Well-built 2-story home w/terrific, versatile layout. Generous living room & adjacent library/office; open light bright kitchen spills into indoor & outdoor dining areas across a spacious deck. Comfy upstairs w/2 bedrooms /1 bath. The sunny, large, vaulted master suite, could be studio space, office, gym, potential ADU, inter-generational living, many options! ML# 20013418
Charming Arbor Lodge bungalow with amazing updates. This light-filled home was fully remodeled in 2018 – updated kitchen, electrical & plumbing, new water line, new high-eff furnace & A/C, finished lower level. Cozy living room with wood burning fireplace, dining w/ built-ins, 2 bedroom & 1 bath up, lower w/ large master bedroom, family room & second bath. Sunny private backyard. A delightful home in a wonderful neighborhood, just minutes from New Seasons and the Max. ML#:20153335
Mid-century Reed starter ranch in excellent condition with an x-large very private fenced lot. This home has 2 bedrooms, a bonus room (pass-through), 1 bath, living, dining, separate laundry room, and eat-in kitchen. Featuring oak floors, fireplace with high-efficiency wood-burning insert, and vintage light fixtures. Enjoy a southern perspective (perfect for solar!) with large yard, firepit, and lovely terraced landscaping. Gardener’s delight! Close to busline, Max, Kenilworth Park & Reed College.
Lovingly-maintained Classic Hawthorne Bungalow. Inviting spaces with room for entertaining or just settling in. Beautiful Batchelder fireplace, built-ins, chef’s kitchen designed for excellent function with high-end appliances. Two bedrooms on the main with a beautiful Pratt&Larson bath. Generous space in upstairs bedroom w/ adjacent den area. New high eff gas furnace, excellent storage in basement. Enjoy the welcoming front porch or stroll in this lovely, walkable neighborhood close to so many amenities.
Classic stucco bungalow with distinctive elegance. Eyebrow dormers, dentil trim and a welcoming front porch invite you into this lovingly maintained home. The light-filled interior has leaded built-ins in the living and dining rooms and a Batchelder tile fireplace, hardwood floors. The home has an appealing floorplan with two bedrooms and a bath on main and a spacious master suite with walk-in closet and large den up, engineered flooring up. Period style remodeled baths, a generous kitchen with breakfast nook. The backyard has a 220 wired shop/garage, lush landscaping and a custom redwood pergola. Don’t miss this beautiful home!
Nestle into this charming and sophisticated sanctuary surrounded by trees. Generous living space and expansive outdoor decks, combined with cozy and protective personal space. Enjoy a warm and inviting large living room that spills onto a generous deck, intimate and welcoming dining room that communicates easily with the cook in the updated kitchen with custom cherry cabinetry and sustainable countertops. 3 bedrooms/2.5 Baths, near many NW amenities and yet so private. MLS # 20137460
With all of the volatility in the stock market and uncertainty about the Coronavirus (COVID-19), some are concerned we may be headed for another housing crash like the one we experienced from 2006-2008. The feeling is understandable. Ali Wolf, Director of Economic Research at the real estate consulting firm Meyers Research, addressed this point in a recent interview:
“With people having PTSD from the last time, they’re still afraid of buying at the wrong time.”
There are many reasons, however, indicating this real estate market is nothing like 2008. Here are five visuals to show the dramatic differences.
1. Mortgage standards are nothing like they were back then.
During the housing bubble, it was difficult NOT to get a mortgage. Today, it is tough to qualify. The Mortgage Bankers’ Association releases a Mortgage Credit Availability Index which is “a summary measure which indicates the availability of mortgage credit at a point in time.” The higher the index, the easier it is to get a mortgage. As shown below, during the housing bubble, the index skyrocketed. Currently, the index shows how getting a mortgage is even more difficult than it was before the bubble.
2. Prices are not soaring out of control.
Below is a graph showing annual house appreciation over the past six years, compared to the six years leading up to the height of the housing bubble. Though price appreciation has been quite strong recently, it is nowhere near the rise in prices that preceded the crash.There’s a stark difference between these two periods of time. Normal appreciation is 3.6%, so while current appreciation is higher than the historic norm, it’s certainly not accelerating beyond control as it did in the early 2000s.
3. We don’t have a surplus of homes on the market. We have a shortage.
The months’ supply of inventory needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued appreciation. As the next graph shows, there were too many homes for sale in 2007, and that caused prices to tumble. Today, there’s a shortage of inventory which is causing an acceleration in home values.
4. Houses became too expensive to buy.
The affordability formula has three components: the price of the home, the wages earned by the purchaser, and the mortgage rate available at the time. Fourteen years ago, prices were high, wages were low, and mortgage rates were over 6%. Today, prices are still high. Wages, however, have increased and the mortgage rate is about 3.5%. That means the average family pays less of their monthly income toward their mortgage payment than they did back then. Here’s a graph showing that difference:
5. People are equity rich, not tapped out.
In the run-up to the housing bubble, homeowners were using their homes as a personal ATM machine. Many immediately withdrew their equity once it built up, and they learned their lesson in the process. Prices have risen nicely over the last few years, leading to over fifty percent of homes in the country having greater than 50% equity. But owners have not been tapping into it like the last time. Here is a table comparing the equity withdrawal over the last three years compared to 2005, 2006, and 2007. Homeowners have cashed out over $500 billion dollars less than before:During the crash, home values began to fall, and sellers found themselves in a negative equity situation (where the amount of the mortgage they owned was greater than the value of their home). Some decided to walk away from their homes, and that led to a rash of distressed property listings (foreclosures and short sales), which sold at huge discounts, thus lowering the value of other homes in the area. That can’t happen today.
If you’re concerned we’re making the same mistakes that led to the housing crash, take a look at the charts and graphs above to help alleviate your fears.
The Portland real estate market has begun to show signs of weakening from the critical efforts our state and our citizens have been making to curb the spread of the COVID-19 virus. Governor Kate Brown has not curtailed real estate activity. Her Executive Order can be summarized in one sentence: If social distancing requirements (minimum of 6 feet) and additional sanitizing criteria cannot be met, the activities cannot be conducted. In response, the Oregon Association of Realtors, the Portland Metropolitan Association of Realtors, independent brokerages, and their agents are adapting quickly to new means of marketing and selling residential properties: Listing appointments, contract negotiations, and marketing activities are being conducted via Zoom, FaceTime, and related technologies. Homes are being shown ‘virtually’ with 3-D tours and FaceTime appointments. Real estate brokerages are implementing strict precautions that comply with CDC guidelines to protect their agents, their clients, and other participants in real estate transactions from the spread of the virus. (As examples, homes for sale now need to have adequate sanitization products prominently available for any visitors; agents only are allowed to open doors, turn on/off lights, etc; all visitors are encouraged to leave their hands in their pockets and maintain strict social distancing protocols, etc.)
We anticipate further restriction of real estate sales in Oregon as we bend into the curve of the COVID-19 outbreak already experienced by neighboring California and Washington. What’s the Outlook for the Real Estate Market? In light of the Governor’s Executive Order and the real estate industry’s response, we are seeing the market begin to react. New listings, pending sales, and closed sales are down about 9% in comparing the last week’s reporting period with the previous week. Withdrawn and Canceled listing are up 9%.
Long time readers of our “Notes from Shannon and Jeanne” may recognize an old chestnut from our archives: As Jean Dixon, one of the best-known American self-proclaimed psychics of the 20th Century, said, “If you must predict, predict often.” Many expert predictions about the COVID-19 crisis draw comparisons to the market disruptions we’ve experienced in the past. 9/11 is most often called attention: it, like COVID-19, was a rare experience that was not systemic in nature. It happened and it didn’t last long. It was not caused by an economic or “systems” breakdown, but by an external event. Therefore, it’s reasoned, the economic and political structures in place before the crisis will be unaffected by it and normalcy will return as soon as the dust has cleared.
“What 9/11 has in common with what is happening today is that this shock has also generated fear, angst, and anxiety among the general public. People avoided crowds then as they believed another terrorist attack was coming and are acting the same today to avoid getting sick. The same parts of the economy are under pressure – airlines, leisure, hospitality, restaurants, entertainment – consumer discretionary services in general.” [David Roseberg, Chief Economist, Gluskin Sheff and Associates]
We watched a Facebook video which likened the effects of the damage from COVID-19 on the housing market to the effect of a tornado (the 2006 – 2012 housing collapse) versus a snowstorm (9/11): A tornado passes through in a hurry and leaves devastation in its place, there’s a need to rebuild, While a snowstorm can be devastating, once it melts the infrastructure to start up again remains. We appreciate the comparison and love the prospect of a fast recovery, but we aren’t quite on board with the analogy. This analogy fails to note that a whopping snowstorm can leave a significant flood behind as it leaves, not exactly leaving everything open for immediate business. Importantly, the severity of the Coronavirus is not being felt by one city on one day. Here we do not mean to minimize the impact of 9/11; it was catastrophic for our country. However, the coronavirus is marching through the country, at different rates, and leaving country-wide devastation in its wake. Its damage will probably not be systemic, we may not need to rebuild the financial industry. The true effect of the coronavirus on the housing market won’t be felt for at least another month. And it will depend on the duration and severity of the crisis – both largely undetermined at this time – before we can begin to talk about probable outcomes with any authority.
Large, beautifully maintained, Mid-Century Modern with irresistible charm and endless possibilities. Generous spaces throughout. Outstanding landscaping features and lush plantings. Sprawling basement with enormous craft area, oversize family room and utility space. This home has great colors, good light, and the feeling that someone with impeccable style lives here.