First Time Buyer (foreclosures, mortgage, mortgage, sales)

[Moosicman]

I will be moving to the Portland, OR area in a few months for my wife to start a PHD program. We'll be out there for at least 5 years. Housing is very expensive in that area, and I'm torn between buying or renting.

Rent for a nicer 1 or 2 bedroom looks to be anywhere from 1,200-1,700. 2 bedroom condos or townhomes that are updated are running between 185,000-230,000. These numbers are very similar to what homes were selling for in 2007.

I'm afraid that if we buy something the market is going to tank and then we'll never be able to get our money back since we don't plan on staying there for a very long time. I'm also not a fan of paying 1,400 to rent a place and gain no equity.

Anyone have any advice as to how they would handle this?

[Pfhtex]

I live in Lake Oswego. This market is not tanking -- there is not a prevalence of ARM loans, no 100% financing, many sales involve big down payments, so the threat of mass foreclosures is not a serious one, IMO. California transplants will not slow down in the next 5 years.

First, on a deal like yours, you make your money when you buy it. I work with several Real Estate companies that specialize in stuff like this. It's worth a conversation. So many areas are turning, that if you buy in the right location, you will do ok.

Purchase with a Realtor - - and a down payment, go with bi-weekly payments to further push down the balance, then FSBO your way out.

[cargoman]

Good luck with that! I could not afford anything in Portland last fall with more than two bedrooms.

[rational1]

A few thoughts:

- there's no guarantee of a 5 year Ph.D. program (qualifiers? support?)
- a recent article I read suggested that housing in Portland is a near-crisis situation, with big increases in rents and prices
- your rental and housing prices sound pretty low to me (I don't live in Portland, though, I just read about it)
- depends a lot on what YOUR income is.

[Kayela]

I live in Seattle which is a similarly hot market. We were always somewhat against buying - preferring the mobility and low maintenance lifestyle of renting. However rents have gone through the roof! The amount rents have gone up over three years, let alone 5 was enough to convince us to buy, and we're so glad we did. Our mortgage is now significantly cheaper than rent would be on a similar place (even taking into account maintenance).


Buying isn't always a better deal, but when both prices and rents keep skyrocketing, it's good to lock something in. The downside is that you better like what you buy because it's' hard to buy anything right now, and something you could afford yesterday may be out of range in a few months. For you, the upside is that you don't intend to stick around so the money you put into the purchase (less closing costs) will continue to appreciate at the rate of the Portland housing market, then you can cash out and have a nice down payment elsewhere.


Portland isn't a 'bubble'. These prices aren't the result of ninja loans or interest-only loans with ARMs. Even if the market does slow down, buyers have plenty of equity - you won't see mass foreclosures. The current market is a result of a strong local economy that is attracting an influx of workers for good-paying jobs. You'll be competing against them, so be prepared with a hefty down payment and solid financing because otherwise no one will even consider your offer.