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Mar 30 2017

A tree is nice – and if you buy one for Earth Day the City of Portland will put money back in your hands

When my kids were little, we read the Caldecott-Award-winning storybook that offers a child’s view of why “a tree is nice.” With Arbor and Earth Day coming up April 22^nd, it’s timely to review the many virtues of trees.

Trees are very nice. They fill up the sky. They go besides the rivers and down the valleys. They live up on the hills. Trees make the woods. They make everything beautiful. – Janice May Udry

Stumptown, 1857 (Oregon Historical Society)

In its frontier days of breakneck growth and timber clearing, Portland was dubbed Stumptown. About 160 years on, the City aspires to the nickname ‘Treetown’ for grown-up economic and environmental reasons.

As every realtor knows, trees boost property values. How much? According to one study, each large front-yard specimen increases a home’s sale price by 1 percent. Neighborhoods with good tree cover enjoy a 6-9 percent price edge over those without. Lower income communities see the highest gains from tree planting and landscaping, by the way.

Trees also reduce homeowners’ utility costs. Two 25-foot trees on the west side of a house result in yearly savings of about 36 percent on cooling bills and 7 percent on heating bills. When whole cities commit to trees, everyone benefits. A good canopy cover lowers both summertime highs (by 5-9 degrees Farenheit) and demand for air conditioning.

Urban tree canopies also help preserve our natural capital, removing greenhouse gases and pollutants from the air. By one estimate, planting 30,000 trees a year for five years will absorb 75,000 tons of carbon dioxide at a cost of just $34 per ton. By another, the tree cover in the Willamette and Lower Columbia Region removes 89,000 tons of pollutants annually.

As they clear the air, trees also clean our water. Urban canopies absorb and filter storm water – to the tune of about 845 gallons per year per tree – that would otherwise flood sewers and pollute waterways. They also help recharge groundwater supplies.

As recently as 1991, 6 billion gallons of untreated sewage and storm water flowed into the Willamette and Columbia Rivers every year. Facing an Environmental Protection Agency order, the City built new “grey” infrastructure like a $1.5 billion wastewater storage tunnel. Over time, Portland has given higher priority to building our green infrastructure, a more cost-effective approach to protecting the watershed.

The City launched the Grey to Green program in 2008. Tree planting is one of 6 key activities to improve water and air quality, wildlife habitat and livability. The other pillars of the program are acquiring and protecting open spaces, constructing green street planters, building eco-roofs, controlling invasive species and restoring natural vegetation.

As part of Gray to Green, Portland runs an annual “treebate” from September 1 to April 30. If you plant a tree during this period, your water and sewer utility bill will be credited for half the purchase price up to $15 for small species, $25 for medium species and $50 for large species. Click here for details. Local non-profit Friends of Trees partners with the City in the treebate, helping homeowners to choose, buy and plant.

In part as a result of these efforts, Portland can rightly be called Treetown. Covering about 30 percent of the city, our urban forest canopy made the top 10 list compiled by conservation group American Forests a few years back. But the City isn’t resting on its laurels. Much of the canopy we enjoy today is the legacy of previous generations and needs to be restocked as it reaches maturity. Its quality can also be improved. There is not enough diversity (for example, maples and elms are overrepresented and vulnerable to disease and pests) and we need more species that will be large at maturity.

You can check out the health of the canopy in your neighborhood here. If your area doesn’t have a tree report card yet, you can help organize one. Across Portland, community volunteers have worked with the Parks & Recreation Department to inventory neighborhood trees and develop improvement plans. There’s always work to be done – pruning, planting and so on.

Well-being, recreation and aesthetic pleasure

In addition to their economic and environmental value, trees provide these social benefits:

Improved health and psychological well-being
Privacy, sound barriers and wind breaks
Lower crime rates
Stronger community ties
Recreation
Aesthetic pleasure

Believe it or not, these intangibles can be quantified with hedonic pricing, a method commonly used to calculate the effect of environmental features on the market price of housing. I suspect the hedonic value of Portland’s urban canopy is a factor in the tide of migration to the city and rapidly rising home prices.

Though my head understands the need for such valuations in public policy and commerce, my heart doubts that you can put a price on our urban canopy – or put the appeal of trees into words, for that matter. Maybe that’s why the storybook comes to mind. Maybe there’s no better testament to their power than the childlike wonder of A Tree Is Nice.

Dec 19 2016

Made your resolutions for 2017? 5 reasons to trade in your home for a better one in the new year

Most people probably think of the decision to sell their home as a highly personal one. And of course, it is. But if you can choose the timing, it’s wise to look at your personal circumstances and beyond. Here are 5 reasons why early 2017 could be the right time to sell in the Portland market.

Your home is no longer a good fit with your needs and wants
You have significant equity in your home
Portland continues to be a lopsided seller’s market
Portland is expected to remain near the front of the national pack in home price gains next year and mortgage interest rates may rise
There are real advantages to selling in winter rather than waiting for spring

1. Your home is no longer a good fit with your needs and wants

It may be time to move if you’re facing a growing or shrinking family, a promotion with a bigger paycheck, a new job with a long commute, retirement or aging, divorce and so on. As your life changes, what you require in a home changes too.

Apart from the question of size – whether you need something larger or smaller – you may be looking for an upgrade in the quality of your home. For example, energy efficiency and low monthly utility bills, little or no need for renovation and improvements, an updated kitchen, age-in-place features, more privacy or lots of storage space.

In fact, these features were among the top 10 unmet housing needs in a national household survey by the Demand Institute last year. If your home doesn’t have these features, you may decide to move to get them. And if your home does have these features, it’s likely to be especially attractive to buyers if you have other reasons for selling.

2. You have significant equity in your current home

You may be lucky enough to have lots of savings and assets apart from the ownership you’ve built up by paying down your mortgage. But for most people, home equity accounts for the lion’s share of personal wealth. So they need proceeds from the sale of their home to qualify for a loan to buy a new one.

The good news? Equity is back. According to the Case-Shiller indices, the leading measures of residential real estate prices in the US, the market has fully recovered from the recession, with home equity doubling in the last five years.

In fact, Portland ranks #6 among 88 metropolitan areas for its share of equity-rich homeowners. Over 33 percent have a loan-balance-to-home-value ratio of 50 percent or less. The national average for equity-rich homeowners is 23.4 percent. Of course, you don’t have to be equity-rich to sell your home. Many Portlanders have the financial means to make a move, not just those who meet the definition of that term.

3. Portland continues to be a lopsided seller’s market

The Portland Metro market has favored sellers since March of 2012, but the trend has intensified over time. The threshold for a balanced market is 6 months of inventory, but we haven’t broken two months since February 2015. This year inventory peaked at 2 months in September and October, and then slipped to 1.8 months in November according to the Regional Multiple Listing Service. Meanwhile, the current figure nationally is 5.2 months.

In a seller’s market, where demand outpaces supply, homeowners have the best chance to sell quickly, at or above list price, and under other favorable terms and conditions.

4. Portland is expected to remain near the front of the national pack in home price gains next year and mortgage interest rates may rise

Realtor.com predicts that Western metropolitan areas will see much higher gains in prices and sales than the country as a whole next year. Portland is forecast to be among the top 10 markets, with price growth of 6.6 percent and sales growth of 5 percent.

Though interest rates remain at historic lows, they spiked after the election last month. And last week the Federal Reserve raised its key interest rate for the first time in almost a decade – by a quarter of a percentage point. Mortgage rates will likely rise in the coming year.

In an environment of rising prices and interest rates, it’s wise to buy a home sooner rather than later, especially if you’re trading up. You’ll get more for your money and a lower monthly payment than if you wait.

5. There are real advantages to selling in winter rather than waiting for spring.

The idea that winter is a bad time to list a home is a myth according to US home sales data for the past four years through August 2016.

In Portland, winter takes 2^nd place after spring for the percentage of homes sold above list price – 13.8 versus 15.2 or a percentage point difference of just 1.4. There is a bigger seasonal difference where the percent of homes that go under contract within 30 days is concerned. At 33.9 percent, winter takes 3^rd place after spring (38.6 percent) and summer (35 percent).

But other factors offset the advantages of listing in spring. As explained in Item 4, sellers who will buy a replacement home stand to get more for their money and a lower monthly payment by acting sooner rather than later. Furthermore, both sellers and buyers face less competition in winter, sales close faster or spend less time in escrow because the market is not as busy as in the spring, and buyers who are looking tend to be more serious.

Of course, given Portland’s very low inventory, what holds many local homeowners back is concern that they may not be able to find the right replacement home and uncertainty about whether to buy or sell first. But there are lots of ways to hedge your bets. Click here or on the image for a free tool that will help you develop a game plan.

Nov 14 2016

Buy and sell with eyes wide open – home inspections expose threats to your safety, health and pocketbook

shutterstock_208429570-home-inspection Buying or selling a home is the biggest transaction most of us ever face. With such high stakes, you’ll want to vet your investment as a buyer and protect or enhance the value of your asset as a seller. A home inspection is a vital means to those ends. But it has other benefits – revealing major and minor defects that can affect your safety, health and comfort as well as your pocket book.

What an inspection should cost and cover

Here in Oregon a licensed professional can do the job in 2-4 hours for no more than about $350 – unless the property is unusually large, old or in a remote location. Your inspector should assess:

The home’s structure or skeleton, including its foundation (and crawlspace or basement), frame and roof
Major mechanical systems – electrical, plumbing and heating/cooling/ventilation
The exterior including windows, doors, siding, trim, surface drainage, steps, sidewalks and driveways
The interior including walls, ceilings and floors; steps, stairways and railings; countertops and cabinets; and the garage
Attic insulation and ventilation
Any fireplaces

Your inspector can tailor investigations somewhat based on the home’s age, whether you have children, and so on. And he or she may advise follow-up testing, such as for mold, asbestos or radon. Environmental testing is usually performed by specialists at an added cost.

Sewer scopes are a recommended add-on to basic home inspections. A mini-video camera is inserted into the sewer line to look for blockages, cracks, holes, pooling or pipe separation. A sewer scope takes about an hour and costs around $125. Discounts may be offered if the sewer scope is “bundled” with the home inspection

Inspect before you sell and before you buy

Paid for by the seller before a house is put on the market, a pre-inspection is money well spent – unless the property was built just a few years ago and has been well-maintained. Significant defects that turn up in the pre-inspection can be repaired to get the best possible price for the property. Or the cost of repairs can be factored into the list price. If your home passes inspection with flying colors, your realtor should let potential buyers know in marketing materials.

A buyer should always inspect a property he or she plans to buy. Even if the seller has had a pre-inspection, defects can be missed or concealed. By default in Oregon, the buyer has 10 days to complete an inspection once an offer is accepted. Longer or shorter periods can be negotiated.

Whether you’re a buyer or seller, your realtor should offer a list of reputable licensed inspectors but leave the choice to you. When the client chooses, the potential for conflict of interest is avoided. Your realtor should then take the lead in scheduling the inspection and be on hand when it’s carried out.

If possible, you should be present too. At a minimum, attend the last half-hour to hear the summary of findings, pay the inspector’s fee and ask questions. If you’re a buyer, for example, you’ll want to learn where and how to access different areas and systems of the home and get maintenance tips.

The benefits outweigh the costs

Sellers may be reluctant to have a pre-inspection because they want to minimize their costs. Or they may think it’s best not to go “looking for trouble.” By law in Oregon a seller must disclose any known defects to a buyer after accepting his or her offer.

But opting out of a pre-inspection will only postpone the inevitable. Defects will come to light in the buyer’s inspection. If the defects are serious, there are usually delays or breakdowns at the negotiating table. And even if the seller agrees to make repairs or offer credits to the buyer, there will be very little time for finding a contractor to do the work or estimate costs.

When a sale fails due to inspection results, the seller is at a big disadvantage. A property that is back on the market is often viewed with suspicion. And the golden window for marketing a home – the first 3-4 weeks after it’s listed when interest peaks – will be shortened or lost. Research shows that homes fetch the best prices during this window.

In short, a pre-inspection strengthens the seller’s position in the market. It enables the seller to identify defects, shop around to control or accurately assess the cost of repairing them, and set a fair list price with confidence – the single most important step in marketing a home effectively.

Sometimes buyers are reluctant to have an inspection. They may worry about spending a few hundred dollars, only for the sale to fall through. True, no one can predict the outcome of an inspection or a transaction. But you can be sure of the protection an inspection provides. If you’re dissatisfied with the results for any reason, you can exit the sale with your earnest money deposit.

Given the average price of a home and the average cost of an inspection, it’s penny wise and pound foolish for a buyer to opt out of the chance to find defects that can put a whole new light on a property’s value.

What buyers should look for before and after an inspection

It may surprise you to know that a buyer should start looking for defects even before making an offer on a home. You can spot obvious red flags that may help you to rule out a property with this simple checklist. If you decide to make an offer on a house after touring it with checklist in hand, you’ll still need a thorough professional inspection, of course.

Once the professional inspection report is in, you should read and discuss it with your realtor. Structural and mechanical defects are costliest to repair and have the biggest impact on the safety, health and comfort of those who live there. Everything else – known as cosmetic repairs – are of less concern. How you and the seller act on the results will depend on factors explained in the next section. Your realtor should help you weigh these factors as you make decisions.

How to act on inspection results

The bargaining power of seller and buyer post-inspection is influenced by three key factors:

The severity of the defects
How motivated each party is to close the sale
Overall conditions in the market

If serious structural or mechanical defects are identified in the buyer’s inspection, the seller’s position is weakened. Sale of the home is unlikely unless the seller is prepared to make repairs, offer credits to the buyer or document convincingly that the list price has taken the defects into account. Cosmetic repairs have much less impact on the seller’s position.

A highly motivated seller – for example, one who must relocate for a new job – may be willing to offer credits or lower the sale price for cosmetic repairs. On the other hand, a highly motivated buyer – for example, one who is in the market for a fixer and has skills or contacts for renovating at a low cost – may happily take on a house with major defects if the price is right.

Finally, the market shapes negotiations. In a seller’s market – when demand to buy outstrips the supply of homes for sale – buyers are wise to seek repairs or credits only for major defects. In a buyer’s market, sellers are wise either to get their homes in top condition before going to market or to price accordingly and/or be open to offering credits for cosmetic repairs.

Do you have other questions about home inspections? Let me know in the comments section below or contact me.

Nov 05 2016

Too much stuff or planning a move? NW Organizing Solutions to the rescue

beth-giles On any given day, Beth Giles may be creating a filing system, lugging tires around a garage or delivering a carload of castoffs to Goodwill. Since 2008 she has parlayed an uncanny gift for organizing homes, offices and moves into a successful business: NW Organizing Solutions.

Her work as a professional organizer is a mission, not just an occupation. And her focus is people more than things.

“Clutter and chaos come from hiccups in life,” she says, “from financial, health, relationship or other challenges.”

Beth helps people bring order and clarity to their surroundings – and achieve more peace within. Though she can deliver “house beautiful” or organize a move at the drop of a hat, she knows that each client’s journey is personal and unique. So she works in a spirit of partnership and dialogue.

“I ask questions that help clients decide what solutions work for them, what things they can let go of and when they’ve reached satisfaction with the results.”

Asked about her proudest moments, she mentions a client whose home was filled to the brim and thought her health was failing.

“She made her first Good Will donation – a basket of just 5 items – 6 weeks into our weekly sessions. But soon, I’d leave her home with my car half full. And after some months, it was crammed every time.”

Eventually the client got a clean bill of health and decided not to move. But the habits of order and simplicity stuck. Now friends, she and Beth have lunch a few times a year and she invites Beth in to “inspect” her home and keep her accountable.

Though a seasoned veteran, Beth never stops learning or sharing her knowledge and insights. She serves on the Board of Directors for the state chapter of the National Association of Professional Organizers (NAPO), which holds monthly training events. She is also a member of the National Association of Senior Move Managers. This year she attended a local workshop on hoarding organized by Multnomah County. And the annual NAPO conference in Atlanta included sessions on working with people with ADHD and memory problems. Beth dispenses free advice and tips in two monthly newsletters: Organizing Tips and On the Move.

Not surprisingly, her business runs almost entirely on referrals from happy clients.

“I get so much back from the people I work with – hearing about their lives and how they’ve overcome obstacles. And you wouldn’t believe the number of hugs I get when I finish jobs!”