Calm or pitiful?

 December is usually a busy and bustling time for me. Blazer games, year end business activities, holiday parties, preparations for travel or guests and gathering with dear friends all coincide for a year end crescendo. But not this year.

Yes, my year end business activities are still happening and we did get a Christmas tree. I'm sending cookies to family with whom we usually gather, and the three of us are planning Christmas (and Don's birthday) celebrations.

It's SO calm.  Oh, believe me, I miss the hustle and bustle.  But I'm noticing activities are less emotionally loaded. Heck, no one has been in my home since February, who cares if the tree isn't perfect?  Yes, we'll set a nice table for Christmas dinner, but I'm loving the absence of so many "supposed to's" and "have to's".

I'm thinking a lot about the difference in my attitude and standards.  Though we usually gather with close family, there is no reason they'd be judgmental that there aren't a good balance of blue lights toward the top of the tree.  It wouldn't really matter that I don't have matching red candles for the dinner table, would it?

I really need to hang on to this relaxed approach and bring it back next year (we will be able to gather by then won't we?).  COVID has taught us all a lot. I hope one of the things I remember is the importance of the connections and the unimportance of perfection.

Thoughts informed by the Home Builders Association Economic Forecast

 Last week, I attended the Oregon Association of Home Builders' annual economic forecast.  There are a variety of economic forecasts in late fall and early winter. I usually try to hit a few, from differing organizations and perspectives.   

The two presenters at this event were: Tim Duy, currently a professor of Economics at the University of Oregon and Robert Dietz, the chief economist for the National Association of Home Builders. These presentations are always a "drinking from the firehose" experience. Following are my notes, and stream of consciousness thoughts.  

It's not news to me, but a combination of low inventory, low interest rates and high demand is keeping the housing market brisk.  Part of the low inventory is builders being cautious not to over build, as many were caught with too much inventory when the last recession hit.  We currently have the largest gap ever between the rate of home sales and production.  Also different these days, the median price of a re-sale home is higher than the median price of a new home.  What?

 High labor costs (due to not enough skilled labor) and difficult access to materials (that are expensive when finally attained) are  also slowing construction.  Though prices have eased since then, nationally, lumber prices increased 170% between April and September.  170 %.   While I know many love to hate builders and developers, keep in mind, these forces also effect non-profit housing developers and those building affordable housing.

Oregon, and Portland in particular, is one of the most expensive markets in which to build, in the country.  The combination of our urban growth boundaries (land is expensive), combined with extensive regulation and high system development charges give us that distinction.   According to  the NAHB, regulation accounts for 24% of the total construction and land cost of a new home.  Some municipalities do waive, or lower SDC charges for builders of affordable housing.   It was suggested that, to encourage building, municipalities consider covering the SDC costs, rather than putting them all on builders and developers. 

Oregon (HB2001) and Portland (Residential Infill Project), are both making efforts to increase density within the urban growth boundaries.  At the same time, COVID has soured the market for high rise, common access buildings, with the market favoring townhouse style buildings, along with garden style, attached dwellings. The is essentially the "missing middle" housing both HB2001 and Portland's RIP sought to encourage.  A favorite quote came from Tim Duy; "Oregonians hate density almost as much as they hate sprawl".

Work-from-home orders (and losing commutes), combined with the desire for larger homes (work and school from home take more space) is driving many to the suburbs and ex-urbs. Construction costs and land costs are cheaper, and the potential commute of less consequence. It is thought that 60% of those currently working at home due to COVID, will continue to do so for at least three days a week, post COVID.  That is, the the five day a week slog into the office will be a thing of the past.  This flight from cities may effect the service sector, unless development outside cities adds amenities found in urban areas; restaurants, spas, shopping districts, gyms etc.

Among others, home builders are hoping for an infrastructure bill from the Biden administration.  Such a bill may be one of the few things the Senate, House and Biden administration can all agree on.  The thought is that any such bill must address the skilled labor shortage.  The NAHB economist said 30% of an infrastructure bill should be about work force development in high schools, community colleges and trade schools.  Efforts also need to be made to bring women into the construction trades, as they currently make up only 3% of the construction work force. He indicated builders will need to push for and participate in this effort.  I have long felt our high schools need to get away from the singular focus on college attendance, and offer other, better articulated programs in the building, construction and manufacture trades. 

Builders are looking to the Biden administration to reach trade agreements for more reasonable and steadier construction materials. A soft-wood lumber agreement with Canada was sited as an example.

In general, both presenters thought housing is one of the bright spots of the economy, and could help the economy in a variety of way, especially if supply chain and labor shortages can be addressed.  While movement to the suburbs will effect some of the Portland market (high rise condominiums may be in less demand) we are still seen as a refuge for folks moving from more dense and more expensive cities.

On a personal note, Don and I are at the very early stages of planning a new construction project.  It will involve deconstructing an existing rental house, and building a home for us, with one level living, and a garage with an apartment above. We are about to have some up close and personal experience with SDC charges, and the City of Portland's planning, zoning and permit folks.  Thank goodness for our experienced architect.  And here's hoping those lumber and supply costs come down a bit.  Have you run into any supply or labor shortages around construction and home repair?  Have you had to replace an appliance and had trouble finding currently available inventory?  I'm curious.

Some thoughts for first time buyers (or any buyers, really)

In the past month, I have, coincidentally, been working with several folks who are buying their first home. There is SO much exciting about the prospect of home ownership, it can sometimes be hard to separate that general excitement from one's specific needs and priorities.

Sometimes, we think we know what we want in a home, which may be based on the kind of home grew up in, what our friends bought, what is trendy in the area or what we think we *should* want.  Often, getting out and looking at actual properties, not just online photos and video walk throughs, can help inform what we really want.  Maybe you thought you wanted an old, charming bungalow, but once you've seen a few, decide the charm isn't worth the small closets, dragging your laundry to the basement and closed off kitchen.  Or conversely, you really like the clean lines of modern homes, but once inside, find them cold and sterile.

What is most important, is if the property will serve your needs today AND into the future, or through a life change.  Real estate fees (commissions, loan fees) and moving are expensive.  While you don't want to put ALL of your money on your home, try to buy so you can stay for a longer, rather than shorter time.  

One year, I seemed to specialize in selling very small houses to single people...who soon thereafter met and decided to co-habit with a partner.  All of the houses were really too small and they all ended up selling sooner than later.  While I appreciated the business, I felt badly that they moved on so quickly.  

Buy so, if you lose your job, there is space to take on a roommate to help pay the bills.  Or if a pandemic comes along and everyone is working and going to school from home, that you have space in which to accomplish this.  Don't buy right next to your current work place, if you don't like the area. If you have job change, you still want to like where you live.  This isn't necessarily about always buying bigger (though often it is) but allowing for change to happen.

No matter the price range, choosing a home is about compromise.  It is rare to get everything you want.  Think about the absolutes; I must have a fenceable yard for my dog, I must have a one level house as I have mobility issues, I must have a garage for my classic convertible.  Are those really absolutes?  Might you put the classic car in a garage elsewhere?

We've all heard it, location, location, location.  Location is not changeable, or pretty darn hard to change.  But maybe there are several locations that fit your needs.  Don't get stuck on just one, unless you need to be near a family member, etc.  

Lastly, just because a house checks all the boxes on your list, doesn't mean you have to buy it.  You need to feel good in the space.  Engineer types have trouble with this.  Put a box on your list for the feeling, or unquantifiable aspects of a property; that "je ne sais quoi".  But don't let that feeling override too much!  Know when you are being swayed by the pretty paint job.  Its fine to buy the pretty paint job, as long as you are aware and be sure it doesn't cause you to forgo a true "must have'".

If you already own your home, were there particular features that caused you to buy *that* home?  Were there things on your list you wish you'd held out for?  

Portland Real Estate Market Update

 The stats from the RMLS for September 2020 are hot off the presses, and boy is it crazy.

Buyers are getting frustrated in their home searches and at how hard it is to get an offer accepted.  And now we see why.  We are now at what may be an all time low of 1.1 months of inventory (compared to 2.8 for September 2019).  Inventory is calculated by dividing the active/residential listings at the end of the month (September) by the number of closed sales for that month. Keep in mind, this includes proposed and under construction homes. 

Pending sales are up 17.3% over September 2019, and new listings are down 5.9% from September 2019. So more sales, fewer listings. 

Oh, and prices have increased (year to date, median price) 5.7% to $433,500. And market time is shorter at 38 days, down from 52 days in September of 2019. 

Fewer houses, more sales, in a shorter time. 

It's a pretty interesting report.  If you have questions, want to talk this though or get information specific to an area or neighborhood, get in touch.  

Update to City of Portland relocation fees for renters

 Hey All, a quick update for landlords (hate that term) and renters in the City of Portland. City Council just passed a temporary amendment to the "renters' relocation assistance policy".  

Previously, if a landlord increased rent (given 90 days notice) by 10% or more, and if the tenant said they couldn't afford that increase, the landlord would pay the tenant relocation assistance in relation to the number of bedrooms in the rental unit.  In general, these fees were between $2900 and $4500.

As of yesterday, and until March 31, 2021, these same relocation fees will apply to any rent increase, no matter how small.  If you are a landlord, and have already given your tenants notice of a rent increase, you may rescind that notice (in writing) to avoid being subject to the fees. 

There is also currently a statewide moratorium on evictions for unpaid, or partially paid rent.  Tenants have six months, from the expiration of the moratorium to pay any owed rent.  The moratorium is set to expire on September 30th, giving tenants until March 31 to pay any owed back rent.  While there is not a moratorium on evictions for other violations of the lease/rental agreement, eviction courts have been understandably reluctant to evict during the pandemic. 

City data shows Portland has approximately 264,000 households, with 47% of those being renters.  43% of white household rent, and 74% of Black households rent.  Health issues and financial hardship from COVID have disproportionately affected Black households.  This move by the City Council was meant, in part, to lessen the impact of COVID on the city's Black community. 

Might as well talk about earthquakes.

I am NOT an expert on earthquakes and old foundations, but I do know a few things.  And I've attended a few classes that taught me things.

First, an ever so brief history.  In Portland, our old houses were built on concrete foundations made of cement combined with river rock and sand.  The aggregate (rocky stuff) was not washed, and thus the cement mixture didn't adhere well, and there were often larger rocks and gravel.  These foundations were usually covered with a skim coat to protect the foundation and for a more uniform look. By the late 1930's and in part due to construction as a result of the war, concrete foundation practices improved greatly.  Not all builders adopted the new fangled ways quickly, so it really wasn't until the early 1940's that the quality of foundations was consistently better. 

When looking at an old foundation, here are a few tips.  If you can see lines on the concrete the width of lumber, you are most likely looking at the actual foundation, the lines being the imprint of the form boards for the foundation.  If it is smooth, with no lines, you are most likely looking at a skim coat, covering the actual foundation.  A weak foundation can have a pretty skim coat. An awful foundation will most likely have a peeling or failing skim coat.   And, just because you see metal ties and braces at the structural beams and supports, don't assume all is good.  Or in other words, beware of pretty hardware.

Vertical cracks in a foundation aren't thought to be an issue.  Horizontal cracks can lead to a hinging effect, where the foundation (in an earthquake) folds on itself.

With a higher quality foundation one has the option to tie the house to the foundation.  And there are some decent pre-1940's foundations as the timeline is an estimate.   Best practice is to have a core sample tested; looking for 2000psi strength or better, to justify the retrofit of tying the foundation to the house.  The foundation core test costs around $1000.

If the foundation is found be in good enough shape, tying the house, to the perimeter foundation AND installing bracing/tying hardware to the support posts and beams can be a good way to go.  Even better would be to also install some braced wall panels and continuous sheathing mentioned below.

If the core sample shows a poor foundation, replacement may be your best option.  Constructions costs vary, but the  average cost of a new foundation , 120 linear feet, would be about $80,000.  As often is the case with remodel projects, beware of the "while we are at it" budget. "While we're putting in that new foundation, let's add a bathroom down there and at least provide for a future apartment". 

If $80,000 seems a bit high, at least consider installing an earthquake valve at your gas meter.  This valve, when it experiences shaking, will automatically close the gas line. Remember, the 1906 San Francisco quake didn't do all that much damage.  It was the fires that came after.  The gas line valve is a very inexpensive fix, and can prevent a lot of harm. They cost somewhere around $500. 

In 1976, building codes were written to include attaching the house to the foundation, and other stabilization techniques.  These were primarily about the affect of wind on a building.  It wasn't until 1998 that building codes addressed earthquakes and foundations.  The Loma Prieta Quake, which hit Central and Northern California in 1989 and the Northridge quake, which hit Southern California in 1994 provided plenty of field data leading to the 1998 code changes.  The Loma Prieta quake especially, contributed to the "prescriptive path" method of "earthquaking" buildings.  This approach uses braced wall panels, continuous sheathing AND tie down anchors to help a building resist both wind and earthquakes.   Wind often brings lift, or vertical forces to a structure, whereas most earthquakes bring lateral forces.  

Earthquake insurance can be a good thing.  Read the fine print.  Often, the deductible applies to each type of claim;  house damage, fire damage personal property loss,  instead of to the whole loss. So if deductible is 10% you pay 10% for personal property, 10% for house etc.  Still useful, but good to know the limitations.  

Have you had your house "earthquake"?  If so, what work was done?  Do you carry earthquake insurance?

COVID-19 and new home loans

 If you've bought a home in the past 20 years, you know there is an unbelievable amount of paperwork.  And for every law suit, example of fraud or other malfeasance, new forms come along.  Over time some are incorporated into boiler plate while others stand alone.

Making loans during the pandemic has got to be challenging.  Early on, lenders started verifying a borrowers employment multiple times; some even asking about the borrowers future prospects of employment.  This seems like a stretch to me.  Asking employers to predict the future at such an unknown time.  

As our COVID economy has "matured" borrowers with existing home loans have had some protection from foreclosure through forbearance arrangements.  With proper paperwork, homeowners can miss payments without triggering a credit issue nor foreclosure.  Different lenders have and enforce different versions of forbearance.  Some loans were put in forbearance even if the borrower didn't ask, same with some student loans.

Lenders making new home loans are challenged to tell which borrowers will be able to pay loans back and which could quickly go into forbearance.  Plenty of borrowers are behind in payments, but this is not reflected in their credit reports. 

So...its time for another form!  This form asks borrowers to commit that they don't expect changes to their income.  Some even have the threat of penalties, should the certification from the borrower prove to be false.  Ack.   

Fannie Mae and Freddie Mac, who provide government backing of home loans are buying back loans in forbearance with a penalty to the lender of 5-7%.  The Federal Housing Administration (FHA) is backing loans in forbearance, but will charge the lender hefty (20%ish) fee if the loans go into foreclosure.  

With such penalties in place, it is understandable lenders are casting about for a way to mitigate their risk. While low interest rates have borrowers flocking to both new home loans and refinances, the credit market is slowly tightening.   The pool of borrowers eligible to take advantage of low rates will continue to shrink as the general credit market tightens and verification of credit worthiness is muddled by forbearance protections.

As with many things COVID, mortgage lending will continue changing (tightening?) as long as COVID is with us.  Some of these changes may stick around longer than COVID.  

Preparing for the COVID-19 winter

Dave Davies (Kinks) has a song, Cold Winter, that starts; “I’ve seen you, cold winter, I know you, cold winter.  You showed me no mercy”.

 

Since we haven’t gotten COVID-19 under control, this winter could be a hard one.  We’ve enjoyed socializing outside, maybe gone camping, or even enjoyed a meal at an outdoor restaurant.  We’ve had lots of fresh air, with windows and doors open.  We expanded our living space to yards, porches, parks and plazas. 

 

As the weather changes, we’ll start losing some of those opportunities. Oh yes, the outdoors will be there, but perhaps less hospitable than this summer. 

 

Some of the things I’m thinking about for winter:

 

1)    Make sure you have basic medical supplies on hand; thermometer (and covers if you need them).  If you have asthma or like me, situational asthma, be sure you have inhalers on hand. Remember Ibuprofen is counter-indicated with COVID, so be sure you have some aspirin or Acetaminophen on hand.  Consider a pulse-oximeter for reading oxygen levels in the blood (that’s one of COVID’s sneaky things, lowering blood oxygen levels even if you don’t feel lightheaded).  You can pick up a pulse oximeter for around $35 or so.  Get your flu shot.

2)    Think about how you’ll get your social interaction needs met.  Will you be comfortable going into restaurants or someone’s home?  Do you have a covered outdoor area, or one that could be covered?  Or perhaps buy a canopy big enough to accommodate social distancing to leave set up in the yard?  If you’ll have people over, round up blankets and throws; keep some clean, in a tub or tote, to keep your guests warm.  If you don’t have a yard or covered area, identify restaurants that do (along with heaters) so you have that list ready. Also, compile a list of favorite, nearby hikes and walks.  A bit of walking in Portland’s drizzle isn’t so bad, and you’ll be more likely to go if you have ideas of where to go. 

3)    We may be spending extra time inside, with our “pod”.   Reading, streaming, singing, puzzles and crafts could be your savior.  Make sure you have a valid library card (Multnomah County is accommodating pick up for hold/ordered books), exchange puzzles with friends, organize your craft supplies (trade with friends?).  If you stream content, look at your sources.  Is there one you can let go, or do you regularly use them all? Consider switching your streaming platforms to give you access to new content.

4)    Take advantage of every nice day between now and winter.  Was there something you wanted to do this summer, but haven’t?  Now’s the time. Go berry picking, take a hike, sit in the sun, fit in a last camping trip, walk by the river.

Who knows?  Maybe all this out and about is what has kept the virus going.  Maybe several months of hunkering down will do the trick?  Wear your mask, be vigilant about distancing, don’t congregate indoors and wash your hands.

Have I missed something?  Do you have any winter preparation ideas to share?

Portland's Residential Infill Project

After five years of collaboration and wrangling, the City of Portland, last week, adopted the Residential Infill Project . This is the largest overhaul of the City's planning and building codes...ever.  It is also groundbreaking nationally.  From an article published by the City of Portland, "Explained Sightline Institute’s Senior Researcher Michael Andersen, "This is the most progressive reform to low-density urban zoning in American history. Portland is going above and beyond Oregon's mandate for re-legalizing middle housing. Nonprofits will now be able to add below-market housing to any neighborhood. Middle-income Portlanders will be able to afford newly built, energy-efficient homes in walkable areas essentially by teaming up with each other to split the land costs.”"

Basically, RIP opens up the large majority of lots in the city to more, smaller units; cottages, ADU's, duplexes triplexes etc.  Projects that build in affordable housing can build more units.  It also restricts the above ground size of single family homes, from 6500 down to 2500.  

Before the passage of RIP, larger lots with multi-family zoning, were sought after by developers to build apartments and condominiums.  With most every lot being able to accommodate more units, it will be interesting to see what happens to land prices.  Many developers say construction and system development costs are fixed, leaving profit and land cost as the variables.  With smaller houses and ADA requirements, developers say they'll need to pay less for the land (cuz taking less profit isn't an option they'll choose).  

Neighborhoods and preservationists worry there will be a flood of projects in Portland's historic neighborhoods, making older homes vulnerable to demolition.  While I've not found details, the synopsis on Portland's website says that the RIP discourages demolitions and provides bonuses for the preservation of older homes.

RIP followed pretty closely behind Oregon's HB2001 which legalized development of duplexes on residential land currently zoned for single-family housing in all communities with a population of 10,000 or more.  Many worried this would effectively "ban" single family housing.  There is still plenty of single family housing being built, so this worry may have been unfounded. 

Restricting the size of new single family homes to 2500 (above ground) may well increase the value of larger homes built recently.  That is, if buyers want new(er) homes, bigger than 2500 sq ft, they may well pay a premium.

I'm excited to see more cottage developments in Portland,  There have been a few of late, offering stand alone small houses, on commonly owned property; condominium ownership, but single family.  These projects have been well received.

I expect we'll also see more folks build on their own existing lots; like an ADU, but perhaps a duplex.  Financing additional units on an owner occupied lot has always been tricky as there really isn't a bank product for that purpose.  Most owners use an equity loan on their existing home to build the new unit(s). This restricts such projects to those who have both enough equity in their home and can qualify (based on their income) for the increased payment without considering the potential income from the new unit.  Ironic that the owners who could really use the extra income from another unit on their property are exactly the folks who can't afford/qualify to do so.  I hope we'll see some new loan products.

The specific code for RIP is still in process, with implementation expected in 2021. I'm hoping to get further educated on this in the future.  For now, I probably can't answer your questions about RIP, but would be glad to chat about 

Portland's real estate stats for July.

Holy cow!  Its busy out there.  

Our multiple listing service released the report for July.  Most notable to me was inventory, or the lack of it. 

Inventory in Months is calculated by dividing the Active Residential Listings at the end of the month in question by the number of closed sales for that month. This includes proposed and under construction homes.  July showed 1.2 months of inventory...including proposed and under construction homes.  We haven't been that low since December of 2015 (and low inventory in December is less about a busy market and more about a slow market, with folks not selling during the holidays).

These two charts give the best visual of how things are going. This chart shows active listings as compared to the past two years. 2020 looked to be off to a good start, and then the COVID decline.

This chart shows pending sales as compared to the last two years. The COVID drop is pretty clear, followed by a pretty steep spike.

So, yeah, lots of buyers buying and fewer sellers selling.  We're back in multiple offers, with many selling well over list price.  A buyer client of mine recently offered $508,000 on a $475,000 house, and was offered second back up position.  Meaning, there is an accepted offer, and a party in back up position, and then my client.  This is par for the course, with many buyers getting frustrated and fatigued.

Other stats of note; the year to date median sale price is $426,500, up 4.5% year to date over the same period last year.  Our market time in July was short at 42 days, though North Portland has the shortest market time the metro area at 29 days.  

Record low interest rates are fueling some of this activity.  We are seeing some COVID inspired moves; more space, closer to family and away from dense urban east coast cities.  

If you are thinking of making a real estate move, get in touch,  I'd be glad to chat.  leslievjones@gmail.com. 503-312-8038

Has your house or household changed?

Okay, we're however many months into distancing brought to us by COVID-19.  Along with distancing,  we have rapidly declining employment, whole industries shutting down or being re-imagined, and a whole class of college graduates in the stagnant and distanced job market.  Childcare is near to non-existent.  Some feel living opportunities for the elderly are unsafe.

With all that going on, are you using your living space differently? Have you re-purposed a room to accommodate a friend or family member? Make a home office or gym?  "Once this is over" will you be making changes to your living situation? 

I have a friend who recently turned their spacious living room into a bedroom/living area for their newly graduated daughter.  Heck, its not as though they'll be needing it to entertain anytime soon.  Their dining room became their living room; don't really need a full sized dining room these days either.  And they'll eat at the perfectly comfortable kitchen table.  I love this re-purposing of space to fit the family's current needs. 

We're using space slightly differently at our house. The living room has amassed an amount of exercise equipment; stability ball, kettle bell, weights, yoga matt, foam roller, etc.  And the front porch got a bit of a make over to accommodate two distanced pods of people eating.  For winter (though generally an optimist, I think we'll still be distancing this winter) I expect we'll add two propane heaters and a bin of clean blankets should our guests get cold.

Though our recent college graduate daughter has her own studio, she isn't thrilled about distancing alone in 440 square ft.  Though not re-puposing, she has been staying with us, in her childhood bedroom. 

I know other folks who have turned their camp trailers or RV's into home offices.  With a small house, adding a whole new space is pretty great.  And working from home, separation, with physical and audio space, can be pretty fabulous.  

Oh yeah, and the hooks on our mantle for Christmas stockings have become mask hooks. How handy.

What is going on at your place?  Carved out any new space?  Or did you pick up a new hobby that requires new space?  Where does your sourdough starter live?  Are you one of the many industrious mask makers? If so, where are you doing that?

A new look at property flood risks

FEMA administers the National Flood Insurance Program and its efforts to reduce the impact of flooding.  In theory, the program reduces the socio-economic impact of disasters.  A large part of the program is driven by FEMA's flood maps, used by homeowners, developers, and city planners when considering projects and purchases.  FEMA mapping wasn't really intended for that purpose, but more for flood plain management and emergency response decisions. 

FEMA seems to do a better job of mapping coastal areas, leaving much of the inland areas with less attention. But even then, FEMA maps look backwards at what has occurred, not using predictive analytics looking at future sea-level rise or increased rain from climate change. Many properties flood, without ever having shown upon FEMA's flood maps. 

The non-profit research group, First Street Foundation has undertaken to provide better information with regard to future possibilities of flooding.  Climate change is quickly affecting our weather and flooding risks for both coastal and inland properties.  First Street Foundation's work is not mean to replace FEMA's efforts, but to provide accurate and forward looking information and resources.  The site has an interesting tool providing information specific to an address.  Within that, there are some tips on mitigating water damage, and indicators of what kind of damage varying heights of flooding will cause to a home. 

The Portland area's flood risk, aside from water front properties, is in high water tables, overly taxed sewer systems and overflowing creeks.  I remember, in the 1996 flood, our old house, off SE Hawthorne, had water coming up from below the foundation, that high water table. Eventually, Don put a sump pump in the basement, which solved the problem.  

Wander around the site and see what you can find.  Take a peek at the tool, and check out your address.  This site is also a great tool if you're considering a new real estate purchase.  

I notice, in my neighborhood, some of the streets show some flooding potential.    I'm guessing that's where water has pooled or larger sewer mains run (posing overflow, back up risks).  See anything interesting? Have you had flooding issues at your house?

Corporate citizenship in the times of Black Lives Matter and COVID-19

Corporate citizenship from yesteryear was about paid time for employees to volunteer at a charity, sponsorship of local events, food and blood drives and other workplace initiatives.  Those are all good things.   But...

In the absence of needed federal action, local governments, along with for and non-profit corporations should be taking a stand, and not hiding behind the lack of federal guidance. 

Black Lives Matter and COVID-19 are very different, but powerful forces in 2020.  

While the timing and groundswell of Black Lives Matter protests was not predictable, the deeply rooted racism and oppression left no doubt our country (and world) would one day reckon with it.  Racism and oppression are pervasive through out our country. Some changes and reparations will be local, but federal guidance and minimum standards would be appropriate, though the current administration will be loathe to do so.  It is not my place (white woman of a certain age) to suggest appropriate benchmarks.  That being said, there is a groundswell of support for change NOW, that should not be denied nor wasted.

We're seeing plenty of corporations make pro-Black Lives Matter statements.  While this is a good start, even better would be actions consistent with those statements.  Most companies have, at some time, done some sort of equity and inclusion trainings.  Also, a good start, also not enough.  I am not an expert on this, but I'd sure like to see some tangible changes; professionally led discussions within companies, specific actions to empower people of color within the work place, initiatives not just to hire people of color, but to provide mentoring and education to those populations, giving them preparations and access to  employment opportunities.  And separation from, and rejection of biased practices, materials and business associates. 

COVID-19 seemed unpredictable in late 2019 and early 2020.  The early denial and utter lack of a coordinated national response left the United States vulnerable and unprepared.  Different states and municipalities have pulled together response standards; PPE, tracing, acceptable hospitalization rates, testing protocols etc.  Economic pressure (not to be under-rated) has states and counties opening at different times and based on differing criteria.  Certainly, dense urban areas have differing risk factors than rural counties.  Hot spots, usually in dense work or living environs, can be anywhere; urban or rural. 

While getting folks back to work is laudable, and in some cases necessary, there are plenty of ways companies can uphold necessary safety requirements.  Even if your municipality doesn't require masks, masks still do a great job of decreasing the transmission of COVID-19.  How about all companies require masks by employee, clients, contractors etc.  And just because it is "okay" for an office to open, is it necessary in order to conduct business?  Plenty of white collar jobs have been done from home, with reasonable success.  

Many states, including Oregon, are seeing both higher positive tests and higher hospitalization rates right now. No,  it is not merely due to increased testing.  If that were the case, we wouldn't be seeing an increase (80% increase in hospitalizations since May).  That businesses are opening has nothing to do with safety, and everything to do with economics.  If your business can be done remotely, please keep that up.  Now is not the time to unnecessarily bring workers back in.  

Let's step it up.  In the absence of leadership, take some real responsibility, take meaningful action.

Some thoughts

This post is about racism.  These are some of my struggling thoughts these last days.

As a white woman of privilege, I'm really trying to listen, be supportive yet also express my anger and outrage at the systemic, relentless racism that continues to grip our nation.  It is not mine to tell black America how to feel or act; what forms of protest are best, more effective, more...acceptable.  It's not protest if its acceptable, is it?

My mother was raised in the Deep South, with all of then trappings in effect in the 40's and 50's.  As a young adult she heartily rejected then blatant racism of the south, and got out.  For her time, she was more aware of race and privilege than many.  She volunteered with "Women for Peace" in Chicago in the mid-sixties.  I have a vague childhood memory of seeing Dr. Martin Luther King Jr. speak. I was so young, I was looking for the king, you know, with the crown and all.  I guess it speaks well for my mother, that she had held him in such esteem, I was looking for a king.  Mom mourned his death like none other.

Even with that upbringing, and some amount of awareness of racism and my white privilege, it is very easy for me to ignore, or conveniently be unaware of it.

My anger and outrage at the current state of America's racism,  aren't really the thing either. It's not about me. But, somewhere in that anger and outrage, I know, is buried some guilt.  It is not my first emotion, but it is there.  I'm anxious to use my  privilege to help.  I donate money. I read and listen.  I support local black owned businesses.  This is not enough.

Let me be clear, my anger is at the systemic racism.  Not at the protesters.  I don't love looting.  Some looting, I do see as a form of protest, based in anger, frustration and the system.  Looting has some power to it.  I do believe some looting is being perpetrated by folks who want to stir the pot; either to further the racial divide, or simply because they like the excitement.  And yes, I believe some looting is being done by opportunists, looting for the stuff.

Martin Luther King Jr, in writing about looting said," "Urban riots must now be recognized as durable social phenomena. They may be deplored, but they are there and should be understood. Urban riots are a special form of violence. They are not insurrections. The rioters are not seeking to seize territory or to attain control of institutions. They are mainly intended to shock the white community. They are a distorted form of social protest.

The looting which is their principal feature serves many functions. It enables the most enraged and deprived Negro to take hold of consumer goods with the ease the white man does by using his purse. Often the Negro does not even want what he takes; he wants the experience of taking. But most of all, alienated from society and knowing that this society cherishes property above people, he is shocking it by abusing property rights."

Martin Luther King also referenced this quote from Victor Hugo, 'If a soul is left in the darkness, sins will be committed. The guilty one is not he who commits the sin, but he who causes the darkness.'  Our society has caused the darkness' and clearly continues to cause, the darkness.

I am encouraged.  I am encouraged that we see the beginnings of change.  I am encouraged that, mis-guided and too little too late as some of it seems, at least we are talking.  I am encouraged at specific proposals especially as related to policing and police unions.  

I was touched (not oh how sweet touched, but feeling it in my gut touched) by the young man who introduced Barack Obama a few weeks ago, Playon Patrick, and his poem,  So many strong words in that piece, I was struck by, "Tonight, a riot is the language of the unheard".  Give a listen.

In a conversation the other day, an acquaintance (white, male) commented that he wasn't thrilled with Trimet (our regional public transportation) removing the transit police in response to the Black Lives Matters/George Floyd protests.  He said he would feel less safe riding public transportation.  I thought for a moment, and then pointed out the black community has not felt safe riding public transportation because of the transit police.  So yes, he'll need to endure a bit of his white privileged discomfort to help our black community's be safer on public transport.

There is so much more to come, and come I hope it does.  There will be (and should be) discomfort to those of us with privilege.  Our (my) discomfort should come as society shifts, opens and listens.  There should be change, which is often uncomfortable.  Bring it.

May's Portland area real estate report

Whoo wee.  Its a wild ride out there!

No question, COVID has had an affect, and has slowed the number of transactions we have.  That being said, from April 2020 to May 2020 we've seen a 20.1% increase in new listings, and a 52.5% increase in pending sales.  Wait, what?  No wonder buyers are having such a hard time getting offers accepted.  Yes, we are solidly back in the land of multiple offers, bidding wars and offers well above list price.

Add to that, a shortened market time, 38 days in May 2020, compared to 44 days in April 2020, and 61 days when compared with year to date stats from 2019.

Oh yes, and the median year to date price has gone up 4.1%, to $415,000, compared to the year to date price from 2019.  For perspective, median price increased 2.5% in all of 2019.

Read the RMLS report.

A few updates on lending: Interest rates remain quite low.  Jumbo loans, often needed on higher priced properties, do still exist.  As you might imagine, due to the rapid onset off COVID restrictions and job losses, lenders are a bit spooked.  We're seeing multiple employment verifications on active loan files (sometimes asking about the borrowers prospects of future employment), and self-employed borrowers are often required to provide audited profit and loss statements.

Forbearance, what originally might have looked like a generous offer from lenders on existing loans, has played out a bit differently.  Most lenders offered to suspend payments for three months, with the balance of those missed payments due at the end of the three months.  Not such a help afterall.  And, anyone with a loan in forebearance, will have trouble getting a new loan.  So...perhaps one might re-finance to take advantage of lower rates and lower one's house payment -  a financially responsible thing to do.  But wait, if you're current loan is in forbearance, you may not be eligible to do so.  If you even called to inquire about forbearance, but didn't sign any papers or complete any process, your loan may have been put in forbearance without you even knowing it.  You might should check.

Similarly,  many student loans were automatically put in forbearance, without the borrower even inquiring.  If so, your payments may not be applied to what would be the current payments.  If you have student loans, log on and check to be are all looks as it should.

This is very clearly, a great time to sell.  If you are thinking of doing so, get in touch.  Its a bit more challenging to be a buyer these days, though I do have some tried and true methods that get offers accepted.

Because of COVID, we are using distancing and other protocols.  Masks, booties, gloves, and hand washing stations all help keep us safe.  I have these supplies on hand.

Socializing " these days"

If you know me, you know I am a very social person.  I LOVE settling in for a nice meal with good friends and family.  This "distancing" has certainly taken a toll.  I think, having been quite sick the first weeks of March, has me taking more precautions than many.

This past weekend, we engaged in our first distanced socializing.  Boy did it feel good!

Saturday evening, after dinner, we went to some friends and socialized around the fire pit in their back yard.  They had thoughtfully placed the chairs substantially more than 6' apart (6' is a bit of a random number, which I take to be a minimum).  We brought our own beverages.  They had sterilizing wipes available so we could use their restroom and wipe surfaces on our way in and out.

Sunday evening we went to some friends deck for dinner.  We brought our own food and drink.  They have a nice large deck, and had two tables set up, so we had our own table.  In addition to food and drink, I brought sanitary wipes (also known as gold, these days ) in case they were needed.  It was a lovely evening, and so nice to catch up.

In a way, this is socializing in its purist form; it's not about fancy meals and slaving in the kitchen, it's not about showing off your fancy house.  And hey, you don't even have to clean the house! Simply, it's about spending time together.  I like this.  It is odd though, inviting someone over and letting them know they'll need to bring their own...everything.

For now, we'll stick with this kind of socializing; small groups, outside, distanced, and no shared food.

What have you been up to?  Have you come up with fun or innovative ways to safely hangout with folks?

Thinking about selling that rental property?

Many sellers, preparing to sell a property, will do some fix-up, repairs and cleaning.  Often a seller hasn't thoroughly inspected a rental property during a tenancy. Are smoke and carbon monoxide detectors up got date (they'd better be, if it is a rental), does the water heater have the required seismic straps, I'd bet a deep clean to the bath and kitchen would be good, and so on.

The City of Portland and State of Oregon tenant protections have made it tricky to sell an occupied rental property.  SB 608, known as state wide rent control, also placed restrictions on moving a tenant out to sell. An owner must already have an accepted offer from a buyer who plans to owner occupy the property.  This means, any pre-listing or marketing work would need to be done with the tenant in place, and showings and marketing could be affected by a tenant's housekeeping and allowed showing access.

Selling to an owner occupant means the buyer will want to move in.  But it can take months, and City of Portland relocation fees, to move a tenant out.  Better to sell when one unit, or the whole thing if it is a single family property, is vacant.

Other things to do.  Be sure you have up to date financial information on the property.  That is, a current profit and loss showing real maintenance costs, insurance, owner paid utilities, ledger of rent history (if selling an occupied unit), ledger of tenant paid deposits and a list of included personal property(stove, fridge, washer, dryer)  Spend a bit of time getting these items in order before you sell.

Smaller, independent rental property owners aren't always the best at this financial record keeping.  The lack of information can look, to buyers like disorganization or even dishonesty.  Better to avoid giving these impressions.

If you have an upcoming vacancy, think, if this is the time to sell.  If you are in the City of Portland, in filling your vacancy, be sure to abide by the new tenant screening and deposit rules, now in effect.  More on those rules later.

This real estate market is SO interesting

We now have the stats for the month of April, which was our first full month of a COVID-19 influenced market.

As expected, we've seen decreases in both new listings and pending sales, with new listings down 32.4% from April 2019 and 17.9% from March 2020.  Similarly, pending sales are down 34.2% from 2019 and 12% from March 2020.

Inventory bumped up a tad, to 2.4 months.  But...market time decreased to 44 days, from 61 from the year, and March.  What?  That's a pretty substantial change.

And, we're seeing an increase in the median sale price, up 3.9%  year to date compared to the same time period last year.  A 3.8% increase in the median price for the previous 12 months.    That's all greater than the 2019 median price increase of 2.5%.

So fewer new listings, fewer pending sales, shorter market time and higher prices.  What the heck?  And all this amid distancing and hygiene protocols including no in-person open houses, restrictions on the number of people in a house at one time, booties, masks, gloves etc.

Different from the recession, housing and lending didn't cause this "downturn" if it even is a downturn.  With decisive buyers and sellers still transacting real estate, pressure remains on prices and market times.

We often make assumptions about motivations and pressure on buyers and sellers.  How people feel about and are affected by COVID-19 seems to vary greatly.  Some folks are fully employed, some not.  Life changes continue to influence real estate, with people transacting depending on their specific situations.  Some buyers and sellers are sitting out of the market until things clear up, others are proceeding.

Its pretty clear to me that we'll have several months, if not longer, with some distancing guidelines and protocols.  Our challenge is to continue living our lives amid those guidelines and protocols.  The path I find, and the risks I choose to take may vary from yours.  I may add in a second or third grocery store trip per week, while someone else might attend a large gathering. Neither are right or wrong.  Similarly, some buyers and sellers may proceed to transact, while others aren't comfortable doing so.  Neither are right or wrong.

I am working, and should you be comfortable, I'm glad to help you transact real estate.  I do have a (small) supply of gloves, masks, booties and disinfecting wipes to help keep us safe.  If you've got questions about the market (or our protocols) get in touch.

A brief history of building codes as they relate to health and safety

Way back when, there were REALLY basic building codes.  King Hammurabi created the first known building codes in Babylon, in 1758 BC.  Here are a few of his rules, per lexology.com

229 If a builder builds a house for someone, and does not construct it properly, and the house which he built falls in and kills its owner, then that builder shall be put to death.
230 If it kills the son of the owner, the son of that builder shall be put to death.
231 If it kills a slave of the owner, then he shall pay, slave for slave, to the owner of the house.
232 If it ruins goods, he shall make compensation for all that has been ruined, and inasmuch as he did not construct properly this house which he built and it fell, he shall re-erect the house from his own means.
233 If a builder builds a house for someone, even though he has not yet completed it; if then the walls seem toppling, the builder must make the walls solid from his own means.

These early building codes, along with many of ours today, focus on health and safety.  Many building code updates and revisions have been in reaction to disasters such as fires, floods, earthquakes and hurricanes.

After  9/11, changes were made to the codes for high rise building to provide additional stairways, better emergency exit lightning and specific exit paths.

Following Hurricane Andrew, Florida made some changes to their building code, requiring stronger and more impact resistant glass, and minimum design loads, especially with regard to wind resistance.

And after the Northridge earthquake, owners of concrete tilt-ip buildings had to complete mandatory retrofits on certain welds that were considered of lesser quality.   

Over the years, many states and municipalities enacted their own building codes.  As a matter of fact, it wasn't until 2008 that New York adopted the International Building code.

Why am I talking about building codes now?  It looks as though group living may be putting people at higher COVID-19 risk, whether it be room mate situations, care facilities, prisons, dormitories and even apartments and condominiums.  

Here in Portland, we've been moving toward more dense housing.  Tiny houses, accessory dwelling units (stand alone or basement/attic units), micro-housing and co-housing can be seen in the metro area .  Even condominiums and apartments have more common elements; bike rooms, roof decks, common rooms and gyms.

How do you practice social distancing when there isn't enough room?

Will we see a move away from common entry buildings?  Will multi-unit buildings with distinct exterior entries for each unit prevail?  And will these changes be per building codes, or market forces fueled by consumer preference?

Some quick updates on lending and real estate

While states are starting to talk about benchmarks needed to "open,  Portland's real estate market marches on.

Tracking lockbox "opens" can be an early indicator of a changing market.  That is, our electronic boxes allow tracking of how many times lockboxes were opened in a certain week.  Last week, in the Portland area, our lockbox opens were up almost 6% from the previous week.  hmm.

Anecdotally, there are plenty of reports of multiple offers, with listings selling after just a few days on the market.  Tracking pending sales in certain zip codes,  I can see houses switched to pending, in a broad price range.

That brings me to lending.  Lenders are moving pretty quickly to limit their exposure with regard to certain loan types.

 Lending on jumbo loans (in our area, loan amounts above $550,000) is being curtailed.  Some lenders are still offering these loans: mostly banks offering loans to existing customers.  In some cases, banks may be requiring a certain balance of funds on deposit.

Chase Bank is now requiring 20% down and a credit score of 700 or over ,for their conventional loans.  Before the advent of mortgage insurance, all home loans required 20% down.  Consider this a return to tradition.  Other lenders are still offering lower down payment options, and FHA and VA loans are still available.

Most all lenders are being pretty vigilant about employment verification; double checking through the escrow period and before funding the loan for closing.  In addition, some lenders are having employers complete a form with information about borrowers' prospect of future employment.

Get in touch if you have questions about your specific situation or property.

COVID-19 and housing preferences?

I've been thinking a lot about COVID-19 and distancing.  I live in a single family home, with a distinct front door entrance.  I easily control who enters.  My daughter lives in an apartment building with two secure, exterior entrances.  This means, she, the other residents and other residents' guests enter through those two doors.  There is one elevator, and two stairways.  From a germ exposure standpoint, were she staying there (she's staying with us), she'd be exposed much more than we would.

It seems that the density of living situations is playing a part in COVID-19 infections.  New York City is so dense, strict shelter in place rules aren't showing the same positive results as other places.  Similarly, with seemingly rampant cases, care facilities and nursing homes are struggling.  The assisted living place where my dad lives, was quick to keep residents in their apartments, and forbid outside visitors, but for essential personnel.  We're thankful this seems to be working.  But this is a place where all residents have their own distinct apartments.  Imagine working through this in a shared room environment.

As many of us think about "after" and "normal", I can't help but wonder if we'll see changes in housing preferences.  Do some folks realize working from home is great, if only they had a distinct home office?  Will people move to be closer to family, after having been unable to travel to be with family? Will people in shared living spaces want more control of their environment?

Will all off this influence housing amenities?  Buildings with secure entrances and elevators have been popular.  Will people now favor apartments and condominiums with distinct, outside entrances?  Will developers tout superior air handling capacity, mangers advertise aggressive cleaning protocol?  Will lobbies, roof decks and common rooms no longer be seen as desirable amenities?

As our journey to "after" is sure to be slow, possibly with some set backs, it may be years until we can look back to see changes to housing preferences.  That being said, has "stay home, stay safe" caused you to think about possible changes to your living situation (aside from I wish the fridge refilled itself and the laundry got magically done)?

More COVID-19 influenced thoughts

I last wrote about loan forbearance and kittens.

Since then quite a few folks have talked with their lenders, and gotten forbearance agreements for their mortgage payments.  But...many of the forbearance agreements, in the fine print, require re-payment of the full deferred amount at the end of the forbearance period.  This means, if you defer payments for three months, you'd have to pay those three months' payments after three months.  So unless you'll somehow come by that due balance all at once, I'd think twice before signing such an agreement.  It may still be worth contacting your lender to ask, but do read the fine print.

Currently, real estate activity is still permitted in both Oregon and Washington.  Open houses and brokers open houses are pretty taboo, and our multiple listing service has removed that data field, making it challenging to promote open houses.  This is as it should be.  Most offices have recommended  protocols in place for property showings including cleaning, booties, hand washing and social distancing.  Title companies are continuing to close transactions, and county recording offices are handling electronic recordings.

The City of Portland permit office is closed, so building permits, including those for sewer repair/replacement and radon mitigation systems are not available.  Multnomah County's in-person recording window is closed.  It's a challenge to get repairs completed prior to closing, and moving  companies either aren't working, or are very booked.

It sounds as though some loan programs geared toward first time and low income buyers, may be tightening their lending requirements.  Programs like FHA have traditionally allowed a buyer to have a lower down payment, lower credit score and higher debt level than conventional loans.  While these programs will remain more approachable than conventional loans, they will be requiring buyers to have an amount of financial strength.

A few blogs ago, I talked about ibuyers; Zillow, OpenDoor and others.  These companies can offer an easy button to sell your house quickly when timing or other circumstances make selling via traditional means untenable.  Now seems like a great time to use this service, if, for instance you need to sell for a job relocation, to lessen expenses during the pandemic etc.  Oh, but Zillow isn't buying right now, and I'm not sure about OpenDoor.

Who is working now, (carefully) are Realtors; licensed and doing business here in Portland.  We're taking plenty of precautions, with cleaning and distancing protocols in place.

And kittens!  What about kittens?!  Actually, today I'm thinking about puppies!

The folks at One Tail at a Time will soon have puppies available for adoption.  If a puppy seems like too much work (they are very busy creatures) One Tail at a Time has more mature dogs too.  You just might need a buddy...

Loan forebearance and kittens!

I hope you're all staying healthy, and surviving whatever version  of "social distancing" you are observing.

A few things, real estate related, to know.

It looks as though mortgages through Fannie Mae and Freddie Mac (the is about half of all US loans) will be eligible to have mortgage payments reduced or suspended for up to 12 months.  Don't just stop making your payments!  Contact your loan servicer to work out a plan.  I'm optimistic some lessons learned by lender in the 2007/2008 financial crisis will help implement this plan quickly.  Rumor has it, you won't have to submit a bunch of paperwork in triplicate.  I believe they are working for this process to be completed by phone.  You will, eventually, have to make these payments.  This is not loan forgiveness, just a break from having to pay if your income has been affected by COVID-19.

If you are a tenant, or housing provider in Multnomah County, the county is placing a moratorium on most residential evictions for the duration of the crisis.  In addition, tenants may pay partial or no rent, not be subject to late fees, and have up to six months to pay back the owed rent.  Non or partial payment of rent would not threaten their status as tenants in good standing.  Currently, the state of emergency declared by the county goes through April 8th, so this policy would just be for April rent. I expect the state of emergency will be extended.

Not so real estate related.  If you have been considering adding a pet to your family, now might be a great time.  With folks around the house MUCH more, your family would have plenty of time to help a new pet settle in.  Or, you might consider fostering for a local rescue group. Also, kitten season is here! this gorgeous mama will be ready to part with her kittens in May.  You can find out more through Animal Rescue and Care.

Lastly, people actually are transacting real estate.  Sincere efforts are being made by all involved to have "clean" showings, interest rates remain low and seemingly folks have more time to contemplate a move. Who knows, maybe being home bound has folks looking for more, or different space.  I am working, just with a bit more space between my clients and me.  If you'd like to look at houses, I'm glad to do so, but let's take our own cars.   Similarly, I'm glad to list your home, but will steer away from open houses.

A funny thing about Zillow

I put a new listing on the market last week; a nice mid-century classic in Northeast Portland, priced at $435,000.  At the time, the zestimate was $429,000 and change, and showed the value had increased $5000 in the previous 30 days (I should have snapped a picture).

Two days after the listing went live, the zestimate was $437,000 and change, and showed the property increasing in value by $13,000. in the previous 30 days.

Today:

This is the same house, over less than a week.

We're looking at offers tomorrow, and I expect we'll have at least four from which to choose.  Zillow can be a handy tool, sometimes, to gauge the general value of a property.  And clearly our pricing is right in the range, though I priced to comps, and didn't look at Zillow until it was listed.

I'll update once the sale closes, with the final selling price.