Susan Marthens Real Estate
Newsletter From Susan & Shelli
Portland Metro Area Home Prices for May 2015 
In This Issue
May 2015 Highlights
Prices
Sales Price Change
Cost by Area/Community
Mortgages
Weather
New Oregon Laws
Portland Apartments Myths
Newsletters
Portland Neighborhood Papers
Join Our List
May 2015


If you've been at the www.movingtoportland.net website recently you will notice a significant change. The site is now mobile friendly, meaning that it displays correctly on hand-held devices such as smartphones, iPhones, iPads, and tablets. It also loads faster, is easier to read, and navigation is simpler since menus have limited space on mobile devices. The site avoids using Flash because Apple products do not support Flash.

 

We use Google Analytics to track and report website traffic. We noted that close to half of you are using mobile devices when visiting the site. Hopefully, your experience has improved using your mobile devices when visiting www.movingtoportland.net.  

 

You are welcome to express your opinion about the new design by emailing webmaster@movingtoportland.net.   

 

The Market Action report for the Portland metro area as well as all Oregon areas and Southwest Washington are available to download (see "Newsletters" on the left). It also has the summary page for the May 2015 Portland metro area home prices.

 

May 2015 Real Estate Highlights
 
May brought little relief for Portland-area home shoppers trying to navigate a crowded market.

Home sales climbed in May, but the inventory of homes put on the market couldn't keep up with demand, new numbers from the Regional Multiple Listing Service show. Prices climbed almost four percent from April.

The listing service reported 2,942 homes sold in May, an 18.5 percent increase from the same month a year earlier.

 

May 2015 Inventory: 1.7 Months 

  

The 4,161 new listings were 0.7% cooler than the 4,192 new listings offered in May 2014 but showed a 5.4% increase from the 3,949 new listings offered in April 2015.   

May's inventory decreased to 1.7 months. A six-month inventory generally indicates a balanced market, and a number below indicates a seller's market.

Total market time decreased to 55 days. Active residential listings numbered 5,125 at the end of May.

   

Click on image to enlarge.
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Above based on information from the RMLS™  Market Action report for May 2015.
Average and Median Sales Prices 
Median Sales Price $313,000 in May  

 

Prices continue to rise in 2015 compared to 2014. Comparing each year through May, the average sale price rose 4.6% from $327,200 to $342,300.  In the same comparison, the median sale price rose 5.9% from $278,500 to $295,000.

In May, the median price of a home sold in the metro area was $313,000.

Note the graph below and you will see that current prices now have almost caught up with and even surpassed the high point of the summer of 2007. 
   
   
Click on image to enlarge.
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Above based on information from the RMLS™ Market Action report for May 2015.
Sales Price Percent Change 
Average Sales Price Percent Change +5.6% in May 2015

 

The Average Sale Price Percent Change is based on a comparison of the rolling average sale price for the last 12 months (6/1/2014 - 5/31/2015) with 12 months before (6/1/2013 - 5/31/2014).
  • Average Sales Price Percent Change: +5.6% ($338,300 v. $320,500)
  • Median Sales Price Percent Change:  +6.2% ($292,000 v. $275,000)

Below are the sales price percent changes in May 2015 from their peak prices in 2007: 

  • Average Sales Price Percent Change from peak in August 2007: -2.0% ($359,100 v. $366,900)
  • Median Sales Price Percent Change from peak in July 2007: +4.3% ($313,000 v. $302,000).
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Above based on information from the RMLS™ Market Action report for May 2015

Cost of Residential Homes by Area/Community

 

Below is the chart that displays the May 2015 numbers by area or community. It includes the following:
  • Number of closed sales.
  • Average price of homes sold.
  • Year-to-date average price.
  • Year-to-date median price.
  • Average sales price percent change.

  
 
or
Click on image to enlarge.

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May based on information from the RMLS™ Market Action report for May 2015.

Mortgages

 

Freddie Mac released its Primary Mortgage Market Survey® (PMMS®) on June 11 showing average fixed mortgage rates
reaching new highs for 2015 with the average 30-year fixed-rate mortgage above four percent for the first time since November 6, 2014 when it averaged 4.02 percent.
  • 30-year fixed-rate mortgage (FRM) averaged 4.04 percent with an average 0.6 point for the week ending June 11, 2015, up from last week when it averaged 3.87 percent. A year ago at this time, the 30-year FRM averaged 4.20 percent. 

  • 15-year FRM this week averaged 3.25 percent with an average 0.6 point, up from last week when it averaged 3.08 percent. A year ago at this time, the 15-year FRM averaged 3.31 percent. 

  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.01 percent this week with an average 0.4 point, up from last week when it averaged 2.96 percent. A year ago, the 5-year ARM averaged 3.05 percent.

  • 1-year Treasury-indexed ARM averaged 2.53 percent this week with an average 0.2 point, down from last week when it averaged 2.59 percent. At this time last year, the 1-year ARM averaged 2.40 percent.
Numbers for a 30-Year Mortgage in Portland

Taking the median home price in the Portland area of $313,000 for May 2015 and with 20 percent down payment ($62,600) and a mortgage of $250,400, the payment for a 30-year fixed loan is $1,159.64 per month (excluding property taxes and insurance) in Portland, Oregon. 

The interest rate is 3.750%, and the APR is 4.113%. Total closing costs are $11,853.80.
 
Estimated closing costs are as follows: 
  • WMS Series LLC's origination charge: $945.00
  • Your charge for this interest rate: $9,390.00
  • Required services we select: $545.00
  • Title services and lender's title insurance: $842.80
  • Owner's title insurance: $980.00
  • Government recording charges: $131.00
  • Fees typically paid by Seller: ($980.00)
This fee estimate does not include advances that may be required at closing, such as interest due at closing or initial deposits for escrow accounts, if applicable.

Sixty days rate lock. Escrow fees are not waived. FICO credit score is 720-739.

Conveniently located in real estate offices throughout the Pacific Northwest, Windermere Mortgage Services (WMS) is a full-service mortgage banker providing home buyers with complete real estate financing expertise over the entire home loan process.

Contact Clayton Scott (503-497-5060) at Windermere Mortgage Service in the Windermere Stellar Lake Oswego office for the latest rates. You can also email Scott at cscott@windermeremortgage.com.

Weather

 

Oregon Governor Kate Brown has declared drought emergencies in four more Oregon counties, bringing the total to 19.

That's more than half of the state's 36 counties and the most since 2002, when 23 counties experienced drought emergencies.

Brown used the announcement to push for a $56 million package in her proposed budget that would fund a statewide water resources program.

 

And speaking of water, the city of Portland just released its 2015 City of Portland Drinking Water Quality Report

 

Contact the LeadLine at www.leadline.org or 503-988-4000 for information about free lead-in-water testing. For more extensive testing, private laboratories can test your tap water for a fee. Not all labs are accredited to test for all contaminants. For information about accredited labs, call the Oregon Health Authority, Oregon Environmental Laboratory Accreditation Program at
503-693-4122. 


Monthly Weather Summary 

Below is the National Weather Service weather data for the month of May 2015. These readings are from the Portland airport.
  • Average Monthly Temperature for May 2015: 61.1 (2.98 degrees above normal of 58.3 degrees).
  • Warmest Day: 91 degrees on May 14. 
  • Coldest Day:  45 degrees on May 7.
  • Most Rainfall in 24 Hours: 0.49 inches on May 11-12.
  • Rain Days: 0 days with thunderstorms, 0 days with heavy rain, and 9 days with light rain.
  • Clear/Cloudy Days for May 2015: Six fair days, 12 partly cloudy days, and 13 cloudy days.
  • Average Wind Speed for May 2015: 5.8 mph.
Portland's rainfall is measured by the "Water Year" which runs from October 1 - September 30. As of the end of May we are about three inches below the normal amount of rain we should have received by this time. The average rainfall for the month of May is 2.47 inches.  There were 0.59 inches of precipitation in May 2015.

Background Checks for Private Gun Sales and Other Laws Enacted by Oregon Legislature in 2015

 

Some Oregonians have been confused about when Oregon's new law takes effect requiring that background checks be conducted for private firearms sales.

 

That's because the language of Senate Bill 941 says the measure becomes law the moment it was signed by Governor Kate Brown in early May. The section requiring the new background checks doesn't take effect for 90 days which would be August 9th. This is to give the state police 90 days to ramp up so that it will be able to conduct the additional background checks.

 

On August 9, 2015, if you're conducting a private firearm sale, you will have to go through a federally licensed dealer to get a background check. The check is meant to determine whether someone is legally prohibited from owning a gun.  Among the legal prohibitions: felony convictions, commitments to a mental hospital or  misdemeanor domestic violence convictions.

One key provision that does take immediate effect deals with mental illness, a major issue in the debate over gun violence.  This provision requires judges who have ordered someone to undergo outpatient mental health treatment to rule on whether that person should have their gun rights suspended during treatment.

Gun control opponents quickly filed a petition to recall the Democratic lawmakers behind the bill. The recall petition against Senator Floyd Prozanski of Eugene joins three others targeting Democrats who sponsored the legislation. Prozanski was the chief sponsor of the background checks bill.

Clean Fuels

The Oregon House approved controversial legislation in early March to extend Oregon's clean-fuels program, a decision that could shape the state's environmental policy for decades to come.

The final vote on Senate Bill 324 was the culmination of one of the most divisive debates at the Capitol in memory, with Democratic supporters and Republican opponents clashing in a gloves-off debate on the House floor that lasted more than five hours.

"Clean fuels" are fuels that have a lower carbon intensity than the standard for the fuel it replaces. Examples of clean fuels include most types of ethanol, biodiesel, natural gas, biogas, electricity, propane and hydrogen.

Oyster Week   

 

Who else has an official Oyster Week? The Oregon lawmakers passed a bill this year making the fourth week in April of each year as 'Oregon Oyster Week.' Oregonians are encouraged to join in observing the week by enjoying fine Oregon oysters.

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Sources: The Oregonian and The New York Times.    

Five Myths About Portland Apartments 

 

The Velmor on NE 7th Avenue
 

The accusations ring out in bars. The gripes spill onto Internet comment threads. And the complaints echo like angry yodels down the newly built canyons of Southeast Division Street and North Williams Avenue.

 

The backlash against Portland's apartment boom runs deep, if not silent. And the myths people voice are as predictable as sneering hatred of Californians.

 

The case goes like this:

  • Fancy new apartments are making the city more expensive.
  • Renters are being kicked out of cheap houses so greedy developers can smash them and build grotesquely oversized homes. 
  • We need rent control to quell the skyrocketing prices.
  • We could keep working-class people in the city by forcing developers to build affordable housing. 
  • The heart of the argument is Portland would be less expensive--and better--if neighborhoods stopped changing.

It's likely you believe a few-maybe all-of these things. Here's why you're wrong.

 

Myth 1: New apartments are raising the cost of rent.

Apartments don't raise rents. People do. And like Buddhism warned us, they do it the same way that people ruin everything: with desire.

When you curse an apartment building like Burnside 26 for charging $1,336 a month for a studio, you're confusing cause and effect: thinking the developers caused a pricey apartment building by constructing it.

That's so wrong that when we called local economists to ask them about it, three of them laughed at us.

"Force them to remember the economics class they slept through freshman year," says Portland economist Joe Cortright.

Pencils down: What causes the price of anything to go up isn't a new supply, but the strength of demand for a product that's in short supply. Long before developers broke ground on Burnside 26, Portland apartments became extremely hard to find.

Portland housing has been hot for a while. By 2011, this city's rental market was the tightest in the nation.

Last year, the number of apartments available for rent at any given time hit a record low of 2.8 percent, says real-estate brokerage Marcus & Millichap.

With so few units available, tenants have no leverage-landlords can charge more.

"It's like musical chairs," Cortright says. "If you don't add more chairs to the game, people get squeezed out of the game."

If it makes you feel better, you can still blame greedy developers for this shortage. That's because for most of the past decade, developers weren't building apartments--they were building condos, and taking rental units off the market and selling them as condos.

When the mortgage bubble burst in 2008, people wanted apartments again. So did the newcomers flooding to a city hyped by every publication from The New York Times to Kinfolk magazine. But Portland didn't have many apartments left, and nobody built any new ones during the recession.

 

Developers have finally started adding new apartments-increasing construction from 518 rental units in 2011 to 4,413 in 2014.

 

But the population continues to grow, and Portland added 30,500 jobs last year, nearing a 15-year high. So the supply of new apartments still hasn't caught up to the demand of people who want them. (See chart above.)

Until the supply of new apartments jumps way ahead of demand, rents will keep rising.

 

Read the entire article in the Willamette Week ...

 

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Source: "The 5 Myths About Portland Apartments," by Aaron Mesh, June 10, 2015, Willamette Week.

 

Sincerely,

Susan Marthens, Principal Real Estate Broker, CRS, GRI
Shelli Gowdy, Real Estate Broker