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The Regional Multiple Listing Service reports that Portland area home prices continued to increase last month and are now the least affordable since the organization began tracking sales 13 years ago.
The median home sales price was $300,000 in July, a $10,100 increase over the media sales price of $289,900 in June, according to the most recent Market Action report published by the RMLS.
The federal Department of Housing and Urban Development determined the median family income in the Portland region to be $63,800. The report said this means the median Portland area family can only afford to pay 88 percent of a typical mortgage for a median-priced home.
“This is the lowest affordability rate recorded since the RMLS began tracking the data in 1994,” it said.
The report said the rate could have been influenced by the fact that the recently changed the way it calculated median family income. However, the report noted that median home prices had increased 8.7 percent over June 2007.
According to the report, median home prices differed throughout the Portland area, from a low of $257,500 in North Portland to a high of $430,800 in the Lake Oswego/West Linn area.
Well, it's a buyers market with over 6 months of homes on the market. Add to that the ARM's that are rising, the crush on the financial markets and we are starting to feel the same crunch in housing that the rest of the country has felt for some time. Our homes are wildly overpriced due to the Urban Growth Boundary which has lead to some really crappy places to live (row houses, townhouses and condos to name the main ones). Prices will be dropping, but the stuff they want us to live is not very attractive.
(email verified)
Sun, Aug 19, 2007 at 03:45 PM
Allowing the market to even itself out is the only way for this economy to make sense. We are fortunate to live in a market that is still growing and prospering in a time where everyone and everything else is faltering. Oregon is still an opportunity in a crazy world.
(email verified)
Sun, Aug 19, 2007 at 05:04 PM
a lot of it is taxes,fees and regulations by the greedy,selfish,arrogant governments of the city of portland and multnomah county.they are pricing the average person like myself out of ever being able to afford to ever afford to buy a home in multnomah county and portland and its sad.15 to 20 yrs ago portland and this area was relatively cheap.look at it now its becoming like california.
(email verified)
Sun, Aug 19, 2007 at 07:55 PM
I just went to www.rmls.com and did a search using the criteria of price 100k - 200k in zip 97203(Cathderal Park - NoPo) and found 4 homes listed. How about some fact checking Mr. Redden, or are you just trying to make a headline? There are still affordable homes out there.
(email verified)
Mon, Aug 20, 2007 at 03:17 AM
There are lots of houses in the SE area that are still affordable for some. I think the average income is a little high though. I think it is more like in the high 40's not 60's.
I think we are missing the point here and it is not necessarily the housing market is out of reach it is the cost of living keeps rising an pay is not keeping up with it.
You have to have two incomes in order to afford most houses in the Portland Metro ara today and if you are trying to make it on one it is tough. Top Roman and Spaghetti is probably what you will be eating alot.
I lived in California when everyone was moving to Victorville because you could still buy a three bedroom home for under 150k back in the 80's.
That is what will happen in Oregon the urban growth boundry will be lifted and people will move further out in order to afford a home.
The other thing that is happening is medium income jobs are disappearing along with all the benifits that come with them. So families are having to work harder and more hours in order to afford the American Dream.
(email verified)
Mon, Aug 20, 2007 at 04:08 AM
When is the last time a home builder built a home LESS than 1,000 sq ft? Its no wonder that the median home (Re)sale (and new sales figure) is running over $300,000. Look at what sorts of dwellings are on the market.
I am not saying the hardworking middle class households don't deserve a new 3 bd, 2 bath 1,500 sf home for a family of four. However, since when did our society deem that a requirement?
I do agree that our jobs here in Portland are pretty scare for those wanting to earn enough money to buy their own home while they are earning say a respectable $15 per hour. We should remember that at that wage (or say $10 to $12 per hour in the early 90's) employers were providing some form of group health insurance. Today, for many hourly workers, they must pay more for their health coverage, let alone a family. Also, look at the amount of money devoted to a personal vehicle, and the parking space to support it (including the streets and freeways). Six and seven year mortages on a new car? It used to be that 3 year loans were the norm. As a consumer driven society, we are seeing sales techniques that are chasing our supposed disposal income and trying to garner a greater share of our "take home" income.
The federal figures for affordable housing (no more than 30% of monthly gross income) may be meaningless today because for different things, services we value today may be different than it was 15 years ago. For example the full package cable for our phone, computer and TV. Our personal cell phones. Many young people are opting for personal items and forgoing other choices (like housing, and having to work so hard, in some cases).
However, our household is struggling day to day, with little savings, as is everyone else and we (the middle class) do no perceive we are getting ahead. Perhaps other societies are beginning to catch up to us.
We are not helping ourselves by buying processed foods (let someone else do the cooking and food prep), paying for supposed conveniences we just have to have (buy now, pay later) or extending mortages (interest being paid to someone else).
Its all relative. And I think more and more young people will see the value in compromising a bit and asking mom and dad if its ok to live with them a bit longer to finish school (without taking on huge education loans)and "until they can get on their feet". Our society is changing and families are needing to stick together more to survive.
Builders and developers only respond after there is a definite pattern of change. Of course, for our retiring baby boomers, support housing will be an issue as well (including health care)--and the federal index will have more to do with how baby boomers are surviving in group facilities rather than individual homes. When's the last time you heard a federal report talking about the median senior standard of living?
(email verified)
Mon, Aug 20, 2007 at 05:20 AM
Housing prices are determined by the market of buyers, not the sellers, realtors, builders, lenders, or government agencies.
Secondly, as a morgage loan officer, I deal with this everyday, and I can't begin to tell you how many people I come across that have credit card debt equal to one year's earnings, car loans with a payment that takes up 25% or more of gross income, or private student loans at 19% for some stupid trade school that got them a dead end job making $14/hr.
Simply put, if people didn't live beyond their means and made wiser choices, those people would find housing to be a lot more affordable.
(email verified)
Mon, Aug 20, 2007 at 06:41 AM
Experts are saying that home prices are going down big time because of the nationwide and worldwide credit crunch just beginning now. In one year expect hompe prices in Portland to sink 50%! Portland and a few other markets have been slightly rising still because they were slow to catch on to the housing bubble.
(email verified)
Mon, Aug 20, 2007 at 07:34 AM
You will be waiting until you are blue in the face if you think a 50% drop will occur in Portland. Not gonna happen.
(email verified)
Mon, Aug 20, 2007 at 12:09 PM
i don't think lifting the urban boundary is the answer. home prices are increasing as demand (read:population) increases. we need dense housing and to keep defining neighborhoods so we don't end up with the sprawl that contributes to people having to commute to jobs which wastes gas (and their money) and detracts from time at home with family.
we need liveable wages and i completely agree with the person who said that not every family needs a 1,000+ square foot home.
my little family and i are lucky to have just bought a (tiny) home. i doubt we would be able to afford one in a few years. i'm happy to see developments like milepost 5, though. it's a solution for others who need not just affordable housing, but a sustainable community.
(email verified)
Mon, Aug 20, 2007 at 03:02 PM
Portland will not face a 50% drop because the supply of homes here is much tighter than the rest of the country.
That is why home prices here are still rising. This area is more of a true supply and demand market due to the scarcity of new homes and available land.
This is thanks to the artificial urban growth boundary, which is keeping supply tight. The UGB is good for existing homeowners in keeping prices high but absolutely terrible for first time home buyers.
(email verified)
Tue, Aug 21, 2007 at 07:32 AM
Lot’s of people want to live in Portland -- and the entire Willamette Valley. THAT’s what's driving up (and sustaining) our home values! In fact, many people have moved to Oregon because of our land-use regulations, and they're not leaving because of them. If we didn't have Urban Growth Boundaries we'd look like Washington (state). If you like that kind of un-checked sprawl - go for it - it's right across the river!
Home prices have gone up astronomically across the nation, especially in the most desirable locals. Many are due to the pyramid-scheme where low interest rates allowed 'anyone' to qualify for a loan; more buyers = escalating prices; and ‘banks’ couldn’t lose – even on a default. Until now...
Portland & Oregon should fare pretty well, but remember: our quality of life drives up home values; as the increased population & competition drive down wages. Guess that ‘quality of life’ has to reach the depths of that across the nation before this influx stops? …I’m waiting ~
(email verified)
Wed, Aug 22, 2007 at 03:29 AM
Time was, not too long ago, when you could get into a ridge-top, 3,000+ sq ft home in the Alameda neighborhood for what it costs to buy a new Jeep.
And the taxes and fees on that home weren't in the tens of thousands per year.
Ahhh, but the class-envious, socialist types in government just HAVE to stick it to the rich and MAKE them PAY their "fair share".
Ain't Portlandistan grand?
(email verified)
Wed, Aug 22, 2007 at 05:53 AM
The housing issue is not only a crisis in Portland, its every major city. You can stay or you can move. Its market driven and realestate developers are 'not' going to cater to the lower/middle income since its not profitable. It's how businesses work and thats the bottom line.
There are many more affordable cities across in the midwest where the median/avg price of homes are less than $100,000. I left one of the most expensive metro areas in the US last year and moved here just because Portland was way more affordable for me. I'm fortunate enough that I can buy close-in Portland for the same price of buying 30 miles out in the burbs of our nations capital.
You should only dream of where you cannot afford to live and live where you can realistically buy. Stop complaining about the economy, market, your lifestyle needs.....if it means commuting then accept that solution until you earn a higer income.
(email verified)
Wed, Aug 22, 2007 at 06:05 AM
SIX MONTH SUPPLY OF HOMES ON THE MARKET IN PORTLAND RIGHT NOW!!! That means to just be patient. Housing prices are going to crash nationwide thanks to our wonderful new unregulated banking system allowing any body with a pulse to get a no money down ARM loan.
(email verified)
Wed, Aug 22, 2007 at 09:25 AM
The major markets are still economically sound and people are still moving to the major cities for jobs, change in life, etc...
Housing price will crash in the speculative overbuilt cities in Florida, Arizona, Nevada, etc.
Six months of crappy old houses or condos maybe, but not homes in desirable inner portland neighborhoods in the $350-450k range.
(email verified)
Wed, Aug 22, 2007 at 04:10 PM
"Six months of crappy old houses or condos maybe, but not homes in desirable inner portland neighborhoods in the $350-450k range."
I tend to agree. Thanks to the double whammy of the credit crunch debacle and the rising gas prices the outer burbs are in big, BIG trouble!
(email verified)
Thu, Aug 23, 2007 at 04:49 AM
I'm begining to believe many who live in Portland want to leave, but they cannot afford to buy another home outside the city or the Tri-County area. Portland is very desirable IF you find Light Rail, Public Transit, and High Density Housing desireable, but if these changes have grown up around your home of 30-40 years it can be a very miserable place to live. Being compeled to reduce your expectations and compromise your values, due to the political philisophy and lack of respect by new residents make Portland, for some, a hellish place to live. Now I'm sure many will just take the position of "if you don't like it leave" but where do you go after your hometown essentialy askes you to leave, well I guess it proves just how "undesireable" it is to live here.
(email verified)
Thu, Aug 23, 2007 at 04:19 PM
The high cost of housing is not due to the urban growth boundary. There are still many areas within the urban growth boundary that are undeveloped. Don't let the developers pull the wool over your eyes with that one. Los Angeles has no urban growth boundary, yet their prices are much higher than ours. We are the cheapest large city on the west coast even.
The reason why there are condos and row houses is because people actually want to live closer in. They don't want to commute 20 miles. They also want to be where all the action is. That's why.
And before you go and stereotype me as some Tom Potter loving, utopia living green hippy yuppie, I am not. My feet touch the ground. I too am a native Oregonian.
(email verified)
Fri, Aug 24, 2007 at 01:15 AM
RW - The personal income is also much higher in Southern California AND LA is the opidomy of High Density in North America. Look to the desity goals of Metro and you will find Portland and LA are not very different.
(email verified)
Fri, Aug 24, 2007 at 09:29 AM
"Mark" - I was born in Portland and have now lived half my life outside it, in Yamhill County. Measure 37 it devastating this county; it’s 3rd in claims behind Clackamas & Wash. Co. It makes my visits to the old neighborhood almost heavenly in comparison! There remains the same basic density I grew up with. Sure, the freeways are more crowded, but then there’re more freeways!
What eats me is the crazy expansion of the suburbs. But inside the established ‘city proper,’ it's not that different. But like I said, I'm in the country now, and if Measure 49 doesn’t fix M-37 there will be a new standard for ugly! So hang in there, you could do a lot worse than Portland, you could be living next to an approved 131 -one acre lots of potential dog-farms (like me)! ...There's many a time I miss my hometown ~
(email verified)
Sat, Aug 25, 2007 at 03:13 PM
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Re: Home prices out of reach for many
Home prices are a concern here. That is a huge jump for one month, I wonder if it is a statistical anomaly
"greshamguy"
(email verified)
Sun, Aug 19, 2007 at 01:15 PM