Friday, June 27, 2008

Field Research: The Oregon Housing Market

I have now written many blog posts about the Oregon housing market. In them, I inevitably talk about some new data that have been released and what they mean. But out of loyalty and devotion to you, dear readers, I have decided to go one step further - I have conducted my own field experiment. Well, okay, it is not exactly an experiment.

I am moving to Portland so that my wife can continue her career as a non-profit fundraiser. This means that I had to sell a house in Corvallis, find a rental in Portland and will soon begin the search for a house to purchase. The Corvallis end went shockingly fast - we had an offer accepted the very day it was listed - no sign of a housing slump from my experience. Talking to the realtor I think our experience, while exceptional, is evidence of a real estate market that is fairly solid in Corvallis. The supply of new houses slowed quickly as the market softened and now the market for the stock of existing houses is fairly strong.

The Portland side also looks pretty strong in relative terms, but nothing like two years ago when we were deciding between Portland and Corvallis as a place to live. As we are focused on a close-in neighborhood (Sellwood), the softness of the suburban developments is not very apparent.

What was striking was the trouble we had finding a decent rental. I have a theory: because the credit crunch is national many would-be buyers, even in Portland, are being pushed onto the rental market. However, as the market, especially in near-in neighborhoods, is still pretty robust, there have not been many houses pushed into converting to a rental. So tight supply versus strong demand make for a tough rental market.

By the way, I am still keeping my position at Oregon State, so thank goodness I have a very fuel-efficient car. Our families carbon footprint is going to be slammed by my energy profligacy. But we should come out ahead, I reckon, because we can walk everywhere in Sellwood to get what we need, and my wife, who will work in Old Town, plans on commuting mainly by bike and bus.

[By the way, this explains recent and near-future spotty blogging - my apologies]

4 comments:

jessibeaucoup said...

Sweet truck...

I love living in P-town - I hope that you will too!

Patrick Emerson said...

The living in Portland I will love (it has been 16 years, but I lived for many years there and have pined to come back ever since), the commute, not so much. Fortunately, there are others from my college who do this so car-pooling is a reality and, being an economist, I can do my research pretty much anywhere there is a computer and an internet connection so I can work a lot up in Portland.

Thanks for the well-wishes - I'll keep my eye out for Smart cars...

Jeff Alworth said...

Our families carbon footprint is going to be slammed by my energy profligacy. But we should come out ahead, I reckon, because we can walk everywhere in Sellwood to get what we need, and my wife, who will work in Old Town, plans on commuting mainly by bike and bus.


It's a testable hypothesis. Have you kept track of the miles you put on your cars over the past year? It will be interesting to see.

Purple Quill said...

Sorry, I have to disagree about the rising cost of rental houses in Portland.

Now, it may be different in Sellwood, as I was looking at inner NE, but I've been trawling the "For Rent" ads since last November, and I've noticed a few trends: the price of "agency managed" rentals is rising, but the price of "owner managed" rentals may be falling.

I've read the papers and blogs and have heard all the rental real estate investors talking about how the market will tighten, so they can now raise rent. This is exactly what has happened. From last November to current, I had to up my max price range from $800 to $900 to find the kind of apartment I wanted. Then I noticed a funny thing: I was occasionally seeing HOUSES listed for $900/mo.

I then began shopping exclusively for houses being rented because they couldn't sell; there are some TERRIFIC deals out there! It's pretty competitive to get into them, but if you can prove you're a low credit risk, these unwilling owners want to get you in there YESTERDAY! We finally found the right one (1926 Craftsman, 4 bed, 2 bath, 2200 sf) for $1500. We're going to offset the additional cost of this big beauty by getting a roommate.