Portland Metro Area Home Market Report For May 2014 http://www.movingtoportland.net Voice 503.497.2984 smarthens@movingtoportland.net In This Issue Portland Home Market: May 2014 Cost of Residential Homes by Community: May 2014 Mortgages Weather Summary for Portland Metro Area Fire Season Safety: Check Conditions Before Heading Out Portland Metro Area: 725,000 More People in the Next 20 Years? Portland Home Market for May 2014 May 2014 Highlights: Sales Down but Prices Still Rising Real estate activity in the Portland metro area continues to see seasonal gains. New listings (4,192) are up 15.5% over April s 3,629 and up 9.4% compared to the 3,833 new listings posted last May. It was the strongest May for new listings since 2008, when there were 5,182. The 2,989 pending sales were a 5.8% increase over last month, but just a 0.4% increase over the same month last year. May had 2,483 closed sales, up 15.9% over April s 2,143 closings, but down 7.4% from the 2,682 closings posted in May 2013. There are currently 6,858 active residential listings in the Portland metro area. Total market time continued falling in May, and currently sits at 67 days. Inventory stayed stable at 2.8 months.
Page 2 Portland Metro Area Home Prices for May 2014 Average and Median Sales Price The average price the first five months this year was $327,200, up 9.1% from same time in 2013 when the average was $299,900. In the same comparison, the median rose 10.1% from $253,000 in the first five months of 2013 to $278,500 in the same period of 2014. Year-to-Date Summary Portland s real estate market has seen only slight cooling compared to 2013. New listings (16,077) are up 3.2% compared to the first five months of 2013. Pending sales (11,852) and closed sales (9,772) are down 2.7% and 0.9% in the same comparison. Sales Price Percent Changes for Portland Metro Area The Average Sale Price Percent Change is based on a comparison of the rolling average sale price for the last 12 months (5/1/2013-5/31/2014) with 12 months before (6/1/2012-5/31/2013). Average Sale Price Percent Change: 10.6% ($320,400 v. $289,800) Median Sale Price Percent Change: 12.2% ($275,000 v. $245,000) Sales Price Change in May 2014 From Peak in 2007 Here are the sales price percent changes in May 2014 from their peak prices in 2007: Average Sale Price Percent Change from peak in August 2007: -9% ($335,300 v. $366,900). Median Sale Price Percent Change from peak in July 2007: -4% ($290,000 v. $302,000). Average and Median Sale Price Chart for May 2005 - May 2014 Below is the Average and Median Sale Price chart for the periods 2005-2014 showing the home sales by six-month intervals. The chart is for the five county Portland metro areas. It does not include homes in southwestern Washington (Vancouver to include Clark County). Home sales in the Portland area took a small tumble in May compared with a year ago, though a small supply of homes for sale means the market is still very competitive. Note that the Median Sale Price Percent Change is only down four percent from its peak in July 2007. The housing market has recovered in Portland, but it has taken seven years. More houses are coming on the market, which may begin to ease the inventory crunch and further cool prices. Homeowners newly listed more than 4,000 homes in May, nine percent more than the
Page 3 Portland Metro Area Home Prices for May 2014 same month a year ago. So far this year, though, listings are only up 2.7 percent. It s not uncommon for many Realtors in the Portland area to have 4-5 offers on a listing. The resulting competition is helping to drive prices higher, and it's also contributing to a fast-moving real estate market. Homes sold in May spent on average only 67 days on the market, from listing to closing. That's 15 days less than a year ago. Above data based on information from the RMLS Market Action report for May 2014. Active Residential Listing This graph shows the active residential listings over the past three calendar years in the greater Portland, Oregon metropolitan area. The red line is 2014 and it clearly shows that more homeowners are putting their homes on the market as prices increase. Median Sales Price for Condos This graph represents the median sale price for all condos sold in the last three calendar years in the Portland, Oregon metropolitan area. The increasing price of condos in the Portland metro area may see some new condo building projects in the downtown area of Portland.
Page 4 Portland Metro Area Home Prices for May 2014 Home Sales Report: Portland Metro Area for May 2014 Below is the Home Sales Report for residential properties in the Portland metro area for May 2014. This includes the five county Portland metro areas (Clackamas, Columbia, Multnomah, Washington, and Yamhill). Note the third line where the areas are listed. RMLS divides the counties into numerical areas. For example area 141 is North Portland, area 142 is Northeast Portland, etc.). Above data based on information from the RMLS website for the period May 1-31, 2014.
Page 5 Portland Metro Area Home Prices for May 2014 Cost of Residential 1 Homes by Area/Community for May 2014 Area May 2014 Closed Sales May 2014 Average Sales Price Year-to-Date For Period Ending May 31, 2014 Average Sales Price Median Sale Price Average Sales Price Percent Change 2 Portland Metro Area 3 Includes these counties in Oregon: Clackamas, Columbia, Multnomah, Washington, & Yamhill 2,483 $335,300 $327,200 $278,500 10.6% Portland North 114 $304,200 $282,200 $265,800 15.1% Northeast 220 360,600 348,800 299,000 11.7% Southeast 300 307,000 295,300 250,000 14.5% West (Includes SW and NW Portland and parts of eastern Washington County) 276 463,500 465,000 379,800 6.1% Portland Metro Suburban Areas Corbett, Gresham, Sandy, Troutdale 151 $247,500 $234,000 $224,300 10.9% Clackamas, Milwaukie, Gladstone, Sunnyside 219 301,500 299,500 280,000 12.9% Canby, Beavercreek, Molalla, Mulino, Oregon City 129 295,500 293,100 278,000 14.4% Lake Oswego and West Linn 139 532,100 526,100 455,600 7.2% Northwest Washington County & Sauvie Island 133 399,000 411,600 379,000 8.0% Beaverton and Aloha 235 284,800 272,600 250,000 13.7% Tigard, Tualatin, Sherwood, Wilsonville 212 342,000 327,900 309,000 8.4% Hillsboro and Forest Grove 151 263,600 257,700 235,000 10.9% Mt. Hood: Brightwood, Government Camp, Rhododendron, Welches, Wemme, ZigZag 21 273,700 256,600 237,500 23.1% Counties Columbia County 52 $206,900 $201,700 $197,000 23.1% Yamhill County 131 261,200 255,600 219,400 12.1% Southwest Washington State Clark County (Battleground, Camas, Ridgefield, Vancouver, Woodland, etc.) 600 $263,100 $261,700 $233,500 9.4% 1 Residential includes detached single-family homes, condos, townhomes, manufactured homes, and multi-family (e.g., duplexes, triplexes, etc.) homes when one of the units is sold. 2 The average sales price percent changes are based on a comparison of the rolling average price for the last 12 months (6/1/2013-5/31/2014) with 12 months before (6/1/2012-5/31/2013). 3 Based on information from the RMLS Market Action report for May 2014.
Page 6 Portland Metro Area Home Prices for May 2014 Mortgages Primary Mortgage Market Survey: 30-Year Fixed Mortgage Rate 4.20% Freddie Mac released its Primary Mortgage Market Survey (PMMS ) on June 12 showing average fixed mortgage rates following Treasury yields higher and coming off the May jobs report, which largely met forecast expectations. News Facts 30-year fixed-rate mortgage (FRM) averaged 4.20 percent with a 0.6 point for the week ending June 12, 2014, up from last week when it averaged 4.14 percent. A year ago at this time, the 30-year FRM averaged 3.98 percent. 15-year FRM this week averaged 3.31 percent with an average 0.5 point, up from last week when it averaged 3.23 percent. A year ago at this time, the 15-year FRM averaged 3.10 percent. 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.05 percent this week with an average 0.4 point, up from last week when it averaged 2.93 percent. A year ago, the 5-year ARM averaged 2.79 percent. 1-year Treasury-indexed ARM averaged 2.40 percent this week with an average 0.4 point, unchanged from last week. At this time last year, the 1-year ARM averaged 2.58 percent. Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac: Mortgage rates continued to climb for the second week in a row following the increase in 10-year Treasury yields. Also, the economy added 217,000 jobs in May, following a 282,000 surge in April and a 203,000 increase in March. Meanwhile, the unemployment rate in May held steady at 6.3 percent." To view the Regional Breakdown click here. Portland Area Mortgage Rates To check on Portland metro area mortgage rates visit Professor Guttenberg s website at mtgprofessor.com click on Fixed-Markup Lender. Jack M. Guttentag is Professor of Finance Emeritus at the Wharton School of the University of Pennsylvania. Taking the median home price in the Portland area of $290,000 for May 2014 and with 20 percent down payment ($58,000) and a mortgage of $232,000, the payment for a 30-year fixed loan is $1,107.60 per month (excluding property taxes and insurance) in Portland, Oregon. The interest rate is 4.00%, and the APR is 4.171%. Total closing costs are $6,470.88. Guaranteed lender fees are $4,093.88 the lender fees are guaranteed not to change from the time they lock your rate (30 days) to closing. Closing attorney/agent, appraiser, title insurance, and credit reporting costs are $2,160.00. The markup fees are $4,728.24. Local government taxes and fees are $217. Escrow fees are not waived. FICO credit score is good (720-739). According to the professor: In using an on-line lender monitored by the mortgage professor, a borrower enjoys competitive wholesale prices, which are disclosed and passed through by the online lender and a standardized and reasonable markup over the wholesale price, which is guaranteed by the professor. This eliminates all potential sources of abuse."
Page 7 Portland Metro Area Home Prices for May 2014 Weather Below is the National Weather Service precipitation data for the month of May 2014. These readings are from the Portland airport. Average Monthly Temperature for May 2014: 61.2 (2.9 degrees above normal of 58.3). Warmest Day: 91 degrees on May 11. Coldest Day: 42 degrees on May 1. Most Rainfall in 24 Hours: 1.18 inches on May 17-18. Rain Days: 0 days with thunderstorms, 1 day with heavy rain, 15 days with light rain. We had 8 days of fog with visibility equal to or less than.25 miles. Clear/Cloudy Days for May 2014: 5 fair days, 14 partly cloudy days, and 12 cloudy days. Average Wind Speed for May 2014: 6.1 mph Below is the precipitation data for the water year (October 1 September 30) Water Year (October 1 - September 30) Average Precipitation In Inches Actual Precipitation in Inches Water Year Year-to-Date 31.54 26.68 October 3.00 1.15 Portland s rainfall is measured by November 5.63 3.05 the water year which is from December 5.49 1.62 October 1 through the end of January 4.88 2.70 September. February 3.66 5.12 March 3.68 7.52 April 2.73 3.03 May 2.47 2.39 June 1.70 Precipitation is measured from the July 0.64 NOAA Weather Station near the Portland August 0.67 International Airport. September 1.47 Yearly Average 36.27 Fire Season Safety: Check Conditions Before You Head Out Prediction are for a warm and dry summer in Oregon and Washington that will result in a high number of forest fires. The meager snowfall this past winter reduced the snowpack in most of the region so that is another factor that adds to the increase in fires. Rainfall in May was well below average in most of the Pacific Northwest, and June is following the same pattern. Oregon has already had a wildfire (Two Bulls) that blackened the skies of Central Oregon and burned through nearly 10 square miles outside Bend. The fire was most likely set by arsonists. Oregonians make use of public facilities for a variety of summer activities such as hiking, fishing, and boating. People heading out to use public lands during fire season need to check fire and weather conditions. It can be very unpleasant traveling near or downwind of a fire due to smoke and limited visibility. Air quality can be severely degraded, even though fires are burning many miles away.
Page 8 Portland Metro Area Home Prices for May 2014 Sources of Wild Fire Information Here are other websites to check: The National Weather Service updates red flag warnings for Oregon and other states. Checking in advance is a routine precaution that travelers should exercise every summer during fire season, if for no other reason than road closures are always possible. The best source for Northwest wild fire information is the website nwccweb.us, the coordinating center for public agencies charged with responding to wild fires. A "large fire map" on the website brings up a map of Oregon and Washington that shows where fires are burning. Locations on the map are clickable for detailed information on each fire. The website provides the location of the fire, the lead agency fighting it, when it started, how large it is, what percent is contained, the start date, the cause and expected containment date. It also details how the fire is being fought and how it affects the public, regarding highway, campground and other land closures. For the latest information on problems that affect state highways, visit tripcheck.com for Oregon, or wsdot.wa.gov/traffic/ for Washington. Both states also participate in telephone road condition alerts by dialing 5-1-1. Campers with campground reservations near where fires are burning should call local office of the U.S. Forest Service, the Bureau of Land Management or Oregon State Parks to see if their campground is affected. A regulated closure on private land protected by the Oregon Department of Forestry may also be in effect. Complete information is on ODF's website. Restrictions on the Use of Public Land Public-use restrictions may prohibit building, maintaining, tending or using a fire, campfire, wood stove or briquette fire outside designated recreation sites. Liquefied and bottle gas stoves and heaters may be used for cooking and heating. Smoking is only allowed within enclosed vehicles, buildings, developed recreation sites, or while stopped in an area at least three feet in diameter that is barren or cleared of all flammable material. Or, in a boat on water. Under the restrictions, motorized travel off developed national forest roads and trails is not allowed, except to go to and from a campsite near an open developed road. Motorized travel on segments of roads where access is blocked by a gate, barricade, log, boulder or earthen berm is also prohibited. Violation of these prohibitions is punishable by a fine of not more than $5,000 for an individual or $10,000 for an organization, or imprisonment for not more than 6 months, or both. These restrictions may remain in effect until forest and weather conditions reduce the risk of wildfire. National and state forests will have different fire use restrictions, so check with the district office in the area you expect to visit. Source: Wildfire conditions should be checked before heading out to recreate on public land, by Terry Richard, outdoors writer for The Oregonian newspaper. Published June 8, 2014.
Page 9 Portland Metro Area Home Prices for May 2014 Portland Metro Area: 725,000 More People in the Next 20 Years? The seven-county Portland area might grow by up to 725,000 people, topping the three million population mark by 2035, according to the most recent estimates from the regional government Metro. The agency will release a detailed report on the population estimates in July. The metro area includes Multnomah, Washington, Clackamas, Clark, Skamania, Yamhill and Columbia counties and is expected to reach 2,343,000 people by next year, almost 600,000 more than in 1995. Metro senior planner Ted Reid briefed the Washington County Coordinating Committee in early June. The committee is a group of mayors and other officials who meet every month to discuss transportation issues. Reid remarks were reported in The Oregonian newspaper in their June 9 edition. Urban Growth Boundary This forecast might be at the foundation of next year's assessment of the Urban Growth Boundary expansion. The process allows the regional government to work with cities to plan development. Portland is often cited as an example of a city with strong land use planning controls. This is largely the result of statewide land conservation policies adopted in 1973 under Governor Tom McCall, in particular the requirement for an urban growth boundary (UGB) for every city and metropolitan area. Portland's urban growth boundary, adopted in 1979, separates urban areas (where high-density development is encouraged and focused) from traditional farm land (where restrictions on non-agricultural development are strict). The UGB is assessed every six years, in a process that involves various levels of government and the public. This winter, the Oregon Legislature passed a land-use "grand bargain" to designate urban and rural reserves after the process got tangled in court. In this new planning cycle, Metro is looking at urban growth in a brand new way. In the past, the agency used to make population projections and then calculate, based on certain formulas, how many people would live in existing or redeveloped housing units, and how much land would be needed for new development. Now, the agency takes aerial snapshots of every piece of land within the Urban Growth Boundary and analyzes their development or redevelopment potential one at a time. Metro will focus on redevelopment to accommodate urban growth in the next two decades. Metro staff will expand on these population estimates during a presentation before the Metro Council in July. In December, the council will decide whether to adopt these estimates as a basis for future planning. Where will the Homes be Built? If the planners are correct about 725,000 more people living in the metro area, where will the homes be built be house them? Planners and elected officials in the area are faced with a decision. Should the UGB be expanded thereby creating more suburbs or should growth be within the existing UGB by increasing density. According to Metro, from 1998 to 2012, 94 percent of new homes houses, condos, apartments and townhomes were built within the original 1979 urban growth boundary. That's about 112,000 homes permitted for construction. The trend is clear as more people desire to live close in. One doesn t have to drive very far in inner
Page 10 Portland Metro Area Home Prices for May 2014 Portland before running into an apartment complex under construction or signs advertising apartments for rent in newly constructed buildings. Most of these new apartments do not have to provide parking. This upsets residents that already live in the neighborhood and now have to contend with more demand for street parking. Many of the inner city neighborhoods are seeing redevelopment taking place. Redevelopment or land recycling is development that occurs on previously developed land. Infill buildings are constructed on vacant or underutilized property or between existing buildings. Infill development is more financially feasible for development when it occurs on a large plot of land (several acres). Large scale development benefits from what economists call economies of scale, and reduces the surrounding negative influences of neighborhood blight, crime, or poor schools. However, large scale infill development is often difficult in a blighted neighborhood for several reasons. These include the difficulties in acquiring land and in gaining community support. Infill housing is the insertion of additional housing units into an already approved subdivision or neighborhood. These can be provided as additional units built on the same lot, by dividing existing homes into multiple units, or by creating new residential lots by further subdivision or lot line adjustments. Units may also be built on vacant lots. In Portland, many neighborhoods are protesting these projects. There claim is that they change the character of the neighborhood. Metro claims, that since 2007, 58 percent of new residential growth in the Portland region has taken place as either infill, where a home or homes is added to a preserved home on a tax lot, or redevelopment, where an existing building is torn down or replaced. The rest of the residential construction in that time, about 42 percent, has been on vacant land. Infill and redevelopment are collectively referred to as refill. Refill on this scale is new for the Portland region. From 1997-2001, only 30 percent of new residential growth was in refill areas. From 2001-06, 33 percent of new homes were in refill areas. Decision Time Looms The decision to reset the UGB or increase the density within the existing UGB will have to be made in 2015. So what should planners and elected officials do about housing 725,000 more bodies? Their decision is not going to be en easy one as you can see from the information above. Source: Portland-area population could jump by 725,000 in 20 years, Metro forecasts, by Simina Mistreanu, June 9, 2014. The Oregonian. Susan Marthens Principal Real Estate Broker, CRS, GRI Windermere/Cronin & Caplan Realty Group, Inc. 6443 SW Beaverton-Hillsdale Hwy, Suite 100 Portland, Oregon 97221 Telephone: 503.497.2984 Email: smarthens@movingtoportland.net