Moving to Portland
 May 2016 Newsletter


Shelli Gowdy
Real Estate Broker
Windermere Stellar
Susan Marthens
Principal Real Estate Broker
Windermere Stellar

May 2016:  Average Price Over $400,000 
The average sale price of a home in the Portland area broke the $400,000 mark in May, rising to $402,500, according to the latest report from the Regional Multiple Listing Service (RMLS). It's the first time the number has reached such heights.

Below are the highlights of the two stories for this month's newsletter.

Story One  Developers would be required to reduce the scale of homes they build in Portland's single-family zones and would be allowed to construct more duplexes, triplexes and other forms of so-called "middle housing" on those lots under a tentative set of city proposals that will be made public sometime in June.

The proposals are available on the city's website as of June 15, and residents can attend a series of open houses throughout June and July.  The City of Portland council will hold hearings on the new rules and we are sure that some changes will be made before they vote on the new regs. We have more information from an OregonLive/The Oregonian article posted below.

Story Two  The Portland City Council on June 15 passed a new Comprehensive Plan that sets the city's course through the year 2035. The plan calls for taller towers downtown, more apartments in single-family neighborhoods and perhaps even a new streetcar line.

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Below information from the RMLS™  Market Action report for May 2016

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 May 2016 Portland metro area home prices.
May 2016 Real Estate Highlights
May brought some moderate activity increases to the Portland metro area, but the numbers are cooler than last May. Pending sales (3,563) ended 0.5% higher than the accepted offers from May 2015 (3,546) and 3.8% higher than last month in April 2016. 

New listings, at 4,144, fell 0.4% short of the 4,161 new listings offered last year in May 2015 but edged 1.5% over the 4,082 new listings offered last month in April 2016. 

Similarly, closed sales (2,896) increased 10.9% from the 2,611 closings posted last month in April 2016 but fell 1.6% short of the closings posted the same month last year in May 2015.

Click on image  to enlarge.
Average & Median Sales Prices
Median Sale Price for a Home in the Portland Metro Area was $354,500 in May 2016.

Prices continue to rise in the Portland metro area. Comparing 2016 to 2015 through May, the average sale price rose 11.9% from $342,300 to $383,000. In the same comparison, the median sale price rose 13.3% from $295,000 to $334,200.

Click on image to enlarge.
Sales Price Percent Change
Average Sales Price Percent Change:  9.1% ($369,100 v. $338,200)

The Average Sale Price Percent Change is based on a comparison of the rolling average sale price for the last 12 months (6/1/2015 - 5/31/2016) with 12 months before (6/1/2014 - 5/31/2015).
  • Average Sales Price Percent Change: 9.1% ($369,100 v. $338,200)
  • Median Sales Price Percent Change:  9.6% ($320,000 v. $292,000) 
Inventory May 2016
Inventory remained unchanged in May and currently sits at 1.4 months. Total market time decreased by a few days and currently stands at 37 days.

There are currently about 4,000 active residential listings in circulation in the Portland metro area.

The graph below shows the closed sales over the past five calendar years in the greater Portland, Oregon metropolitan area. You will note that for the last two months (April and May) that the closed sales dipped just a hair in 2016 (red bar) compared to the same two months (green bar) in 2015. 

Is this a sign that Portland's housing market is starting to slow down? One of the reasons given is that the low inventory slowed the pace of sales in April and May compared to the same months in 2015. 

Click on image to enlarge
Cost of Residential Homes by Community
In the chart below we have extracted the most important data from the RMLS Market Action report (21 columns) and created this simple chart. Below is the chart that displays the May 2016 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).
Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®) on June 16. The 10-year Treasury yield continued its free fall this week as global risks and expectations for the Fed's June meeting drove investors to the safety of government bonds. The 30-year mortgage rate responded by falling 6 basis points for the second straight week to 3.54 percent-yet another low for 2016. Wednesday's Fed decision to once again stand pat on rates, as well as growing anticipation of the U.K.'s upcoming European Union referendum will make it difficult for Treasury yields and-more importantly-mortgage rates to substantially rise in the upcoming weeks.
  • 30-year fixed-rate mortgage (FRM) averaged 3.54 percent with an average 0.5 point for the week ending June 16, 2016, down from last week when it averaged 3.60 percent. A year ago at this time, the 30-year FRM averaged 4.00 percent.
  • 15-year FRM this week averaged 2.81 percent with an average 0.5 point, down from last week when it averaged 2.87 percent. A year ago at this time, the 15-year FRM averaged 3.23 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.74 percent this week with an average 0.5 point, down from last week when it averaged 2.82 percent. A year ago, the 5-year ARM averaged 3.00. 
Penrith Home Loans 
Penrith Home Loans  (PHL) Penrith was formerly 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 NE 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.
Monthly Weather Summary

weather data for the month of May 2016. These readings are from the Portland airport. 
  • Average Monthly Temperature for May 2016:  62.2 (3.9 degrees above normal of 58.3 degrees).
  • Warmest Day:  89 degrees on May 28th. 
  • Coldest Day:  45 degrees on May 7th.
  • Most Rainfall in 24 Hours: 0.65 inches on 5/14-5/15.
  • Rain Days: 9 days with light rain.
  • Clear/Cloudy Days for May 2016:  8 fair days, 9 partly cloudy days, and 14 cloudy days.
  • Average Wind Speed for May 2016:  6.2 mph.
The Pickles are part of a new summer wood-bat league which will hopefully attract college players from around the country before they go pro.
A "water year" is defined as the 12-month period beginning October 1 of any year and continuing through September 30 of the following year. The water year is designated by the calendar year in which it ends and which includes 9 of the 12 months. Thus, the water year ending September 30, 2016 is called the 2016 water year.

The normal precipitation for a water year in downtown Portland is just under 44 inches and at the airport it is 37.04 inches. The official measurement is taken at the Portland International Airport (PDX) which is one of the driest places in the metro area.

The HYDRA rainfall network is operated and maintained by the City of Portland Bureau of Environmental Services, and there are 38 gauges throughout Portland where rainfall is measured - the water year average for these 38 gauges is 42.77 inches.
  • May 2016: Normal precipitation at the airport is 2.47 inches, and we had 1.72 inches in May.
  • Water Year:  As of June 14 we have had 50.25 inches of rain (average of 38 gauges from different locations in the metro area)  so we have already exceed our average water year total of 42.77 inches. We have been adding a few more drops the last few days. After a few days of record setting temperature in early June the typical Portland late spring with scattered showers came back.

Why Doesn't the West Coast Have More Thunderstorms?

While people along and east of the Rockies seem to have thunderstorms almost every other day this time of year, folks along the West Coast never see our level of exciting weather. 

To highlight how few thunderstorms occur along the West Coast every year, take a look at climate data taken from some of the region's largest cities. The records keep count of the number of days that featured thunderstorms each year, along with the average number of thunderstorm days seen over the thirty year period between 1981 and 2010. During the period of time Portland averaged 6.7 thunderstorms a year whereas Chicago's average was 38. Other cities east of the Rockies averaged about the same as Chicago.

Cold Water and Dry Air

Why doesn't the West Coast see many thunderstorms? It comes down to two major factors: cold water and dry air.

The eastern Pacific Ocean is cold and meteorologists make a big deal out of the fact that cold water kills hurricanes, and the Pacific Ocean's temperatures cause pretty much the same phenomenon.

Water is able to slowly heat or cool the layer of air above it through conduction. When water temperatures are warm, it warms the air; cool water cools the air. Thunderstorms need warm, unstable air to form, so they thrive when they move over warmer waters. This is why hurricanes are able to strengthen so quickly when they move over the Gulf of Mexico, for example.

The cold water of the Pacific creates a very stable airmass along the coast and inland, killing any spontaneous convection. In other words, for thunderstorms to form along the West Coast, they need a strong forcing mechanism such as a cold front to help the air rise fast enough to create a storm.

A second factor directly related to the stable airmass that sets up thanks to the Pacific is that the air is usually too dry for hefty thunderstorm activity to form. When we talk about dry air, it's not about the relative humidity, but rather the dew point. The dew point is the temperature to which the air needs to cool in order achieve full saturation, or 100% relative humidity. The lower the dew point, the drier the air.

Dew points lower than 55°F are generally considered to be comfortable, while readings above 60°F start to feel muggy. Dew point readings in the eastern two-thirds of the United States routinely reach 65-70° or higher, creating that signature soupy summertime atmosphere that's ripe for rocky weather.

Cities along the West Coast typically see lower dew points than their counterparts to the east, keeping the air on the drier side and joining forces with the stable air to kill just about any chance of thunderstorm activity outside of a powerful storm system moving in from the west.

Source: by Dennis Mersereau
New Development Rules Would Limit Home Sizes, Encourage Density 
Some middle housing types adaptable to Portland  single dwelling zones include accessory dwelling units (upper left) houses on small lots (lower left) duplexes (upper right) and triplexes (lower right).
Developers would be required to reduce the scale of homes they build in Portland's single-family zones and would be allowed to construct more duplexes, triplexes and other forms of so-called "middle housing" on those lots under a tentative set of city proposals that will be made public this month.

The Bureau of Planning and Sustainability is readying the recommendations based on the input of a committee organized to determine the best way to regulate infill development as Portland grows and faces a housing shortage. The committee Tuesday night met for the last time until October, capping nine months of work. The official name is Residential Infill Project Stakeholder Advisory Committee (SAC).

Portland officials are now looking for public input. The proposals are available on the city's website as of June 15, and residents can attend a series of open houses throughout June and July. The committee will eventually make a recommendation this fall to the Portland City Council, which could approve or modify the new zoning rules.

The committee's work comes at a time when Portland is experiencing a boom in development, rising home values and a surge in population growth. Neighborhoods are feeling angst about a rash of home demolitions, which often make way for expensive, towering homes that many feel are out of sync with surrounding houses.

The committee has worked to develop a series of rules that would prohibit developers from building such large, non-conforming homes but also incentivize them to increase supply, density and affordable units by adding accessory dwelling units, duplexes, triplexes and, in some cases, fourplexes.

In other words, many of the 20-plus committee members arrived at a bargain: Developers will decrease the scale of homes, but the homes are allowed to be more than simply single-family dwellings.

Another of the proposals would make it easier, in certain areas, for developers to reclaim historically narrow lots that lie underneath larger parcels where there is currently only a single home. The developers would be allowed to split the parcels to align with the historic lots and add more homes. The city wouldn't require on-site parking and would prohibit front-loaded garages on such lots.

The committee consists of developers, affordable housing advocates, architects, neighborhood representatives and others.

Majority Favor Aggressive Housing Diversity 

The committee has identified two ways forward: a majority of members want to more aggressively increase housing diversity and supply in Portland, and a minority wants to put a greater emphasis on preserving neighborhood character.

To read the entire article click Here

Source:  "New development rules would limit home sizes, encourage density," by Luke Hammill, June 8, 2016. OregonLive/The Oregonian 
Portland Approves 20-Year Growth Plan
A little more than 35 years ago, Portland welcomed its first Comprehensive Plan, a blue print for the city that would be admired around the world in the decades to come. In 1980, the population of Portland was 366,000, a little more than half of what it is today.

Portlanders banded together into neighborhood associations to block the Mt Hood Freeway and ensured those transportation dollars would go toward the construction of the MAX blue line. A downtown parking lot was transformed into Pioneer Square, and the Harbor Freeway into Tom McCall Waterfront Park. And Portland's 1980 Comp Plan directed population and employment growth into a series of "nodes and noodles."

The Portland City Council on June 15 marked years of work trying to answer that question, unanimously passing a new roadmap for growth - officially dubbed the Comprehensive Plan - that sets the city's course through the year 2035. Imagine taller towers downtown, more apartments in single-family neighborhoods and perhaps even a new streetcar line.

The plan, which won't fully take effect until January 2018, dictates where and how the city will develop through zoning rules. It also prioritizes infrastructure improvements such as transportation and parks projects.

Portland leaders project that the city's population will grow by nearly 42 percent - reflecting about 260,000 new residents - over the next 20 years. Approximately 140,000 new employees will work in the city, a 38 percent spike.

A planning committee working on infill development (see above story) would encourage more so-called "middle housing" in single-family neighborhoods, such as duplexes, triplexes and cottages. A tentative proposal would allow a developer to build an extra unit, resulting in a fourplex in some cases, if at least one unit meets certain affordability guidelines.

Proposed transportation projects in the plan include an $80 million extension of the Portland Streetcar to Southwest Portland's Johns Landing neighborhood, seismic improvements to Willamette River bridges, and upgrades to pedestrian and bicycle infrastructure across the city.

Read the entire story by clicking Here

Source:  "Portland approves major 20-year growth plan, looking to 2035," by Luke Hammill, June 8, 2016. OregonLive/The Oregonian

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