Wednesday, June 22, 2005

What I'm Up Against - The Ridiculous Housing Market

It's bad all over. I know this - I read the papers. I'm plugged in. But it seems especially bad in Portland. What am I griping about? The skyrocketing price of real estate, of course. Duh. Maybe it's because that's where I'm from and where I hope to return to, but the cost to buy a home in Portland is out of control. Seriously out of control.

I actually really like the home buying process. I love looking at homes and the nervous excitement that comes when you think you've found the perfect home and put in an offer. Will it be accepted?? What will they come back to us with? I'm sick like that. I'm not such a fan of the selling process or the moving process, but I'll take the bad with the good. I think I must have been a real estate agent in a former life.

In a dramatic statement of my adulthood ("I'm all grown up now, see? I don't need to be married! Ha!") I bought a cute little house all by myself back in 1996. It was small but surprisingly spacious at the same time: 3 bedrooms, 1 bathroom, indoor laundry/storage/mudroom, hardwood floors - the works. It was post-war construction (when they did it right) built in 1950, I think. It had a whopping 950 square feet and I paid $96k for it. It was yellow with white shutters. No garage. I loved it. The neighborhood was "in transition" (code for emerging ghetto), but I felt safe and I was very proud of myself. I had arrived in the world of the responsible adults.

2 years later Mr. Chick finally got around to proposing (we'd been dating 6 yrs by then!) and he, too, owned his own home. We agreed that we should both sell our houses and buy one together as married people vs. one of us moving into the others' place. I sold my little bungalow, having done nothing to it other than live in it, for $107.5k - a nice little profit in just 2 years. Mr. Chick also did well with his place. So the hunt was on for a new place at the same time as the wedding plans (we got engaged an married within 6 months). We found just what we were looking for: a 2-story contemporary/traditional home with 3 bdrms, 2.5 baths, a formal living and dining room, a kitchen w/ an eating nook and a family room off the kitchen. It had a laundry room and a 2-car garage on a big-ass corner lot with a view of the mountain. We paid $189k for it. When we decided to go to law school 4 years later (2002) we sold it For Sale By Owner for $221k. Not a great return, but it was what it was.

In Eugene we expected the housing market to be much more affordable. We were so wrong! This shocked us. The cost of housing here is nearly as bad as the cost of housing in Portland, but the wages in Eugene seemed lower. So really, in many ways, Eugene is MORE expensive. And we moved here when there was a big shortage of real estate. We were downsizing to prepare for student life and a tight budget. We didn't want to spend more than $150k on a house. That didn't give us many options. We ended up putting in offers on a couple of places and losing out because a bid war would start and we'd get priced out quickly. It was stressful. I finally found the house we have on a total fluke. I was out with an agent to look and knew the area I liked. We were driving down the street randomly and happened to spot a For Sale sign in the yard. It's a cute house, but small. We were surprised that it didn't turn up in her search - how could such a small place be more than $150K?? Maybe it only had 2 bedrooms or something. So we called - from the driveway. Turns out the sign had gone up only 10 hrs before and the house hadn't even hit the MLS yet. The asking price was $151k and it had 3 bedrooms. So we called the owners who let us come in to see it right away. I made a full price offer on the place that day - Mr. Chick never saw it before we officially bought it. Thankfully our offer was accepted and we moved in a month later.

Now it's 3 years since moving in and it's nearly time to think about moving out. We can't stay in Eugene - there aren't job opportunitites for Mr. Chick here. We hope to return to Portland. Sooo... being the freak that I am, I'm always keeping my finger on the pulse of real estate there. It is utterly ridiculous what the price of houses has done in our absence. I mean, it's BAD. Skyrocketing asking prices and bids being offered for even more. There are more buyers in the market than sellers, so sellers are getting whatever they want for their homes. Mr. Chick has a SWEET job interview today in Portland. I'm totally getting ahead of myself by projecting where we'll be if he gets an offer. I've done some searching to see what we can expect. Oh.My.God - ! Who can afford to buy a house anymore? Seriously. I don't want a mansion! I don't need all the fancy top-of-the-line features! I just want a decent, comfortable home in a good area with acceptable schools and a manageable commute. At a minimum we need 3 bedrooms. 4 would be better. I want at least 2 bathrooms, but 2.5 would be ideal. I'd like to have more than 2000 sq.ft. but would be ok with 1800 (I've been living in 1200 and that is too damn small with 2 kids, IMHO). I'd like a big kitchen and a formal dining room (I LOVE dining rooms!). A flat, usable yard would be good. My wish list is long, but my must-have list is short. I'm not scared of having to make cosmetic changes/updates. Major remodels? - that's another story. There are many nice suburbs in the Portland area we are willing to consider, mostly south. A quick search of those areas gave me serious sticker shock. Behold:


Totally my style: traditional/colonial. In fact, in looks like the same house I grew up in! But it's $300k for 4 bedrooms and 1966 sq.ft. That's actually decent in this market, if you can believe it!


This number also has 4 bedrooms and 2120 sq. ft., but the asking price is $320k! Yikes.


I really like the red door and dormer windows of this one. It has 4 bedrooms and 2389 sq.ft. and the price tag is a staggering $320k. Gulp!


This baby looks impressive, but it only has 3 bedrooms, 2162 sq.ft. and the asking price is $350k. Is that ridiculous or what??!

So can you see what I'm up against?? We're in trouble. Admittedly, these are very nice homes. They're upper middle-class. Surburban neighborhoods. There are many that are not so nice and are going for even more money. Fixer-uppers in sketchy areas. These are just a sampling of homes that appeal to me. We will make more than we should on our little house here (again, the market in Eugene has remained good for sellers and people are getting whatever they ask for their homes.) We'll be able to get $200k or thereabouts for our little place. That blows me away. But we'll need it if we have any hope of buying a house in Portland. Can you say house-poor?? We would like to stay under $300k but that might be hard to do. Depending on how much he'll make as a starting new attorney, we may not have a choice. It's hard to feel like you're going backwards, but that's how fast the market is moving. We can afford less today than we could before law school (most likely). Say it with me: Real Estate Bubble. And oh yeah, before I forget to mention it, Oregon doesn't have a sales tax. That's right, no sales tax. (Do your shopping here!). So to make up for it our property taxes are super-high. The taxes on these home would be in excess of $4000/year. That really makes a big difference on your monthly mortgage payment....

I probably sound selfish for griping about *only* being able to afford a house in the $200k - $300k range. I fully recognize that that is a shitload of money. A quarter of a million, in fact. I know we're fortunate. Mr. Chick and I made some good, sound investments in our early days when we were D.I.N.K.'s (double-income, no kids) and both working well-paid, professional jobs. Now I stay home full-time (for now) and we're trying to make it on one income. We've protected ourselves financially and have made a lot of sacrifices. We've been living on less than $30k/yr during law school. It's just hard to see what you want and see it slip further away because of a silly housing boom. I also know that everything is skewed regionally. What might be considered high-priced here is a damn good deal somewhere else. But it's all relative, right? And if things in the real estate market keep going the way they're going we're going to have to move in with our relatives just to have a roof over our heads. Ha!

Keep your fingers crossed for Mr. Chick and his interview today. All of my worrying will be for naught if it goes well.Posted by Hello

Comments:
I think you could get these for about $100,000 less in Pittsburgh (but our property taxes are insane). I like the first one the best except I would want a big front porch added.
 
MP, know the West side can be considered a little scary, but maybe you could look for something off of 205 on that side of town. Unless having a PDX address is important to you?
 
there are many parts of the metro area I'm totally open to, but Mr. Chick is very specific about which areas he will or won't live. Most reasons have to do with traffic/commute issues (he's likely working downtown). He won't do west (hwy 26/sunset) because of the traffic. He won't do 205 for the same reasons. He won't do (or would prefer not to) do Multnomah County for the ridiculous extra special taxes they imposed a few years ago. That leaves us with a few areas south off I-5 in Clackamas County. A Portland address means nothing to me - I don't care with "town" I live in. MOst of the homes I posted pics of were in Tualatin or Tigard. I used to live in NE PDX and loved it, but am not wild about PDX Pub Schools. I grew up going to Bvtn schools, but if Mr. Chick won't consider anywhere dealing with hwy 26, then that area is out. He went to L.O. schools, and they're top-notch, but who in the hell can afford LO?? Beyond scary the prices there. I'm totally open to even Vancouver, WA and a MAX commute, but Mr. Chick doesn't want Vancouver, either. Too far away from everyone else we hang with. I've heard great things about Gladstone and West Linn schools, but again, 205 is out. So we're most likely going to be looking in the Tigard/Tualatin/Wilsonville school district - Clackamas County. Long answer - whew!
 
We just moved to Montana from Clackmas in October. My husband worked on in LO and I worked near the airport, so the 205 worked really well for us. Plus all the great things you hear about N. Clackamas Schools. If we would have stayed, we were thinking about the Wilsonville area, and of course who wouldn't lob off a limb to live in some of the awesome homes in the Tualatin/LO area. And now that I thik about it the I-5 communte is probably one of the best in town. ESPECIALLY with the hour Mr. Chick is going to be putting in. That has been the nicest part of moving to MT, my husband's commute is 4 mins.

Anyway, good luck!
 
The houses in Portland Maine are going for about the same, especially here in South Portland where we live, there is NO way we could ever afford a house in this area, we currently live in an apt.,they are going for 300k or better these days, and some of them are crap!! Our friends spent 200k on a house 2 years ago, 4bedrooms,1bath, 1/2 finished basement,1car garage, they have had a leaking roof, MOLD!!everywhere, mice etc etc, and this was in a nice neighborhood, to sell this now even with these problems they were told they could get 300k or better, absolutely ridicoulus!! Our property taxes are off the charts here as well!!
 
How funny. (Grew up in OR, in fact you look familiar!) I'm sitting in the same shoes. Waiting to see if my husband gets the job in Seattle he interviewed for this past week. We've only been gone a year and prices are so up, we too feel like we will be going backwards. So frustrating. In the "good" school districts you can only get crap for 1/4 mil. This sucks! But I'm still looking!
Jen
 
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