Portland housing market (Beaverton, Tigard, Tualatin: real estate, apartment complex, rental)

[moveagain]

Used to live in Beaverton area over 10 years ago, now considering moving back , and realized the price of houses has gone up a lot! Anybody can recommend a nice neighborhood that’s safe and not so expensive? Preferably close to the train ... I am single and don’t care about school district

Thanks

[texasdiver]

Originally Posted by moveagain

Used to live in Beaverton area over 10 years ago, now considering moving back , and realized the price of houses has gone up a lot! Anybody can recommend a nice neighborhood that’s safe and not so expensive? Preferably close to the train ... I am single and don’t care about school district

Thanks

In Beaverton or in Portland?

If Portland, I'd look along the orange line in Westmoreland or Sellwood in SE Portland.

Nice and not expensive are mutually exclusive concepts. You just have to decide how far you want to go in the nice direction or the inexpensive direction. If it were me, and i was single, I'd go with location over price. Get a smaller place in a nice location versus a larger place in a less nice location. When you have kids and need the space that isn't always an option.

[Pavlov's Dog]

I would rent. This housing market has a lot more downside than upside potential. Wait for the inevitable correction and then buy.

[pdxMIKEpdx]

Current Portland trend is to rent a smaller two bedroom apartment close to a storage facility.

Funny how the storage place pops up first, then all of a sudden "BOOM", an apartment complex with small retail shops on the first floor pops up right next to it!

Almost like this was planned to happen years ago!

[ccjarider]

Originally Posted by Pavlov's Dog

I would rent. This housing market has a lot more downside than upside potential. Wait for the inevitable correction and then buy.

Based on what wisdom and insight?
Can you advise what stock market will do this year?

What is premise of comment? That someone should buy at market bottom and sell at market top? Good luck with that timing. Housing is a life cost and, if lucky, it MAY be also make someone some money. Too many people overthink the concept though.

Every month of rent is a sunk cost too. Total rent and moving costs can likely hit $20K annually for a family of four in Portland area. That's not chump change either.

Having said all that, prospective buyers should know their market and not pay above market rate. If one is flexible, there are always "deals" to be had. Potential to make $ is usually locked in at purchase, not at sale.

[Pavlov's Dog]

Originally Posted by ccjarider

Based on what wisdom and insight?
Can you advise what stock market will do this year?

What is premise of comment? That someone should buy at market bottom and sell at market top? Good luck with that timing. Housing is a life cost and, if lucky, it MAY be also make someone some money. Too many people overthink the concept though.

Every month of rent is a sunk cost too. Total rent and moving costs can likely hit $20K annually for a family of four in Portland area. That's not chump change either.

Having said all that, prospective buyers should know their market and not pay above market rate. If one is flexible, there are always "deals" to be had. Potential to make $ is usually locked in at purchase, not at sale.

What wisdom? Common sense. Well, everyone knows the economy is cyclical. The current growth cycle is the longest in US history. That would indicate that for every month that passes we are setting a new record and that the probability of the end coming increases. We also know that usually something precipitates an end to the cycle. In this case the Corona Virus seems like a very likely catalyst. It is impacting manufacturing and demand in multiple industries.

As I see it the housing market is usually tied to six factors:

1. the economy - people who have jobs buy houses
2. wage growth - increased wages means increased ability to pay more
3. interest rates - lower rates means you can afford more
4. demographics - population growth means more people needing housing, families with children have different wants needs than empty nesters, retirees have different needs than young singles
5. psychology - if "everyone" expects housing prices to increase or decrease the flock mentality can drive willingness to pay.
6. housing supply and quality - simple supply and demand, if you could build 200,000 more homes in Silicon Valley overnight prices would drop.


Economy - I already mentioned the first one. When it happens is anyone's guess. Would be interested in hearing your thoughts

Wage growth - as everyone knows, this has lagged productivity gains despite the long growth period- probably due to employment markets becoming more global

Interest rates - these have been at a very comfortable level for a long time. If housing costs were a larger component of inflation we might measure inflation differently.

Demographics - this is an ominous one for the US. People are having far fewer children than before and immigration has plummeted the past few years. Short-term probably won't have much impact but the correlation between population growth - economic growth and housing demand is strong

Psychology - very supportive of housing prices right now but this can change overnight as we witnessed in 2008/09

Housing supply - This is currently quite low for Portland and would indicate continued price stability or increases in the short-term.

-------------------------------------------

If one were to buy a house for $500k with $100 down and the market decreases by 10% you've lost half of your equity. If it decreases by 20% you've lost all of your equity. It could be someone who is thinking long-term might not care if they find the home of their dreams but circumstances change. People get laid-off, divorced, die, get debilitating injureis and healthcare costs, sick parents who need to get taken care of elsewhere. Getting stuck with a house under water is a problem. Having to sell a house under water is a nightmare that can have serious and permanent consequences.

In the buying vs. renting equation you also have to factor in repairs and maintenance. That is a big wildcard.

To summarize I have absolutely no idea of how housing prices will change the next month, year or decade but I sold my rental property in NE Portland in December if that gives you any indication of my sentiment. Don't have anything in the stock market either. I'm all cash in the bank waiting for a correction. It may be foolish but I'm not the type of investor who is that concerned with maximizing return. I'm more concerned with mitigating risk and sleeping well at night.

[ccjarider]

Thank you for reply.

Most of the factors you mention may affect real estate pricing short term but long term (>7 yrs), it is a almost a given that one can assume rate of appreciation at inflation plus 2-3%.

It is not a given I grant you, but 100 yrs of history (with all the wars, economic and political cycles etc) show that the assumption is pretty accurate and indeed in "growth" areas too conservative.

I do not know if Portland is a growth area for future but it has been since 1970's. I think new Federal tax regulations limiting state deductions and State gov't's continued attacks on livability may hamper Portland Oregon desirability to some degree but I do not know to what extent.

Bottom Line: I would stick with long term proven safe assumptions and not overthink all the potential "noise" for which none of us has a crystal ball. If OP wants to buy for whatever reason, I recommend they consider doing so if/when the right scenario presents itself.

PS: You asked my thoughts on economy? I do not see recession nor inflation on the horizon. Economy will continue to grow at 2.5-3.2%. Wages will increase for marketable/needed positions but automation and AI will continue reducing positions in other sectors. Most people move through different phases of jobs anyway. There is too much emphasis on wage growth stats in the news as it assumes we all work the same "job" for 40 yrs. Most people do not.
People gain experiences/skills and move up the ladder so to speak and make more $ all the time. The stats are kind useless in the real world.

Europe will remain sluggish as they do not embrace capitalism and have too many socialist programs hampering their growth plus they have reduced their rate of immigration and do not replace themselves.

China will slow down as the Party will not be able to deal with increased demands for personal freedoms and due to higher wage costs, foreign firms may reduce manufacturing capacity in China and move to new areas.

The USA will likely remain the best place to invest as technological innovation, immigration and generally, a more Laissez-faire approach to business will always draw the most opportunities.

[fortunatus]

Tigard
Tualatin

[MDCB]

Originally Posted by ccjarider

Thank you for reply.

PS: You asked my thoughts on economy? I do not see recession nor inflation on the horizon. Economy will continue to grow at 2.5-3.2%. Wages will increase for marketable/needed positions but automation and AI will continue reducing positions in other sectors. Most people move through different phases of jobs anyway. There is too much emphasis on wage growth stats in the news as it assumes we all work the same "job" for 40 yrs. Most people do not.
People gain experiences/skills and move up the ladder so to speak and make more $ all the time. The stats are kind useless in the real world.

Europe will remain sluggish as they do not embrace capitalism and have too many socialist programs hampering their growth plus they have reduced their rate of immigration and do not replace themselves.

China will slow down as the Party will not be able to deal with increased demands for personal freedoms and due to higher wage costs, foreign firms may reduce manufacturing capacity in China and move to new areas.

The USA will likely remain the best place to invest as technological innovation, immigration and generally, a more Laissez-faire approach to business will always draw the most opportunities.

Well thought out arguments on both sides! Bravo!

I personally think given climate change, the PNW and mild climate/good amounts of water will help maintain value here also.

[texasdiver]

What you get today in Tokyo for $950/mo: https://youtu.be/G7jkFNUoNu8
What you get today in Portland for $950/mo: https://www.apartments.com/1010-nw-1...nd-or/3vfp3zd/