A (Real Estate) Tale of Two Cities and Four Zip Codes
Posted on May 13, 2008
Filed Under Portland, Lake Oswego, bubbles, Statistics, Builders, Buying Real Estate, Selling Real Estate, Real Estate |
For those who still doubt that all real estate is local, I thought it would help to compare two areas with approximately the same number of listings (detached single family). The first - the southeast zip codes of 97202 and 97206, encompassing Woodstock, Eastmoreland and Sellwood - has 438 active listings; and the second - the Lake Oswego zip codes of 97034 and 97035 - has 497. Note both the areas are included in the MSA used by Case/Shiller, the Portland Metro designation used by RMLS, and even the Bubblers’ favorite Housingwatch region, which is so addled it includes among its cities the metropolises of Wankers Corners [sic], Helvetia and Interlachen, but excludes the possibly more significant cities of Canby, Wilsonville and Oregon City. (In fact LO is included three times: Lake Oswego, Oswego and Lake Grove.)
Lake Oswego
LO is to Portland as Bellevue is to Seattle, Beverly Hills to LA, Scottsdale to Phoenix. It’s gorgeous, has fabulous schools, surrounds, as you might guess, a 415 acre lake, and is home of Oregon’s most expensive real estate.
Five or six years ago the area went nuts. With very little available undeveloped land within the city limits, builders were buying older homes for teardowns and rebuilds, or buying odd shaped lots and subdividing them into flag lots. With the cost of land already high and getting higher - LO had one of the highest appreciations in the state during the runup - added to which was the cost of site prep, it seemed impractical to put a $350k home on a lot that had cost $300k. So we had a steady increase of new million dollar homes, an increase that slowed only recently.
The consequence now is 4500 sf homes on 6000 sf lots; new million dollar homes built between two 1950 teardowns; $1.2 million homes crammed so tightly on flag lots that a Suburban can’t maneuver into the garage. Lake Oswego has some, well, issues:
Total active inventory: 497.
Median price (active): $749,000.
Months’ Supply of Inventory: 11.7 (Terradatum)
New construction active: 97, 19.5% of total.
Median price new construction: $1,249,000.
MSI $749,000 + : 23.5
MSI $749,000 - : 7.9
I think it’s safe to say we’re somewhat over built in the million dollar range; over $1 million new construction accounts for 42% of the inventory. The prices are going to have to come down to move, but builders, at least so far, have been anchored to their costs.
A strong buyers’ market. It’s going to be a relatively slow recovery.
[Although, JP, we’ve had four consecutive months of increased pending sales. Isn’t that, by your definition, an upward trend?]
Southeast Portland: Eastmoreland, Sellwood, Woodstock
Much older established neighborhoods, much of it early to mid twentieth century. Much more affordable price points.
Total active inventory: 438.
Median price (active): $277,000.
Months’ Supply of Inventory: 3.9
New construction active: 37, 8.4% of total.
Median price, new construction: $269,000 (!)
MSI $277,000 + : 4.2
MSI $277,000 - : 3.7
So we have a strong buyers’ market and a moderate sellers’ market within eight miles of each other. This can be repeated in neighborhoods and at price points throughout the area. Broad based indices are not adequate, in this market or any other, to base vital buying and selling decisions; you need to go deeper.
AREIL.
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9 Responses to “A (Real Estate) Tale of Two Cities and Four Zip Codes”
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[…] Original post by Jeff Kempe […]
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This site should be renamed “Conversation is the Pits” I think your style discourages comments. IMHO
>I think your style discourages comments.
If you’re looking for a Daily Kos comment section - where nonsense and venom routinely goes unchallenged and where the only comments read are by those repeatedly reading their own - this isn’t it. I have no use for those who play games with IP addresses, who rant unintelligently simply to incite.
On the other hand I enjoy intelligent debate, like that led by both Bearlee and Git. I’m happy to admit mistakes, but what I won’t do, when I disagree, is capitulate in deference to being nice.
If that impedes comments, well, I invite you to not comment as often as you like.
Can I ask why there aren’t more comments on this blog and other RE blogs? I can speculate that you get hits as you check them daily and have commented about it in the past. Reminds me of the ol’ site: www.hotornot.com. It always cracked me up to see when the last time the poster checked his/her rating…ie. 12 minutes ago.
I wish there was more discussion and civil debate. I would like to hear about other people’s perspective and their experiences in real estate especially in today’s market.
How are sellers feeling right now? How about buyers? Any trouble getting loans? Etc.
I noticed the realtors have been remarkably silent about the recent S&P Case-Shiller numbers. Portland down 4%.
I personally have a collection of thousands glossy real estate flyers. At 30-50 cents a flyer I figure I have personally cost agents hundreds of dollars.
Best of luck selling shoes.
[…] been on the market in Lake Oswego since March ‘07 that just went pending. I wrote here that because of inordinate new construction LO had more inventory than most areas and that prices […]
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