Attics; is that living space or what?

I sell a lot of older homes in Portland's close in neighborhoods.  Many of these houses have had various increments of work done over time.  When a house was built, it may have had stairs to an unfinished attic, used for storage or maybe as a sewing room.

Over time, subsequent owners may have added wall board, a few outlets, and maybe gotten some heat up there.  Perhaps another owner added some insulation, and decided it was reasonable to use the space as a bedroom. 

In some cases, someone added a half bath; no big deal, just to avoid going downstairs in the middle of the night.  And then another owner added a shower to that half bath.

While not all of a sudden, it was actually over decades, the unfinished attic became a finished attic with bedroom and bath.  Or is it?

Over the same decades, buyers have gotten pickier about wanting permitted work, municipalities have become more sophisticated about the permitting process and permit records, and insurance companies may have gotten stricter about paying claims in unpermitted spaces.

How is a buyer to know?   In the City of Portland, many permits are on portlandmaps.com, but not all.  Other jurisdictions also have pretty good portals for checking permits;  Clackamas County , Washington County  It is best though, for the buyer to go to the permit office and ask to see the records.  Checking the usage or property description in municipal databases can also be informative.  Is the house considered a one story with attic?  With finished attic?  What is the ceiling height like in the attic?  Are the stairs crazy steep and narrow? 

Many of our building codes have to do with fire and earthquake safety.  The city isn't just being picky when requiring a decent stairs way.  Can people safely get up or down?  Are there sturdy handrails? Could a fireman, with full gear, get up the stairs and maneuver in the attic?   When the space was "finished' was the proper fire blocking done to prevent the spread of fire? 

Why should a buyer care?  I'd prioritize safety concerns first.  Questionably finished space is probably best not used as sleeping quarters; when we are most vulnerable.  Next, I wouldn't spend money on pretty, fancy finishes in unpermitted space as buyers won't value it to its fullest.  If future building permits come into play, the unofficial finished space may need to be brought into compliance.  And, some buyers may not even consider buying a house with questionable, or unpermitted space.  Perhaps you plan to stay in the house forever, and are only using that upstairs for storage, and the occasional hobby project.  Maybe its okay to leave it as is? 

And then there are appraisals, as completed for the loan process.  While appraisers may not (or may) want to see building permits, they may enlist a set of criteria for considering a room a bedroom, or finished space.  Appraisals do use square footage calculations, so this can matter.  Maybe the buyer and seller agree on a price, even if that attic is funky.  The appraiser may not be willing to include that space in their consideration of value, resulting in a low appraisal.

The City of Portland has a pretty good piece on converting attics and basements to finished space. 

My advice; if you are considering finishing an attic or basement, do so with building permits from the municipality with jurisdiction.  If you have a semi-finished basement or attic, don't over improve it until you know if it is considered "legitimate" space.  Consider going back,and getting previously finished spaces permitted.  Buyers are getting pickier on this.  Addressing these issues before putting your home on the market will give you time to do the right thing, make decent decisions an be far less stressful

Times, they are a changing

Okay then.  iInterest rates are up, inventory is up (highest since February of 2015), the rate of increase in the median sales price is down, the number of pending sales is down, and market time is longer.  Those are all signs of, or contributors to, a slowing market.

Most buyers have more power in the market place than they have in years.  A slowing market, combined with seasonal slowing, leaves sellers who need to sell before the end of the year, in a tight spot.  Sellers currently under contract would do best to stick with that sale, and agree to repairs being negotiated from the home inspection.  It could be hard to go back on the market after a failed sale, and do any better.  I can't say this with enough emphasis.

What IS selling, are houses that have been very well prepared for the market.  While I'm not usually a fan of doing a lot of work before selling, this may be the time to do just that.  Houses that have good mechanicals, are aesthetically pleasing and priced below $400,000, are still in high demand.  Some sellers of these properties are seeing multiple offers, and competitive bidding.

Is this a good time to buy?   Should buyers wait until spring?  Those are tricky questions.   While I don't think home prices will go up so much as to price current buyers out of the market, rising interest rates could lead to less buying power. 

Just as I don't think a college education is for everyone, home ownership doesn't always make sense.   For now, buyers should plan to stay in a house at least three years, and a five year plan would be better.  For sellers, if you're planning on moving in the next year or two, you might consider selling now, and renting until you move on.  We know the market we have now.

If you've got questions about your particular neighborhood, property or situation, I'd be glad to talk with you.

Convenience vs. customized service

I've been doing a lot of thinking about this.  Call me old fashioned, but there are certain services which I'd rather be provided by the same person or team, in the interest of consistency and a personalized experience.

In the age of convenience, "get it now" seems to carry the day.  And sometimes you can have both; the convenience and speed of a drive through coffee place, combined with the ability to make your personalized order; the half sweetened mocha, no whip cream etc.  Zoom Care (and other clinics) offer speedy service, available at a variety of hours.  But you won't always have the same provider, and the cost may be higher.

In health care, I want to see see the same provider who has been treating me.  The exception would be for urgent or super routine care, where the issue is clear and easy; stitches, flu shot, other immunizations, strep throat.  This is a pretty clear case for me, where personal service is important.  And sometimes it may take me longer to get an appointment with a specific provider; the wait being a price I am willing to pay.

Similarly, most veterinary care for my pets, needs to be with the same vet.  In a rush, I once dropped my cat at the vet as she seemed to be in pain and was crying out when touched.  She is the most good natured cat ever, so this was alarming.  Because of my schedule and timing, I was not with her when she was examined, and she was examined by a vet  not familiar with her demeanor.  He was a good vet, mind you.  Talking with him later he said she seemed fine. When asked if she had vocalized during the exam, he said yes, but no more than any other cat might.  But here's the thing.  She would normally purr and snuggle during an exam.  You know, the kind of cat where the vet has trouble listening through the stethoscope for all the purring.  Had her regular vet been available, or had I been there, it would have been clear the cat was in pain.

Aside from health care, where else is the customized experience important?  Certainly for some, myself included, hairstylists might also fall in this category.  For Don, the buzz cut of his quickly disappearing hair can probably be done by most any stylist.  So is it personal care?

I suppose, if one had a vintage, finicky car,  the same mechanic would be important.  Or an old, quirky house; you'd probably want the same contractor working there and knowing the idiosyncrasies.  So, if we all lived in tract homes and drove recent model, mass produced cars, would service be easier, cheaper and still high quality?

What about professional services;  Lawyers, accountants, financial planners, and yes, real estate agents?  Certainly the more specialized the need, the more specialized the service should be.  And the need may not just be personal, it could also be location based.  So I don't just need an attorney who knows me, I need them to know the local laws AND me.  I need a property manager familiar with Portland's tenant protection rules, not just Oregon statutes.

Hotels are an interesting example.  They endeavor to provide customized options to an everchanging client base, at a reasonable or at least predictable cost. But hotels tend to provide choices, by which we can have a customized stay. Some hotels provide both foam and feather pillows, control over HVAC and/or openable windows, coffee set up in the room or at breakfast, room service or a dining room, valet parking or self-parking.  So here, the hotel doesn't know me, nor my preferences (and they don't need to), but tries, within reason to provide choices such that I can customize my stay.

Where are you willing to potentially compromise a customized experience vs convenience?  For me, I don't need the same car mechanic, do want the same providers for most all personal and veterinary care.  I'm fine being served by different folks at the pet supply store I frequent, and certainly don't need or expect customized service at the grocery store.  Though I don't use a dog walker, I think I'd want the same one.    And for professional services, yeah, I want personalized.

An aside about convenience and artificial intelligence.  Auto-fill in online stuff, is that a bonus or a pain?  On your phone, do you have auto-correction and "predictive" set to on? Do you let a program store passwords and credit card info?

Can I paint that vinyl siding?

I have an active listing with vinyl siding.  The color is kind of blah; not offensive, just ahem, shall we say, low profile.

So, the question comes up from potential buyers; can I paint the siding?

The answer is yes, kind of.  Vinyl siding expands and contracts with temperature and humidity changes, more than other sidings (wood, fiber cement).  Because of this, it is important the new paint contain acrylic and urethane resins; that is a latex urethane paint formulated for exterior use.

And, it is suggested the color be lighter, as dark colors retain heat, which can warp vinyl siding.  Hmm.  With a drab, light grey, I'm not sure a lighter color will do much for the aesthetics of this particular property.

As for all exterior paint jobs, cleaning the surface is essential for a good paint job.  Usually, vinyl siding is in decent shape, so primer is most likely not necessary.  And then, its best to do a few good, but not gloopy coats, rather than fewer thick coats.

A bit about vinyl siding. The great thing about vinyl siding is you don't have to paint it.  It is easier to care for than wood; doesn't rot and doesn't need painting.  Usually, when installed, it has a layer of foam-like insulation behind it - makin the property more energy efficent than wood or fiber cement siding.  

Sometimes, trim paint and architectural enhancements can be another way to help a low profile building.  A snappy trim color can go a long way.  Here the property, its the unit on the unit on the right, with the red door.  I think, if a buyer wanted to add pizazz, a fun trim color (in the red family?), would go a long way.

What do you think?

When my values and work clash

I'm thankful.  I enjoy my work, and rarely does my work challenge my values, or vice versa.

It happened this week.  I have a new listing in a close-in eastside neighborhood.  In the first days,  I noticed a homeless camper up the street.  This is not news.  Portland's neighborhoods have lots of homeless campers these days.  Even if we are used to it, homeless campers aren't exactly a selling point for a property.  This particular camp was very neat and tidy, self-contained.  I was thankful for the considerate campers, and paid it little mind.

A few days later, I arrived to hold an open house for brokers.  The camper had moved right in front of the listing. This really wouldn't be a selling point.  I have fiduciary duties to my seller, to work in their best interest.  But man, was I really going to ask this camper be moved just because we're selling a property?!  On the other hand, how in the world would I get this listing sold, with a homeless camper right out front?   ugh.

Later that afternoon, a neighbor to my listing called me, as she was upset by the camper. She had contacted the Portland Police, sent me the link to report the camp and contacted other neighbors.  I did submit a report of the camp on line, and notified the seller (he wasn't occupying the property).  The seller is a good guy.  He did report the camp on-line also.  He also spent some time talking with the gal who was camping; learned a bit about her situation and her resources.  It sounded like she was in a queue for transitional housing and had some support and resources.  He gave her a little money for bus fare.

A day or so later, she was gone, as was her stuff.  Word has it she did successfully get into transitional housing.  While this was not an ideal situation for any of us; homeless gal, seller, neighbor, me, I am thankful for what feels like a decent resolution.

I'm guessing most of you run into situations where your work and your values aren't in sync.  Care to share?

Some finer points of Portland's rent stabilization rules

Portland has had three different iterations of the rent stabilization rules.  The most recent rules are now permanent, and not based on a temporary housing emergency.  Like it or not, effective or not, unintended consequences or not, they are here to stay.

The basics are rent increases of 10% or more per year, or a "no cause" notice to a tenant to vacate, trigger landlord obligations to pay relocation costs to the tenant, should they move.  There are specifics about when the money must be paid, and what tenant obligations are around the money.

Landlords owning only one property are no longer exempt.  Landlords renting out a room in their own residence, or a unit in a multi-unit building in which they reside, are exempt.

Many folks owning one property they are renting out don't think of themselves as landlords, and didn't seek to become landlords.  Often, a life change will have the owner living somewhere else, with the intention of moving back in, or selling in the not so distant future. Think job transfer, or moving in with a partner; temporary job posting abroad, graduate school, sabbatical and so on.  Often, owners like this haven't taken landlord training classes, don't have a go to landlord/tenant attorney, and may or may not have used a property manager.

 In such a cases, a landlord can, at the time a fixed term lease is signed, put in the lease that they will be returning to live in the property, and the tenant is on notice that they'll need to move at that time.  It is required that this be in the original, fixed term lease.  Merely coming back to town and giving tenants notice to vacate as you want to live there, will not provide an exemption from the relocation costs.  In theory, this method also works if you plan to sell, though I've heard differing opinions on this.

 In any case, the relocation assistance fees are as follows:

Studio ...................................................$2,900
One-bedroom....................................... $3,300
Two-bedroom..................................... .$4,200
Three-bedroom (or larger).................. $4,500

These fees must be paid to the tenant 45 days on advance of the move out, or rent increase date.  So,  the required 90 days notice is given, and then 45 days later, the relocation assistance is paid.  This gives the tenant funds with which to place deposits on a new rental.  Since landlords have up to 30 days after a tenant vacates to refund deposit (or provide cost accounting for retained deposits), it can be hard for tenants to pay new deposits without access to funds on deposit with the current landlord.

This is just an overview of the rules, with a focus on the unintentional landlord.  I am not a property manager, nor an attorney.  I have paid attention, taken several classes, and done some reading.  Please consult a property manager or attorney for specific advice about your individual situation.

Late breaking news: the City of Portland is moving toward a registry of rental properties.  Many cities do register rental properties, including Seattle, San Francisco, Eugene and Gresham. I'll write more on this later.

Mid-year market update

RMLS released the market statistics for June.  This gives us a mid-year glimpse at the market.

I usually keep track of three factors, and feel these can give a pretty good sense of the market; median price (and percentage change), market time, and inventory.

The June's median price was $417,900, with the year to date median price at $400,000.  From June 2017, this is up 7.2%, up 2.2% from May 2018, with the year to date percentage change of 6.7%.    In 2017, the median price was $390,000, and the year to date price was $375,000; year to date change of 10.3% .  Its really that year to date percentage change on which I keep my eye.  When I talk about a slowing market, I'm talking about the speed at which our median price is increasing

Market time can also be seen on the chart above.  There isn't much change here; May and June 2018 had the same market times, 2017 and 2018 year to date are the same at 48 days.

Our look at inventory is calculated by dividing the active residential listings by the number of closed sales for the month.  So far inventory in 2018 has been equal to or greater than the two previous years.  Our market usually sees a summer slow down in July and August, and even into the fall.  It looks like that slow down came early this year.

The rate of increase in prices is slowing, we have more houses in relation to sales, and our market time is holding steady.  I'm glad to see a slowing in that rate of price increases.  6.7% is still a healthy rate, and outpaces the increase in wages in our area.  The price increase, combined with rising interest rates can make it hard for buyers to save as quickly as the cost of buying is going up.

Is it still a good time to buy?  I think so.  But, don't buy thinking you can sell in a year, without doing any work, at a profit. If you're buying today,  plan to stay for three years or more.  Is this a good time to sell?  Yes.  But don't bank on multiple offers and bidding wars.  Yes, we do still see multiple offers and bidding wars.  But we also see overpriced houses sitting, lowering their prices while buyers stay away.  Buyers worry about what is wrong with that hasn't been snapped up.  Sometimes, the only thing wrong is the price.

As always, I'm glad to answer any question you might have, or to talk about your specific situation.  leslievjones@gmail.com  503-312-8038.

Government Camp; summer version

Many of us think of Government Camp, and the surroundings as a winter playground.  Or a place to stop through on your way to or from camping.

We're just back from a lovely few summer days playing in and around Government Camp.

We stayed at the lovely Grand Lodges at Collins Lake.  While in Government Camp, the property is slightly west of the hubhub; all the conveniences a short walk away, but we were in a welcome quieter spot.  All but the top floor units are spacious, 1800+ sq ft, one level units, with three bedrooms and two roomy bathrooms (the top floor units also have a 300+ sq ft loft, and gorgeous soaring ceiling in the living and dining areas).  There is a fab kitchen, large dining area and big sitting area with fireplace.  There is a deck across back. overlooking sweet, little Collins Lake.  The property has covered, secure parking, elevator, pool house with pool, sauna and hot tub.  Oh, and there is electric vehicle charging just across the way at Ski Bowl.  We used the CHAdeMO, fast charger for $7.50 a session; no waiting, no issues.

We were six; three couples, and were quite comfortable in the space.  The kitchen was easy to cook in; and nicely connected to the rest of the unit, so the cook didn't feel left out.  Thankful for the well stocked kitchen, we didn't want for a particular utensil or specific pot.

Our first day, there was indeed a run to the Huckleberry Inn for baked goods, that may or may not have occurred on subsequent days. And then we headed up to Timberline Lodge, for  a hike.  Half our party had not been to the Lodge before, always a treat to be with first timers.

Our hike was to the Zigzag Canyon Overlook, really just a part of the Mt. Hood Loop trail.  As with most hikes from destination resports (Crater Lake felt much the same way) the trail is quite crowded to begin with, and thins out quickly.  It is a 4.4 mile loop, of mostly easy hiking.  There is a fair decent to the overlook, so be sure to save energy (especially if you've got younger kids along), for the return trip.  From the Lodge, head out to the terrace, and go left.  There are a few options, most of which lead to the same place.   There are, of course, great views as you start out, some lovely treed parts of the trail, and also sparse, exposed areas.  The overlook itself is stunning.

Heading out. Mt. Jefferson in the distance.

Zigzag Canyon

Then it was back to our accomodations for lunch and pooltime!  Dinner that night as with our previous night, was in.  There was pie!  The Huckleberry Inn had fabulous apple and huckleberry pie.

Next day, some in our party went back up to Timberline Lodge to ride the magic mile chairlift up to 7000 ft. The ride is quite scenic, with a fee of $54 for a family of four.   Others headed down to hike the Salmon River  out of Welches.  The Old Salmon River Trail is also a nice one, and probably better if you have small kids along.

We splurged our last night, and had dinner in the Cascade Dining Room at Timberline Lodge.  We were pleasantly surprised with a superb meal.  Sometimes, destination resorts have cache, and a beautiful room, but the food can be a bit blah. Not the case at Timberline!  Our party of six all enjoyed the meal; salmon, pasta, rib eye, flat iron steak and mussels.  Plus salads, bread and a succulent lemon creme brulee.  We were interested to learn that the dining room has their own beef program; owning the land, cattle and process.  Those who had steak said it was fabulous.  The service was great, attentive, but not too. The food was delicious, and the ambiance can't be beat.  If you can, treat yourself.

We took the long way home, via Highway 35 and a stop at  Idiot's Grace, Memaloose Winery and Tasting Room  in Mosier.  It had been several years since I've come down Highway 35.  The Hood River valley is lovely.  We were a bit early for fruit picking , aside from cherries.  Idiot's Grace Winery is a small, organic winery.  Their basis of operations used to be across  the river in Lyle, until a few years ago.

I'm not a wine drinker, so can't comment on that.  We were, though, at a private event there, and our wine enthusiast compatriots were impressed.  The vintner gave a variety of interesting talks, and a tour of the spread.

All in all, a fun, easy few days, rather close to home.  The Pacific Northwest is so lovely in summer, it's nice to stick around.  Do you have a favorite easy get away to share?

Weird Home Tour

We did the Weird Home Tour last weekend.  The tour originated in Austin, TX, and has expanded to other cities.    This tour benefited Central City Concern, who provided volunteers to staff the event.

This was the first weird home tour in the Portland area.  Some homes are on the tour by virtue of their unique architecture or form; think the airplane, shipping containers, domes etc.  Others are there based on the unique decorating style.  As a real estate broker, and the least creative person you'll ever meet (I can suck the creativity out of things), I'm drawn to the unique architecture.  Oh, I enjoy seeing weird decor, and there was plenty of that.

The real draw for us was the airplane house.  OPB did a story on it a few years ago, you can hear that story here.  The house is located in the woods, on the south end of Hillsboro.  We set out there first.  It was a lovely morning for a drive, and we really enjoyed getting outside the urban growth boundary on that side of town.  While there was decent signage, there wasn't clear information about parking, so there was a bit of a cluster getting parked on the narrow dirt road among the trees.

Those foundation cribs are doing some work

Doesn't your house have a cockpit?

Open the pod bay doors Hal.

The interior of the plane is primarily hollowed out. The overhead luggage bins have been removed, and a lucite/clear plastic floor put in.  Its cool to see the inner parts of the plane. In places, the "wall covering" on the inside walls has been removed.  Its pretty much a long, one room dwelling, with a somewhat makeshift shower. and the planes small bathroom is indeed, the bathroom.  The dwelling is hooked up to a septic/cesspool system, has running water and electricity.

The second house we went to was named Nautical Moderne, which was a cool, ranch with basement.  Predating mid-century modern, it for shadowed some of that styling, while being anchored a bit in an older style.  The homeowners has fabulous decor that really rounded out the feeling.  It had a great retro kitchen, with what must have been a first generation dishwasher.

Super duper streamlined

And this original banquette

There is a fun gallery of all the houses here

The last house we went to was "Serendipity"; billed as an accessible house.  Which it was, kind of.  It was very much a work in progress.  There were some interesting design features, providing accessibility, but I'd guess the house was a bit rough for most.

There were six houses in all.  We didn't make it to all of them.

For the first year, I thought it a fun tour.  The homeowners were all present, and quite gracious in opening their homes and so willing to talk about their passions and their projects.   I'll look forward to next year's tour.  I'd love to see more "weird" architecture.  I know the Portland area has plenty!  Do you have a wierd home, or know someone who does?  Sign up for next year!

Solar Update

We upgraded our solar "system" in March 2018, to 10.05 KVA system; 30 panels.

Here's the layout of our system. The set to the right is on the east side of the roof, the center set on south (the original solar was only on the south face), and that one little panel is on the west (added only because Don wanted the system to be 10 KVA or more).  

KVA is the non power measure of the voltage multiplied by the amperes.  KVA is not a measure of true power it is a measure of the level of apparent power.

A kilowatt hour (kWh) is a measure of energy. So a 1,000 watt drill needs 1,000 watts (1 kW) of power to make it work, and uses 1 kWh of energy in an hour. That's why, if you leave a TV or computer on standby, it is still using power and creating a kWh cost on your energy bill.

A MWh is 1,000 kilowatt-hours (kWh). An MWh is the amount of electricity generated by a onemegawatt (MW) electric generator operating or producing electricity for one hour. On an electric bill, electricity usage is commonly reported in kilowatt-hours.

Since installing our upgraded system in late March, we have generated 6.61 MWh.  That's the equivalent of 257.71 trees planted or 10,231.85 pounds of CO2 emissions saved (or prevented from being created).

Our electric usage from May 20 - June 19, 2018 was 575 kWh.  From 5/18/18 - 6/21/18 (my tracking is easiest looked at by week or month),  our system generated 1276.43 kWh.  So, we generated more than twice our usage.    This ratio has pretty much held true since the system was turned on in late March 2018.

Clearly, winter, with more cloudy days and shorter daylight hours, will have our usage going up, and our generation decreasing.

Our plan, with PGE, provides for them to buy power back from us at the same rate at which we pay them.  Overage from high solar production is banked, to cover those winter months.  But any overage at the end of our contract year (end of March), transfers to those enrolled in low income assistance programs.

The fantasy, you know, in my energy nerd of a household, is, if we are really generating a large surplus, as our natural gas appliances age and fail, we'd replace them with electric versions.  Currently, (hah, see what I did there?) we have a gas hot water heater, dryer, stove and fireplace.    The electric versions of the hotwater heater and dryer  less expensive to buy, and could potentially be powered at no charge.  The gas fireplace and gas stove will most likely remain powered by gas, in any case.

And yes, our electric usage is high.  I'm driving an electric car these days, and charging at home.  Your monthly usage should be lower.

Studies continue to be done, looking at the value of solar electricity in a real estate transaction.  Here's a link to the Lawrence Berkeley National Laboratory study, Selling into the sun.   There is lots of depth to the study, but here are a few nuggets.  In general, across states, a premium of $15,000 is attached to an average 3.6kw system.  The larger the system, the lower the per panel or kw premium.  And the, there is the idea of "green cachet".  This indicates, potentially, that there is a fixed component of PV home premiums that occurs regardless of system size. This might indicate that a green cachet exists for PV homes in our sample. In other words, buyers might be willing to pay something for having any size of PV system on their homes and then some increment more depending on the size of the system.  If you are selling a home with solar, be sure the lender and appraiser know about this study. Until recently, we did not have a solid study showing the values of solar, and many appraisers work under old, outdated information.

If you're considering putting solar on your house, we really liked working with Imagine Energy

And, as always, I'm glad to talk about solar and energy efficiency, especially in relation to real estate!  leslievjones@gmail.com  503-312-8038.

Getting a handle on this varied market

Oh man.  This market is so inconsistent, its hard to find any over arching trends.  I'll try.

The market is definitely slowing.  The Portland market often slows in the summer.  Its a beautiful time in the Pacific Northwest, and folks are out playing.  We've also become a vacation destination, so we  see lots of out of town folks falling in love with our city.  Do they all want to buy houses right  now?  I don't think so.  We'll see them back on subsequent long weekends.

We are seeing LOTS of price reductions, and some rather steep and rather quick.  If it doesn't sell now, it may not sell until the September/October market flurry we usually see in advance of the holidays.  For builders, flippers and move-up sellers, that fall flurry may be too far away, hence, the price reductions.

So what do I mean by slowing?   May 2018 saw 6.3% more new listings hit the market, than May 2017.  Closed sales fell 3.2% from May 2017, pending sales decreased 6.8% from May 2017, and the median price through May 2018 has risen 8.0% as compared to 10.7% through May of 2017. 

But, that puts our year to date,  median sale price at $399,500 in 2018, as compared to $370,000 in 2017.   So, still going up, but at a slower rate.   And those price reductions?  Some of them aren't due to "dropping values", so much as aspirational pricing by sellers.

 I think Realtors are reluctant to talk about a slowing market (as with many financial markets, does talking about it change it?).  Sellers are often basing their pricing expectations on what they've heard about the market from friends and neighbors.  This anecdotal evidence can be a few months behind reality.  The expectations of every house generating multiple offers, bidding wars and sales prices well above the list price are unrealistic.  Are we still seeing some multiple offers?  Yes.  Are some houses still selling well over list price?  yes.

Here are the frustrating parts:
1) We, the professionals, are having a hard time predicting what houses will sell quickly and which won't. 
2) With such a varied market, buyers might be able to look at houses priced above their top price range, as some sellers are accepting offers below their list price. 
3) Some houses are still going well over list price, so buyers should be shopping below their top price.
4) Though the stats look like a slowing market, May 2018 market time was 37 days, compared to 39 in 2017.

Here are a few things we do know:
1) Interest rates are increasing, and will continue to do so.
2) Portland is still seeing significant in migration from other states.
3) With a slowing market, it can be possible to get an offer accepted, subject to the buyer selling their current home.  These "contingent" offers have long been a favorite approach for move up buyers.
4) In a slower market, buyers can make better buying decisions.  Now, buyers might be able to think about making an offer on a house for as long as they can think about that new pair of shoes, or where to eat dinner this weekend.
5) Houses that are priced too high, and stay on the market, will eventually sell for less than than had they been priced properly at the beginning.  Sellers who say they'll "wait to get the price they want" are misinformed.  Who ever paid more for a house because its been on the market so long?

There you have it.  To buyers, you may have a bit more buying power than you did previously.  This means, you might be the only offer on a house, and might have the luxury of negotiating with the seller, or not.  Sellers, be careful about over pricing.  We have seen very good appreciation in Portland in recent years. Don't get greedy.

If you have questions about your particular property or situation, get in touch.  I'll be glad to help.  and as always, let me know if there are questions I might answer.  Here's the link to the most recent RMLS stats.

leslievjones@gmail.com   503-312-8038

Interim market update - are we in a buyers' market?

There was a one liner in a KGW piece a few nights ago, where Zillow said the Portland market , "is a buyers market right now".  That caught my attention.  Zillow's article about the national market also points to slowing.

The RMLS report for April can show some hints of this.  For the first four months of the year, our inventory was equal to, or higher than the inventory for the same months in 2016 and 2017.

The market time for listings that sold in that same time period was also equal to, or longer than 2016 and 2017.

And pending sales are down 2.6% from April 2017.

Zillow's report for Portland shows our annual home value change increased 6.2% as compared to a 9.1% increase in national values.

Anecdotally, we're still seeing multiple offers on certain properties.  We're also seeing more and more houses on the market and price reductions in a variety of areas.

What does this mean for you?

If you've been in the market to buy, while prices are still going up. the pressure is easing.  While the list price used to be a starting point, with prices going up from there, it now can be possible to buy a house at or below the list price.  Some buyers stay out of the market, while they save money to buy.  In the past few years, prices have been rising quicker than most people can save.  We may be entering a time when you can actually save faster than the market increases.

If you are thinking of selling, you might want to get your property on the market sooner than later.  While we're seeing some slowing now, we often see a bit of a lull in the summer months, especially July and August.

Let me know if you have questions about your specific situation.  I'm always glad to talk.

Leslie Jones  503-312-8038   leslievjones@gmail.com

New heights of energy nerdism

My husband told me the other day, he tries to limit the number of times he opens the refrigerator, in an effort to preserve the cold air.  There is a bit of context...a glimpse into my world.

I'm driving an electric car these days, and we REALLY wanted it to be truly powered by the sun.  In 2010, we installed a system with 10 solar panels, that generated about 80% of our electricity.  The electric load in our house, is plugs, lights, fridge, washer and small appliances (toaster, coffee pot) and the electricity needed to power the electronic parts of the stove and dryer.  And now, the car charger.

ImagineEnergy, who did our original system, helped with the upgrade.  We removed the old panels and inverter (and sold them to a friend), and had 30 new panels (more efficient) installed.  The panel technology has improved so much, merely upgrading the 10 existing panels would have given us a nice bump.  The load of the electric car can be hefty and the panel upgrade alone wouldn't generated enough to power the house and the car.

With the 30 panels and new inverter, we also get a fancy web interface through which to monitor our system.  The monitoring system just got turned on in late March, so we don't have a bunch of data yet, and we've not even gone a full billing cycle since installing the new panels.  But we are excited and optimistic!

The monitoring system is by Solar Edge.  I can see, today, we have generated 33.71 kWh, so far. I can see today's weather, along with the forecast. Switching to a different screen, I can see a physical layout of the panels, and which panels have produced how much power today, or this week, or month, or year. And once we have more data, there's a plethora of reports to be run. 

Portland's Home Energy Score requirement is driving more awareness of energy efficiency into the market.  Portland was one of a handful of cities benefiting from an in depth study of the value of solar power in certain markets.  In that 2015 study, solar panels were seen to add a premium of 1.97% - 3.25% (median and mean) to the price of a house.  The sales in that study were from 2012 and 2013.  I'd guess that premium, as a percentage of price, has increased since then.

If you have questions about navigating solar systems (ha ha), I'd be glad to chat.  You can reach me at 503-312-8038 or leslievjones@gmail.com

A look at Q1 2018 in Portland real estate

We receive monthly market statistics from the multiple listing service.  Looking at those numbers, a month a time, doesn't necessarily give the full picture.  Now that we've got three months of statistics, let's take a look.

In my annual report, I predicted an increase in the median price of around 8%.  Right now, looking at the percentage change of the 12 month sale price with the previous 12 months, the median price has increased 8.8% from $353,800 to $385,000 (this is metro-area wide).  I expect to see this come down a bit as the year progresses.

We are seeing the number of new listings creep up a bit.  Our inventory in months, calculated by dividing the active residential listings at the end of the month by the number of closed sales that month, has been (averaged for Q!) 1.9.  In 2016 and 2017, that three month average was 1.63.

On a similar trend, year to date listings are 3.8% higher than the same period in 2017, and closed sales are down 3.8%.  And market time, measured in days has increased 3.1% from 59 to 61 days.  Keep in mind, real estate always has a bit of a slow start in January, as many buyers and sellers are not focused on real estate through the holidays. 

While the general Portland market is slowing a tad, and prices are not increasing as quickly as in recent years, some neighborhoods remain hot.  Properties are still receiving multiple offers, and selling for well above asking price.  Anecdotally, it seems well priced properties are drawing lots of attention (as it should be), along with properties that have been well taken care of and prepped for sale.  Sellers wanting top dollar are best to put a lot of effort into preparing their property for sale, AND price properly.  An overpriced property, sitting for weeks or months will not bring top dollar.

From here, I expect we'll continue to see more properties on the market, a decline in the rate of price increase and a bit saner market for all.  Buyers, there are lots of good properties on the market in most neighborhoods and price points.  While you aren't in the driver's seat, you may be less disadvantaged than you've been in recent months. Sellers, you still have a desirable product, but you'll need to pay attention to condition and price. 

RMLS report

Get in touch if you have questions or would like additional information.  Leslie Jones leslievjones@gmail.com 503-312-8038.

The makings of a good flip

No, I'm not talking gymnastics.

The house on the corner of our block recently sold.  It was a classic situation; elderly gal had moved out several years ago.  The house went on the market this last fall.  It  was a big, old, run down bungalow in disrepair.  It had large, gracious rooms, great light and a decent floor plan, but only one bath, and that one needed work.  It was the kind of house neighbors hope will be saved, and not torn down.

In my work, I often see these houses.  And I often see the results, when the work has been done and they are ready to be sold.  The trick of doing a flip is doing good work, to maximize the value and profit of the project. Doing too much work slows the project, eats into profit and is a direct route to a different line of work.  Not doing enough work, good enough work or the right kind of work will cause you to miss the higher end buyers.

An aside, my husband can build or fix just about anything. and he has VERY high standards.  He can't do a B+ job.  he just can't.  We have never done a flip, and never will.  He'd take too long and would do way too much work, taking away any gain.

But, the folks who bought, and are currently working on the house on the corner seem to be doing a good job.  Clearly, they've done this before, and have access to crews available to work (that is a challenge in Portland right now).  They've put on a new roof, decommissioned the buried oil tank, brought in a gas line and installed a high efficiency gas furnace.  They've brought in a new electric service.  They are adding a bath upstairs, and are currently prepping the house for a new coat of exterior paint.  The prep work is being done using lead safe practises, as required by law.

They are not putting in new windows...that is expensive to do.  But they do appear to be re-glazing the old widows and fixing the sash cord/weight system so the open and close easily.

By contrast, I regularly see houses of a similar caliber where they've left the oil tank and old furnace, along with the sub-par electric service. A new coat of paint has been quickly sprayed on with little or no prep (a sure way to shorten the life of a paint job, but who cares?  Its cute for the sale. ).  Fancy bath and kitchen finishes are added to aged and failing plumbing and electrical.  Buyers and home inspectors can see right through a crappy flip, extending the market time and the lowering eventual sales price.

A good flip also addresses items sure to come up on inspection. For instance, the standard is that hot water heaters will have two seismic straps, securing the tank in case of an earthquake.  This is known, and easy and inexpensive to do.  A flip that neglects this, is probably neglecting other things we can't see.

And then there are permits.  Building permits are required for most any but purely cosmetic work.  Basically, touching electric, plumbing or structural triggers the need for permits.  There are LOTS of flips done with few or no permits.

Back to the house on the corner.  They have pulled permits.  They're using licensed and bonded crews and the people working on the house are friendly and courteous to neighbors. Yes, they are working quickly, and at times have different crews working on different parts of the house.  I know nothing of the finishes they'll be putting in, but expect they'll be higher end.  I hope they re-finish the hardwood floors, rather than laying engineered wood floors over them.

Neighborhood the neighborhood rumor mill says the house will be on the market in about three weeks.  I'll be curious to see at what price.

The company is Portland City Homes

Are you thinking of doing some fix up work to your place, or taking on a flip?   Or are you curious to see the above mentioned house when its completed?  I'd be glad to talk with you, just get in touch.
503-312-8038  leslievjones@gmail.com

The 2018 federal tax changes and Portland real estate

It was hard to miss the changes to federal tax code that were quickly enacted in December 2017.  Previous tax overhauls entailed months of committee work and hearings, which vetted out most of the inconsistencies and grey areas.  The December 2017 tax changes left more room for interpretation and fine tuning.

I don't expect to see much effect on Portland real estate as a result of the changes.

 Limiting the property tax deduction to $10,000 per year on a personal residence won't hit many of us. While we do see some property taxes over $10,000, that's pretty high value house.

The interest on home equity loans and lines of credit will no longer be deductible.  But, it is thought that if such loans are used to invest in real estate, including remodeling or adding to your existing property), that interest may be deductible  This is one of the grey areas in which we may see some rule making in the months to come.  In any case, I'm not sure that lack of interest deduction will change behavior.  And if home equity interest IS deductible for real estate (and improvement) investing, it really won't change behavior. 

I talk with many clients deciding whether to add on/remodel their existing home, or move.  My advice is always this: if you like where you are,and the finished product will be the home you want, stay and remodel.  If you want a different area, or even with work, your house won't be what you want, consider selling and moving.  Will the lack of deductibility of the home equity to do the work change this?  I doubt it.

As we saw, the tax changes seemed to hit hardest, those states with high income tax; of which Oregon is one.  High net worth folks, especially moving toward retirement, tend to avoid such states.  We may then, see fewer very wealthy folks moving here, or choosing to stay here. 

So maybe, with the combination of the property tax deduction limit at $10,000 and the hit to states with high income tax, we might see that upper end of the real estate market soften a bit.

Certainly, there were other changes to the tax code that will change household financial pictures.   So much of this depends on your specific financial situation.  As far as our local real estate market, I don't anticipate much effect. 

If you have questions about your specific real estate situation, get in touch.  I'd be glad to talk with you.  leslievjones@gmail.com   503-312-8038

2017 Year-end housing stats - Portland

RMLS just released the housing stats for 2017.

Focusing on the Portland area, our year to date median sales price was $379,900, up 9.5% from $347,000 in 2016.  I expect we'll see the rate of increase slow a bit in 2018, to something like 8%.

In 2017, we had 31,624 closed sales, down 3.6% from 32,798 closed sales in 2016.  The year has started off quickly.  I'm guessing, at the end of 2018,  we'll be similarly close.

Our year to date market time was 45 days, as compared to 42 days in 2016.  Toward the end of 2017, we were definitely seeing buyers a bit more relaxed at not having  to race out immediately to see a new listing.  Some buyers even had the luxury of seeing a house a second time, before choosing to write an offer.  I welcome this wee bit of slowing, and think both buyers and sellers make better decisions when not acting in a pressure cooker. 

And we finished the year with 1.6 months of inventory, up a tad from December 2016's 1.3 months of inventory.  This slight bump in inventory was also a welcome change, giving buyers more properties to consider.

These numbers bear out what I had been feeling.  We did slightly less business, still saw prices increase a bit.  Personally, I did 3 fewer transactions in 2017 than in 2016, but made slightly more money.

The Portland market remains a sellers' market...to an extent.   With the extreme frenzy of 2015 and 2016 gone, sellers do have to price according to comparable properties, usually have to do an amount of repairs as a part of selling, and often don't have a plethora of offers from which to choose.

We're in a funny spot, where it is a good time to buy or sell.  As the year progresses, we expect to see interest rates edge up. as high as 5% toward the end of 2018.  This increase will decrease buying power for buyers getting loans, and could put a bit of downward pressure on pricing. 

If you're thinking about making a move, or just curious, get in touch.  I'd be glad to talk!  leslievjones@gmail.com  503-312-8038.