In a related story, the national government is looking at changes to the loan modification process. Story here.

A recent article in Portland’s local daily newspaper highlights the increased demand for apartment rentals, as well as the rising rent rolls. According to local property managers, average rents in the Portland area have risen 8% in the past year. The average 2-bedroom, 1-bath apartment in the Portland metro area runs $743 a month, although there is a wide range of pricing from area to area (see chart below).

While most property managers plan on an 8% vacancy rate (average 1 month per year), recent vacancies are below 4% (even lower in the city core). And because new apartment development slowed during the recent housing downturn, new inventory will be slim until developers find the wherewithal to build again — meaning rents aren’t going down anytime soon.

Are these reasons to consider a purchase instead? Not if your job situation is tenuous, or you’re new to the area, or the responsibilities of owning aren’t your thing. But at some point, the trade-offs may be worth a second look.

Portland Apartment Rental Market

Data source: Metro Multifamily Housing Association, via The Oregonian Business section. Full coverage at Oregonlive.com.

Unfortunately, Fair Housing laws limit our ability to guide or ‘steer’ people into specific neighborhoods based on our opinion of  a neighborhood’s racial complexion, family-friendliness, safety, and other social factors. Often, we just point them to the raw data, where available, and let them come to their own conclusion.

Over the years, sites like PortlandMaps, Walkscore, and others have made this process a lot easier, through geomapping and other visualizations. For example, I love M Realty’s Walkscore heatmap view for searching in highly walkable neighborhoods.

But what if someone wants to know where Portland’s badass neighborhoods are?

I have little to no hipster in me, so I wouldn’t even know where to start. But a couple local dudes apparently do and have created the city’s first bad-assness index.

The factors:

• Public transportation availablity. Good.
• Property values. Yes.
• Bike access. Sure.
• Beer availability. Still with you.
• Coffee locations. Makes sense.
• Food cart proximity. I suppose…
• Pinball availability…um.
• Strip clubs…no comment.

Pull together the data, geocode it, and turn it into a heatmap, and voila — Portland’s badass neighborhoods (PDF).

Areas of town get ratings from from ‘Hella Badass’ to “Flannelville” to ‘Vancouverish’ at the low end (sorry my Clark Country friends). The Boise neighbhorhood gets top prize, followed closely by Goose Hollow and Oldtown/Chinatown. Your mileage may vary, as they say.

Click here to view the embedded video.

Shout out to Rick Turoczy at the Silicon Florist for the find. From Dillon Mahmoudi on Vimeo.

One option, bank-owned properties (homes that have reverted back to the lender through default or foreclosure) can sometimes provide some of best housing bargains around.

I say sometimes. Bank-owned (also known as REO or Real Estate-Owned) homes can be:

• Overpriced (still);
• Not left in the best condition by their previous owner;
• Unfinanceable due to condition;
• Clouded in title, due to recent allegations of improper foreclosure processes by banks.

The process of buying a bank-owned property is not difficult, but does differ from buying from a private party homeowner. You will not get any useful property disclosures from the lender and they will undoubtedly respond to your offer with an addendum of their own that will attempt to shorten your due diligence and financing periods. Also, lenders rarely make repairs on their holdings, so don’t expect a lot of help there.

Nevertheless, the bank-owned property market can provide some of the more attractive values, if you have the time to monitor the selection and the will to filter the keepers from the losers. Good values tend to stick out, so you have to watch diligently and act quickly, as many REOs can generate multiple offers overnight.

Keeping track of bank-owned inventory couldn’t be easier. I’ve compiled some links below that will connect you to up-to-the-minute lists of bank-owned properties by area:

Bank-Owned Properties in and around Portland

• Downtown Portland
• NE Portland
• NW Portland
• SW Portland
• North Portland
• Lake Oswego | West Linn
• Tigard | Tualatin | Sherwood | Wilsonville
• Happy Valley | Clackamas | Milwaukie | Gresham
• Beaverton | Aloha | Hillsboro
• Oregon City | Canby

These are not definitive community lists, but I can certainly put a custom search together for you and send you updates by email. Just drop me a note and let me know what parts of town or outlying area you’d like to watch.

As their agent, I was sorta obligated to go along with the deal. I mean, who would turn down free publicity, right?

Well, the episode finally airs this Thursday, May 27 on HGTV. Check your local cable provider for the time, but you’re looking for the episode titled, “Living the Rock ‘n Roll Lifestyle“. (My client, Zaven, is an accomplished multi-instrumentalist and frontman for the band, Abort! Abort! The music thing is kinda key to the episode.

Without giving anything away, the house hunt did not go as planned. Hilarity ensured and it was all caught on film. Nine months later, I’m petrified at what might end up on screen, but it’s too late for that now.

I have not seen any of the footage, and have no idea how it all turned out. It must not be too bad because it is just the 2nd or 3rd episode of the new season. The production is formulaic, but less contrived than you think. We were encouraged, even implored, to share our true thoughts out loud.

We met with the crew at least a half-dozen times: the house hunt, a follow-up showing, the contract writing, the contract response, the home inspection, a meeting or two, etc. Despite working with the relaxed video, audio, and production staff, it was still a grind. Each filming stretched our visits to 3 or 4 times longer than normal, and there were moments when I felt I had to oversimplify things for the camera. Nevertheless, I’ve been on the local news a few times, and this was a much more natural and relaxed process for me.

The transaction got a little complicated at the end due to the recent restrictive lending environment, but it all worked out. Working with Zaven and his wife Amber was the best part of the whole thing, and I was delighted that we found a really cool place for them along the Williams corridor in the Boise neighborhood.

Here’s to hoping that post-production takes off a few pounds, puts a little hair back on the dome, and mostly that I didn’t say anything horrifically unprofessional.

Click here to view the embedded video.

Click here to view the embedded video.

[ NOTE: March 31 - We are having some issues getting the photos online. Please check back. ]

We’ve summarized the opportunities in the table below, including view direction, estimated property taxes and monthly HOA fees.  We took a couple pictures of each unit to give a rough idea of the view and kitchen set-up. Floor plans are available, too. Just ask us.

Additionally, we’ve prepared some spreadsheet analyses for the auction that might give you a sense of how you might bid. Note, if you wish to have agency advice during the auction process, you will need to register an agent (like Jason or I) with the John Ross sales office prior to April 8. Also, the auctioneer is hosting a free informational seminar on April 3 at 1:00 pm at the John Ross information office.

If you would like to talk through your strategy for the auction, give us a call: Jason Lucas at (503) 481-7332 or Ron Ares at (503) 460-7992. Jason in particular has seen dozens of units in the South Waterfront properties (including the Meriwether and Atwater) and he wrote the expanded John Ross section at the bottom of this post.

John Ross Auction

Every effort has been made to ensure accuracy, but please note these are estimates provided by the developer.

More about the John Ross Condominiums

The John Ross Condominiums were developed by Gerding Edlen along with Williams & Dame Development. The building is Portland’s tallest residential building standing 31 stories. There are 303 condo units in the John Ross ranging in size from 600 square foot studios to a 5000+ square foot penthouse. The building is unique aesthetically because of the elliptical shape of the building’s tower which also provides great views from almost all of the condos.

The interiors of the John Ross tower units are clean and modern with hardwood floors, high-end appliances, wool carpets in bedrooms, and silestone quartz or granite counter tops. Although the materials are high quality in general, the overall fit and finish of the building is a tier below the Atwater or Meriwether properties. Given the price point of the John Ross condos, however, the building offers a very competitive value for South Waterfront home ownership.

Features of the building include secure parking in the underground garage, a 5th floor garden terrace and community area, and impressive lobby with full-time concierge.

Situated in the center of the South Waterfront neighborhood, the John Ross is a block from the Portland Streetcar which connects to Downtown, the Pearl District, and Nob Hill. The Aerial Tram is also just steps away next to OHSU.

Links

John Ross Auction site
John Ross Condos site
Oregonian coverage of the auction

The Senate and House have approved a bill extending the $8,000 tax credit and offering move-up buyers a similar $6,500 benefit. President Obama is expected to sign this quickly, since the bill contains unemployment benefit provisions as well.

Here’s the latest:

• The tax credit would be $8,000 for first-time home buyers and $6,500 for move-up buyers (from December 1, 2009 to April 30, 2010).
• Move-up buyers will be eligible, as long as they have lived in their principal residence at least 5 years.
• Contracts through April 30, 2010 will qualify, but closing must occur within 60 days.
• The income limits have been raised–$125,000 for single return and $225,000 joint return for both first-time and move-up buyers.
• Cost of the home may not exceed $800,000 to be eligible.
• Taxpayers will be able to claim the credit on their 2009 income tax return for purchases made in 2010.
• Home buyers would not have to repay the credit, as long as the home remains their principal residence for 36 months after the purchase date.

More people will qualify for the plan (high income earners and current homeowners). And the tax credit will sunset just as the peak real estate season is ramping up.

So the question remains, does this expansion move your housing timetable up? Sound off in the comments, please.

I am also aware of the strong support in Congress for doing more to support the housing market, including extending the First Time Home Buyer Tax Credit beyond 2009. At the same time, I am mindful that these proposals can be very expensive, especially at a time of significant budget deficits. I can assure you the Administration will work with Congress to fashion appropriate and effective home buyer incentives, mindful of both their benefits to stimulating new demand and their costs to the American taxpayer.

Politicians on both sides are taking a hard look at the expense of the stimulus vs. the potential effects of stalling the momentum the market has made through the year. Sounds like a decision is still weeks away.

Full commentary at http://www.cnbc.com//id/33398833.

My small post about the auction scheduled for September 21 for the South Waterfront’s Atwater condo project attracted a fair amount of traffic, so I thought I would update it. I visited the property a few weeks ago for some first-hand assessment. Buyer traffic through the units was brisk. I don’t know if that translates to big participation at the auction or not.

Forty units of various size are slated for the auction. If all 40 were to sell, then the building would basically only be 1/2 sold out. Perhaps the marketing company will put together another auction if this auction is successful.

So, a little Q and A:

How does someone participate in the auction?
You must register and get pre-qualified to participate in Sunday’s auction by 7 pm on Friday, September 18. You can visit the condos between 11 am and 7 pm each day through Friday. If you want your own agent representative to guide you through the process, they must accompany you at the first visit to the property and register themselves.

What are the general contract terms?

The sales contract does not offer much in the way of protections for buyers. You cannot use a property inspection as a contingency for purchase. You cannot use a typical financing contingency. In other words, you will likely lose your earnest money deposit if you fail to close the transaction.

All the purchase paperwork and disclosures are available in advance from the marketing company (registration required), so you won’t be surprised at the signing table. You must close your purchase on or before October 19, 2009. They are offering a $2,500 incentive to close the transaction before October 5.

What is the auction format?
It is a live auction. Open bid amounts start at about 1/2 of the original list price, with increments controlled by the auctioneer. There is no published, pre-determined order to how the units that will be auctioned. You should likely have a back-up unit in mind in case your first choice is gone. If you like to see how the auction will be operated, you can go to a ‘mock auction’ at 6 pm on Saturday at the Marriott.

You must bring a cash equivalent (check or money order) for $2,500 to the auction. If you have a winning bid, you will immediately go to a separate room to sign an official contract and deposit 3% of the sale price with Ticor Title as earnest money.

How much are the HOA fees?
The homeowner association fees are equivalent to $0.303 per square foot, or $484.49 per month on a 1,594 sq. ft. 2 bedroom, 2 bathroom unit for example. The HOA fees cover water, sewer, and garbage for utilities, plus management, maintenance of all common areas, insurance, etc.

Is financing available?
If you need a mortgage, you must be pre-qualified through the Atwater’s two preferred lenders, Bank of America or MetLife. These lenders are offering $1,500 credit toward your closing costs. You’ll have 5 days to complete the loan application process after your winning bid. You can arrange your own financing, but I doubt outside conventional lenders will loan on this project. If you’re paying cash you must show proof of funds.

What about the property?
The units are very nice, comparable to the Meriwether and much of what is in the Pearl District–appointed with granite counters, nice appliances, etc. The high-end units (what I saw anyway) were fine, but I felt the Meriwether had better views (at least in the East building). There’s very little in the way common area space (i.e. no workout room), but there is a mid-sized community room in the foyer. Some extra storage in the basement may also be available for an extra fee.

What is the parking situation?
Each unit has a deeded, secure parking spot. Two bedroom units get 2 spots.

KOIN recently did a piece on the auction:

Click here to view the embedded video.

Photo courtesy of Excell Marketing Group.

Q&A: Advice for navigating the housing downturn

Columnist Ryan Frank touches on a number of consumer questions regarding the housing market. And, scroll to the bottom of this story for more on how current home buyers are faring in the current environment.

Is PDX housing hitting a false bottom?

Ryan Frank follows up his article with a sundry rundown of housing information resources.

Modifying loans creates credit mess, not relief

Brent Hunsberger of The Oregonian’s money beat shares the perils of a couple local consumers seeking loan modifications, when proactively solicited by the lender. Caveat emptor.