North Portland New Building Update
When news came of 50s-themed bowling alley, Interstate Lanes, closing, many of Portland’s serious bowlers were devastated. Having been around for nearly 90 years, Interstate Lanes was a big part of the North Portland community. It was known for its dated charm, cheap round (or two) of bowling, and the best potato wedges on the block. Some members of the Farrell Realty team remember it as a “classic bowling alley” with everything you’d need from pool tables to cosmic bowling on the weekends.
What was once a space that provided entertainment for the local bowling community has been replaced by an apartment complex. Ryan Miyahira of Ankrom Moison Architects filed a permit to build, which features a brand new five-story building and features 174 units with 63 tuck-under parking spaces. While the bowling alley is certainly missed, the apartment complex has invited substantial and important revenue into the community.
If you’re still seeking a vintage bowling experience, consider the Viking Gameroom. Located in the basement of PSU and open to the public everyday except Sunday, this bowling alley has proven to be a fun and cost-effective alternative, featuring billiards, video games, and six lanes of regulation bowling.
2019 Market Review
2019 was an interesting and eventful year for the Portland Housing Market. Although things started a bit sluggish, it ended up being a very hot first half of 2019, which continued well into the summer season. Below is a review of some of the trends we saw.
Slow But Productive Start: January and February
January 2019 proved to be very promising following the holiday season, when more buyers entered the market. This was surprising, given the surge in interest rates and mortgage rates. During this period, houses stayed on the market for a median of 58 days, which is a trend that continued into February when new listings dipped again. There was far less inventory in February than in January, with 875 listings versus 1,131, respectively. This was likely due to snowfall, which briefly halted activity.
Heating Up Steadily: March through May
After a slow start, the Portland Housing Market picked up steam in March, with buyer demand remaining high. The median sell price neared $420,000 and the time it took to sell homes was about a week longer than average. Those in the $600k range sat on the market for much longer. Mortgage rates remained low in March, which ultimately puts the power in buyers’ hands. Houses under $400k were in high demand and ultra competitive among buyers, inviting many bidding wars. May was the hottest month in all of 2019, despite a slowdown in the months leading up to it.
Plummeting Mortgage Rates
The reason May was such a hot month, unlike years past, was due to plummeting mortgage rates. 30-year fixed mortgage rates hit below 4%. Unfortunately, this also invited many bidding wars among buyers who were eager to lock in low rates to secure a home.
End of Spring + Beginning of Summer
May’s trends continued well into June, as things stayed hot. Prices remained steady in June and mortgage rates dropped even lower to a whopping 3.75%. Because the Portland unemployment rate was so low at this time, buyers wanted to take advantage of steady home prices and low rates while they had both. June saw just under 1,000 homes sold, with a median sold price of $432,000.
Fall and Winter
The fall market is always slower with less people selling and buying. The months of November and December bottomed out as people became busy with the holidays and needed to take care of other expenses. Generally, the colder months prove to be demotivating, as people opt to stay home instead of going and looking at houses. However, that sometimes means less competition, which can be advantageous for the right buyers and sellers. This was true of the Portland Housing Market from August onward, right after the busiest time of year.
A Glimpse into 2020
The future of real estate is not easy to predict. But as it stands now, the National Association of Realtors is predicting 3.6% appreciation next year and 3.5% for 2021 nationally, so things are certainly looking bright.
2019 certainly had its hot moments and big wins for many buyers and sellers. 2020 is shaping up to be a good time to buy as well, of course taking into account the facts and figures above. Overall, the Portland Housing Market is very healthy at present due to low unemployment and interest rates and a thriving economy. Our recommendation for next year is to buy smart and work with a local real estate agent who truly knows the ins and outs of the housing market. This will surely prime you for success when purchasing a home.
Renting vs. Buying
Homeownership is a huge milestone in adult life. It can also be a financially overwhelming prospect for those considering it. Luckily, there are some potential options for helping with your down payment, and there are plenty of benefits to purchasing instead of renting.
Benefits of Buying As Early As Possible
Purchasing a home may feel daunting at first, especially if you have a history of renting, but there are plenty of reasons to consider it. Firstly, if you know you will be living in a certain area for at least three to five years, buying a home should be on your radar. Here’s why:
- The home is completely yours. You have free reign to do with it what you please. (Yes, even if that includes painting the walls your favorite shade of green.)
- You can sell when you’re ready. Without a binding contract or lease, you don’t have to worry about a specific timeline. Sell when you feel ready.
- Stop paying rent. While you’ll continue to pay monthly costs with your home, the money you’re spending through ownership is much more of an investment than renting.
Ultimately, homeownership gets easier over time. Generally, the biggest deterring factor is the initial down payment. After all, according to U.S. News, 61.7% of millennials say they cannot afford it. But what if we told you there’s hope for that?
Potential Down Payment Help For Buying
With the creation of down payment assistance programs, those who once thought they weren’t adequately prepared for homeownership now have the help they need, and can more fully transition from renters to homeowners. Down payment assistance programs take three forms:
- Down payment grants. This generally involves providing grants for closing cost funds so they do not have to be repaid.
- Forgivable second mortgage programs. Traditional second mortgage programs generally charge interest, but with forgivable second mortgage programs, there is a possibility for a zero percent interest loan when certain requirements are met.
- Matched savings program. Open a new bank account dedicated to saving for your down payment. A designated entity will make a contribution that matches yours.
While you must be qualified in order to receive any of the above, it’s certainly worth looking into. Eligibility is generally determined by income and where you live.
Start Small, Grow Over Time
Buying your first home can be exciting and is often a memorable experience. But it’s also important to weigh the costs and not overextend yourself on your first home purchase. Buying a smaller home is advantageous for a few reasons:
- With a smaller home, less can go wrong. You can find comfort in knowing that with less square footage, you’ll likely be spending less in maintenance costs.
- Smaller monthly payments. If you’re accustomed to a monthly rent amount, see if you can get a lender to secure a similar number for your mortgage payment so you’re not suddenly overwhelmed by higher costs.
- Home value declines. As a general rule of thumb, homes increase in value by 3-5% per year, but they can always decline in value as well. So while there is potential risk involved, starting small is one way to err on the side of caution while still reaping the benefits of home ownership.
Consider your plans for the future, your budget, and your current lifestyle. This should tell you what you need to know about your being ready to buy a home. If you feel prepared to take the next step, know there is very realistic hope for you financially. And get excited, because this is one of the best and smartest decisions you can make for your future.
Real Estate Investment For Your Retirement
Most everyone would agree that they want a comfortable retirement. Many work hard their whole life to ensure these years are both secure and enjoyable. But achieving financial independence and stability can come through many different revenue streams, one of which is real estate investment. Although there will always be risks involved with real estate, those who play their cards right have found it to be a very fruitful source of income in retirement.
Tips For Success
Should you decide to invest in real estate, it’s advised that you polish your skill set so you can set yourself up for success. Here are some practical and accessible tools to aid in that endeavor:
- Be realistic about your skills and portfolio. If you have no prior experience investing in real estate, know your limits and start humbly. Choosing your first investments is an important step in the process so you don’t get in over your head. Should you have connections in the real estate business, don’t hesitate to reach out to them.
- Read books on real estate investing written by experts. It’s always a good idea to be well-read when investing a considerable amount of time and money into something.
- Location matters. Familiarize yourself with the area you’re hoping to buy in. Know the regions that are popular because they will continue to be in high demand even when the economy takes a turn or slows down.
Benefits of buying multiple properties
If you feel inclined to invest in real estate, there are several benefits to buying multiple properties rather than sticking with just one. A Real Estate Investment Trust, commonly abbreviated to REIT, is “an investment in a collection of properties or other real estate assets.” These REITs have a special tax status, requiring them to pay at least 90% of their income in dividends. While some REITs are risky, most are very safe and a great option for retirees who can very easily gain real income from dividends. Moreover, the process of buying an REITs is trouble-free and simplistic.
Different tax implications
There are many pros to buying an REIT, such as the substantial income they offer, but realistically, dividends are still subject to taxes (and are often taxed the same way as regular income). However, on the whole, REITs are hands-off as you do not have to be inconvenienced with property management. It is low-maintenance investment.
Beefing up diversification in your retirement plan
Diversifying your retirement plan is both an informed and intelligent decision. REITs allow many freedoms, one of which is the ability to buy multiple properties, reducing risk overall and naturally expanding your real estate portfolio.
Some may consider real estate investment for your retirement a bit of a gamble. And at times, it certainly fits that description. It takes guts to enter into something that doesn’t always have a fixed outcome, or poses significant challenges along the way. But when done wisely and with the right amount of patience, investing in real estate can be one of your most solid sources of income for retirement.
North Portland Housing Marketing Update: 2019, Quarter 2
Market Still Hot in May
The real estate market began with a bang in 2019. In similar fashion to 2018 and the First Quarter of this year, things have stayed hot in Quarter 2. The good news for homeowners is prices are not appreciating in the same way they did in 2016. This is especially promising due to the current prominence of low mortgage rates. Overall, things are not on a downward trend as was once predicted for the majority of 2019.
Despite trends and forecasts predicting a slowdown by midyear, May was the brightest month of 2019. Detached single family homes are still performing the strongest, while condo markets are showing a slowed pace. This trend has been bringing down the combined average market slightly, but not by a significant amount.
As for specific statistics in May 2019, houses were on the market for an average of 31 days, with a median of 10 days. In May 2018, houses were on the market for an average of 29 days, with a median of 9 days. There was a grand total of 965 houses sold in May 2019, with the median selling price rounding out at $455,000.
Plunging Mortgage Rates
More homes went pending in May 2019 than May 2018, and although we can’t say for sure, a reason for this year’s increase in pending homes may be the descending mortgage rates. Ultimately, this has empowered buyers to buy while rates are low, which is something many have capitalized on.
June Follows Trend
Once June rolled around, we expected there to be a slowdown, as July and the majority of the summer is generally a slower time for Portland. However, with low mortgage rates and a solid job market, people in the Portland area continued to buy homes. Since everyone seems to be capitalizing on this pattern, the only challenge that remains in Portland is lack of inventory to support the high interest in buying.
In June 2019, houses were on the market for an average of 29 days and a median of 12 days. As for June 2018, houses were on the market for an average of 27 days and a median of 10 days. There was a grand total of 927 houses sold, with the median selling price hovering at $432,000.
We are all excited about the Portland housing market and how it has kept us on our toes this year. With stats not yet released for July, we anticipate a slowdown, as real estate is highly seasonal and less busy during the summer months. However, we fully expect the market to remain steady. It’s safe to say that while mortgage rates remain low, we’ll be keeping a close eye on the market as the fall season approaches.