Difficult house hunt this past year and still nothing. Pay more or continue to rent?! (Portland: lease, HOA fees)
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40 years of renting? What drove you to rent that long rather than buy at some point and at least cash out on rise in house prices? That includes a few periods of time where anyone with a pulse could qualify for a mortgage.
It was due to the fact that I had a huge financial setback and could not afford a down payment no matter what the times. Also, there were medical issues that took up a lot of my earnings. My salary barely kept up with my rent increases let alone a down payment or mortgage payments.
Any suggestions, words of encouragement, similar experiences?? Thanks for listening to my woes...
So you're looking at a house for around $290,000 with $15,000 down in Milwaukie near your daughters school? Mostly from what I saw were 2 bd condos or townhouses outside of Portland unless you wanted a much older 1 bedroom house. You can find some descent 3 bedrooms in Tigard and Beaverton. I haven't really checked Milwaukie.
The good news is the market is currently down by 4% right now in the Portland metro. Prices are dropping and this is including the rents. I've watched houses disappear quickly within a month. From what I understand this is the seasonal dip and come Spring time more houses traditionally become available for sale but prices also go up because more people are looking to buy then.
Everything we read online says buy now because prices are only going to go up in Portland for the next 10 years. That they're edging to an all time post-crisis high. Similar to before the crash. They're saying with the migration San Francisco is the new LA. Portland and Seattle are the new San Francisco and Boise is the new Portland and Seattle. I'm not sure how much I agree with that. However, I was blown away at how much Boise has changed in the past five years when I went back there to visit recently.
I agree from what I've seen renting is more than a mortgage for what you can get. However, there's other costs to consider with owning a house such as you do your own repairs. You do lawn maintenance and landscaping. Homeowners insurance, ect. A house is an investment but you're not giving your money away like with rent. You're building equity.
So right now one way or another you're going to have to compromise on something if the school thing isn't the thing to compromise on. You'll also have to find a way to make it feasible. Be it buying something you can afford, renting a room out, taking some side work or marrying again and having someone share the responsibility.
I think in your case the problem isn't finding the answers. The problem is facing the answers you have and making a decision on what you want.
OP just hold on a little longer. Keep saving money and renting. It's going to crash. Interest rates are rising, we have a loud mouth reality tv star as our new president. China is becoming unstable. All economic data from FRED looks just like 2006. This is going to be a pretty interesting year (2017.) The DOW has been flat for the entire year. Some people are happy about a Trump presidency but the DOW is flat again below 20,000 in anticipation of holiday spending and earnings reports. After the first of the year you will see a slow sale off by the major players. Last time it all crashed this is the same pattern: Flat then a strong rally with a strong year then a slow decline followed by steep decline 9 or 10 months later. Everyone keeps saying housing is strong. Okay well what about 1.3 trillion ins student debt? 1 trillion in worthless auto loans. Not as severe as 8.4 trillion in home loans but still going to cause a problem.
2019 will be your year! Then you can get a killer deal and laugh at all the morons who paid 300k for a shack.
Portland does not have the same economic prosperity as Seattle or pretty much anywhere in California. People conveniently forget this. You can only own a nice house if nothing changes employment wise. I don't think we will see 2000sf homes for 200k but. 240-250 for a nice house in Milwaukie isn't out of the question.
I bought during the "great recession" twice. It was a calculated move and it really paid off. The first time 175k for a crap hole in Saint Johns I did 40 k worth of work and sold it for 400k in 2014. At the same time I bought a really awesome house in Milwaukie for 350k, which I thought was ridiculous.
I know how to buy houses and look for the signs because I bought into the hype twice and paid for it dearly both times.
1999: "You can't lose a penny. Housing price returns have never been higher, get in while you can with these low 9% interest rates they will never be this low again. Texas is highly desirable, the new found natural gas wells are going to bring a lot of jobs!" I lost 60k.
2007: "You can't lose a penny. Housing price returns have never been higher, get in while you can get in at an unprecedented 5.5% it will never be this low again. Tucson is flooding with Californians looking for investment and retirement properties." I lost 80 k.
2016: "The secondary mortgage market is on fire, get in while you can get 3.4%, it will never be this low again. Portland is flooded with Californian buyers with tons of equity and Chinese buyers are paying cash for investment properties. You don't want to be left behind do you? Properties will never be this cheap again. Its just going to go up and up. ....nah I'll wait till 2019. uuuh uhh okay, but you understand now is the time to buy. No, its not, its the complete opposite of the time to buy.
OP just hold on a little longer. Keep saving money and renting. It's going to crash. Interest rates are rising, we have a loud mouth reality tv star as our new president. China is becoming unstable. All economic data from FRED looks just like 2006. This is going to be a pretty interesting year (2017.) The DOW has been flat for the entire year. Some people are happy about a Trump presidency but the DOW is flat again below 20,000 in anticipation of holiday spending and earnings reports. After the first of the year you will see a slow sale off by the major players. Last time it all crashed this is the same pattern: Flat then a strong rally with a strong year then a slow decline followed by steep decline 9 or 10 months later. Everyone keeps saying housing is strong. Okay well what about 1.3 trillion ins student debt? 1 trillion in worthless auto loans. Not as severe as 8.4 trillion in home loans but still going to cause a problem.
2019 will be your year! Then you can get a killer deal and laugh at all the morons who paid 300k for a shack.
Portland does not have the same economic prosperity as Seattle or pretty much anywhere in California. People conveniently forget this. You can only own a nice house if nothing changes employment wise. I don't think we will see 2000sf homes for 200k but. 240-250 for a nice house in Milwaukie isn't out of the question.
I bought during the "great recession" twice. It was a calculated move and it really paid off. The first time 175k for a crap hole in Saint Johns I did 40 k worth of work and sold it for 400k in 2014. At the same time I bought a really awesome house in Milwaukie for 350k, which I thought was ridiculous.
I know how to buy houses and look for the signs because I bought into the hype twice and paid for it dearly both times.
1999: "You can't lose a penny. Housing price returns have never been higher, get in while you can with these low 9% interest rates they will never be this low again. Texas is highly desirable, the new found natural gas wells are going to bring a lot of jobs!" I lost 60k.
2007: "You can't lose a penny. Housing price returns have never been higher, get in while you can get in at an unprecedented 5.5% it will never be this low again. Tucson is flooding with Californians looking for investment and retirement properties." I lost 80 k.
2016: "The secondary mortgage market is on fire, get in while you can get 3.4%, it will never be this low again. Portland is flooded with Californian buyers with tons of equity and Chinese buyers are paying cash for investment properties. You don't want to be left behind do you? Properties will never be this cheap again. Its just going to go up and up. ....nah I'll wait till 2019. uuuh uhh okay, but you understand now is the time to buy. No, its not, its the complete opposite of the time to buy.
we bought all cash during the last recession which is where you can really find deals, but doesn't look like OP will be in that position. Higher interest rates and an unstable economy really isn't great for most people.
So you're looking at a house for around $290,000 with $15,000 down in Milwaukie near your daughters school? Mostly from what I saw were 2 bd condos or townhouses outside of Portland unless you wanted a much older 1 bedroom house. You can find some descent 3 bedrooms in Tigard and Beaverton. I haven't really checked Milwaukie.
The good news is the market is currently down by 4% right now in the Portland metro. Prices are dropping and this is including the rents. I've watched houses disappear quickly within a month. From what I understand this is the seasonal dip and come Spring time more houses traditionally become available for sale but prices also go up because more people are looking to buy then.
Everything we read online says buy now because prices are only going to go up in Portland for the next 10 years. That they're edging to an all time post-crisis high. Similar to before the crash. They're saying with the migration San Francisco is the new LA. Portland and Seattle are the new San Francisco and Boise is the new Portland and Seattle. I'm not sure how much I agree with that. However, I was blown away at how much Boise has changed in the past five years when I went back there to visit recently.
I agree from what I've seen renting is more than a mortgage for what you can get. However, there's other costs to consider with owning a house such as you do your own repairs. You do lawn maintenance and landscaping. Homeowners insurance, ect. A house is an investment but you're not giving your money away like with rent. You're building equity.
So right now one way or another you're going to have to compromise on something if the school thing isn't the thing to compromise on. You'll also have to find a way to make it feasible. Be it buying something you can afford, renting a room out, taking some side work or marrying again and having someone share the responsibility.
I think in your case the problem isn't finding the answers. The problem is facing the answers you have and making a decision on what you want.
Hi MarsMom, I feel for you. We own a starter home and we are frustrated by the market as well and have decided to stay put in our very cozy 2/1. Others have advised you on this problem from a real estate perspective, but I'm looking at it more as a parenting/life decision given you have two kids and recently suffered a great loss (my condolences.)
I'd buy a house on a busier road if it was assigned to the school my child was thriving at. Your children will benefit more from the stability than they will from a quieter street. You can update the windows and door to help with sound proofing, and some creative landscaping will enhance your view and privacy. No it's not ideal but *nothing* in Portland metro is ideal anymore unless you have $600,000+ to spend and even at that price point, people are making "sacrifices." Stretching yourself too far beyond your comfort zone is also not ideal, especially given you are the sole income earner for your family. Your children will benefit from the stability of a modest home on a busier street for a price you can comfortably afford in their current school.
Some will argue you should try to time the market because prices might drop. If prices drop it will be because the economy tanks in other ways too... at that point, what if you lose your job? At least if you buy now you will have your home. Personally I think prices and rents will only level off or go up. If you were purchasing investment real estate than fine, maybe play the game a little and try to time the market. But this your home first, and an investment second.
In six years, you might be in a totally different situation. Maybe you will have a partner to share expenses. Maybe your home will have appreciated and your income will go up enough to sell and buy a few streets over. Maybe your kids' schooling needs will change.
if you are paying $1000+ for rent, you may as well be paying a mortgage. Every time you pay that rent to your landlord, guess what- you are paying THEIR mortgage for them.
IF you can hold a job, build your credit, and stick to a strict budget, you CAN be a home owner. There are great First Time Buyer programs in Oregon & Lenders willing to help if you are qualified and can afford your mortgage payment.
Spring & Summer are hot markets for new listings. SO please, start now... stop paying rent, start buying.
I hate seeing families, friends,single moms, dads, parents, etc paying outrageous amounts of rent. I paid $600 for a 450sqft studio 2 years ago & I thought that was over priced... I realize I am pretty lucky that I am not renting now.
Yes, while a lucky few long time portlanders bought when it was cheap (20 years ago, and most 99% that I know had family help to do so), many didn't for what ever reasons (one spent the inheritance on "stuff"), and I hate to see these folks being priced out of even the rental market now - a lot of rentals are being sold...
OP- buy while you can- its a good investment even if you decide to move later- your home will retain value! Its money in the bank for that rainy day!
Unfortunately this is not an uncommon occurrence in Portland these days. Increasing COL especially in housing is causing people to be priced out of the area. Everyone wants to be near the best schools where their children are concerned. Unfortunately this causes the competition for available housing to be very strong.
OP, If you really wish to remain in Portland, you will have to find some sort of compromise like giving up the neighborhood you are hoping to buy into and choose one you can afford.
We've lived in Oregon for 25 years. Lived everywhere from PDX area and surrounding areas. Even bought a home on the coast, eventually sold it and eventually moved to Sandy. Nothing is cheap in Oregon.
Talked to a few realtors lately and they all same the same thing. It's not a bubble, and it's only going to get worse. People are buying homes with cash. Californians are buying up houses like crazy. One realtor told me he had a buyer who put own 2 million dollars down on his desk and wanted to buy a few homes in the Gorge area. Who can compete with that?
I can't. Sooooo...my hubby just took a job in Prescott, Arizona.
Yep, looks like were outta here.
I LOVE Oregon and will miss it, but these prices are crazy for what you get.
Good luck!
Okay OP lets look at this from a real money prospective. Right now the average 3/2 not even a nice one is going for somewhere around 320k.
320 k purchase price.
15k down=5% ( I assume you do not have 65k or 20% but I may be wrong.)
intrest rate is 4.099 with stellar credit.
Property taxes are ridiculous. mine are 3800/yr and most people I know are paying north of 3000.
PMI (if you don't have 65k)
Home insurance closing costs and all associated fees.
Your looking at $2,100 per month. 500 dollars is huge difference regardless of who you are paying. You never know the full condition of the home when I bought my home it was "turn key" and looked great but 7 months later I had to replace a section of roof for 5k, then the furnace went out that was another 3k.
I think everyone who is speculating is going to get a rude surprise when it all comes down in a few years. The baby boomer die off is going to hugely impact the housing market in the next 10 years.
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