Moving to Portland
August 2015 Newsletter
IN THIS ISSUE
NEWSLETTERS
NEIGHBORHOOD NEWS
Shelli Gowdy
Real Estate Broker
503-497-5061
Windermere Stellar
Susan Marthens
Principal Real Estate Broker
503-497-2984
Windermere Stellar
Two news items in the last few days about the Portland metro area real estate are covered in this issue of the Moving to Portland newsletter. The Oregonian newspaper covered both of these stories, and we have included excerpts from them and links to the complete stories. One of the articles is about the inequities in the metro area property taxes and the other is a rebuttal from an economist about Portlanders slapping "no Californians" stickers on For Sale signs around towns. 

The Moving to Portland monthly newsletter as well as the Moving to Portland website are now both mobile friendly and about half of you are reading the newsletter and accessing the website on your smartphone and tablet. 

Please let us know if you have problems viewing the newsletters by emailing newsletter@movingtoportland.net.

Market Action Reports 
The Market Action reports for the Portland metro area as well as all Oregon areas and Southwest Washington are also available to download. It also has the summary page for the August 2015 Portland metro area home prices.
August 2015 Real Estate Highlights

The Portland metro area saw slightly cooler real estate activity in August, but all measures remain strong. Pending sales (3,347) ended 23.8% stronger than the 2,704 offers accepted in August 2014, although 4.2% lower than the 3,494 offers accepted last month in July 2015. The last August there were more pending sales in August for the Portland metro area was in 2005, when there were 3,771 offers accepted for the month. 

The below chart shows the numbers for August and July of this year along with the year-to-date stats.



Click on image to enlarge.

Closed sales (3,098) fared similarly, 19.8% above the 2,586 closings posted in August 2014 but 10.3% under the 3,452 closings posted in July 2015. New listings, at 3,880, were 8.3% stronger than the 3,581 new listings offered last August but 9.2% lower than the 4,273 new listings posted last month in July 2015.

Inventory rose slightly in August to 1.9 months. Total market time decreased slightly, to 41 days. There are currently a total of 5,837 active residential listings in the Portland metro area.

Year-To-Date

Activity has been higher in 2015 than in 2014 across the board. Pending sales (24,784) are up 24.4%, closed sales (22,026) are up 21.8%, and new listings (30,314) are up 8.5% for the year thus far.
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Above based on information from the RMLS™  Market Action report for August 2015.

Average & Median Sales Prices
Median Price for a Home in the Portland Metro Area $316,500 in August 2015

Prices continue to rise in 2015 compared to 2014. Comparing each year through August, the average sale price rose 6.2% from $332,600 to $353,200. In the same comparison, the median sale price rose 7.0% from $285,000 to $305,000.

Click on image to enlarge.
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Above based on information from the RMLS™  Market Action report for August 2015.

Sales Price Percent Change
Average Sales Price Percent Change 6.4% in August 2015

The Average Sale Price Percent Change is based on a comparison of the rollng average sale price for the last 12 months (9/1/2014 - 8/31/2015) with 12 months before (9/1/2013 - 8/31/2014).
  • Average Sales Price Percent Change: 6.4% ($347,300 v. $326,300)
  • Median Sales Price Percent Change:  7.1% ($300.000 v. $280,000)
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Above based on information from the RMLS™  Market Action report for August 2015.

Portland Market Cools in August
Despite some Portlanders slapping "no Californians" stickers on For Sale signs around town, the Portland housing market maintained steady growth. The average price of homes sold in August dropped $4,500 from July which is normal, and sales dropped a tad also which is usually the trend.

Pending sales  are up 24.4%, closed sales are up 21.8%, and new listings are up 8.5% for the year thus far.

The inventory of homes available for sales rose slightly from 1.7 months in July to 1.9 months in August and that is good news for buyers. It will help Realtors also as this will reduce the number of multiple offers on homes. There's no joy for us trying to find a home for a client and having to tell them that their offer for a home that meet their needs was rejected.
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Above based on information from the RMLS™  Market Action report for August 2015.

Cost of Residential Homes by Community
Below is the chart that displays the August 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.

Click on image to enlarge or
click here to view the report (pdf).

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

Mortgages
Freddie Mac released its Primary Mortgage Market Survey® (PMMS®) on September 10 showing average fixed mortgage rates largely unchanged following a shortened week and mixed economic signals prior to the Fed's meeting next week.

News Facts
  • 30-year fixed-rate mortgage (FRM) averaged 3.90 percent with an average 0.6 point for the week ending September 10, 2015, up from last week when it averaged 3.89 percent. A year ago at this time, the 30-year FRM averaged 4.12 percent. 
  • 15-year FRM this week averaged 3.10 percent with an average 0.7 point, up from last week when it averaged 3.09 percent. A year ago at this time, the 15-year FRM averaged 3.26 percent. 
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.91 percent this week with an average 0.5 point, down from last week when it averaged 2.93 percent. A year ago, the 5-year ARM averaged 2.99 percent.
  • 1-year Treasury-indexed ARM averaged 2.63 percent this week with an average 0.3 point, up from last week when it averaged 2.62 percent. At this time last year, the 1-year ARM averaged 2.45 percent.
Attributed to Sean Becketti, chief economist, Freddie Mac. 

"Following a shortened week, mortgage rates were virtually unchanged, inching up 1 basis point to 3.90 percent. The employment report released last Friday provided mixed signals, adding one more note of uncertainty prior to the Fed's September meeting. The unemployment rate dropped to 5.1 percent in August, the lowest rate since April 2008, but only 173,000 jobs were added, well below expectations. Wages grew 2.2 percent, a neutral indication at best."

Numbers for a 30-Year Mortgage in Portland

Taking the median home price in the Portland area of $316,500 for August 2015 with 20 percent down payment ($63,300) and a mortgage of $253,200, the payment for a 30-year fixed loan is $1,136.98 per month (excluding property taxes and insurance) in Portland, Oregon. 

The interest rate is 3.50%, and the APR is 3.889%. Total closing costs are $12,910.70.

Estimated closing costs are as follows: 
  • Penrith Series LLC's origination charge: $945.00
  • Your charge for this interest rate: $10,444.50
  • Required services we select: $545.00
  • Title services and lender's title insurance: $845.20
  • Owner's title insurance: $990.00
  • Government recording charges: $131.00
  • Fees typically paid by Seller: ($990.00)
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.
Penrith Home Loans

Penrith Home Loans  (PHL) Penrith was former called Windermere Mortgage Services, and  they changed their name in 2015. PHL is Northwest owned and operated and headquartered in Seattle with offices throughout Washington and Oregon.  PHL is a full service mortgage banker and direct lender - in addition, they have access to numerous other lenders which allows them to meet everyone's individual needs.
  • West Portland Contact:  Bertha Ferran, telephone (503) 464-9215. Address:WMS Series LLC/AT, West Portland Branch, 6400 SW Barnes Road, Suite 305, Portland, OR 97225.
  • East Portland Contact:  Tanya Elder, telephone (503) 497-5367. Address: WMS Series LLC/AT, Lloyd Tower Branch, 825 Northeast Multnomah Street, Suite 120, Portland, OR 97232.
  • Lake Oswego Contact:  Clayton Scott,  telephone (503) 497-5060. Address: WMS Series LLC/AT, Lake Oswego Branch, 220 "A" Avenue, Suite 200, Lake Oswego, OR 97034.
Weather
28 Days Above 90 Degrees Sets Record -
Average is 12 Days

Portland has beaten its own record - again, and again, and again - for days at or above 90 degrees.

The thermostat at Portland International Airport showed temps reached 90 degrees September 11 at 2:53 p.m., and climbed to 94 degrees as of 4:53 p.m., according to the National Weather Service. This makes September 12th the 28th day to reach or exceed that mark this year. The average is 12.

With September well under way and fall quickly approaching, forecasters say this should be the last "hot" day we have for the year.

Monthly Weather Summary

Below is the National Weather Service weather data for the month of August 2015. These readings are from the Portland airport.
  • Average Monthly Temperature for August 2015:  72.4  (2.9 degrees above normal of 69.5 degrees).
  • Warmest Day: 98 degrees on August 11. 
  • Coldest Day:  54 degrees on August 21.
  • Days of 90 Degrees or Above Temperatures in August 2015:  6.
  • Most Rainfall in 24 Hours:  0.49 inches on August 29-30.
  • Rain Days: 0 days with thunderstorms, 0 days with heavy rain, and six days with light rain.
  • Clear/Cloudy Days for August 2015:  Ten fair days, 15 partly cloudy days, and six cloudy days.
  • Average Wind Speed for August 2015:  6.7 mph.
Portland's rainfall is measured by the "Water Year" which runs from October 1 - September 30. As of the end of July we are about four inches below the normal amount of rain we should have received by this time. The average rainfall for the month of August is 0.66 inches, and we received 0.67 inches of precipitation in August 2015.

The Portland Area Uneven Property Taxes
Tom Lewis says his east Portland neighbors have voted time and again with the rest of the city to raise taxes, but they've seen little of that money come back in the form of improved schools, transportation and parks.

That's bad enough. But it also turns out that Lewis and his neighbors are paying more than their fair share of those taxes compared to other parts of the city.

"We've got 'sucker' written on our forehead," he says.

Last year, Lewis' property taxes came out to $15.74 per $1,000 in value. Across town, a similar house just off trendier Northeast Alberta Street is worth twice as much, but its owners paid just $4.59 per $1,000 in value.
Oregon's property tax system has dramatically distorted the tax burden in the Portland area, an analysis by The Oregonian/OregonLive found, pushing responsibility for basic government services off the backs of one set of homeowners and onto others.

Swaths of North, Northeast and Southeast Portland are getting tax breaks while homeowners in east Portland and Southwest Portland pick up the bill. In Clackamas County, many Lake Oswego residents see major savings while 58 percent of the county's homeowners pay more than their share based on home values.

The culprit: ballot measures voters approved in the mid-1990s to slow soaring property tax bills. That's when Oregonians moved away from the traditional standard of taxation in which the amount you pay depends on how much your home is worth.

Homeowners like Lewis and his east Portland neighbors now make up a solid majority of taxpayers in the metro area. If the total amount collected stayed the same but taxes were once again tied to market values, 57 percent of homeowners in the Portland area would see their bills drop, according to the analysis.

In some cases, residents least able to shoulder the extra burden are being forced to carry more. The median household income in Lewis' east Portland  ZIP code is $35,970, compared to $61,962 near the house off Alberta.

"It's not fair and it's not equitable in terms of what we get for our tax dollars," said Arlene Kimura, an east Portland neighborhood activist. "We're not even close in proportion to some of the more affluent parts of the city."
In a sense, this is how it was supposed to work.

Oregon voters' tax revolt began in 1990 with Measure 5, which limited property taxes to 1.5 percent of a home's value. But rapidly rising property prices meant tax bills rose quickly, anyway.

So in 1996, ballot-initiative activist Bill Sizemore put Measure 47 on the ballot.

"Property taxes still dictated for a lot of people what they're going to eat. When people are on a fixed income, property taxes can be a major burden," Sizemore said. "My motivation was to help people stay in their homes and not be taxed out of them."

His measure rolled back property tax assessments to 1995 levels minus an additional 10 percent. Annual increases would be limited to 3 percent a year.


Source:  "Tax breaks for gentrifiers: How a 1990s property tax revolt has skewed the Portland-area tax burden," by Elliot Njus, The Oregonian. Published September 11, 2015.
Despite Anti-California Stickers, Numbers Suggest Migrants are Good for Economy
After a recent Oregonlive.com story about Portlanders slapping "no Californians" stickers on For Sale signs around town, the Internet exploded with reaction.

The post generated more than 1,000 comments. It was published as far away as Hawaii. And a healthy contingent of readers seemed to share the stickers' sentiment: Citing Portland's rising housing prices, 44 percent of respondents to an unscientific poll said they supported the actions of whoever is responsible for them.

But a look at the numbers suggests that the influx of Californians and other transplants is actually good for Oregon's economy.

Josh Lehner, a senior economist with the Oregon Office of Economic Analysis, penned a post titled "Migration (In Defense of Californians)" on the agency's blog. In it, Lehner points out that "Americans have been moving to Oregon in droves since Lewis and Clark and are likely to continue to do so." Nearly half of Oregon's American-born population, Lehner wrote, came here from another state.

"Migration is vital to Oregon's economic health," wrote Lehner, himself a transplant from the Great Plains. "It is one of the two primary reasons Oregon outperforms the typical state during an economic expansion. The other being our industrial structure. ... Our state's ability to attract skilled, young working-age households is a huge economic benefit. We rank quite well on the brain-gain spectrum (the opposite of the brain drain)."

Lehner went on to say that job growth corresponds positively with migration. And he debunked the idea that everybody is coming from San Francisco - the majority of California migrants are coming to Oregon from Los Angeles and San Diego, Lehner wrote.

Oregon DMV data shows that the percentage of driver's licenses surrendered in Oregon that come from California is historically low. Less than 30 percent of the licenses have come from California every year since 2008, compared to over 35 percent in the mid-2000s.

The percentage of licenses coming from California does appear, however, to be rising faster than the percentage of licenses from other states.

Source:  "Despite anti-California stickers, numbers suggest migrants are good for economy," by Luke Hammill, OregonLive.com. September 11, 2015.
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