Moving to Portland
 April 2016 Newsletter
IN THIS ISSUE
NEWSLETTERS


PORTLAND
NEIGHBORHOODS NEWS

Shelli Gowdy
Real Estate Broker
503-497-5061
Windermere Stellar
Susan Marthens
Principal Real Estate Broker
503-497-2984
Windermere Stellar

April 2016 at a Glance
 
Clyde Holland, Chairman and CEO of Holland Partner Group states in an article written for the Center for Real Estate that "From 2000 to 2014 the number of individuals in the Portland metropolitan area grew by 400,297. During this same time only 155,704 units of housing were constructed. With the changing household demand driven largely by creative class workers and millennials, the majority of which prefer single occupant housing, we estimate this housing shortfall exceeds 40,000 units, or 4,000 units annually over the next decade."

Holland thinks he can fix the housing shortage in the Portland metro area so you'll want to read the complete article that we include in this issue of the newsletter.

Please let us know if you have problems viewing the newsletters by emailing newsletter@movingtoportland.net.

Below information from the RMLS™    Market Action report for April 2016.

Market Action Reports 
The Market Action reports for the Portland metro area as well as all Oregon areas and Southwest Washington are also available to download.  It also has the  summary  page for the April 2016 Portland metro area home prices.
April 2016 Real Estate Highlights
The Portland metro area continued seeing seasonal gains this April, although numbers are cooler than in April 2015. New listings (4,082) gained some traction this month, rising 3.4% above the 3,949 new listings offered in April 2015, and 19.7% above the 3,409 new listings offered last month in March 2016.

The last April there were more new listings was in 2010, when 4,713 were offered.

Closed sales (2,611) ended 4.5% below the 2,734 closings posted last year in April 2015, but edged 1.8% ahead of the 2,565 closings recorded last month in March 2016. Pending sales (3,432) rose 11.6% above the 3,076 accepted offers from March 2016 but were 5.0% lower than the 3,613 offers accepted last year in April 2015.

Total market time in the Portland metro area decreased to 43 days this April, with inventory increasing very slightly to 1.4 months. There are currently a total of 3,721 active residential listings in the Portland metro area.
 
Click on image   to enlarge.
 
Average & Median Sales Prices
Median Sale Price for a Home in the Portland Metro Area is $318,500 in April 2016.

Comparing the average price of homes in April of this year ($397,700) with the average price of homes sold in March ($385,000) shows an increase of 412,700. In the same comparison, the median has increased $15,000 from $335,000 to $350,000.

 
Click on image to enlarge.
 
Sales Price Percent Change
Average Sales Price Percent Change:  8.7% ($365,100 v. $336,000)

The Average Sale Price Percent Change is based on a comparison of the rolling average sale price for the last 12 months (5/1/2015 - 4/30/2016) with 12 months before (5/1/2014 - 4/30/2015).
  • Average Sales Price Percent Change: 8.7% ($365,100 v. $336,000)
  • Median Sales Price Percent Change:  9.8% ($318,500 v. $290,000) 
Market Time April 2016
Total market time in the Portland metro area decreased to 43 days this April, with inventory increasing very slightly to 1.4 months. Total Market Time is the number of days from when a property is listed to when an offer is accepted on that same property. If a property is re-listed within 31 days, Total Market Time continues to accrue; however, it does not include the time that it was off the market. 

There are currently a total of about 3,700 active residential listings in the Portland metro area.

Click on image to enlarge
Housing Affordability Index
Index for 1st Quarter 2016:  123.4

The housing affordability index (HAI) provides a way to track over time whether housing is becoming more or less affordable for the typical household. The HAI incorporates changes in key variables affecting affordability: housing prices, interest rates, and income.

The HAI index has a value of 100 when the median-income family has sufficient income to purchase a median-priced existing home. A higher index number indicates that more households can afford to purchase a home.

In the 1st quarter 2016, the composite HAI for the Portland-Vancouver-Hillsboro MSA was 123.4, indicating that the typical household had 123.4 percent of the income necessary to purchase the typical home:

HAI = ( Median Family Income / Qualifying Income ) * 100
123.4 = ($73,900 / $59,893) * 100

Qualifying income is derived from the monthly payment on the median-priced existing home, at the effective mortgage interest rate. The HAI assumes borrowers make a 20 percent down payment and that the maximum mortgage payment is 25 percent of gross monthly income for the household.  That means the monthly P&I payment cannot exceed 25 percent of the median family monthly income.

There is a wide difference in HAI reporting as it depends upon the numbers (e.g., income, mortgage increase rate, and housing price) used in the calculation. For example RealtyTrac reported that the 1st quarter in 2016 HAI index was 106 for the Portland MSA area. RMLS reported the HAI of 127 for the last quarter of 2015 - they have not released their 1st quarter 2016 number yet.

Components of the index include:

Median price of Existing Single-Family Home Sales:  Comes from the existing home sales monthly survey conducted by the National Association of Realtors (NAR). Quarter one 2016 the price was $326,700.

Monthly Mortgage Rates:  NAR uses the  "effective mortgage rates" for pre-occupied homes in the HAI calculations. The "effective mortgage rate" is reported by the Federal Housing Finance Board on a monthly basis. The effective rate reflects the amortization of initial fees and charges. For the index above the mortgage rate used was 4%.

Median Family Income:  NAR uses Income data from the Census Bureau American Community Survey.  Census income data is not available for the upcoming year.  Thus, NAR analysts project income levels for the upcoming year that are used in HAI calculations. The latest HUD median family income for a family of four in the Portland-Vancouver-Hillsboro MSA was $73,900.
Cost of Residential Homes by Community
In the chart below we have extracted the most important data from the RMLS Market Action report (21 columns) and created this simple chart. Below is the chart that displays the March 2016 numbers by area or community. It includes the following:
  • Number of closed sales.
  • Average price of homes sold.
  • Year-to-date average price.
  • Year-to-date median price.
  • Average sales price percent change. 
    Click on image to enlarge or  click here  to view the report (pdf).
Mortgages
Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®) on May 12.  Disappointing April employment data once again kept a lid on Treasury yields, which have struggled to stay above 1.8 percent since late March. As a result, the 30-year mortgage rate fell 4 basis points to 3.57 percent, a new low for 2016 and the lowest mark in 3 years. Prospective homebuyers will continue to take advantage of a falling rate environment that has seen mortgage rates drop in 14 of the previous 19 weeks.
  • 30-year fixed-rate mortgage (FRM) averaged 3.57 percent with an average 0.5 point for the week ending May 12, 2016, down from last week when it averaged 3.61 percent. A year ago at this time, the 30-year FRM averaged 3.85 percent.
  • 15-year FRM this week averaged 2.81 percent with an average 0.5 point, down from last week when it averaged 2.86 percent. A year ago at this time, the 15-year FRM averaged 3.07 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.78 percent this week with an average 0.5 point, down from last week when it averaged 2.80 percent. A year ago, the 5-year ARM averaged 2.89 percent.) 
Penrith Home Loans 
  
Penrith Home Loans   (PHL) Penrith was formerly called Windermere Mortgage Services, and they changed their name in 2015. PHL is Northwest owned and operated and headquartered in Seattle, with offices throughout Washington and Oregon.  PHL is a full service mortgage banker and direct lender.  In addition, they have access to numerous other lenders which allows them to meet everyone's individual needs.
  • West Portland Contact:  Bertha Ferran, telephone (503) 464-9215. Address: WMS Series LLC/AT, West Portland Branch, 6400 SW Barnes Road, Suite 305, Portland, OR 97225.
  • East Portland Contact:  Tanya Elder, telephone (503) 497-5367. Address: WMS Series LLC/AT, Lloyd Tower Branch, 825 NE Multnomah Street, Suite 120, Portland, OR 97232.
  • Lake Oswego Contact:  Clayton Scott,  telephone (503) 497-5060. Address: WMS Series LLC/AT, Lake Oswego Branch, 220 "A" Avenue, Suite 200, Lake Oswego, OR 97034.
Weather
Monthly Weather Summary

Below is the National Weather Service
weather data for the month of April 2016. These readings are from the Portland airport. 
  • Average Monthly Temperature for April 2016:  57.8 (5.5 degrees above normal of 52.3 degrees).
  • Warmest Day:  89 degrees on April 27th. 
  • Coldest Day:  39 degrees on April 15th.
  • Most Rainfall in 24 Hours: 0.81 inches on 04/13-04/14.
  • Rain Days: 13 days with light rain and one day with heavy rain.
  • Clear/Cloudy Days for April 2016:  6 fair days, 12 partly cloudy days, and 12 cloudy days.
  • Average Wind Speed for April 2016:  5.6 mph.
Rain
Bright pink blossoms decorate a blooming decorative cherry tree at the Japanese Garden in Portland. Photo credit David Cobb.
A "water year" is defined as the 12-month period beginning October 1 of any year and continuing through September 30 of the following year. The water year is designated by the calendar year in which it ends and which includes 9 of the 12 months. Thus, the water year ending September 30, 2016 is called the 2016 water year.

The normal precipitation for a water year in downtown Portland is just under 44 inches and at the airport it is 37.04 inches. The official measurement is taken at the Portland International Airport (PDX) which is one of the driest places in the metro area.

The HYDRA rainfall network is operated and maintained by the City of Portland Bureau of Environmental Services, and there are 38 gauges throughout Portland where rainfall is measured - the water year average for these 38 gauges is 42.77 inches.
  • April 2016: Normal precipitation at the airport is 2.73 inches, and we had 1.96 inches in April.
  • Water Year:  As of May 17 we have had 48.77 inches of rain (average of 38 gauges from different locations in the metro area)  so we have already exceed our average water year total of 37.04 (airport average) inches. We will add a few more drops by the end of September when the 2016 water years ends. The rainy season is coming to an end.

April Sets Record

April 2016 was the warmest April on record in Portland, Oregon. The average temperature for the month at Portland International Airport was 57.8 degrees, which shattered the previous record of 56.3 degrees set in 2004 and was about 5.5 degrees warmer than the expected average temperature for April. This is the ninth time since 2014 that Portland has set or tied a record for warmest average monthly temperature.

In fact, this is closer to the average temperature for May, which is about 58 degrees. According to the National Weather Service, April 2016 was about as warm as an average May, especially impressive considering spring is a transition season where monthly averages ramp up quickly from winter to summer.
An Alternative Development Strategy to Address the Area's Housing Shortage
Clyde Holland, Chairman and CEO of Holland Partner Group (HPG) authored a paper for the The Center for Real Estate quarterly winter report published in early 2016 entitled, "An Alternative Urban Development Strategy to address the Portland Metropolitan Area's Housing Affordability Challenge." The Center for Real Estate is a department at Portland State University.  

HPG actively develops, redevelops, constructs, acquires and manages multi-family communities with institutional partners throughout the Western U.S. Over the past 30 years Mr. Holland has had primary responsibility for over 50,000 units of development and redevelopment in some of the Western U.S.'s most demanding markets. Within the multi-family industry, Mr. Holland has taken a significant lead in the development of new multi-family product concepts focused on high-density, urban infill and mixed-use opportunities.

Housing Shortfall Exceeds 40,000 Units

Holland states that, "From 2000 to 2014 the number of individuals in the Portland metropolitan area grew by 400,297. During this same time only 155,704 units of housing were constructed. With the changing household demand driven largely by creative class workers and millennials, the majority of which prefer single occupant housing, we estimate this housing shortfall exceeds 40,000 units, or 4,000 units annually over the next decade. The overwhelming housing preference for many individuals including creative class professionals is to be urban and walkable. This accounts for the higher rent growth in the urban core. Addressing this urban housing shortfall is also supportive of attracting high wage jobs which will benefit the entire region." 

Holland's Solution

To address the shortfall we recommend removing barriers in support of 25,000 units of new high-rise housing in Portland's walkable urban core, 15,000 units of mid-rise housing at transit locations and 9 million square feet of urban office space to attract new economy jobs. The ratio is 2,500 units annually in the urban core (60 percent of demand) and at 1,500 units annually at transit locations (40 percent of demand). Both locations can produce the required housing with minimal impact on public infrastructure and transportation. 

Developing effective solutions to address the Oregon's housing affordability challenge is an important policy imperative. However, to achieve a sustainable balanced market this challenge must be addressed in conjunction with policy that supports an adequate supply of housing, higher workforce wages, increased resources for education, police, fire, parks, and transportation. Only when each of these are effectively addressed will employers and citizens develop the confidence to invest in a sustainable way towards a successful future.

Holland states in the report that "The only way to have housing that is affordable to all income levels is to have an adequate overall supply of housing. To achieve this, you have to measure demand and deliver a supply at or above demand. Only by removing barriers to housing construction will it be possible to increase production and hold rising costs in check over the long term. One possible cost effective solution to providing affordable housing is to subsidize eligible households accessing the private market."

To Read the Entire Report Click Here
Visiting Woody Guthrie's Small Portland Apartment 75 years Later
Woody Guthrie with guitar and harmonica in Los Angeles, just before he moved his family to Portland in 1941. (Photo by Lester Balog/Courtesy of Woody Guthrie Center/Woody Guthrie Archives)
Next year,  an East Portland community development agency will honor Woody Guthrie by naming a new affordable-housing complex in Lents after the legendary songwriter and champion of the downtrodden.

"I've been thinking for a long time that celebrating and acknowledging history is important for the neighborhood," said Nick Sauvie,  ROSE Community Development's executive director. "Woody Guthrie's story is really significant for Lents. And we haven't done enough to say he was here."

At a time when skyrocketing rents are pushing low-income residents to the city's edges, ROSE's multifamily Woody Guthrie Apartments will actually go up a few blocks from the address where the guitar-strumming  Bernie Sanders of his day lived in May of 1941.

The old four-plex at  6111 S.E. 92nd Ave., located on the cusp of Interstate 205, still stands. Ironically, nothing outside the building acknowledges that one of America's greatest songwriters created some of his greatest work with three children at his feet in a cramped apartment on the second floor.

"Seriously? I had no idea Woody Guthrie lived here," a surprised property manager with  Interwest Properties remarked as I walked around the 400-foot living space. "Had no idea."

Yes, the Okie drifter most famous for writing "This Land is Your Land" and eventually inspiring Dylan, Springsteen and Wilco was a Portlander -- if only for four weeks when he was restless and 28.

Desperate for work in the dust storm of the Great Depression, Guthrie arrived in Portland 75 years ago this month with his wife, Mary, their three children and a well-used guitar with "THIS MACHINE KILLS FASCISTS" scribbled on the front.

Guthrie had been hired by the Bonneville Power Administration to write songs promoting the building of new dams along the Columbia. In 30 frantic days, he wrote 26 songs and recorded nine of them, earning $266.66 - or $10 a song.

And Guthrie's young brood ate, slept, sang and struggled to make ends meet in that tiny space.

Greg Vandy, a Seattle radio host and author of the  new book  "26 songs in 30 Days: Woody Guthrie's Columbia River Songs and the Planned Promised Land in the Pacific Northwest," said Guthrie worked on some of his most iconic songs in the apartment.

They included the classics "Roll On, Columbia," "Grand Coulee Dam" and "Pastures of Plenty."

"Woody wrote in the back seat of a car when they were driving him around," Vandy said. "He'd also write on a typewriter at the BPA offices. Then he'd take them home and work on the songs in the apartment in the evening hours, testing them out on Mary there."

At $795 a month, a struggling musician today might be able to afford to rent the place.

Vandy said Guthrie's 30 days in Portland was one of the artist's most productive periods.

But it almost didn't happen because BPA bosses weren't sure an avowed socialist was the best person to write songs selling hydropower, irrigation and the Grand Coulee Dam to the masses.

Guthrie had already laid down recordings at the Smithsonian and hosted a show on CBS Radio. But Guthrie's application could have just as easily been for a jack-of-all-trades seeking work.

Read the Entire Story by Clicking Here

Source:  "Visiting Woody Guthrie's small Portland apartment 75 years later," by Joseph Rose. Published May 8, 2016. T he Oregonian/OregonLive.


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