Helping Families One Home at a Time

December 2001

Year-to-Date Trends
Increases in pending and closed sales are evident for the year-to-date as well as the month.  Closed sales grew 10.8% from the amount reported between January-October 2000.  New listings is once again the category that fell (down 1.9%) rather than grew.

Affordability 
Affordability (calculated for September 2001) is at 132, its highest since 1999.  With a 20% down payment, a median-income ($55,900) family would have 32% more income than needed to afford a median-priced ($169,400) home.

Appreciation 
North Portland continues as the "hot spot" as prices continue to increase in anticipation of the Interstate MAX light-rail, along with the new Adidas American headquarters being built in that part of the city. The median sales price for North Portland is only $129,000 whereas Southeast Portlands median price is $146,000. 

Outside of the Portland metro area, Roseburg (Douglas County) continues as the area with the highest appreciation gains in Oregon for 2001.  The Glide/East Roseburg area has year-to-date appreciation of 21.3% while the Green district has 14.9%.

Area

Average
Sales
Price

Percent
Appreciated
**See note

North

Northeast

One answer, plainly, concerns the strong results now being obtained in Afghanistan in late November.  The result is greater public confidence at home, more people buying stock, and fewer people buying bonds.  Reduced bond sales -- the willingness of people to commit dollars for the long-term -- ultimately leads to higher mortgage rates.

Will we see a continuing pattern of higher rates?  First, while rates are higher than two weeks ago, when interest rates hit levels not seen in many years, today's rate are hardly steep, high, or inflated. They are merely somewhat higher than the rates seen two weeks ago -- and very much lower than the rates paid a year earlier.  For example, interest rates on 30-year fixed-rate mortgages averaged 6.75 percent with an average 0.8 point for the week ended November 23, up from 6.51 percent in the prior week, according to Freddie Mac's Primary Mortgage Market Survey. A year ago, the average 30-year fixed-rate was 7.73 percent.  Second, public confidence may change if corporate profit reports are weak, the war in Afghanistan suffers a reverse, or if another substantial terrorist attack takes place in the U.S.

For the week ended November 23  Refinancing activity represented 72.9 percent of total applications, decreasing from 76.6 percent the previous week. This week marked the eighth consecutive week the refinance share was greater than 70 of total applications.  ARM activity increased to 9.9 percent from 9 percent a week ago. 

To check on local mortgage rates go to Bankrate.  To talk with a mortgage broker, consider: 

• Associated Mortgage Group   They are licensed in both Oregon and Washington.    Telephone:  (503) 221-0064  Fax:  (503) 221-0396.  Ms. Barbara Ogburn is your contact.
• Stevens Mortgage  Telephone: (503) 670-0535  Fax: (503) 670-0481.   Mr. David Dishman is the contact.

You may want to read our Privacy Policy with regard to recommendations.

A primary environmental concern for buyers and sellers is the presence of hazardous substances, including petroleum from underground heating oil storage tanks (USTs) and indoor pollutants.  With the large number of USTs in Oregon, steps should be taken to determine whether a tank exists and, if so, whether decommissioning and/or clean up are required.

According to the Oregon Department of Environmental Quality (DEQ), there are approximately 210,000 residential underground heating oil storage tanks in the State of Oregon. Oregon DEQ says there are approximately 60,000 underground heating oil tanks still in use and 150,000 that have been abandoned, i.e., not properly decommissioned.  Many of these tanks still contain fuel, and therefore pose potential environmental liability. Statistically 60-70% of underground heating oil tanks on record have leaked some product into the soil.

You will want to view the Oregon DEQ's Heating Oil Tank Bulletin #2 entitled, What You Should Know About Buying or Selling a Home with a Heating Oil Tank dated August 2, 2000.   The important issue here is future liability to quote from the bulletin:

The current owner of the property is responsible for any necessary cleanup even if the leak happened before he or she bought the property. If you buy property knowing that a tank is present and no work has been done to determine if it has leaked, you also become responsible for any leaks discovered in the future. You then would have to contact an attorney for advice if you wanted to recover any costs from the prior owner.

I have handle numerous transactions involving heating oil tanks and know how to handle this issue.  USTs are an important issue both for environmental reasons and for potential homeowner's liability.

"Portland was really the originator of that concept of putting a mall-like atmosphere for retail food and beverage in the airport," said Michael Taylor, director of travel services for J.D. Power & Associates.  PDX tied with San Diego and Cincinnati in the highest rank for "check-in," a performance measure that covers ticket time, staff courtesy, and cleanliness of the area.  The Portland airport tied with San Diego and Pittsburgh for the second-highest score for "terminal facilities," which includes signage, personal safety, and staff courtesy. 

Lighter Side of the Pacific Northwest
It has been 30 years since the original jumping skyjacker, DB Cooper boarded a Northwest Orient flight from Portland to Seattle on Thanksgiving Eve in 1971.  He paid $20 cash for a one-way flight to Seattle departing at 4:35 p.m.  He then waited 50 minutes to board the Boeing 727. He took a seat near the back of the plane, and had the row to himself.

Soon after takeoff, Cooper handed a note to a stewardess and said he had a bomb on board. He let her peek into his briefcase at wires and red sticks that seemed to be explosives. He then demanded $200,000, four parachutes and "no funny stuff." At 5:40 p.m., the plane landed at Seattle-Tacoma International Airport and authorities met his demands.

After his demands were met, Cooper ordered the 727 back into the air and to fly toward Mexico via Reno at no more than 10,000 feet.  He  jumped from the rear of the plane somewhere over Washington state. Despite exhaustive searches, Cooper's body was never found and his whereabouts are unknown.

The hijacker actually called himself Dan Cooper; a law officer mistakenly described him to the press as "D.B." and the name stuck.

In 1971 and 1980, the FBI conducted extensive searches for Cooper, collecting 1,200 files and looking into countless leads with no luck. About six inquiries still come in to agents each month, but most are just filed away.

What authorities know about Cooper is that he smoked Raleigh cigarettes, drank whiskey and was familiar with aerodynamics.  So now you know more about one of the Pacific Northwest folk heroes.

So instead of talking about the Oregon economy, let's explore the importance of agriculture in Oregon.  You quickly realize how large an impact agriculture has in Oregon once you start driving around the state.  The 40,000 Oregon farms produced 3.5 billion dollars of goods in 1998 and accounts for 140,000 jobs.  Over 200 different commodities are grown in Oregon - more than any other state - other than California.  Oregon leads the world in production of high-quality grass seed.  Here are some of the numbers:

• Value of greenhouse and nursery production in 1998 - $532,000,000
• Value of cows and calves in 1998 - $365,000,000 
• Value of hay in 1998 (grown on a million acres) - $343,000,000
• Value of grass seed in 1998 - $338,000,000

For a tour of Oregon agriculture go to Oregon Ag Tour.

While definitions of recession vary, the NBER is considered the leading authority.  The orgtanization, based in Cambridge, Mass., weights four factors in determining recessions.

A recession is a significant decline in activity spread across the economy, lasting more than a few months, visible in industrial production, employment, real income, and wholesale-retail trade. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough. Between trough and peak, the economy is in an expansion. Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades.  The committee gives relatively little weight to real GDP because it is only measured quarterly and it is subject to continuing, large revisions.

Although the four indicators described above are the most important measures considered by the NBER in developing its business cycle chronology, there is no fixed rule about which other measures contribute information to the process.

A recession involves a substantial decline in output and employment. In the past six recessions, industrial production fell by an average of 4.6 percent and employment by 1.1 percent. The Bureau waits until the data show whether or not a decline is large enough to qualify as a recession before declaring that a turning point in the economy is a true peak marking the onset of a recession.