will I miss the housing affordability window? (Portland: to rent, condo)

[dadr]

I wrote here several months ago with concerns about moving cross country and trying to buy a home & support a family of 4 on $50K while still being able to live in the city proper, near downtown/OHSU. I didn't honestly think I could do that very easily even after deciding to rent, if I wanted to be financially secure and be able to pay down other debts, build savings, etc.

Therefore, I decided to take a position back here in the Midwest which will be a 4 year commitment. However, in the past few months I've seen home prices plummet on the West Coast (I was also looking at Seattle and San Diego) with projections of a 50% price decline, which may have pushed me into the affordability range. I'd like to potentially settle in Portland but will not be able to for about 5 years; I'm wondering if I missed an opportunity to buy at the supposed bottom next year?

[karlsch]

Originally Posted by dadr

........... I'm wondering if I missed an opportunity to buy at the supposed bottom next year?

The only possible answer to your question is, nobody knows.
http://reason.com/news/show/129049.html

[scone]

Originally Posted by karlsch

The only possible answer to your question is, nobody knows.

Check. Welcome to capitalism. Here's risky proposition A, and risky proposition B. Choose one.

[ozymango]

Originally Posted by dadr

I wrote here several months ago with concerns about moving cross country and trying to buy a home & support a family of 4 on $50K while still being able to live in the city proper, near downtown/OHSU. I didn't honestly think I could do that very easily even after deciding to rent, if I wanted to be financially secure and be able to pay down other debts, build savings, etc.

I suspect housing in PDX will still be as "affordable" as it is at the moment (down in some areas a bit, up in some areas a bit) at least into later 2009; that being said, it still ain't all that affordable in terms of income to housing expense ratio, and I don't see it getting all that much better.

Or to put something of a positive spin on it based on your particular circumstance: To support a family of 4 in PDX on a (single?) salary of $50K and living in the "city proper," near downtown/OHSU ... that'd be tight. Really tight. Do-able, if you're very thrifty, but still, housing prices in the closer in neighborhoods (OHSU/downtown) are pretty strong over all. Renting would most likely be the only real option, unless you've got some $$$ from selling a home where you're currently at, there's pretty much nothing under $150K anywhere in PDX anymore, aside from maybe a small condo, and then with a family of 4 ... boy that's tight.

So I don't think you missed any major windows, I can see housing prices appreciating more normally in the next few years, meaning things will still be pricey, just not going up 15% every year. Jobs in PDX just don't pay enough to cover that kind of housing increase.

Anyway, in the meantime, keep saving money for a downpayment and check back in 2009 and see how things are doing, I'll bet if you still feel like making the move something will open up. Good luck!

[ozymango]

Oh, I missed that you made a 4-year commitment: No worries, I bet you'll be a lot better off financially by then and if you're still interested, again I just don't see PDX housing appreciating at the last few years rate, it's pricing too many people out of the market.

Yes it's true the Seattle and San Diego housing has come down quite a bit, but it was way expensive to begin with, in the 10:1 median house cost to median annual income ratio (a 3:1 ratio is pretty much what any sane bank will lend you, on a good day). In PDX I think it's about 5:1, not quite as painful but still a major hit on any kind of budget.

[dadr]

Thanks for the insights, ozymango. I should definitely be in a better situation in five years. I'll be a board certified physician when I'm done so the income should go up at least a few-fold, and if prices go down further and appreciation remains relatively flat, I should still be in good shape. I'm just bummed that I couldn't foresee that the housing bubble would burst in time for my move in 2009 (had to make my decision several months ago) and that PDX may be more doable than I thought. I'll have to stick it out in the Midwest for now, but hopefully will be able to look at PDX when I get done.