Should I buy in Portland. Live in SF n rent is $ 1000. I can buy a home in Portland for 150k n mortgage would be $ 700. Should I wait another year or two? Thanks for the help! Best of luck to all.
Patrick should I buy in Portland
By Sulli Follow Sun, 26 Sep 2010, 6:36pm 2,004 views 26 comments
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Saint George, UT
elliemae's website
what are rents in portland? what are taxes? are there hoa's? what's the job outlook? do you wanna stay there awhile?
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46 male
Menlo Park, CA
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Yeah, all that!
Basically, if you can rent cheaper than owning, I think you should rent.
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Why not live in Portland for at least a year to get a feel for the place before even thinking of buying?
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sybrib says
Nice words of wisdom.
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Alexandria, VA
Leigh should be able to give him an advice or two.
Too bad we can't see her when she is needed.
Sulli, basically buying a home vs rent is business decision. You take it when it's worth taking it to you, otherwise, you don't, doesn't matter whomever say what.
To get some help from people here, I suggest you being little more specific. Give us what ellemae said, and take what patrick and sybrib said as a grain of salt. :)
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Saint George, UT
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bubblesitter says
Oh, yea - many times I've known people who moved to a place, bought a house and then a year later realized it wasn't what they wanted/needed. Wrong area, under the airport landing path, windier than other areas... bad schools, new housing project under construction...too far to drive to work... and so on.
There are so many reasons that you should rent unless you've lived there for a while.
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44 male
Egg Harbor City, NJ
I think you should recheck your figures. Assuming your putting nothing down and a 150k mortgage with no taxes or PMI at a 4 percent interest rate, fixed 30 year mortgage comes out to $716 a month. Portland, Ore tax rate is between $14.00 to $20.30 per $1000 which gives you $2,100 to $3,045 property taxes a year, or up to $253 a month, figure $1,000 a year home owners insurance (another $82 a month), PMI is typically 1/2% to 1% of the purchase price, that's another $125 a month, this gives you a grand total of $1,177 a month, not including a HOA fee if there is one. Even if your putting 20% down, with a low property tax rate your still looking at $974 a month Minimum.
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If current monthly rent and monthly ownership costs are more or less equal, and if one were to sell their house for the same price they bought the house 10 years from now, would the renter or the home owner be financially ahead taking into consideration that the monthly rent and monthly home ownership costs remain pretty much equal in those 10 years?
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44 male
Egg Harbor City, NJ
I would say the homeowner would be farther head financially. While it true he didn't "make" any money on the sale he did still enjoy a tax write off every year and in ten years, on a 150k mortgage, the mortgage balance would be 125k. It costs you 5% in Realtor commissions to sell ($7,500), which means your $17,500 ahead not counting your tax write on income taxes over the last 10 years.
This is of course highly dependent on a few key issues. If there are HOA fees involved, this changes things, HOA fees can run anywhere from $100 to $700 a month, although at the 150k price range, I would guess it would be on the low end of the scale, that would add up to $12,000 over 10 years. So now the home owner is ahead $5,500. Also the age of the property needs to be factored in, one would assume a new house would need a lot less maintenance than a older home. So if the roof doesn't need replacing or the HVAC doesn't go, the owner would be ahead in the long run.
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TechGromit says
And if he/she didn't sell, but rented out the place for the same amount as his/her mortgage payment (see BobbyS's parameters), and was very careful in selecting his/her tenants, after 30 years s/he'd be even farther ahead. But you'd have to be very careful about the location.
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San Carlos, CA
I'd like to know what kind of house/condo you can get in Portland for $150k. I know it's cheaper than the Bay area but $150k? Them's Alabama prices.
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Redwood City, CA
I lived in Portland for a year, it's an interesting place. But it's definitely not SF, or the bay area.
It rains a lot. Far less than Seattle, but decent rain. It seemed fairly expensive to me in terms of goods and services. A huge amount of the economy seemed to be based on forestry, which drove costs up, but didn't seem to drive up wages for everyone else. I made good wages, so I was able to rent downtown. It was nice, but cloudy, rainy and not all the exciting.
As far as raising a family, it's probably a lot calmer and more family friendly.
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I've been shopping for a house (2000+ sf, 3+/2+, lot at least 6,000 sf) on the east side of Portland for several months now. This area has been beaten down an average of 30% from the top. I haven't seen much worth buying for less than $230,000. The west side of town--Beaverton/Aloha-- is also down a fair bit, similar to the east/southeast. Lots of owners holding out for bubble prices. Inner neighborhoods (trendy bike commuter paradise/high walkscore) not down much at all. Don't ask me about condos; I'd rather cut my leg off w/ a chainsaw. Local wisdom is prices should start dropping again this winter (maybe scary fast) after minor spring/summer increases. As far as 150K goes, maybe a contractor special REO in a really crappy area, but I can't really see it.....and condos are generally in those overpriced inner areas. Love this site, been lurking for a while w/nothing to say.
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Alexandria, VA
I think TechGromit and pkennedy has a good point.
Two things I never wanted to have are pchycho neighbor and bad weather. :p
When Sulli said "a home" I automatically assumed a house. So, 1000 rent vs 700 mortage was kind of confusing comparison from the begining. Then TechG got the math I haven't thought of. Thanks for that.
fireweekgeek, I was looking for something like that for years. It would be over 600K assuming it is decent one in my area, so I was like that's freakin cheap. Lol. But I guess things are quite different from coast to coast. You're comment can be a help of fellow home seekers in portland area, so keep posted and, good luck with your search.
I hope we're not talking ourselves, and Sulli read this thread, throw a response or two.
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East of 82nd ave has lots of bragains. It also has lots of meth and trashy people. It seems more and more, to live in a decent area of any given city, you have to pony up a great of money. It's a part of the internet's ability to facilitate self-selection. But from the many sites I have read, Portland is still overpriced. I'd wait a couple more years before buying there.
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Redwood City, CA
A few years ago, I read about Portland being the most expensive city in the US to live in. I'm not sure where it stands now, but I'm sure it's still up there.
But that says something about Portland! Wages vs Housing vs Goods!
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Some people should not buy even if the numbers work out in favor of doing so. Owning a home is a substatial responsibility. Right now, I'm having trouble getting up the motivation to mow the front yard lawn! And the detached garage could us a paint job and the rain gutters are full of leaves...it's always something.
But if you don't keep up with the maintenance you not only devalue your own place, you take down the entire neighborhood. So, there's that.
In some responses you have already received they go into the math of the purchase but the first bit of math I would suggest you consider is this: Rent is not the same thing as a mortgage payment. Rent is the cost of housing; a mortgage payment is what you pay to acquire the asset a house represents. The value of the housing, in a mortgage situation, is realized as imputed income. I would suggest you factor that into your equation.
In your case, and assuming a market value of the rent as being 1% a month of the purchase price, then imputed income is $1,500/month. So, if you decide not to buy, it can't be based on the numbers; but as others have pointed out, there are other reasons to stay out of the market.
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San Francisco, CA
Thanks to all for your great information! Im hoping .. to buy a tiny house or 1 bdrmm condo/ max 150k in a safe area of Portland. Im in no hurry so maybe in a year or two. ok ... east of 82 trashy n unsafe. Any other unsafe areas of Portland? Best Regards!
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Sulli says
Are you fully committed to Portland proper? Real estate in Clark county (Vancouver) right across the river has crashed totally. It's cheap and the (very small) downtown is pretty cool. The down side is compared to Portland, Clark county has a downright redneck attitude sometimes. Depending on where you need to get to in Portland it can be quicker to be across the river than in some parts of Portland (St Johns comes to mind) that just don't have any good access. There are plenty of nice area's east of 82nd, go out and look around. There's a web site called portlandbridges.com that has a lot of info about neighborhoods. I just checked, it's still around.
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Soooo....Pulling the trigger on an reo property in P'Land. Great east-side neighborhood; looks like something out of Leave it to Beaver. It's a cape cod style, ~3,000 sf, 10,000 sf lot, 1 house away from school, 1 block from park, 1/2 mile from MAX line, shopping about 1 mile away w/ a pedestrian path in between.....Needs some work of course but nothing terrible; the previous owners took the stove, fridge, a bathroom sink faucet (WTF???) and left a big mess but the bank cleaned it up pretty good. Decent price, about 12 times rent and 1.8 times our yearly gross. The big question now is "what are the odds that our timing is EXACTLY wrong and we are stuck in this freaking mortgage meltdown mess?". Anybody want to venture an opinion on THAT? The bank is Freddie Mac, the servicer is Northwest Trustee Serv. Inc. and the previous note was held (whatever that means, anymore...) by Wells Fargo. Hanging' on for the ride.....
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fireweedgeek says
Why do you care unless you are planning to move in less than 5 years (why would you buy?) or flipping. If you are buying a home it shouldn't matter.
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Not flipping, not planning on moving in the foreseeable future, just concerned that the (seemingly) perfect home will get stuck in this huge mess (We can't establish who actually owns these homes so we can't actually sell them). I am not terribly concerned about the status of this particular home, I have done the due diligence and I think that the title to this place is reasonably clean. That said, it's looking like a mass lockdown of all REO sales could be coming down the pike. Honestly, unless you are saying that we have no worries if we are planning to own the place long enough for the dust to settle I'm not sure I understand your point. So.....do you think it being a Freddie Mac property matters, hopefully in a good way?
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Patrick says
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Hey Sulli
Sorry for kinda hijacking your thread....I'm new to this.
About Portland; two sites I check out every once in a while are Portland Housing Blog and Realty Times-Portland, Oregon.
Been working with a pretty good realtor--yes I know and have dealt with horrible loser cannibal realtors before. Sounds like there are very few solid buyers right now, about 11 months of inventory on the market, it is anticipated that prices will nose-dive over the winter. I don't know about buying a property for 150K but there are some good deals once you get out of the city center. Looking at the unemployment rate and the median house price/median income I have to believe that prices here will be going down for a few more years. Portland came late to the bubble, and is late working it's way out. I have concentrated my attention in the east side of town, along the 205 freeway corridor. Neighborhoods here range from solid, low-turnover "leave it to beaver" all the way to "my realtor won't let me buy here". If you are not in the area, check school ratings as you scan around (easy to do on Redfin). Good neighborhoods correlate well with school quality. That said, there is no substitute for driving/walking around and seeing if you're comfortable. Rush hour here sucks, same as everywhere, but the MAX line is an easy way to get around town. I wouldn't commute any other way, though I know people that turn up their noses at it.
If I were new to the area, I would certainly rent for at least a year (just what we did). There are lots of rentals (apartments, anyway) and they seem to be offering a lot of concessions. I have a feeling that the population here may be dropping a little--I've seen some anecdotal evidence in car licensing information.
Bottom line, this is a nice place to live unless a) you can't find a job, b) you hate liberals or c) cloudy weather makes you SAD.
If these things aren't you, then welcome to Portland.
(Popular bumper sticker--Keep Portland Weird)
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fireweedgeek says
Are you worried about being stuck getting in or out? I read it as you were worried about getting out and commented based on that. Clean title is the title insurance companies problem, that's what you pay for.
fireweedgeek says
Luckily it's only a little over an hour drive to get east of the cascades which lets you away from point b and c if need be.
fireweedgeek says
Does anyone have a clue why people in Oregon can't merge without slowing to a crawl 2-3 miles away? Is it the meth or the granola?
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bob2356
No, sorry, I'm only worried about the system jamming before we can close on this puppy.
Title insurance is only as sound as the title insurance company; but they'll probably just get bailed out like AIG--if things really go to hell. Of course, title insurance primarily benefits the little guys.....
Yeah, the coast a short drive one way and central oregon a little ways the other; you gotta like that.
I moved here from Las Vegas, where people generally view merging as a contact sport. I think that the early merging here is the result of excessive politeness, kinda "Oregon Nice".
Overall, not a bad place to be. I suspect things are going to be getting ugly over the next few years--and I think this is a pretty good place to ride it out.