December 2003 Newsletter

by Susan Marthens
Contributors Gail Mann and Teresa Kirsch

In This Issue

1. Portland Home Market - October 2003 Residential Highlights

2. Cost of Residential Homes in the Portland Metro Area - October 2003

3. Long-Term Mortgage Rates

4. Portland Weather

5. Public Utility District - Special Election

6. Smart Growth

7. Walking and Hiking Portland

8. Saturday Night in Portland - The Music Scene

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Portland Home Market

October 2003 Residential Highlights

Milder weather keeping folks outside?  Scarier costumes prompting folks inside?  Whatever the reason, closed sales during the month of October 2003 exceeded the closed sales of October 2002 by 23.1%.  Pending sales, comparing the same time periods, rose by 5.6%.  On the other hand, new listings declined by 6.7%

The area's 9,913 active residential listings at October's end would last 3.6 months with October's rate of sales.

Year-to-Date Trends

Comparing January-October of 2003 to January-October of 2002, closed sales are up 13.8%, pending sales are up 11.0%, and new listings are up 2.8%.

Appreciation

The average sale price for homes in the Portland metro area during the twelve months that ended in October 2003 was $220,900--appreciating 6.2% from the average sale price during the twelve months that ended in October 2002 ($208,100).  Similarly, median sale price appreciated 5.7% ($185,000 v. $175,000).

Affordability

Per a National Association of Realtors (NAR) formula, a family making the area's median annual income ($65,800 per HUD) was making 49% more than required to afford a median-priced homes ($189,000) at the end of 2003's third quarter.  Also required is that the family secured a 30-year fixed rate mortgage at Freddie Mac's average rate (6.15%, at the time) and supplied a 20% down payment.

Cost of Residential Homes in the Portland Metro Area

For Period 10/2003

Area

*RESIDENTIAL

Small Uptick in Mortgage Rates

December 4, 2003

In Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 6.02 percent, with an average 0.6 point, for the week ending December 5, 2003, up from 5.89 percent last week. Last year at this time, the 30-year FRM averaged 6.19 percent.

The average for the 15-year FRM this week is 5.36 percent, with an average 0.6 point, up a little from last week's average of 5.22 percent. A year ago, the 15-year FRM averaged 5.60 percent.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 3.77 percent this week, with an average 0.6 point, unchanged from last week's average of 3.77 percent. At this time last year, the one-year ARM averaged 4.21 percent.

(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)

What Will the Fed Say Next Week?

"Financial markets are speculating about what the Federal Reserve Board will say when it meets next week," said Frank Nothaft, Freddie Mac chief economist. "And it looks like the market is taking bets that the Fed will soften its language and raise rates sooner rather than later. As a result, bond yields drifted higher and with it went mortgage rates.

"On the plus side, we've had three months of positive job growth, albeit the labor force is still almost 2 ½ million jobs short of the peak in February 2000. Hopefully, November employment figures, due out tomorrow, will lower this gap."

Portland Area Mortgage Rates

In early December, Washington Mutual Bank was offering 6.13 percent for a 30-year FRM (APR of 6.16 percent) with zero points. Another lender, US Bank's rate was 6.00 for a 30-year FRM (APR OF 6.14 percent).  Both of these rates are for a $150,000 loan with 20% down.

You can learn more about mortgages by visiting Professor Guttentag Web site. To check on local mortgage rates go to Bankrate.

Portland Weather

Tracking the Moisture and Sunshine

Portland's rainfall is measured according to the "water year" which is from October 1 through the end of September.  Since we receive only a few inches in the summer months, the rain months are from October through May.  Almost half of Portland's annual rainfall falls in November, December, and January. 

Water Year:  Measurements From Portland Airport Weather Station
 

November Weather

Best Fall in Years!  That sums up the months of October and November 2003.   With a bit of rain in early October, it stayed pleasant for almost a month.  Record warm temperatures in September and November allowed Portlanders to engage in all kinds of outdoor activities.  By mid-November, we were all content to let it start raining and that it did.

Snow fell in the Cascades when the rain started in the Willamette Valley and the ski resorts opened quickly.  Timberline Lodge, located on Mt. Hood, has over 40 inches of snow at the lodge (elevation 6,000 feet) and five lifts are operating.

New Water Year Begins in October

Our water year officially begins October 1st and each month we will post the rainfall and comment on the month's weather.

PUD Defeated in November 4th Election

PGE Sold to Texas Firm

I'm sticking to real estate!  My short-lived career as a political prognosticator is over.  After I predicted that Multnomah County voters would approve a surtax in earlier this year, my self-confidence blossomed and I said in the November Moving to Portland newsletter that county voters would also approve a Public Utility District.  It went down by a 2 to 1 margin.  You can see why my career is finished.  Not even close.

The special election, in which Multnomah County voters were being asked to set up a people's utility district with authority to take over the assets of Portland General Electric (PGE), was decided on November 4th.  PGE, an Enron subsidiary, provides power to the city of Portland and other communities within the county. 

Texas Firm Buys PGE

In mid-November,  on what may turn out to be one of the biggest business deals in Oregon history,  former Governor Neil Goldschmidt led a group of political and business leaders at a crowded news conference announcing the agreement:

Portland General Electric, the local electric company owned by the disgraced Enron Corp., would be sold for $2.35 billion to the Texas Pacific Group, one of the country's largest investment firms.

 Texas Pacific Group was founded and is led by David Bonderman, a magna cum laude graduate of Harvard Law School who worked as a civil rights lawyer. 

The sale must be approved by various courts and regulatory agencies before it's final.  The deal marks a new chapter in the furious debate over PGE's future, raging for four years at the city's political and business power structure. It has included threats of city condemnation, secrecy agreements, the state Legislature, Congress, arguments over public versus private power, a PUD vote and private negotiations at two of the city's biggest law firms.

Oregonians to Lead Oregon Electric Utility Company

Under federal law, a majority of the Oregon Electric board of directors had to come from the community.  So the Texas firm sought three people well known in the community:

• Former Governor Neil Goldschmidt was planning on retiring from public activities. The former mayor, 63, and his wife have a place at Kings Hill in Portland and in Yamhill County, where they grow grapes. This year, they bottled their first wine.

• Tom Walsh, also 63, is the former TriMet chief.  When Walsh and Goldschmidt both decided to run for the Portland City Council., Walsh lost his 1970 race, but Goldschmidt won and went on to become mayor and governor.

• Goldschmidt and Walsh will be joined on the board by Gerald Grinstein of Seattle, former chairman of Delta Air Lines. As head of Burlington Northern, Grinstein helped Walsh on the west-side light-rail project.

Smart Growth Helps Lower Consumer 'Location' Costs for Housing, Transportation

Metropolitan areas with more compact growth, a wide mix of land uses, plentiful transportation options, and which were mostly developed prior to the use of the automobile are generally less expensive places to live, in terms of the combined costs for housing and transportation, according to an analysis of consumer expenditures by the Urban Land Institute (ULI).  The report was released in September 2003.

Housing and Transportation Largest Costs

The analysis, conducted by ULI Senior Resident Transportation Fellow Robert Dunphy, involved consumer expenses in 28 metropolitan areas during 2001, according to spending data released earlier this year by the U.S. Bureau of Labor Statistics. Housing accounted for one-third of spending by U.S. households in 2001, twice the amount spent in 1972, reflecting “higher homeownership and larger and lavish homes,” Dunphy said.  Transportation costs ranked a close second to housing, at 19 percent of the average household budget, more than food and clothing combined. The average household spent more than $7,600 annually on transportation, of which $7,200 was for buying and maintaining cars and trucks. In comparison, an average of $400 was spent on public transportation, which included expenditures for air fares.

Together, housing and transportation costs accounted for 52 percent of annual consumer expenditures nationwide, with lower-income households spending an average of 53 percent and higher-income households spending an average of 49 percent. The differences in metro area expenditures reflected local variations in costs for housing and transportation, as well as area incomes.

Although Portland was not one of the metro areas in the study, you may still wish to read a summary of the report at the SmartMoney.com Web site.

Walking and Hiking Portland

Esplanade

It's a perfect place for downtown workers to take a walk.  Surveys are finding that people from all over the metro area are using the 1.5 mile walk that extends from the Steel Bridge south to the Oregon Museum of Science and Industry.

According to the city transportation office, walking traffic has risen 18 percent since 2002 and bicycle use is up 61 percent.  The volume of "fitness" traffic that the Eastbank Esplanade has been attracting show that a person crosses the new Steel Bridge walkway every 20 seconds last summer -- that's 18,700 users a week during daylight hours.

Portland Trails and Weather Make for Ideal Walking and Hiking

The Portland metro area is made for walking and hiking.  The geographic features of rivers, creeks, hills, and valleys offer a range of terrain in which to walk and hike.  With it numerous trails and mild weather, you can walk almost every day of the year.  It helps if you have a dog that demands at the minimum a morning walk. Then you must walk daily.  Another benefit is that many outdoor and fraternal organizations as well as some of the governing bodies have calendars filled with hikes in the metro area. 

Regional Trail System

Metro, the regional planning government body has a webpage about the regional trail system.  You can visit this page to receive a brief description of the present trails as well as to learn more about the proposed trails by clicking here.

Springwater Corridor Trail

The Metro area's premier multi-use regional trail. Currently, the completed portion of the Springwater is 22 miles long and runs from Oregon Museum of Science and Industry (OMSI - just across the river from downtown) to the Sellwood Bridge, passes by Oaks Bottom and then heads east near Johnson Creek to Gresham and the Clackamas County line. Eventually, it will extend further east into Boring, to Barton Park and its terminus in Estacada. 

The Springwater Corridor is a multi-use trail. The paved surface is ten feet wide, with two-foot-wide soft shoulders on each side. The hard surface trail is designed to accommodate a wide range of uses including walkers, joggers, hikers, bicycles, wheelchairs, and strollers. The Corridor serves as an alternative transportation route, providing safe and accessible connections between parks and open spaces, residential neighborhoods, employment hubs, and commercial centers.  To learn more about the trail click here.

Hiking and Walking Clubs and Organizations

With over 25 clubs and organizations that sponsors walks and hikes, you can always find a group that walks/hikes at your level.  Here are just a few of the more visible ones.

• Audubon Society of Portland  Not a hiking club but this very active organization offers birding walks throughout the metro area as well as in all parts of the state.

• Cedar Milers  The goal is to promote fitness and fellowship through walking and Volkssporting.  The club draws members from Beaverton, Tigard, and West Portland.

• Mazamas  Founded in 1894, the Mazamas are a non-profit mountaineering club offering over 500 hikes a year.  They do an urban hike on Tuesdays and Thursdays that starts at 6:00 p.m.

• Metro GreenScene - Regional Governing body responsible for some of the open space and parks in the Portland metropolitan area.  Besides hikes and walks, they also organize bike rides and paddling events.

• Ptarmigans  The Ptarmigans are a group of people that gather to share outdoor adventures; they mountain and rock climb, hike, canoe/kayak, bicycle, and participate in activities to preserve local trails and wilderness areas. Located in Vancouver, Washington.

• Rose City Roamers  The Rose City Roamers is a walking organization in Portland, Oregon, devoted to the promotion of health and fitness through participation in various noncompetitive sports activities. The most popular activity is walking, but they also include cross-country skiing, swimming and bicycling.

• Sons of Norway A Norwegian fraternal organization, you can smell the 'Hiking Viking' coming down the trail with all that lutefisk and herring in their backpacks.

• Trails Club of Oregon  Since its inception on October 15, 1915, the club has developed a rich tradition in the promotion of social and recreational activities for the benefit of its members. The Trails Club features two lodges for use by members and guests in the Columbia Gorge and Mt. Hood areas.

Saturday Night in Portland

The Music Scene in Rose City

Our music tastes are not well-defined as we are all over the radio dial.  I love rock and roll.  My husband does "cowboy."  The radio at home is usually turned to the local public all-classical station, KPBS.  In mid-November, when friends invited us to venture over to the east side and join them at Duff's Garage to hear "Shorty and the Mustangs," it was an easy decision.  See you at Duff's!  It is just a 10-minute drive from our house to Duff's and we had a great time listening to the music and dancing. 

At Duff's, the focus is on the music and the musical focus is "definitely Retro Americana, guitar-oriented," owner John Wallace explains. There is a variety of Bluegrass, Rockabilly, Surf, '60s Garage Rock, Blues and Country and Western. John states that there is "no karaoke, no pool tables and no synthesizers."  The negative is the smoke. 

Shorty and the Mustangs

The Mustangs have been playing to crowds in Oregon and California for about the last six years.  They play traditional country swing, honky tonk and rockabilly tunes made famous by the likes of Bob Wills, Ernest Tubbs, Hank Williams, Patsy Cline, and Willie Nelson.

Visit the Mustangs on their Web site at http://www.shortyandthemustangs.com/.

Music for Every Taste

Portland offers a variety of music including the Oregon Symphony and other "high brow" music.  But we're keeping our discussion to local bands.  PDXNet tracks over 1,300 local bands, and they offer numerous links to the local music scene.  PDXbands.com gives you a rundown on many of the local groups to include some MP3s downloads.  The site is limited to the "heavy metal" world of music.

Portland has lots of bluegrass, and public radio station KBOO offers streaming broadcasts of their programming.  You can catch KBOO bluegrass all Saturday morning as well as at their early show Monday through Friday from 5:30 a.m. to 7:00 a.m.  You can always catch a bluegrass group at one of the local pubs.

Cascade Blues big celebration, featuring a band of Portland Blues All-Stars. Blues lovers hold a summer Waterfront Blues Festival in July. This 3-day music fest attracts blues artists from throughout the USA.

Pink Martini

The most famous Portland band is the 10-member group called Pink Martini.  Pink Martini blends influences from Cuban rumbas to classical chamber music, from Parisian cafe tunes to foreign film soundtracks, creating music that spans the continents.  They travel extensively in Europe as well in the USA.  On New Year's eve, they will be playing at the Walt Disney Concert Hall in Los Angeles.

Dancing in Portland

Want to dance the night away in Portland?  Visit Portland Dancing to obtain a schedule of dances.  This site tracks dancing in Portland by style to include ballroom, swing, Lindy Hop, Irish, Tango, Waltz, Salsa, etc.  Tango is big in Portland and you can find a ballroom where the Tango is being featured most nights of the week.