Spoiler: Price it right! Click the link below to watch the video. To cherry pick content, use this timed outline:
0:00 – 0:24 Intro
0:25 – 0:38 The goal – right pricing
0:39 – 1:21 How a home’s value is estimated
1:22 – 2:29 Marking to market in PDX’s current white-hot market
2:30 – 3:56 Marking to market by segments – $1M homes in 97229 are hot, hot, hot
3:57 – 4:40 Overpricing – a mistake in any market
4:41 – 5:07 Underpricing slightly can attract multiple offers
5:08 – 5:32 Buyers need home value estimates too
5:33 – 5:39 Closing
Homing in on Portland’s neighborhood housing markets – They’re not easy to track but here’s your guide to Cedar Hills and a leg up on the rest of the west side
The Portland Business Journal has good news for lots of homeowners on Portland’s west side. The zip code 97229 (Forest Heights, Bethany, Cedar Mill) continues to be one of the Metro area’s hottest neighborhoods and 97225 (Cedar Hills & Raleigh Hills) broke into the ranks of the top 10 in the 1st quarter of this year.
I feel fortunate to have had a front row seat on the trends. I recently listed homes in the areas (two in Cedar Hills and one in Cedar Mill) and repped buyer clients in the sale of a 4th in Cedar Mill. On average, the three listings sold in 2.3 days at 99.5 percent of asking price.
I aim to be a realtor of choice for area residents. So last month I created a quarterly newsletter on real estate activity in Cedar Hills. Market data is readily available for cities, towns and zip codes. But that’s not the case for neighborhoods, though they’re probably a more meaningful affiliation for most people.
So my work was cut out for me. I did my best to copy by hand the intricate boundaries of Cedar Hills from the map published by its homeowners association in a small search window on the Regional Multiple Listing Service (RMLS) website. I decided to include two small islands surrounded by the neighborhood (Forest Hills Village and Lynnridge) and two areas on its fringes (Belvidere and 2015-13 Partition Plat). I delivered or mailed Homing in on Cedar Hills to about 300 homeowners and linked it to a Facebook ad for digital access.
While working on the newsletter, I consulted Q2 neighborhood rankings for context. I wondered if 97225 had kept its spot among the top 10. But it proved impossible to track that trend because at the time Portland Business Journal published the so-called “Heat Index” – overall rankings based on equal weighting of volume of sales, speed of sales, and average sale price – only in the 1st and 3rd quarters of the year.
I reached out to Brandon Sawyer, the journalist on the hottest neighborhoods beat, to ask if he could share the info and to suggest that the Heat Index be published every quarter. He not only obliged on both counts, but wrote me into his August 21 article.
It turns out 97229 and 97225 slipped in the overall rankings, taking 6th and 29th place in Q2. Still, not bad. And 97225 took 7th for average sale price – 2 places ahead of 97229.
If I can answer any questions about your neighborhood market or you’d like to “subscribe” to Homing in on Cedar Hills, dear readers, drop me a line (catherinequoyeser@kw.com or 503-705-5725). The next issue comes out in October and I’m thinking of launching a counterpart for Cedar Mill.
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Pushing the price envelope in Cedar Hills – does it pay to have the best house in a popular neighborhood?
The short answer to whether it pays to have the best house in a popular neighborhood? It depends.
The question was prompted by an unusual Cedar Hills listing that hit the market just 11 days ago. Financed and newly built by a small development company in the area, the house has luxury features and finishes and over 3600 square feet, occupies a 0.37-acre lot on Butner Rd a short hop west of Cedar Hills Blvd, and is priced at $1.185 million. Click here for a video tour.
As a “location, location, location,” Cedar Hills has a lot to recommend it. Just southwest of the junction of Hwy 26 and 217, it’s close to downtown Portland and Hillsboro; is served by Beaverton schools and nearby MAX stations; and has good shopping, including New Seasons and an outpost of Powell’s Books.
Beyond these tangible assets, Cedar Hills has soul. Established in 1946, it features a large stock of mid-century ranch homes built around Foothills Park and Commonwealth Lake. Neighbors walk, run and rub shoulders on the lakeside trail. Also a hub, its recreation center offers classes, a pre-school program and fitness facilities. The homeowners association meets monthly and organizes an annual garage sale, clean-up and 4th of July parade.
So it’s no wonder demand for homes in the area is high. According to Redfin, the average property is just under 2000 square feet, has 3 bedrooms and 2 baths, and sells for $449,000 in just 14 days. The median sale-to-list price is 99.5 percent.
Of course, averages can be misleading – masking trends in different sub-areas and at different price points. Cedar Hills Blvd divides the neighborhood into eastern and western halves that are roughly equal in size but not in property values. Many homes in the higher-priced eastern half range well above the mid-400K average, with those near the crossroads of SW Lynnridge and Mayfield approaching or topping a million. This pricey enclave falls outside the boundaries served by the Cedar Hills homeowners association, but within what are commonly regarded as the boundaries of the area.
The new million-dollar listing on Butner is a first for the lower-priced western half of Cedar Hills. According to records in the Regional Multiple Listing Service, the highest list price ever recorded there was $679K in 2014. Located on Spring Lane just a block from the Butner new build, the record-holding property was built in 1962 in the Northwest Regional style. It has vaulted wood beam ceilings, a stone fireplace in the great room, over 3000 square feet, and a swimming pool and outdoor kitchen on the 0.8-acre lot. The property sold for just $4K under asking price at $675K, also a record high and an appreciation of 87.5 percent since its previous sale in 2003.
In fact, no other home in the western half of Cedar Hills has ever sold above the $500’s. Four other sellers have tried, as far back as 2007 and as recently as last August. As shown in the last column of the table, a remodeled ranch on Faircrest was relisted at $569K last month after 92 days on the market at $600K.
| MLS No. | 7095238 | 13089408 | 15202640 | 16091321 |
| Street | Belvidire | Belvidire | Belvidire | Faircrest |
| SF | 2808 | 3309 | 2420 | 1986 |
| Lot size | 0.5 acre | 0.5 acre | 0.52 acre | 0.29 acre |
| Yr built | 1955 | 1950 | 1957 | 1950 |
| Condition | Updated | Original | Remodeled | Remodeled |
| List Price | 649,900 | 640,000 | 639,000 | 600,000 |
| Sale Price | 520,000 | 512,000 | 579,400 | Relisted @ 569,000 |
| Market time | 82 days | 214 days | 82 days | 92 days @ 600,000 |
| Yr sold | 2007 | 2013 | 2015 | Still active |
So what’s the lesson? Does the real estate mantra – “Buy the worst house in the best neighborhood” – apply? Though the housing recovery was still underway in 2014, the sellers of the Spring Ln property fared well with an 11-year return of almost 90 percent. And the pricey Lynnridge-Mayfield enclave has also seen strong appreciation – for homes not bought at the top of the market pre-recession and owned for several years or longer.
But at $327 per square foot, the new build on Butner is priced far above both the sale price record set in 2014 for west Cedar Hills ($221 per square foot), and the average ($244 per square foot) for homes sold since 2014 in the Lynnridge-Mayfield enclave of east Cedar Hills.
Unless there’s some sea change underway in the neighborhood market, it’s hard to imagine that the Butner property, grand though it may be, will sell at list price. It’s on my RMLS watchlist and I’ll report the sale price on my Facebook page once it closes.
And here’s a final word for readers who are not looking to buy or sell a million dollar home – in Cedar Hills or elsewhere. Having mined their vast data holdings, the CEO and Chief Economist of Zillow published this revisionist take on “buy the worst house in the best neighborhood” a couple of years ago.
Here’s what the data says: Buy a decent house in the right neighborhood. What’s the right neighborhood? It’s the most expensive one where you can afford a home that is not in the bottom 10 percent.
In nose-bleed territory – have you trekked home price peaks in 97229?
If you keep to well-traveled paths of Washington County, you may not know the heights home prices can reach in the zip code 97229.
Bordered by Highway 26 and commercial districts along the south, the area extends as far north as Germantown Road and the upper reaches of Forest Park. It runs as far west as Cornelius Pass Road and as far east as Skyline Boulevard.
Now at over 60,000, the population of 97229 has grown by more than 2.5 times since 1990. There are around 25,000 housing units in the area with most (8,495) built in the 1990s followed by the 2000s (5,475).
Neighborhoods include Rock Creek, Terra Linda, Cedar Mill, Bethany, Bonny Slope and Northwest Heights. Last month the median sale price of a home in the area was $530K, an increase of 13.9 percent over the previous year according to Redfin.
The lowest priced home on the market at the moment is a 37-year-old condo in Cedar Mill with 2 bedrooms and 1 bath. It’s going for $150,000 or $185 per square foot.
So what would you guess is the top of the range in 97229? Ten or 12 times the price of the condo, maybe?
Try almost 20. The priciest home on the market is going for $2.95 million or $396 per square foot. Built in 1949, it has a pedigree. It was designed by Portland architect Wade Pipes. Better known for his homes in the Arts & Crafts style, one of which was profiled by OregonLive last September, the mansion on Penridge Road is contemporary in style. Located just off Skyline Boulevard on a site of 1.36 acres, it offers territorial views, almost 7500 square feet, old growth wooden beams, a pool, hot tub, sauna and outdoor kitchen. You can take a video tour here.
And the runners up?
- A Georgian colonial with 6411 square feet on 1.55 acres in the gated community of Hartung Farms. Built in 1985 and remodeled in 2010, it hit the market at $2.675M last May and is now priced at $2.495M. Click here for a video tour.
- A “resort-like” traditional home on just under half an acre with over 6000 square feet and a pool, hot tub and outdoor kitchen in Bauer Oaks Estates. The house was listed in July at $2.1 million. Click here for a virtual tour.
- A newly built contemporary home in Forest Heights offers territorial views from its site of 0.82 acres and 5465 square feet of living space. First listed in August of 2015 at $1.895 million, it’s now priced at $2.1 million. Click here for a video tour.
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 2nd 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 3rd 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.