Friday, October 25, 2019

Gresham is a hot spot these days

I started my real estate career with a local company, who's office was in downtown Gresham...thirty years ago.  Gresham had a sleepy, small downtown, a few restaurants and businesses, and some vacant storefronts.  This was before the MAX light-rail, and back when G.I. Joes was still selling us our camping and sporting equipment.

These days, Gresham has a bustling downtown with plenty of shops and restaurants, including a farmer's market and brew pub.  Some old favorites are still around too; M & M Cafe, and The Glass Butterfly, to name a few.

As folks have been priced out of closer in neighborhoods, Gresham, Troutdale and Fairview have caught the attention of buyers and real estate agents alike.  With established neighborhoods and good housing stock, buyers are liking all that, plus larger lots, the downtown area, and better access to Mt. Hood and the Columbia River Gorge.

As some of our market is slowing a bit, as seen in lower increases in the average sale price, Gresham/Troutdale, along with a few other outlying or suburban areas, has seen a pretty good increase in the average sale price.  While overall, the Portland area has seen a 1.9% increase in the average sale price in the last twelve months,  Gresham/Troutdale saw 4.3%,  Beaverton/Aloha 5% and Columbia County's average sale price increased 4.5% in the last twelve months.

Similarly, Gresham/Troutdale's average days on market 45, as compared to the overall Portland area's 55 days on market.

And, as you might imagine, I've just listed a great house in Gresham.

2916 NE 26th St, is a three bedroom, two and a half bath split level house on a HUGE lot.  Priced at $359,950, its pretty affordable.  With newer double paned vinyl windows and a high efficiency heat pump/furnace combo it stays pretty cozy.  The .27 of an acre yard has room for all sort of stuff; dog run, garden beds, RV parking, sand box, hot tub hook up etc.

I'll be there for an open house on Saturday, October 26 from 1:00 - 3:00pm.  Come check it out!  And if you have questions about Gresham and east Multnomah County, give me a holler.

Tuesday, October 15, 2019

What's the deal with Opendoor and Zillow Offers?

These companies are referred to in the industry as ibuyers; instant buyer, internet buyer or investor buyer.   They will make a cash offer on a house, site unseen.  Usually, a homeowner or their agent will request an offer through a website or app.  The offer is then sent to the buyer within 24-48 hours.

While their advertising touts no real estate commissions, Opendoor’s average service fee, in the Portland market has been 7.1%.  Realtor’s aren’t allowed to discuss specific commission rates per the FTC, but trust me, many folks charge fees less than this.  Zillow Offer’s fee is also around 7%.  Once an offer is accepted, the ibuyer will have an inspection done by an employee, not a licensed, third party inspector.  Similar to a “regular” transaction, repairs may be asked for and negotiated.  Close dates are usually set by the seller and can be as soon as 10 days, or up to 60 days.

These quick to close, cash offers can certainly have a place in our market.  While the seller may not get top dollar for their property, they can get certainty, convenience and control.  You’ll know the amount of your proceeds pretty quickly, can control the close date to your needs, and don’t have to be inconvenienced by multiple showings and open houses.  Have a busy family where keeping the house show ready and accommodating showings is hard?  This type of transaction might work for you.  Similarly, if you need to sell your home to buy your next home, working with an ibuyer can make that process easier and less stressful.   Or maybe you’re relocating out of the area on short notice; an ibuyer make things quicker and easier.  

If the idea of possibly leaving money on the table will drive you crazy, an ibuyer may not be for you. 

A few things to know.  Currently, in the Portland market, Opendoor is buying in the area from Forest Grove to Sandy, and the Columbia River to Newberg (they are not yet in Washington).  They’ll only buy homes that were built in 1960 or later, priced from $150,000 - $550,000.  They won’t buy anything behind a locked, shared entry; think condominium or gated community, and they won’t buy anything with a pool.

Once a sale closes, the house will be re-listed for sale through their proprietary systems.  You might see Opendoor’s signs of the 24/7 open house.  Buyer’s can access the house themselves, without an agent, using their app.  Some have security concerns about the public going in houses unaccompanied, and worry about squatters are assault crimes . As far as I know, we haven’t had any of those issues here, but in the Phoenix market (where Opendoor has been for several years), there have been such issues.   

Also to know, when Opendoor buys a property, while they do their own inspection, they usually do not test for radon, do sewer scopes nor oil tank searches.  Buyers should be sure to have these inspections done as part of their purchase.  

In general, the ibuyer model is meant to make money on the transaction fees (that 7% noted on the Portland market).  They are not considered flipper.  That is, the business model isn’t necessarily about buying low and selling high; though I’m sure they endeavor NOT to lose money on the buy/sell. Ibuyers are seen as technology companies, not real estate companies, and have LOTS of financial backing. 

Lastly, in selling to Opendoor, unless you have pre-arranged to engage and pay a Realtor, you will not have your own representation.  Opendoor will, understandably, be acting in their own interests.  Similarly, if you choose to buy an Opendoor property directly from them, you will not have your own representation and counsel through the offer, inspection and closing process.  Buyers can choose to be represented by their own agent.  

Most of this piece focuses on Opendoor as Zillow Offers is quite new to our market and less information is available.  Offer Pad and Redfin Now are active ibuyers in other markets, but  have yet to come to the Portland area. 

If you have more questions on ibuyers, I’d be glad to chat. 503-312-8038.

Wednesday, October 2, 2019

Historic research in Portland

I had a listing recently,  with two houses on one city lot in an older, close-in neighborhood.  In the buyer's due diligence, she discovered the city did not show building permits for the two structures.  Both were built somewhere between 1895 and 1900, so its not surprising that records might be sketchy.  And, it can be tricky to attach building permits for two address to one property.

This was a concern to the buyer as she would be rehabbing these old houses, and would need permits. If the city didn't recognize the existence of the houses, she would be unable to pull permits for her work.  The Bureau of Development Services did say, if we could prove the houses existed prior to 1928 (when certain zoning and building regulations were codified), we could go through a process to, in a sense, grandfather the houses in.  They provided a list of acceptable evidence:

Utility bills
Income tax records
Business license
Listings in telephone, business or Polk directories
Advertisements in dated publications
Building, land use or development permits
Insurance polices
Dated aerial photos
Insurance maps that identify use or development (Sanborn maps)
Land use and development inventories prepared by a government agency.

Mind you, the zoning allows two houses, so the issue was not about zoning.  And the seller had been paying taxes on two houses. The issue was whether or not these particular houses were allowed to exist.

As the buyer had already been unable to find the permits at the Bureau of Development Services,  I knew we had to look elsewhere.  I plotted a whole day, if necessary, to this project, and set off for downtown; City of Portland Archives and the Oregon Historical Society were to be my first two stops.

Basing my starting point on which office closed sooner than the others, I started at the City of Portland Archives, located at 1800 SW 6th Ave #550 .  I read their policies; no pens, be prepared to put your purse or bag in a locker, no flash for photos, no food or drink.  I found my way to the 5th floor office atop a Portland State University building and was greeted by a locked door. I was let in by a staff member and then buzzed in to the public room; imagine a small library room, with glass windows looking in on the actual archives.  The staff person was super welcoming, helped me get signed in and to stash my bag in a locker.

The staff person who helped me was so helpful, and enthusiastic about her job.  As I described what I was looking for she thought of the various ways we could get at the data.  We ended up finding a variety of data to show they houses both existed prior to 1928.  We found a card catalogue index card of permits for both houses, dated appropriately.  The Multnomah County Library has, on line old maps, which the archivist accessed for me.

There are beautiful old books of hand drawn maps for each tiny section of a neighbourhood.  In these, I found the name of the owner of the subject properties, with which we could then cross reference.  And remember, many of Portland's streets are renamed when the cities of Portland and East Portland were combined.  Luckily, I new the historic name of the street on which the properties are located.  Looking at the old maps can be disorienting; SE Powell wasn't very big. and dead ended in the Brooklyn neighborhood Ross Island Bridge ( it opened in 1926).

From here, there is a process whereby we submit they evidence I found (in the city's own archives), and pay a $1100ish fee for the city to review their own documents and "approve" the two houses.  As part of our negotiations with the buyer, the seller will do this before closing.  Mind you, I'm thankful for the archives and how extremely helpful the staff there were.  I am a bit perplexed at paying a fee for the city to look at their documents I rounded up, so they can, in a sense, correct their own error.  The alternative would have been a huge reduction in the sale price, or losing that buyer.

If you've been in a similar position, or have run into road blocks on property information, remember, the Bureau of Development Services has incomplete files, and, while super helpful and convenient, has limited historic information.  

I'm not an expert (at all) on property research, but if you have questions, I'm glad to help.

Thursday, September 5, 2019

Trends in Portland's multi-family housing market

CoStar, a real estate analytics and etc company recently released an article showing a pretty significant drop in out of state investment in our mutli-family housing market.  This decrease is attributed to Oregon's recent rules restricting rent increases, the City of Portland's tenant protection laws and the City of Portland's inclusionary zoning (requiring a percent of larger projects to have affordable units etc).

Given that much of the increase in our rents was driven by out of state investment here, I'm not so sure this is a bad thing.  I'd wager that rental housing owned and managed by folks in our community may better serve our community.

We do though, need investment in rental housing; especially affordable rental housing.  The City of Portland, and Metro both have passed housing bonds in recent years, and we are starting to see housing projects planned and built using those funds.  Some funding requires matching funds from private resources. This can include charitable foundations and trusts, along with money raised from donors.  And, like it or not, actual investors look for a return (profit) on their investment.

Though housing is a human right, it does cost money.  Money, which needs to come from somewhere.  Our current, capitalist system, doesn't provide, in a big way, for housing resources.  Instead, in addition to public/government resources, real estate investors play a role in building and developing housing.

I'm hoping, if its true our various housing regulations and restrictions have discourage out of state investing, that we can foster local investment in rental housing.  How do we do that?  I don't know.  I do know the tenant relocation rules, upcoming restrictions on tenant screening and state restrictions on rent increase and tenant relocation have pushed some small time housing providers to get out of the business.  The rules are complicated enough that most housing providers I know will choose to hire an attorney whenever they need to move a tenant out.   This adds cost  through legal fees and delays, to already thin margins.

Is the future of rental housing completely corporate?  Are there enough local corporate investors to make up the loss of out of state investors? How small of a return is an investor in housing willing to make?

Portland's housing non-profits have been doing a good job of getting new projects approved and built.  The funding provided by the housing bonds bring more projects in the coming years.

Thursday, June 13, 2019

The suburbs are hopping!

RMLS just released the stats for May 2019,  and boy did we have a busy May.  Our closed sales were up 5.9% over May 2018, and 23.2% over April 2019.  It was our busiest May since 2006. I wonder what that is about.

Pending sales are up a bit, and the year to date median price increased a tad 0.7% over the same time period in 2018.

The most active areas (% increase in pending sales and price increase %) were Southeast Portland (with a lot of that activity in outer Southeast), Gresham/Troutdale, Oregon City/Canby, Beaverton Aloha, Columbia County and Yamhill County.   Notice anything?  These are primarily suburban or rural areas.

We often tell buyers frustrated at prices and competition close-in, to drive until they can afford it.  I think that is what is happening here.  The increased activity, but very slight increase in prices can mean that more buyers are buying reasonably priced properties.

Click here to see the complete RMLS report.

Monday, June 10, 2019

Thinking about an accessory dwelling unit?

ADU's are a big topic these days.  They can be a way to add a rental unit to your property, add a guest house for your own use, or even a unit to be used as a short term rental (Airbnb, Vacasa etc).

Different municipalities have different regulations, so be sure to research your specific location. For instance, in the City of Portland, some system development charges will be waived IF you agree not to use the ADU as a short term rental .

Because, by definition, ADU's are added to an existing property, they are very situational.  The City of Portland has different rules, depending on the existing structure, size,  lot size, orientation on the lot, and so on.   For this reason it is helpful, and important to work with an architect and builder who have experience in designing, permitting and building ADU's.

Kol Petersen wrote Backdoor Revolution, A Definitive Guide to ADU Development, which can be a good place to start.  His website also has a bunch of resources, and he is organizing the upcoming ADU tour, for which you can register here.

And here are a few more resources. Folks who will do consults, plans and such.

Schuler Smith, Polyphon Architecture and Design:  503-208-5678

Aram Irwin  503-544-5971   Their website has a form to fill out, and they’ll schedule a “conversation” with you within three days.

The City of Portland has a nice document about converting attics and basements to living space.  And a bunch of information about ADU's. 

Does an ADU add value to a property?  Yes (unless it eats up the whole yard).  We are seeing lots of multi-generational households, where a separate living space is welcome.  In addition, folks like the ability to supplement their income with either a short or long term rental. 

Adding an ADU should be done mindfully, taking into account the lot, neighborhood and setting.  Projects with site work incorporating the ADU into the property, while giving each dwelling some private outdoor space, are best.

Don and I will be taking the toour on June 22nd.  Are you?  And in the coming months we'll be researching and planning to build an ADU ourselves.  If you've got questions, or ar just ADU curious, get in touch.

Tuesday, June 4, 2019

Those buried oil tanks...still

It has been years, I mean years, that we've been dealing with the fallout, or seepage, if you will, of buried oil tanks.

At this point, many tanks have been decommissioned, by someone, using some method.  There may, or may not have been some sort of paperwork may have been generated.  And the homeowner may, or may not have kept that paperwork somewhere.

I can't tell you how many houses I have sold (representing the buyer or seller) where the seller is pretty sure the tank was done at some time.  They have no paperwork, but are sure its fine.  Enter the buyer, who wants proof that the tank was decommissioned DEQ standards, and registered with DEQ.

That last step of registration with DEQ can be a lifesaver.  Once its registered with DEQ, even if the paperwork is misplaced, all is good, and proof of decommission can be provided.  Registration is usually done as a part of a decommission, and is handled by the company completing the decommission.  The fee for registering with DEQ has varied over the years, but has generally been below $200. We just did one which was $195.  Don't cheap out!

In the absence of paperwork, the oil tank decommission needs to be verified by searching for the tank and actually looking at it.  This means sampling the soil beneath the tank looking for leakage, digging down and opening the tank to verify the work was done, and done properly.  Allowing for scheduling, lab results, and so on, this process can take a few weeks, adding costs and delays to the transaction. Then the invoice and certification letter (from the company performing the work) will be generated, and the decommission (if it is agreed upon) submitted to DEQ.  It can take weeks to months for DEQ to issue the actual certification.

Not all decommissions involve removal

The cost of such a verification will vary with the conditions.  Where is the tank? Was the soil tested before, or maybe not, in which case there could actually be something to clean up.  Is the tank under a deck, patio or in some other location that will prove challenging?   Who restores the patio, landscape after the work is done?

In a recent transaction, we lucked out, with the tank being under a fairly high deck, so we weren't disturbing the deck. We got clean soil samples, and when they opened the tank, they could see it had been properly decommissioned!  Hooray!  The cost was $1290 to the seller, and we delayed our normal close date by ten days.

If you are thinking of selling, and think you had a tank at one time, but can't find the paperwork,  get in touch,  If I represented you on the purchase, I'll most likely have the information in my files.  If there was an actual leak, and clean up/decommission, I can usually find that information on one of the DEQ databases.  And if the decommission was registered with DEQ I can track that down.  Sometimes I can track down the company that did the work and get paperwork that way.  And maybe you'll have the paperwork in an old email or in the cloud.  If not...its best to get the decommission verification done before marketing the property.  This avoids delays in closing, getting the buyer involved in the process and we'll have that invoice and cost.  In some cases, the cost can be paid from your proceeds at closing, so you don't have to write the big check now.

If you are in the City of Portland, Portland Maps may show a permit for an oil tank; buried in the yard, or in the basement.  The lack of a permit doesn't mean there is no tank, it just means there is no permit.  And yes, plenty of properties had not one, but two buried tanks. Double bonus points for that (not really).

The Oregon Department of Environmental Quality has some good information for home buyers and sellers.    If I represented you in your purchase, and you have questions, I'm glad to see what I have in my files.  If you bouhgt trough someone else, I'm glad to see what I can find in the various databases.