Housing exploded into the 21st century on a high note, breaking records for home sales, home ownership rates, and the value of residential construction. Buoyed by the longest economic expansion in history, these residential real estate indicators all set records in 1999.
While Portland is occasionally an enigma when stacked next to national trends--mostly because its urban growth boundary demands greater infill development--a report released this summer is nonetheless likely to raise some eyebrows.
"The State of the Nation's Housing: 2000," prepared by Harvard University's Joint Center for Housing Studies and funded by the Ford Foundation, found that Portland's housing prices leaped 44% over the past decade--and even rivaled its neighboring peers, Seattle and San Francisco, by substantial percentage points.
This summer, metropolitan Portland's median sales price for homes rose above the $170,000 mark--and the Lake Oswego/West Linn market soared above the $290,000 mark--according to the Residential Multiple Listing Service's Market Action.
Crunching numbers adjusted for inflation and factoring out rises in home size and quality, the Harvard University report concluded that Portland had the third-largest leap in housing prices out of 35 U.S. cities. The heftiest increases were tallied by Salt Lake City, with 60%, and Denver, with 49%. One of the largest dips in housing prices affected another West Coast neighbor, Los Angeles, which saw prices slump 18%. Metro Councilor Rod Park attributes much of Portland's home-pricing increases to the influx of out-of-state workers. Intel Corporation, for instance, recently announced plans to expand facilities in Hillsboro's high-tech Sunset Corridor. Park said the global chip maker plans to fill many new jobs with out-of-state employees.
The trend with Intel snagging local tax breaks and then bringing in workers from elsewhere ought to raise the eyebrows of local officials, and especially local colleges and universities, he added.
"What we view up here as expensive has a lot to do with people with more earning potential coming in and bidding the prices up," Park said.
According to an affordability index prepared by the National Association of Home Builders, Portland recently ranked as the 25th least affordable of 192 major U.S. cities.
(Source: The Portland Business Journal, Brian J. Back Business Journal Staff Writer.)
Victorian Renovations will be targeting upper income couples to rent its properties. Currently, although the labor market is buoyant in Portland, there is some uncertainty ahead, meaning that there are many people moving into the area who are unsure whether they will be staying for more than a couple of years. In addition, there are a large number of people moving to Portland from out of state who do not know the city as yet, so would rather rent a home than commit to a purchase.
The largest population group in Portland is 20-44 year olds and VR will be targeting the 25 to 30 year olds within this group. They have been out of college for a few years and have established careers, but may not be ready to settle down yet with a home purchase. In addition, many of them are earning high wages with high tech companies. It is estimated that this group makes up 5% of all people in the 20-44 year old age group in Portland.
|Under 5 years||29,779||23,883||30,314|
(Source: US Census. Median value is the middle value, not an average.)
Below are the most recent figures we are able to find on the Portland housing market. If trends in the housing market have remained similar, the vacancy rate of 5.59% looks very promising for VR, since the target is to have the building occupied 80% of the year.
(Source: US Census.)
Competition comes in a number of forms in the portion of the housing market which VR will target. There are a large number of housing options in the Portland market, however we believe that there are very few houses that have been renovated in a unique Victorian style that are for rent. For this reason, although this house will be converted into two 2-bedroom apartments, we will be able to charge a premium price for rental. Where the average price for a 2-bedroom apartment in downtown Portland is $850, we will charge $900 per unit. We believe that there is room in the market for this vintage and quality of building in the rental market.