Housing: Is this another bubble? Opinions? (Beaverton, Hillsboro: eviction, homes, buyer)

[bler144]

Originally Posted by jjpop

I don't know if this is a bubble or not. I do think the price increases seem unsustainable, but I wouldn't expect prices to decrease. If anything, I bet they will just flatten out. What would make prices decrease? If people put their houses on the market and they don't sell. Why wouldn't they sell? Because people stop moving here.

There are any number of reasons sales could dwindle. As just one example, keep in mind that ultimately even people who are leveraging the max to make the purchase still need to make the monthly payments.

Increase rates by 1% and prices would need to drop around 10% for PI to remain the same, all other things being equal.

You have to assume buyers who are already squeezed will still jump on the higher price, and perhaps more importantly can still qualify for a compliant mortgage and the market insurance that carries.

Of course the market/govt can monkey around to extend the number who can qualify even with less affordability, but there's only so much bending that can be done that isn't just making a bad situation worse. Keep in mind federal guarantees through FHA already allow buyers to buy with a piddling 3% down.

There are arguments for and against this course of public policy, but there would seem to be no question that this very low bar helps push buyer demand in the market.

[Minervah]

Originally Posted by bler144

Two problems there:

1) The stats you link cover just the city, not the metro.
2) Also, and perhaps more importantly, only about half the boomers are over 65. Median birth year for living boomers is somewhere around 1956.

Not to mention that's 2010 data and would miss almost all of Portland's recent 'surge' in popularity, plus the median boomer would have been 54 y.o. in 2010.

Nationwide boomers are about 23% of the current population, and most research suggests they have a highly disproportionate amount of both wealth and disposable income.

Two comments I picked up on.

Labor force participation is dropping in part b/c of Boomers.

The relative wealth of the Boomers, and their fondness to relocating to 'awesome' places post-retirement is part of the slosh of cash in the housing market as well.

So we are not talking just about those wealthy "boomers" who are retiring or retired but who are still a part of the labor force.

Chances are though, someone 54 years old in 2010 would probably still be working today. Any idea of the amount of people over 54 who contributed to the slosh of cash with their wealth and disposable income who retired during that time?

[bler144]

Originally Posted by Minervah

So we are not talking just about those wealthy "boomers" who are retiring or retired but who are still a part of the labor force.

Ok, we're risking conflating a few things here. For one, the labor force participation chart shows roughly that participation has dropped from what, 66 to 63 or thereabouts, or 3%. You don't even need all 25% of the population that's in the boomer generation to retire at once to see that sort of impact.

Likewise, the boomer period covers those born between 1946-1964. The eldest of that population would be ~70 now, where the youngest would be 52. Some are retiring and some are not; some are dying off and some are not. But the largest numbers of them are actually in the later years of the generation (1952+).

Particularly if one notes that they disproportionately choose certain markets (Portland for Cali retirees, NC/FL for New Englanders, etc.) over others (ND), you also don't need a particularly big slice of them to juice a small market, as Portland is.

On the younger end, you also have boomers in some cases helping their own kids with down payments, rents, etc. So the sheer demographic scope of the boomers, and the disproportionate amount of wealth/cash they control can make a big difference in key markets.

[VTHokieFan]

I wouldn't call it a bubble per se, but Portland is going to see a correction in the near-term.

[Nell Plotts]

From you mouth to God's ear.

[pdxMIKEpdx]

I predict that there will be a huge surge in people trying to buy homes as soon as mortgage interest rates start to go up, and as they get higher, house prices will start to fall.

But, the days of finding inexpensive housing in Portland, especially in the desirable neighborhoods, are totally over.

I also think that towns cities along the I5 corridor will see some large growth (commercially and residentially) as soon as Portland outprices itself.

[patches403]

Originally Posted by jjpop

Oh, yeah, I'm with you on that. Our house value has increased about 20% (maybe more) since we bought it in 2009, so we could do pretty well if we sold. But there's no way I would sell now, mostly because the inventory of homes we would want is so low we would have a hard time finding a new place.

What I was referring to with that question is that it seems like the American habit of moving every 7 years, or whatever the statistics say, seems to not be playing out this year.

I don't know if this is a bubble or not. I do think the price increases seem unsustainable, but I wouldn't expect prices to decrease. If anything, I bet they will just flatten out. What would make prices decrease? If people put their houses on the market and they don't sell. Why wouldn't they sell? Because people stop moving here. But I don't see that happening... UNLESS... the climate refugees decide after a couple of normal, or, dare I say cooler than normal winters, that they miss their old climate.

I agree that at the worst prices will stagnate or more likely just continue to grow slowly. I doubt prices will continue for much longer to climb like they have been this year, but they aren't going to drop either. There is far more demand than supply for housing here and that isn't going to change anytime soon. Far more people desire to come to Portland than desire to leave it and most of the people coming have no problem paying what it costs to live here. For many of them its still cheaper here than wherever they came from.

[VTHokieFan]

Originally Posted by pdxMIKEpdx

I predict that there will be a huge surge in people trying to buy homes as soon as mortgage interest rates start to go up, and as they get higher, house prices will start to fall.

But, the days of finding inexpensive housing in Portland, especially in the desirable neighborhoods, are totally over.

I also think that towns cities along the I5 corridor will see some large growth (commercially and residentially) as soon as Portland outprices itself.

Perhaps Scappoose becoming a bedroom community like Hillsboro

[CanuckInPortland]

Originally Posted by VTHokieFan

Perhaps Scappoose becoming a bedroom community like Hillsboro

I think Scappoose could almost become a bedroom community for Hillsboro already considering the commute over the mountains to Intel is fairly direct.

[Bluesmama]

Hillsboro just purchased 400+ acres off TV Hwy for large housing development of either 8000 people or 8000 homes (likely people), with no traffic plan! You can't do much to TV Hwy because of the railroad, which would leave razing the other side, which is one of the few remaining viable communities for lower-income residents AND commercial. Don't know what they'll come up with for traffic management, but to make this decision without thinking it through is irresponsible and even cruel. I am so pi$$ed off about this it isn't funny!