Portland: housing-bubble city (Happy Valley: real estate market, apartments, foreclosure)

[Smiled]

Even WITH an urban growth boundary, Portland among the WORLD's hardest-hit cities.
A pretty good article. We will recover but it will take time.


Portland-area among the world's hardest hit cities by recession | OregonLive.com

[TDNY]

Actually, the urban growth boundary probably made the housing bubble worse. It restricts supply, therefore raising prices.

[TDNY]

If you read the report that is linked in the article you posted you see that Portland metro has better income and employment growth than the nation for the whole period in question. I'm actually a little surprised at that. It's pretty interesting stuff actually thanks for the link.

http://www.brookings.edu/~/media/Fil...s/Portland.pdf

[Nell Plotts]

The urban growth boundary does not restrict supply of housing, it constricts where it can be built while preserving agricultural land for that purpose.

The existence of the ugb enables transit, sewerage and water services. To the extent that children are bussed to school that service is more economical.

There is more than enough housing available for purchase. To some extent the construction cost is impacted by the whims of building officials who behave as 's/he who shall be obeyed' while neglecting to assure that buildings are properly flashed (one of my pet peeves). The rest is supply and demand, consumer expectations (homes much larger than those of our parents/grandparents who had many more children). We have more housing than the market can absorb, prices are dropping.

[TDNY]

Listen, I'm not trying to say that the UGB is a bad thing, but when you have restrictions on where, when, and how you can build things, it restricts supply and/or raises the cost to providing new supply.

I am moving from a place, the NY suburbs, that has a tremendous amount of restrictions on where, when, and how you can build things. I think that it's overall a good thing. That's why this is a beautiful, wooded area even though I'm only 25 miles from Manhattan. The down side is that because it's harder to build anytime, anywhere, anyhow, it raises the cost of housing.

There isn't an oversupply of housing in Portland. The prices are going down because people can't afford to pay the prices that were being paid. Portland still has high housing prices relative to income, and it probably always will, given the city's culture of not allowing anything goes development.

Since I'm moving next summer, I thought about buying first, but honestly, the prices are, in my opinion, way too high. I think another 20% drop is a layup. Now, I've been scouting rentals, and there really aren't too many available in the neighborhoods and size I'm looking for, and there wasn't all that many even in the summer when it seems most of the house rentals come on the market. This is not a place where there's too much supply of housing.

If you want to see what oversupply looks like, look at Las Vegas, or parts of California, or Florida. Huge swaths of houses with no people.

[LeftCoastee]

Originally Posted by TDNY

I think another 20% drop is a layup.

I don't see that happening. Maybe a specific house or neighborhood may still be drastically overpriced, but not the general market.

I personally think we are near the bottom. In fact, prices in my neighborhood have held steady in the past 18 months that I've lived here. Comps to my house are up considerably (just below 10%) due to the price I paid (FNMA foreclosure).

I don't think you can look at income levels and determine where the housing prices will go. Not on the West Coast anyway. If you did that, then LA would need to drop another 40-50%.

[TDNY]

This is interesting, and it totally contradicts the earlier link that makes it look as if Portland income growth has outpaced the nations. I guess maybe the info is telling us that income growth was good in the 90's but has lagged since. That makes sense.

Oregon Workforce & Economic Information

[TDNY]

Originally Posted by LeftCoastee

I don't see that happening. Maybe a specific house or neighborhood may still be drastically overpriced, but not the general market.

I personally think we are near the bottom. In fact, prices in my neighborhood have held steady in the past 18 months that I've lived here. Comps to my house are up considerably (just below 10%) due to the price I paid (FNMA foreclosure).

I don't think you can look at income levels and determine where the housing prices will go. Not on the West Coast anyway. If you did that, then LA would need to drop another 40-50%.

I guess we'll just have to disagree on that.

[ksucher]

Being the hardest hit it is a fact that Portland has limited industries for employment and building houses was a major employer.

Our housing prices are a fact of supply and demand (Nell Potts is right on). Portland is high on everyone’s list to live here which drove the prices up and now with the mortgage melt down and no jobs to support payments prices are coming down. At 10 months supply of home inventory we are over supplied which further affects prices.

The UGB supplies enough land for a 20 year projection of future growth. What it does do is limit builders from just building anywhere they want without the infrastructure in place to support the growth.

[Deezus]

The worst hit parts of the Portland real estate market have been housing developments on the edge of the outer suburbs(see Happy Valley) and the overbuilt condo market. The single family homes in my walkable inner NE Portland neighborhood have seen a decline, but have held value much better than other parts of the area. However I'd argue that the same people who would buy a home in the inner Eastside aren't the same people who'd buy a home on outskirts of Clacakamas or Washington Counties at the edge of the UGB.

The condo market was another mess altoghether---the PDC and the developers thought there was a infinitite supply of upwardly mobile types from California and the East Coast ready to buy a luxury apartment in some recently developed urban renewal district..The truth is that it's always been a much better option, both as an investment and place to live to purchase a single family home for $250,000 vs. a smaller condo at the same price. Not sure what's going to be done with some of these condos--but I mean, you had places being built (and advertised as hip urban living) in spots like North Marine Drive---that last summer were being auctioned off starting at around 40% of their original price. Or the best was the conversion of old felony flats style garden apartments into high-end condos around East Portland...