young couple who bought our home bought more home than they could afford, according to their letter to us during the selling process, but they really wanted to raise their family in the hood where they grew up and they were tired of being out-bidded on the 300K homes on the close-in east side. Gee, I see it coming now, they barely can afford the place now (we took off 10K in sympathy and they financed the entire $370K, imagine that mortgage) and they wanna have kids…wonder how they are gonna pull that off.

Our increasing foreclosure rate tells me a lot of folks got in over their heads these past few years.

I am not whining, I just want people to state facts and back them up. I grew up in Iowa, I know what I can get for $100K but the weather, summer and winter, sucks! As it does in Buffalo.

What really concerns me about the current economy/housing market is the ever increasing debt and ever decreasing retirement accounts…if that’s the American way than I guess I am rather unpatriotic.
I

Looks like your priorities were in the wrong place. If owning a home was that important to you, then you could have delayed having kids and going to school so that you could afford your mortgage. You can’t have your cake and eat it too. When I decided to buy, I couldn’t afford anything in SF (at age 35, middle income), so I chose to sacrifice living in the city in order to become a homeowner. I bought a one bedroom condo in Oakland.

You have options – you can rent, you can move to a city that is more affordable for your financial situation, but you can’t expect Portland to cater to you personal circumstances. Capitalism just doesn’t work that way.

Here’s a tip: Move to Buffalo, NY. As a nurse you’ll easily find a job and make a good income. You can by a huge old Victorian era house in Elmwood Village (think Hawthorne) for 150-250K. If you’re stuck on Portland, suck it up and figure out a way to make it work. You’re owed nothing, and playing victim will get you zero sympathy!

So many of you posters here seem to think Portland owes you the house of your dreams at he price you want to pay – it doesn’t work that way in the real world. Stop the whining and get a clue!

I am a median kind of girl. I made $65K as a FT RN in 2007. After having 13% pulled for my 401K, health care premium, and state and federal taxes I brought home around $1500 every two weeks. Given that 10 out of the 12 months I got only 2 paychecks you can say I brought home $3000/month (with a $3K annual ‘bonus’).

Our last mortgage on our Buckman house was $250K at 5.63% making the monthly payment $1,439.93, property taxes $2200.00/yr, insurance $550/yr…so PITI was $1,669.09/month. (no PMI)

Gas, water, and electric averaged $300.00/mo

So basic housing expenses alone were $1,969.09

This left $1,000/month for food, gas, car insurance (my spouse likes to collect speeding tickets at about 1/yr), phone (landline or cell), savings.

In addition, my family had childcare expenses, FT for an infant was $900/month. Plus, unique to my family, tuition for spouse.

How many families have car payments? We don’t.

Luxuries= vacations, even going to Cannon Beach, going out to eat, a foofoo coffee once in a while.

So needless to say, the child care expense sent us over the edge. We sold near the peak in spring of 2007.

Please feel free to tell me how that $1000/month was is gonna cover the non-housing expenses.

I forgot to add in there the $ for house (and car) repairs/maintainance, H2O heater, furnace, roof, plumbing, exterior paint, seems never ending in an old PDXer.

I’m a full-time design engineer who also owns 11 rentals in the three portland metro counties. I’ve been a landlord since 1977.

I can tell you that from my viewpoint, it makes no sense to own rentals in Portland at these prices. There is a big gap between (what economists call) the “risk-free return” and the cashflow yields on single-family homes. To close the gap: prices (NAV) must fall, rents must rise, or treasury yields must drop to the 2-3% range.

This all matters because equilibrium in housing (here) will not be seen until there is equilibrium in the rental markets. No ifs, ands, or buts. This is an outcome of buy/rent decision, net of rent controls (happily we have none), and absent the supply concerns of some other coastal markets.

A prior poster complained about affordability, which is another fundamental valuation measure for this market that should be examined.

As I type this: the HUD median family income for Portland is $67,500. Using the conventional lending guidelines: this median family can possibly qualify for a payment of $1800. This assumes no other debt (a frugal family, to be sure) and credit above 720 or so. At today’s 6.3% 30y rate, the maximum loan available to this median family is $290,000. They’ll need a down payment, of course and that down adds to the maximum affordability. With a 20% down, the maximum purchase they can qualify for is about $358k.

I bring that up to illustrate a couple of things.

1. The median family can make the payments on the median home (in Portland). Whether they SHOULD or not, and whether they’ve SAVED THE DOWN or not are different discussions (though related).

2. Portland is not LA, SF, or even Seattle. In those areas, there is a vast disparity between median incomes and the affordability of the median home. Closing that gap requires incomes to rise or prices to fall. In San Francisco, the median family income is only 58% of that which is required to make payments on the median home (Dec 07).

3. The calculations are in-line with external affordabilty measures (such as http://www.housingtracker.net/affordability/)

With a house, we don’t have the luxury of dollar-cost averaging as we do with many other investments. You buy it once. The prospective buyer has to weigh all of the rent incentives against the buy incentives at that time, and make a calculated decision to by or rent accordingly. Everyone knows that housing (in Portland) will eventually rise again and with 1M people moving here in 20 years, demand will continue to be strong. But timing the bottom in this one-time purchase is tough and it takes guts.

One last thing: a prior poster mentioned buying a house and yet still saving for retirement. We know from both the EBRI and the Fed Survey of Consumer FInances that they are not saving (much), so dispel that concern. The statistics regarding retirement saving are downright frightening. Whether it’s a house, a car, consumer debt or whatever: the money is going elsewhere.

Sorry I missed the party.

-Doug

Maybe next time…

I am putting together a big networking event for July. Maybe a some of you guys will show up for that?

-Jeff

I’ll be easy to recognize – I’ll probabl be the only 6′2″ shaved headed lout with the thick Irish accent

Looking forward to meeting everyone.

Ding ding ding! We have a winner!

This is exactly what I’m trying to do, keep Realtors, and moer specifically the NAR on it’s toes.

I started my blog not because I wanted to spend all day flaming Realtors, but because I couldn’t get a straight answer out of the NAR about home values and which direction they are going.

The level of statistical analysis the NAR puts out is pathetic. You’ve worked in large corporations before Ron, and I bet if you presented that level of analysis you’d get laughed out of the room. I know I would. But nobody was questioning it until Clint and I came along.

I’m glad you’re coming tomorrow Ron, I’m looking forward to meeting you and I hope Charles and other Realtors come as well. The best thing we can all do is keep the debate open and healthy, it benefits everybody in the end.

Ian