The Case of the Rapidly Increasing Oregon Population

WHY SO MANY PEOPLE ARE MOVING TO OREGON AND WHAT I THINK ABOUT IT

 “Nancy Drew and the Jewel Stealing Sasquatch That Moved to Oregon”

If this were The Hardy Boys or Nancy Drew (I devoured those books as a kid) then I would start this case by hunting for clues. There would inevitably be some type of jewels, paintings, or other objects involved and I would almost certainly get to travel to interesting locations. At some point I would get to ride in a spectacular car, motorcycle, boat, plane, or other oddball method of transport like a Sasquatch or something. In the end, my master sleuthing would uncover the mystery, plus some unexpected twist no one was expecting (or maybe I’m thinking of Scooby Doo).

Figuring out why Oregon is one of the top moving destinations in the United States takes a super sleuth. Some reasons are obvious. People from more expensive areas, like much of California, enjoy moving to Portland because they have a lot more buying power. Their jobs also tend to transfer well to our market. Many companies are opening PDX satellite offices and have found that their employees are jumping at the chance to move up here (I’m looking at you, Google).

There is no denying that you can afford more house in Portland than you can in the heavily populated areas of California. The median home price in San Francisco is north of 1.3M. I’ve seen headhunter after headhunter try to recruit many of my engineer friends to move down there (unsuccessfully). The running “joke” is that a down payment in Silicon Valley could buy you an entire house in most of the rest of the United States.

 This is California. If it were Oregon these people would be wearing Smartwool long johns, Pendleton sweaters, Columbia jackets, and Patagonia puffer coats. And they This is California. If it were Oregon these people would be wearing Smartwool long johns, Pendleton sweaters, Columbia jackets, and Patagonia puffer coats. And they’d still be huddled a lot closer together for warmth.

But, as much as Oregonians love to blame all problems (especially traffic) on Californians and people living in Vancouver, there is a deeper story here.

California’s net gain/loss is actually pretty close to zero (about the same amount of people move in as move out). Oregon, on the other hand, stands at about a 67% gain vs 33% loss rate. It seems that word has traveled far and wide. People from Arizona, Texas, Colorado, Illinois, Kentucky, West Virginia, and others are all finding their way to the Pacific Northwest (Seattle is getting them, too).

However, one of the biggest sources of transplants is New York and other northeast states. New York itself is one of the most moved from states at a 63% loss vs 37% gain rate. It’s easy to see why this would happen. All the reasons Californians love to move here make sense for New Yorkers. And unlike Southern Californians, East Coasters aren’t trading year-round mild weather for the privilege of growing webbing between their toes.

 Pro tip(s) for migrators: Only wimps carry umbrellas in Oregon. Never buy a piece of outerwear without a hoodie. Beards are not optional. Pro tip(s) for migrators: Only wimps carry umbrellas in Oregon. Never buy a piece of outerwear without a hoodie. Beards are not optional.

Although, they’ll still have to grow webbing between their toes.

They’re also going to have to deal with an ongoing housing crisis. But that’s another story.

Even though the majority of people move to Oregon for a job (52.75%), there are other reasons. The next most cited response is retirement (19.90%) and people over the age of 65 are actually the largest age group moving to Oregon (24.35%). Although it’s fairly even across the board.

Oregon doesn’t seem like the most likely place to retire but when you factor in Bend, Sisters, Ashland, and the entirety of the coast, it does make sense. Not to mention the fact that we have some kickin’ retirement communities around the Portland metro area.

Family and Lifestyle round out the other major reasons people move to Oregon. Family will always be a good reason to move but not every state offers quite the same lifestyle as Oregon. Whether you want to start a tech company, keep it weird, or follow your outdoor adventure dreams, we’ve got it all.

Weather wasn’t a survey option but I’m sure if it had been, that would have been the top response, right? Or the prevalence of bicycle lanes. That would have been way up there.

 This isn This isn’t a bicycle race. It’s just Portlanders on their normal morning commute.

So, we have a pretty good idea now of why so many people are moving here. The next question would be: Is this a good thing?

I would have to say, “YES!” Many of the people moving here are accepting jobs that sorely need to be filled. Because companies are beginning to realize that Oregon is more than just the end destination of their favorite 80’s computer game, the job market is booming. We’ve been setting records for job growth and we need talent, stat.

Of course, we also need available housing, stat. But, that’s still another story.

Full disclosure: I am not a native Oregonian. I moved here in 2001 from my home state of Georgia. I have an enormous soft spot for anyone from the eastern seaboard because I worked sales for years to New York and the surrounding states. For some reason, my straight-forward, analytical, “get ‘er done” personality jives well with New Yorkers. I sometimes miss traveling back there and being able to visit 6 states in a day (although I don’t miss the tolls).

So if you’re looking to transplant yourself to the Portland area, look me up. We’ll see all kinds of interesting locations, maybe weather a few twists, and eventually uncover a jewel of a home. But no Sasquatches. I promise.

Brandi Whitaker

Property Investment and You

As a property investor,

I’m frequently asked for advice about buying rental properties and how to achieve that goal. There are many factors as to how to make this happen, but I’ll focus on the first time buyer that wants to buy a home and then buy another house or duplex as an investment.

To achieve this there are a few ways to go about it. One way is to let the first purchase appreciate through either time or sweat equity and then refinance to pull cash out or take out a home equity loan in order to have funds for the the down payment. This is a very common direction to go and works quite effectively. In fact, this is how I bought my first rental 20 years ago.

Would I do it again?

I would, but I now have an alternative suggestion to buying investment properties and that is to start with the investment as opposed to purchasing a single family home and parlaying it into an investment property. A duplex is the perfect start as you can live in one side and rent out the other. If the right property is identified you may even be cash flow positive from the start, allowing you to grow your cash reserves for a downpayment on the next investment.

I’ve advised multiple clients to follow this path and they have all been grateful of this direction. In one transaction a young couple purchased a nice duplex in need of some cosmetic touches. After spending nearly a year working on their property they decided they didn’t like living in a duplex so after the home improvements they refinanced to pull some cash out and purchased a single family home and kept their duplex as an investment property. I honestly feel they would have never purchased the duplex if they started with a single family home and now they have the potential of 3 rental units.

In another case, I sold my client a duplex, after looking at many single family homes and, instead of parlaying the duplex into another property, he has decided to stay with one investment property and one side of the duplex nearly pays his entire mortgage payment.

So my advice today:

Start with the investment property and when the time is right move into the house of your dreams.

Byron Twyman

Portland Zoning Changes

WHAT YOU NEED TO KNOW (AND PROBABLY A BIT MORE)

 The joy of understanding zoning. The joy of understanding zoning.

Depending on whether or not you’ve received snail mail concerning zoning changes, and depending on whether or not you read the fine print, your Portland home may undergo a change of zoning next year. This leads to a lot of questions and one very important piece of advice:

  1. Why is the zoning changing?
  2. When does the new zoning take effect and who does it impact?
  3. Where can I go for more information?
  4. Can I stop the change or change my current zoning?
  5. How does zoning work?
  6. What does this mean for home buyers and sellers?
  7. Most Important Advice Ever

1. Why is the zoning changing?
For the past ~8 years the Bureau of Planning and Sustainability (BPS) has been working on a new Comprehensive Plan for the City of Portland. This is a long range (20 year) planning tool that sets the framework for physical development in the city. Most of the legislative work is done but there are always additional projects in the works that you can comment on and provide testimony for (such as Central City 2035).

2. When does the new zoning take effect and who does it impact?
Approximately 24,000 homes will be affected by the zoning changes (including yours truly!). These changes are going to be effective on January 1st, 2018. However, there is the possibility that it could go into effect later than this date depending on the state acknowledgement process.

3. Where can I go for more information?
To find out whether or not any particular home will undergo a zoning change, you can visit this website. To find out what your current zoning is, visit this website and enter your address. Feel free to contact me for help and any questions you might have.

4. Can I stop the change or change my current zoning?
There’s no way that I know of to stop the zoning change if you are part of this particular update because it was adopted by the City Council in December of 2016. However, zoning changes all the time and there are a lot of factors to consider if you think your property should be zoned differently.

While your current zoning may not allow for the development that you want, your property may be part of future zoning changes (comp plan). If so, you may be able to go through a quasi-judicial process to apply for a zoning change which will have a good chance of success. Otherwise, you can apply for a change of zoning but there is absolutely no guarantee of success. Either of these processes carries a high cost and should be carefully considered. Input from professionals is crucial.

5. How does zoning work? (high level overview)
Your base zone may be something like R2.5 or R5. R means residential and the number corresponds to the number of units that can exist per thousand square feet (2.5 = 1 unit per 2500 square feet). Except when it doesn’t… don’t ask. It can be more complicated than this based on other rules, such as location (for instance a corner lot may allow for more density) and overlay zones (such as design overlay zones that require certain design elements). Specific overlay zones, plan districts, and other regulations will all impact the development potential for your property.

Zoning is (unnecessarily?) complicated so don’t expect to understand everything just from knowing what the code is for your zone. You can consult your realtor for help to better understand your situation.

 This is a zone map of a little piece of Portland. You definitely do not need to understand what all this means. This is a zone map of a little piece of Portland. You definitely do not need to understand what all this means.

6. What does this mean for home buyers and sellers?
For buyers and sellers, zone changes can certainly impact the highest and best use for your property. A change from R1 to R5, R10 to R20, etc. may mean that a property no longer has the development potential it once had. Or the property may be changing to allow for higher density development. For a seller, knowing and understanding the current and planned zoning is crucial.

For buyers, understanding the zoning of both the home that you are interested in, as well as all the neighbors, can make a huge difference in whether or not it makes sense to buy the property. For instance, the home you are wanting to buy might be zoned for lower density residential but the corner lot next to it may be zoned for higher density development. Even if that corner lot only has a single level house on it now, it could be developed into a 3-story complex in the future!

Most Important Advice Ever (well, maybe not ever but it’s still good advice)
There’s a lot more to selling and buying homes than listing on the MLS or placing an offer. Find a real estate agent with the knowledge, smarts, and time that will do the work for you to maximize your dollars! (Along those lines, feel free to contact me anytime.)

Brandi Whitaker

Overcoming Obstacles

I work very hard for my clients to make sure each transaction is as stress free as possible. However, things happen that are out of my control, and that was the case when my fantastic first time buyers purchased their home in SE Portland last month.

A Smooth Start

Things started off smoothly – the earnest money deposit was wired to the title company, inspections were scheduled and disclosures were reviewed. Our home inspector called out the roof and we successfully negotiated a credit from the seller to have the roof replaced. So far so good, right?

The Appraiser Throws a Wrench

Enter the appraiser. An appraisal report is not just an opinion on value, it also includes remarks about the property’s condition. In this case, the report included the following verbiage:

“Roof is nearing the end of its economic life with noted composition loss and patched shingles. An extraordinary assumption has been made that the roof has 3 to 5 years of remaining life. If the client has concerns regarding the condition and remaining life of the subject roof, an inspection by a licensed roofing contractor is recommended.”

This threw a wrench in the works. The underwriter would not approve the loan without a certification from a licensed roofer stating that the roof had at least 5 years of life left. Since we were less than a week away from closing, the buyers and I had to scramble to come up with a plan.

Coming Up With a Plan

The first thing I did was to ask the loan officer to push the roof certification condition from a prior-to-doc condition (a condition that has to be satisfied before loan documents are issued) to a prior-to-funding condition (a condition that has to be satisfied prior to the loan funding, which typically happens on the day of closing) to give us more time to get a roof certification issued.

The second thing the buyers and I did was sit down and call every roofing company in the city to see if anyone could come out the next day to review the roof. Our concern was that the roof would not qualify for a roof certificate so we also scheduled roofers to go out there to bid on having the roof replaced. Being that this was 4 days before closing and this was one of the wettest winters on record, we knew that the chances of finding someone who could go out there, bid the job, and get it done in less than a week were slim to none.

The Solution

My buyers reminded me that they had seen a roofing company truck at the neighbors house and said they would go over there to see what that company’s availability was like. Well, fortune favors the brave, as they say, and them going over there to knock on the door turned out to make all the difference. Not only was the company available to provide a bid right there on the spot, they were also able to move some other appointments around to replace the roof on this home and allow us to close on time.

The weather refused to cooperate but the company was still able to replace the roof in pouring down rain and a wind storm. The completion certification was sent to the lender who funded the loan and the transaction closed!

 New roof being installed New roof being installed  Roof Before Roof Before  New roof being installed New roof being installed  Roof After Roof After

-Calle Holmgren

To Rent or to Buy…That is the Question: Market Insights from Starr Gartner

 To Rent or To Buy? Inhabit Portland Real Estate

Happy New Year! 2015 is forecasted to be a great year for the economy and real estate.  The U.S. dollar is the strongest it’s been since 2006, trading at $1.19 per Euro and the GDP increased 5% in the third quarter.  In Portland, rising rents are shrinking the amount of time (2.2 years, down from 3 in 2013) it takes for homeowners to gain a financial advantage.   Homes rise in value on average from 4% to 6% a year and mortgage rates are incredibly low!  Depending on your financial position, it’s a great time to buy vs. rent.  Check out the following financial and lifestyle advantages and considerations to homeownership.

Financial Advantages

  • Equity!!!  Buying a home is a great way to build wealth. You build equity as your pay down your loan. On average, homes rise in value between 4% to 6% per year. Even if your home doesn’t increase in value, you’ll be building equity as you pay down your mortgage. As a renter, you’ll never see your rent money again. You’re are paying down your landlord’s mortgage.
  • Tax Breaks.   Homeowners can deduct their mortgage interest payments and property taxes when they itemize their federal income taxes. These deductions offset the cost of your housing.
  • Fixed Mortgage payments.  With a fixed-rate mortgage, your principal and interest payments remain the same for the duration of the loan. However, your homeowners’ insurance and property taxes may change each year.
  • Wanderlust? Unexpected relocation? Investing Bug?   If you buy a home and choose to leave it, you can either sell it or rent it out and generate income. This works best if you can cover your mortgage (or more) with rental payments. With this in mind, it pays to choose a home that will make a good rental property in the future.

Lifestyle Advantages

  • Community.  Once you commit to owning a home, you are more likely to become more involved in your community because you know you’ll be there for years. You can get to know your neighbors, join a neighborhood association, or volunteer for projects that benefit the community or the local school.
  • Privacy.  Depending on the property type, you may have more privacy in a home. You can’t pick your neighbors, but at least you won’t share a wall or ceiling and floor with them. Of course this isn’t true if you already rent a single family home (where you may have a yard and/or fencing) or purchase a condo (where you might share walls, ceilings and floors).
  • Freedom.  You want a roommate? Miss having a furry friend? If you rent, there are occupancy and pet restrictions, noise restrictions, use restrictions.  Homeownership,  you have the freedom to do what you want to do.
  •  Security.  Your home is yours. You don’t have the move if the landlord changes his mind (rent increases, decides to sell or rent to his nephew, etc.)
  • Style expression.  With a rental you are often limited with what types of changes you can make. If you own your home, you can express your style inside and out. Want to paint your house pepto-bismol pink? Go ahead. Add a satellite dish to your roof? No problem. Because you own the home, you don’t need permission from anyone-unless you belong to a homeowners association that dictates certain rules for changes to the home.
  • Remodeling. In addition to making cosmetic changes to your home, you may also make construction changes. For instance, if you love your neighborhood, but have a teeny-tiny kitchen, you may opt to remodel and expand the kitchen rather than purchase another home.

Considerations?

Base your decision to rent or buy on your net income rather than your gross income. Payment estimates should include principal, interest, property taxes and homeowners’ insurance (“PITI”). Home ownership means you can’t decide one day you just don’t want to pay for it without major financial repercussions or a plan of action. You must continue to make payments and rent or sell the house.

There is also home maintenance to consider. As a homeowner, you must spend time and money keeping your home in good repair. It is recommended to keep a cash reserve equal to two mortgage payments in addition to an emergency savings account to cover unexpected expenses, such as appliances that break, a service contract on your furnace, or the need to replace your windows or roof.

Starr Gartner

What Is the Best Time of Year to Buy a House

When the sun’s away, the inspector will… scratch his head?

When is the best time of year to buy a home here in Portland? We get asked that a lot, and it’s a tricky beast of a question. Probably, it comes down to your priorities as a buyer. What worries you most about choosing a “good” house? As the season changes from long, very warm and sunny days into short, rainy, cool ones, there are some challenges that emerge with respect to the inspection process. However, there are also some hidden benefits to a Winter purchase.

Here are some things to consider:

  1. Air conditioning can only be effectively tested when the outside temperature is above 65F. The cooling element will not be fooled into a setting request for 55F when it’s 52F in the yard… or even vice-versa. All the inspector can check is whether the unit powers up and doesn’t make any troubling noises. Similarly, it is difficult to test the “heat” aspect of a “heat pump” on a day where everyone who can be swimming, is.
  2. The roof – or parts of it – may be subject to a “from the ground” inspection if the pitch is significant; the more wet and cold (read: slippery) the conditions, the more likely you’re going to hope the inspector’s corrective vision prescription is up to date, and/or there are a minimum of raindrops on his eyeglasses. That said, if the roof is leaking, you’ll need rain for a sure assessment of where and how much… not to mention for proof to a skeptical seller.
  3. The basement may indeed be dry as a bone whether there are gaping cracks in the earth or tsunami conditions outside. It’s hard to have confidence in August, but you sure will in December!
  4. Do the gutters work? Only the rains will tell the unvarnished truth.
  5. Is the landscaping thriving or dying? A Spring or Summer sale will give you great confidence about the seller’s assurances of great bounty. Almost everybody’s yard looks like a gravesite in February.

When all is said and done, a good home inspector will do the very best they can to sniff out clues during unhelpful seasons or weather conditions. Your Realtor may have recommended them, but it is YOU who hires them. Don’t hesitate to call them ahead of your inspection to ascertain their approaches to air conditioners in November, or to a low-pitched roof that got too icy under a freak storm the night before – will they come back at no charge when the conditions return to normal?

Generally speaking, be informed of, and prepared for the limitations that the seasons can inflict upon a productive examination of everything you want to know about your house – before the deed has your name on it!

Navigating the Simultaneous sell-buy/buy-sell

Challenge: You want/need to “move up” but you need to sell your current home in order to buy (because you either need the equity for down payment, or your debt ratios are too tight to be approved for an additional mortgage).

Many of our clients are in this boat, and the current competitive market makes this pickle especially challenging. Right now it is difficult to compete in the buying process with a contingent offer. (In this case the contingency would be that your home must sell before you can close on the new purchase)

There are a few solutions or options for home owners in this predicament. None are perfect; however, with a great Realtor, the goal can be accomplished.

Option 1: Prepare, list and sell your existing home. You would then obtain a short term rental or interim housing while you look for your new home to buy. This requires 2 moves, but puts you in a much better buying position with liquid down payment, your purchase not being contingent on the sale of of your house, potentially more flexible closing period, and no need to request a rentback period.

*We realize many people don’t want to move twice, so here are a few other options.

Option 2: List your home at fair market value, or slightly below. You will likely obtain more than one offer, be more in control the closing terms, and negotiate a longer closing period which would allow you time to shop for a replacement house. The sale would be “subject to finding a suitable replacement property” within a certain period of time. You can then write an offer “subject to the closing” (rather than the sale) of your existing home already in pending status.

Ideally in this situation you’d be through the inspection and appraisal contingency on the sale of your home when you write the offer to purchase your new home, while still contingent on closing. This is perceived as a stronger position, with no predictable obstacles in the way. The close of escrow of both the sale and purchase would be scheduled simultaneously.

Option 3: You prepare your property for sale, find a replacement home, and write an offer contingent on the sale and closing of your current home. If the offer gets accepted, the status of the sale agreement becomes “bumpable” meaning that the contingent offer can be bumped by another buyer under certain terms and conditions prior to closing.

Option 4: There’s got to be a rich Aunt or Uncle out there somewhere that will give you some “bridge” financing, right??

News & Events – Prices and rates expected to rise in ’14

Rare, Double-Whammy

There’s a lot of excitement in the air in anticipation of a very strong 2014 nationally and locally. Check out this Portland Business Journal article ranking Portland in the top 10 of the countries hottest markets next year. Fasten your seatbelts and get ready. Prices up and rates too….this will be interesting.

If you’ve been on the fence to buy or sell, now may be the time.

For Buyers – Don’t fear the unknown

Buying a house is a complicated process and, to put it plainly, things just come up. The key is not to fear the unknown. Almost every problem has a solution. It’s crucial that you trust us to guide and advocate for you. We are experienced, we keep you informed at every turn, and we will put your best interests first.

For Buyers – Use the tools available to you

There are many tools aside from online databases that can aid you in your search for a home. Use Google Earth and Portland maps. Use Melissa Data. Do drive-bys at various times in the day and evening. Talk to the neighbors. Use any tool that will help give you a sense of any desired neighborhood and properties.

For Buyers – Be open & flexible

Though you have a good picture of the house you want, it’s important to be open and flexible. Portland is a city that offers a very diverse housing stock. Allow the home search process to reveal things that you may not have considered before. Home buyers typically have to compromise on some aspect of their house so make a list of your priorities and be ready to bend a bit. Having an open attitude will allow you to effectively evaluate your options and make the best decision.

For Buyers – Get pre-approved and be ready

When you are looking to buy a home you should be both pre-approved and ready to go. Good homes go fast in Portland so when you are interested in a house, it is likely that others will be interested, too. If you are not pre-approved, you are not competitive and could lose the house to another buyer. One of our first steps is to connect you with trusted local lenders for pre-approval. And because buying a home is a big decision, we will help get you prepared and informed about buying a home in Portland.

For Buyers – Get a clear picture of the house you desire

We offer a highly customized process for home buyers so that you get a very clear picture of the home you want. It’s not just about beds, baths and square footage; it’s about the life you want to live. For example, maybe you want a south-facing backyard, abundant natural light, a master bedroom on the main floor, and a quiet street that is bike friendly. Maybe there is a specific neighborhood you love that works well for your work commute.  We support you in being as broad or as specific as you like. Once we have a clear picture of the house you want, we work together to find it.

For Buyers – Trust your agent & be loyal

One of the most important things you can do as a buyer is to choose an agent you can truly trust. The right agent likely comes by referral, is local to the area in which you want to buy, and is full-time. The right agent has a communication style that works with your own, is prompt, professional, and responsive. The right agent is someone you feel comfortable riding with in the car. If you do decide to trust us with your real estate needs, we ask that you be loyal and stick with us through the whole process. We believe that you will never be in better hands than when you work with us. If you stick with us (even when there are hiccups) you will be very happy with your home buying experience in the end.