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Old 05-21-2014, 03:54 PM
 
Location: Winter nightime low 60,summer daytime high 85, sunny 300 days/year, no hablamos ingles aquí
700 posts, read 1,240,839 times
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According to a recent article on the OregonLive.com, based on this article
the median home price in PDX metro area is currently $271.9K,
and at the current average %4.57 interest rate you need to make $60,307/year to 'afford' it.

Some relevant quotes:

Quote:
We used standard 28 percent "front-end" debt ratios
["front-end" debt ratio= maximum housing expense ratio = annual salary x 0.28 / 12 (months) {source=Bankrate.com}]
Quote:
and a 20 percent down payment ... to arrive at our figures.
Quote:
That puts Portland among the eighth most expensive among the 27 metros included in the report.

As with any statistics, most of the truly interesting questions remain unanswered...

Last edited by skiffrace; 05-21-2014 at 04:11 PM..
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Old 05-21-2014, 04:26 PM
 
4,060 posts, read 4,621,385 times
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Yes, it assumes above median salary, plus good credit and $55k in assets available to plunk down as down payment. At least when looking at first-time buyers, it's unlikely many can hit all three. Plus a willingness to buy at what might be peak pricing.

If you assume rates go up at some point, then prices have to come down. On the other hand, if you assume Portland becomes an even hotter national draw, or that rates stay low in perpetuity, then who knows, maybe you do risk being priced out of the market. I think that's doubtful, but anything can happen, especially if the RE or financial markets get desperate to move product.

Certainly, one can find properties for less than 270k, but once you move under 250k a sizable share are fixers that buyers may not have any spare cash to fix.
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Old 05-21-2014, 07:53 PM
 
Location: Portland, Oregon
46,050 posts, read 30,400,218 times
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Quote:
Originally Posted by bler144 View Post
Yes, it assumes above median salary, plus good credit and $55k in assets available to plunk down as down payment. At least when looking at first-time buyers, it's unlikely many can hit all three. Plus a willingness to buy at what might be peak pricing.

If you assume rates go up at some point, then prices have to come down. On the other hand, if you assume Portland becomes an even hotter national draw, or that rates stay low in perpetuity, then who knows, maybe you do risk being priced out of the market. I think that's doubtful, but anything can happen, especially if the RE or financial markets get desperate to move product.

Certainly, one can find properties for less than 270k, but once you move under 250k a sizable share are fixers that buyers may not have any spare cash to fix.
When it comes time for my wife and I to buy, I am actually hoping for a fixer under $250K.

It will be interesting to see which way the Portland market goes in the future.
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Old 05-21-2014, 08:43 PM
 
Location: Portland Metro
2,290 posts, read 3,955,996 times
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Quote:
Originally Posted by urbanlife78 View Post
When it comes time for my wife and I to buy, I am actually hoping for a fixer under $250K.

It will be interesting to see which way the Portland market goes in the future.
I think as long as Portland continues to attract new residents, demand for housing will continue to be high. That means continued increases in market prices.
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Old 05-21-2014, 10:59 PM
 
210 posts, read 214,216 times
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Thanks for posting!
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Old 05-22-2014, 09:32 AM
 
Location: Portland, Oregon
10,216 posts, read 17,184,866 times
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Home builders are now back in business. In some areas of N & NE homes at the end of their life span are being replaced with new.
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Old 05-22-2014, 01:38 PM
 
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Quote:
Originally Posted by Nell Plotts View Post
Home builders are now back in business. In some areas of N & NE homes at the end of their life span are being replaced with new.
True, but the resulting structures will likely come in over $250. They're not rushing to build affordable housing. I've seen even quite a few of those skinny houses with no curb appeal and poor durability going for $275k, and that's out around 82nd.

Take a $200k plot, subdivide it and tear down the existing structure, plop 2 x $275k houses on it, and voila. And at least in this market, you'll likely get buyers. The irony is that most of the value is in the land, and the new buyers are only getting half of what was available before and paying more for it - even less available land if you consider easements.
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Old 05-22-2014, 01:48 PM
 
4,060 posts, read 4,621,385 times
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Quote:
Originally Posted by jjpop View Post
I think as long as Portland continues to attract new residents, demand for housing will continue to be high. That means continued increases in market prices.
I agree that 'demand for housing' will be high. But that doesn't necessarily mean the demand will be for the housing stock that's available, since people need to actually be able to afford it.

If you look at renting, people are currently adapting by taking on extra roommates/family to help foot the bill. At some point it's possible the pattern of expressed demand can change entirely, even though the 'demand' in terms of head count continues to climb.

Buying is more complicated, since the buying market is made up of a mix of buyers and demand can be skewed by what financing tools are available, and also how the risk of those products is sold to investors on the back end (whether guaranteed by the Fannie/Freddie, or disguised via exotic securities, etc.).
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Old 05-22-2014, 01:54 PM
 
Location: North Idaho
23,949 posts, read 30,848,550 times
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As far as large cities in a desirable place to live, Portland is pretty darn reasonable.

What's a 3 bedroom house cost you in San Francisco? Or San Diego? Or Seattle?

Prices go down a bit if you don't mind commuting.
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Old 05-25-2014, 10:15 AM
 
Location: Houston
1,257 posts, read 2,277,694 times
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Quote:
Originally Posted by oregonwoodsmoke View Post
As far as large cities in a desirable place to live, Portland is pretty darn reasonable.

What's a 3 bedroom house cost you in San Francisco? Or San Diego? Or Seattle?

Prices go down a bit if you don't mind commuting.
It's the commute for me that would ruin my week. I lived in Portland for over 40 years. I held down mostly blue collar jobs in the peninsula between the rivers. I lived in St Johns. Easy commutes and at one time very affordable housing.

I was blown away by the market value of my home in Portland when I set out to leave for a job opportunity in another state.

I feel bad for the young folks that will have a tough time purchasing a home now. 250k does not buy a lot of home in Portland.

I crunched the numbers and came up with a sweet spot of around $1650 a month (piti) with an interest rate of 4.5% and 20% down on a $250,000 home.

Doable for a young professional. For the not so well heeled lower wage earners its a bit of a stretch considering the down payment.


One note on new home construction. Has anyone walked a home in framing recently? Yikes! Love some of the new tech building material but, the bones scare me.
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