Notes from Shannon and Jeanne

August 9th, 2017

August 9, 2017

Dear Portland Housing Market –Long May You Run?  Portland-area home prices climbed 8.9 percent during the year ending in May, according to the S&P CoreLogic Case-Shiller Index, an increase second only to Seattle’s 13.3 percent rise.  And bronze medal finisher Denver rounded out the podium with a 7.9 percent increase, meeting late-2016 forecasts that the three would lead the nation in price appreciation this year.  (Read our Portland Market Update for the latest statistics and a Portland area-by-area appreciation report.)

Portland’s price appreciation has slowed since a year ago, when prices were up 12.5 percent, and, reporting sluggish market activity in July and August, area agents are asking each other today, “Is these just a typical summer’s market doldrums, or is a protracted slow-down shaping up ahead of us?”

Our market has been on a long march upward, with steady growth since the market recovery began in late 2012. Most observers point out the leading forces driving this market have been low inventories of homes and low mortgage rates; recently we’re reading more reports that new home buildings starts have stalled, which will exacerbate matters in the future.

But that little business about interest rates. . . .

There’s growing interest (pun) in what effect the rising Fed Reserve rate may be having on home sales.  In June the Fed raised short-term interest rates by a quarter point, marking the Fed’s third rate hike since December 2016.  That’s not at all what economists foresaw; the consensus among them late last year was we’d only see two, or, at most, three rate hikes this year.  In fact though, with reports from the Federal Reserve Board that its members are steadfastly optimistic about the health of the economy, and less and less worried about creeping inflation, there’s a strong likelihood the Fed will raise rates once or even – gulp – twice again before the end of the year.

It’s like that adage about boiling a frog, there’s going to be a point where raising the temperature on interest rates is going to kill off some buyers.  Remember, the factors that have spurred on this hot market have been limited inventories and affordable mortgages.  We’re keeping a close watch on the market this month, and, going into September, we’re expecting to see our customary bump in sales activity between Labor Day and late October.  If we don’t get the bump, and interest rates continue to rise, will consumer sentiment falter?  Will buyers take a rain check on moving until next spring?

Portland Market Update Mid-Year Residential Highlights

August 9th, 2017

August 10, 2017

Year to Date Summary.  Activity has been cooler so far in 2017 compared to 2016. New listings (21,505) are down 1.8%, closed sales (14,866) are down 3.9%, and pending sales (16,572) are down 7.2%.  Realtors and other market observers will be looking closely at fall sales as a bellwether for the 2018 market.  (See our Notes from Shannon and Jeanne for details.)

Average and Median Sale Prices.  Prices continued to rise in the Portland Metro area during the first half of the year.  Comparing prices through June 2017 to June 2016, the average sale price rose 9.8% from $388,800 to $427,000.


Mid-Year 2017 Average Residential Sales Price and Appreciation by Area

Inventory moved up incrementally to 1.6 months in June.  The average number of days a property stayed on the market before going under contract (“pending”) was only 38 days.

Year 2016 Residential Highlights

February 21st, 2017

Portland Area Housing Market Tops the List.  According to Zillow, the Portland area had the nation’s fastest growing housing prices in 2016.  Zillow said that the average Metro-area home value rose to $354,000 in December, marking a 13.8% increase from December 2015.  In related news, the S&P CoreLogic Case-Shiller Composite Home Price Index reported Seattle, Portland, and Denver scored the highest 2016 year-over-year gains among the 20 cities in the index; among the 20 largest cities in the US, just Portland and Seattle saw double-digit appreciation in 2016.


2016 Average and Median Sale Prices.  Comparing 2016 to 2015 through December, the RMLS of Oregon reported that the average Portland-area home sales price rose 11.4% from $354,500 to $395,000.  In the same comparison, the median sale price rose 12.7% from $308,000 to $347,000.  (I see the discrepancy between the Zillow figure and the RMLS figure and I’m at a loss to explain it.  Shannon)


Portland Poised to Lead the Nation Again in 2017.

February 20th, 2017

Portland Poised to Lead the Nation Again in 2017.  As we near the end of the second month of 2017, we see a strong consensus among all market forecasters that Portland housing prices will be among the nationwide leaders again.  Look to Portland, Seattle, and Denver, as last year, to lead the pack.

How Much of a Good Thing?   Industry experts predict that Portland home values won’t rise as fast as they have over the past two years, but Portland will still outpace the national average.   The drumbeat – strong demand and limited supply –  will produce anywhere from 5.5% home appreciation in our Portland market, according to Zillow (, to as much as 11.1%, according to Veros Real Estate Solutions, a company that specializes in property valuations and analytics.  The National Association of Realtors is hanging with Zillow and forecasts that the Portland market will see 6.6% price appreciation this year.  It’ll be fun to see whose prediction wins out when we review the numbers next February.

Just What’s Pushing Our Market Ahead of the Pack?  The Portland and Seattle markets are benefiting from robust economies, growing populations, and continuing low inventories of for-sale homes.

Here in Portland the economy is in full swing.  The unemployment rate, at 4.6%, is the lowest we’ve seen here since those halcyon dot com days back at the end of the last century.  The job market’s strong and growing at 3.5%.  Take note: economic growth is no longer limited to just high tech industry; instead, it’s spread across a wide spectrum of different industries.  Our economy is more diversified than at any time in the State’s history, and with broad diversity there’s greater economic stability.

And people are continuing to stream into the Metro area: the most recent data from the US Census Bureau shows we added 40,621 new residents from 2014 to 2015. That’s 4.6 people per hour, 24 hours a day, 365 days a year.

Housing supply on the other hand has not kept its pace with our growing population.  Doh.  We’ve not seen more than two months’ inventory of for-sale homes since March 2015, and even with all the multi-family housing starts we’re seeing here, we’re not likely to see any significant improvement in housing inventories for at least another two years.

Anything Scary Further On Down the Road?  Well, no, apparently not in the short term.  Interest rates are predicted to remain well within reason for the year, with most analysists putting the year-end mark at 4.75 – 5.0% for the conventional 30-year fixed rate mortgage.  Pat Stone, Chairman and CEO of Williston Financial Group (WFG) and WFG National Title Insurance Co., spoke before a group of Realtors last week and said the outlook for the Northwest, regardless of whatever may come down from Washington this year, points to a robust market “at least” all the way through the first half of 2018.  We’re on board with Pat.

Is Portland Fighting Climate Change through Home Sales?

February 6th, 2017

In December 2016, the Portland City council voted to require home energy audits as a part of the home sales process.  The requirement will take effect in January 2018.  We’ve yet to see how it will play out. Advocates say it’s a step toward meeting our 2050 City action plan for an 80% reduction in carbon emissions; opponents say it is an undue burden on sellers.  The audit would give a home an energy efficiency rating between one and ten by which buyers could compare one property to another.  Voluntary audits have been around since 2009, but the rating did not get much attention during a home sale.  Very few homes obtained voluntary ratings, less than 2%, so many homes coming to market did not have scores.  Therefore, energy efficient homes with score rarely had other homes to compare with.

It turns out Portland’s commercial buildings have been subject to this requirement since 2015.  Since about half of all carbon emissions from buildings come from residential housing, rolling in single family residences helps a great deal with the overall reduction goal.

The Realtor associations have opposed this requirement as one more unnecessary burden on a home’s sale.  Critics say the audit could be used against a seller, or used to negotiate improvements to a home during a sale.  Note: we typically negotiate repairs rather than improvements during the process.

Ready for the inside scoop?  We’ve been in favor of this for a long time.  This has not been a popular stance among colleagues. Disclaimer: no doubt we’ll have bumps along the way.  It will make the process more complicated.  It is already quite complicated, but that’s why professional assistance is needed.  There are a small number of environmentally-minded realtors in Portland that have been proponents of this policy all along.  We have consulted with home buyers for years on home improvements, it has been disheartening to discourage a potential homeowner/seller to forgo energy improvements, and opt for an Ikea kitchen instead (no dis meant to Ikea).  We believe this requirement will balance Portland values with more flashy cosmetic upgrades – with an energy score, both home investments will have a way to be visible to buyers.  R-38 insulation as sexy as a farmhouse sink?  Coming your way.

Portland Market Update

September 29th, 2016

Metro Highlights

September 29, 2016

Average and Median Sale Prices.  Prices continue to rise in the Portland metro area. Comparing 2016 to 2015 through August, the average sale price rose 11.2% from $353,200 to $392,600. In the same comparison, the median sale price rose 12.5% from $305,000 to $343,200.


August 20, 2016 Average Residential Sales Price and Appreciation1 by Area


Inventories Have Picked Themselves off the Floor, a Little.  We’ll see inventories pick up through the rest of the year, albeit marginally.   Look for the best buying opportunities in a year come November. 1 Percent change is based on a comparison of the rolling average sale price for the last 12 months (8/20/2015 – 8/20/2016) with 12 months before (8/20/2014 – 8/20/2015)

Inventory in Months, Portland Metro Area

Notes From Shannon and Jeanne

September 29th, 2016

September 29, 2016

Strong sales cap off a busy summer.  Average and median sales prices continued to rise in the Portland metro area through August, and while sales volume is starting show signs of slowing, prices are likely to hold steady through the last quarter of the year.  As we’ve noted earlier this year, Election Jitters, the persistent-but-never-realized threat that the Fed will raise rates, and the customary seasonal slowdown will put some drag on this year’s market rocket ship.  [Tip: if you’re thinking about buying, or know someone who is planning a move – the last part of the year is often the best time to buy.  Put off selling now until February or March, but if a “buy” is in the works, think to call us for advice.]

You can get all the latest statistics, including price appreciation figures, by clicking on our Portland Market Update.

Now not one, but two websites devoted to Portland’s building boom.  When we reported in June that Portland’s growing so fast that there’s a web site devoted to tracking new projects we thought to ourselves, “Holy cow!  Boom town!”  Imagine our surprise when we learned that a second website had been launched by the Portland Business Journal.  Called “Project Watch,” the interactive site covers new hotel, industrial, mixed-use, office, multi-family residential, and retail startups – and the site reports a ton of them.  Check it out here

In the mix:

  • Eleven big downtown building projects are on the books for development on properties owned by the Goodman family’s Downtown Development Group. Watch the first one, a 425-unit apartment building with a grocery store anchor, coming out of the ground now at Harrison and SW 4th.
  • The City has applications from various big developers for construction of eleven new hotels in downtown and close-in Portland.
  • Macadam Ridge, a proposed subdivision of around 46 new single-family homes in the hills above the intersection of SW Macadam Avenue and Taylors Ferry Road is working its way through the city planning process. If approved, it will be the first traditional subdivision built in Portland in many years. Neighborhood and conservationist interests are strongly opposed to the project, which will, among making other environmentally controversial changes, take out 480 trees.
  • “Freeway capping.” Former mayor Vera Katz’s 1998 idea for covering the sunken portion of I-405 that runs along the west side of Portland has been revived again.  The plan would build caps over the sunken interstate that would reconnect neighborhoods and add back 28 of the 36 blocks that were destroyed by building the freeway back between 1969 and 1973.  An example of this idea in action is Seattle’s Freeway Park over I-5.

Summer’s fading. Enjoy the rest of it in the company of your family and friends, and as much of it as you can outside.  Happy fall!

Shannon and Jeanne

In this issue: A controversial housing proposal could save neighborhoods and increase density. Also- dare we say it – signs that real estate sales are cooling?

June 23rd, 2016

In the News:  On June 10th, The Oregonian reported that Portland’s Bureau of Planning and Sustainability (BPS) is preparing a set of regulations to govern infill development to meet the city’s needs for more housing in the face of its recent rapid growth.   The proposal seeks to:

  • Limit the size of single-family homes and end developer’s practice of taking down small houses and replacing them with large, expensive “McMansions.”
  • Encourage more multifamily housing options. The proposal would allow developers to build more accessory dwelling units (ADU’s), duplexes, triplexes and even four-plexes on as-yet undesignated housing lots.
  • Allow more houses on some lots. The proposal would make it easier, in some cases, to re-establish historic narrow lot lines that lie under larger, consolidated parcels where there is currently only a single home.
  • Permit development without provisions for on-site parking.
  • Prohibit “snout houses” (front loaded garages).


An on-line survey of around 7,000 participants conducted by the BPS this past winter revealed that the public’s greatest concerns are housing affordability; demolition of existing viable homes and the consequential loss of neighborhood character and history; parking and congestion; and loss of tree canopy.


While the proposal to adopt more “middle housing” alternatives in Portland’s single-family residential zones may not wholly allay all the public’s concerns, we endorse a course change to Portland’s housing regulations.


The project summary and timeline are available by going to  The public is invited to a series of open houses throughout June and July.   (For a schedule, click here:


Can’t make it to a meeting?   In addition to open houses, an online open house and questionnaire will offer community members another chance to learn about the project and give staff feedback.   As of this writing the open house and questionnaire haven’t appeared on the internet.


Want a Bird’s-Eye View of How Portland is Growing?  Coolest web site ever!  Click on for an interactive aerial map of Portland – zoom into your neighborhood! – and keep tabs on all the growth that’s happening here.  “Next Portland” covers all “multi-family residential, retail, cultural buildings, educational buildings, hotels and other large projects happening in the City of Portland. [They] cover both new buildings and major alterations or additions to old buildings. [Their] blog posts are exclusively written about projects that are either still in the design phase, or are under construction.”   Take a look!  Do you want to know more about the construction at NE 7th, between Russell and Knott?  That’s going to be a 6-story, 68-unit apartment building.  And that’s a 4-story, 40-apartment complex going in at 2330 NW Raleigh, in case you were wondering.   We find ourselves referencing information off this site two or three times a week – it’s a terrific way to stay informed about growth and development in the city.  Check it out!

NextPortland tool

Seeing a Slowdown?  The current seller’s market kicked off in January 2013, which was 42 months ago.  The chart looks impressive:

Pages from PortlandMetroArea

In those 42 months the average price of home in the Metro area has risen 28%, from $287,700 back in January 2013 to $402,500 at the end of the May 2016 reporting period.  While sales remain robust, we’re seeing a decrease in the numbers of participants in bidding wars and even a slight increase in inventories in certain market segments (among more expensive, $600,000-plus homes; in outlying suburbs).  With school getting out and summer vacations cropping up in the calendar, June sales often soften, certainly, but a three-and-a-half-year old market is getting a little long in the tooth. . .  and there’s the fall election and attendant uncertainty surrounding it just ahead.  Going into the summer market we’ll simply note there’s a faint warning light on the dashboard, and leave it at that.   We remain unveeringly, cheerily optimistic about the health of the market in the long run.


The 2016 Housing Outlook

February 8th, 2016

For the third year in a row we’re bringing you the same market forecast: “Low mortgage interest rates and low housing inventories will push the cost of [Portland residential] housing higher as opportunity-seeking buyers bid up prices for limited quantities of available homes.”  Last year we called that statement a catechism; this year we’ll call it a mantra.  Come fall though, maybe we’ll be calling it a prayer.  Read on.  But here, at the year’s onset, all the past two years’ market conditions are still in place and set to propel the first half of the year along at a breakneck pace.

Recapping on 2015, last week the highly-regarded S&P/Case-Schiller Home Price Index reported that Portland housing prices gained more than any other in its 20-city composite index, topping the list with a reported one-year 11.1% gain.  Along with Portland, four other cities – San Francisco, Denver, Seattle, and Dallas – either matched or exceeded their pre-Recession all-time highs.   Our own Realtors Multiple Listing Service, while less sanguine than Case-Schiller, reported that average price appreciation in the metro area last year was 6.5%.  That’s on top of 2014’s 7.2% gain, which was in turn heaped on 2013’s 12.9% rise: in the aggregate we’re looking at a post-recession gain of 26.5% over three years.   (As usual, last year’s market stats, including a breakdown of Portland metro appreciation by area, are tabulated in our most recent “Portland Market Update.”)

If predictions hold, 2016 market activity will show continuing, albeit slower, gains.  CoreLogic, a leading provider of real estate analytics, reported in November that Oregon will see a 5.4% increase in home prices in 2016.  We’ll add this to that sunny optimism: almost every one of the factors that we cited would influence the 2015 market – low interest rates; low inventories; steady in-migration; strong Boomer and Gen-Y demand; and high rents – is still in place as we move into the 2016 market.

Nothing lasts forever, and we note a few things on the horizon that could moderate growth in the housing sector later this year:

  1. Many more international / Chinese economic woes could undermine the US equities markets. That could lead to economic woes of our own, which may stifle housing gains.
  2. Wage growth needs to keep pace with rising home prices. If the gap widens, the housing market, fed from below by first-time buyers, will falter.  Good news here though: last year Portland metro area job growth increased 3.3%, added 35,600 new jobs. That outperformed the state job growth of 3.1% and the national rate of 1.9%.  (Source: The Oregonian, 1/27/2016)
  3. Short of a China-inspired recession (see #1), there’s little doubt that interest rates, which are hovering around 4.0 – 4.25% now, are going to rise this year, albeit slowly. While the rise may not appear to mean much, the slightest shiver in mortgage interest rates could rattle many marginal buyers out of the market.  And again, first-time home buyers will feel it hardest.
  4. The uncertainty that usually surrounds a presidential election will add a note of caution to the market as the spectacle unfolds in the months leading up to the November vote. Look for a slow-down in activity starting in August and persisting into mid-November.  Beyond that, bets are off for the year.

The housing market is like that old adage about the weather in Portland.  If you don’t like it, stick around awhile, ‘cause it’ll change!

(Belated) Happy New Year!

Shannon and Jeanne

Year 2015 Residential Highlights

February 8th, 2016

2015 Year in Review: New Market Highs (Again), Worrisome Inventory Numbers (Again).   

The Portland metro area ended the year with an uptick in closed sales this past December. The 2,710 closings surged 21.0% past the 2,239 closings posted in December 2014 and 25.9% past the 2,153 closings posted in November 2015. This was the strongest December for closings in the Portland metro area ever recorded by the RMLS, dating back to 1992.  Pending sales (1,936) were 16.1% stronger than in December 2014 (1,667) but fell 22.7% from the 2,504 offers accepted in November 2015.  The culprit: low inventories (see below).  December listings (1,538) were down 28.4% from the 2,148 new listings that came to market in November 2015.  The culprit: the market’s ordinary year-end holiday slowdown.  As of the date of this Update there is a total of just 2,495 active residential listings in the Portland metro area.

Average and Median Sales.  We’ll mark 2015 as the year the housing recovery brought prices back to pre-Recession levels.  Comparing 2015 to 2014, the average sale price rose 6.5% from $333,000 to $354,500. In the same comparison, the median sale price rose 7.9% from $285,500 to $308,000.

Average and Median Sales Price

Year 2011 Average Residential Sales Price and Appreciation1 by Area

AREA Average Sales Price Appreciation 1
NORTH PORTLAND $335,000 14.8%
NE PORTLAND $376,700 8.3%
SE PORTLAND $330,100 9.0%
OREGON CITY/CANBY $325,200 8.6%
WEST PORTLAND $495,100 5.3%
NW WASH. CO. $442,700 5.7%
BEAVERTON/ALOHA $297,300 7.1%
COLUMBIA CO. $226,600 7.0%
YAMHILL CO. $2267,100 5.6%

1 Percent change is based on a comparison of the rolling average sale price for the last 12 months (1/1/2015 – 12/31/2015) with 12 months before (1/1/2014 – 12/31/2014)

Low Inventories Continue to Define the Market Recovery.  December 2015 set another record of sorts: inventories of available homes fell to 1.2 months, the lowest inventory number since 1999 at least and a 17-year record.   Reciting from last year’s residential highlights, the same elements which have kept inventories persistently low for the past 3 ½ years are still working their juju on the market:  (1) in spite of rising home sales prices, many home owners are reluctant to bring their properties to market, for fear they will have nowhere to move; (2) other home owners are reluctant to sell because they’ve recently refinanced and can’t afford to sell quite yet; and (3) new construction starts still can’t keep up with demand.

inventory in months

Take a look at our “Notes. . ,” and watch us stick our necks out when we bring you our 2016 Market Outlook.