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October 2002 Newsletter
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by Susan Marthens
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Portland Home Market
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August 2002 Residential Highlights:
Compared to August 2001, listing activity in the Portland metro area shows some mixed changes. Pending sales increased. New listings and closed sales were down. As detailed in the table below, the number of new listings added to RMLS" in August 2002 was 7.2% lower than the number added in August 2001. The number of closed sales also fellby 5.5%. Pending sales increased all the while. The number for August 2002 was 7.0% higher that that in August 2001.
With new listings dropping more than closed sales, the areas inventory shows a slight decline. The 10,740 residential listings active at the end of August would last 4.5 months at Augusts rate of sales.
Year-to-Date Trends
Year-to-date totals are still very close to the totals reported at this time last year. The number of new listings since January is down by 2.2% (32,899 v. 33,636) compared to January through August 2001. Pending sales are off only 1.1% (20,386 v. 20,619). Closed sales are down as well, but by a mere 0.5% (18,326 v. 18,414).
Appreciation
Prices in the Portland metro area continue to appreciate. Overall, the average sales price during the last 12 months is up 2.5% compared to the average for the 12 months immediately prior ($206,300 v. $201,300). The areas median sales price is up by a similar margin, 3% ($174,000 v. $169,000).
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Cost of Residential Homes in the Portland Metro Area
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For Period August 2002 |
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Area
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*RESIDENTIAL |
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| Current Month |
Year-To-Date
For Period Ended August 2002 |
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Average
Sales
Price
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Average
Sales
Price |
Median
Sales
Price |
Percent
Appreciated
**See note
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Portland |
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North
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146,800 |
146,800 |
136,200 |
10.1%
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Northeast
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194,400 |
193,900 |
167,000 |
6.3%
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Southeast |
183,700 |
170,000 |
150,000 |
3.7% |
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West
(Includes SW and NW Portland) |
309,700 |
309,100 |
246,000 |
3.9% |
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Other Areas |
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Gresham/Troutdale |
183,200 |
174,900 |
163,000 |
1.4% |
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Milwaukie/Clackamas |
209,200 |
202,000 |
182,000 |
2.7% |
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Oregon City/Canby |
207,300 |
204,100 |
185,000 |
4.5% |
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Lake Oswego/West Linn |
329,900 |
324,300 |
263,500 |
1.4% |
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Northwest Washington County |
266,800 |
276,300 |
240,000 |
3.7% |
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Beaverton/Aloha |
183,300 |
193,300 |
174,900 |
3.4% |
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Tigard/Wilsonville |
225,100 |
228,600 |
200,000 |
4.4% |
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Hillsboro/Forest Grove |
185,800 |
185,700 |
172,000 |
3.8% |
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Mt. Hood: Government Camp/Wemme |
150,700 |
148,700 |
140,000 |
-1.8% |
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*Residential includes detached single-family houses, townhomes, condos, and plexes with four (4) or less living units.
**Appreciation percents based on a comparison of average price for the last 12 months with 12 months before (09/01/01 - 08/31/02 with 09/01/00 - 08/31/01)
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Long-Term Mortgage Rates Lowest in 30 Plus Years
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September 27, 2002
In Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 5.99 percent, with an average 0.6 point, for the week ending September 27, 2002. This is the lowest level since Freddie Mac began tracking them in 1971. Last year at this time, the 30-year FRM averaged 6.72 percent
The average for the 15-year FRM this week is 5.41 percent, with an average 0.6 point. A year ago, the 15-year FRM averaged 6.23 percent. This continues to be the lowest the 15-year FRM has been since Freddie Mac started following it in 1991..
One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 4.22 percent this week, with an average 0.6 point, down from last week's average of 4.28 percent. This time last year, the one-year ARM averaged 5.45 percent. This is the lowest the 1-year ARM has been since the week ending February 18,1994, when it was 4.18 percent.
Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.
"The possibility that consumer spending will slow, given the current weakening level of consumer confidence, created an uneasy atmosphere in the financial markets," said Frank Nothaft, Freddie Mac chief economist. "Combined with the growing possibility of a war with Iraq, new money flowed into the bond market, driving down yields and other interest rates. Mortgage rates were no exception.
"In the housing market, new home sales in August were up to an all-time high, reflecting the boom in housing construction at the start of the year. However, sales of existing homes appear to be leveling off as does the pace of new construction, indicating perhaps a return to a more sustainable rate of housing activity going into the new year."
Portland Area Mortgage Rates
As of late August 2002, Portland area lenders and mortgage brokers were offering APR 5.64% to 6.01% on 30-year fixed mortgages. Washington Mutual Bank (one of the area's largest lenders) was offering 6 percent (30-year FRM) with zero points (APR of 6.02 percent). Another large lender, Wells Fargo Bank interest rate was 6% (one point) with an APR of 6.31. Federated Home Mortgage has the lowest APR (5.64) with an interest rate of 5.38 and 2.7 points.
To check on local mortgage rates go to Bankrate.
Portland Area Mortgage Brokers
To talk with a mortgage broker, consider:
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Associated Mortgage Group They are licensed in both Oregon and Washington. Telephone: (503) 221-0064 Fax: (503) 221-0396. Mr. Dave Jolivette is the contact.
- Mortgage World Telephone: (503) 292-4900. Mr. Tim Bolen is the contact.
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Stevens Mortgage Telephone: (503) 670-0535 Fax: (503) 670-0481. Mr. David Dishman is the contact.
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Windermere Mortgage Services Telephone: (503) 497-5060 or (800) 867-1337. Ms. Cynthia Rockney-Wilson is the contact. Also Bertha Ferran at (503) 464-9215.
You may want to read our Privacy Policy with regard to recommendations.
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Hats Off to Nike
Donates Two Million Dollars Worth of Basketball Courts to Portland
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We saw the first court this week at Gabriel Park in the Multnomah Village neighborhood and my husband was dying to get out on the new surface - he is recovering from a knee operation and anxious to resume playing basketball .
Nike presented a special anniversary gift to Portland Parks & Recreation this summer. As part of their 30th Anniversary Project, Nike donated $2 million to the City of Portland for the refurbishment of 90 Parks and Recreation basketball courts. The courts' surfaces will be made of recycled rubber soles of used sneakers. Word is the surfaces are awesome.
In June 2002, Nike announced that nearly 90 existing outdoor basketball courts (41 full-courts and 48 half or partial courts) in more than 30 Portland parks would be resurfaced. The revitalized courts will feature a world-class, cushioned Rebound Ace surface containing recycled shoes. The same quality of surface is featured at the Australian Open, Sydney's tennis venue, for the Games of 2002 and at this country's most prominent outdoor basketball court, Holcomb Rucker Park in Harlem.
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With mortgage rates at four-decade lows, homeowners are again racing to refinance their loans. But in the rush to lock in the best possible rate, some people may be paying less attention to the accompanying fees and transaction costs that could easily whittle down, or even wipe out, any potential savings.
Homeowners looking to lower their monthly payments, and possibly save thousands of dollars over the life of their loans, may become so fixated on rates "that they may not be buying the right program," said Paul Hirschauer, a senior loan consultant for Washington Mutual, the large savings institution based in Seattle. He and other mortgage experts, along with consumer groups, are urging borrowers to shop for closing costs as well as rates.
Fees, which generally are 1 percent to 2 percent of the total loan amount, are inescapable. They are necessary, lenders say, to cover the costs of following strict government guidelines for loans completing title searches, for example, or credit checks.
Some lenders may agree to waive certain fees to get or keep your business. But industry experts note that others have been tacking on processing fees or "junk fees" that critics say are intended to squeeze out extra revenue. Recently, a few lenders have even added so-called commitment or refinancing fees, usually around $500, which essentially penalize borrowers who walk away before the closing date, experts say.
Professor Guttentag's Web Site
Professor Jack M. Guttentag, emeritus professor of finance at the Wharton School of the University of Pennsylvania, runs a Web site for consumers at www.mtgprofessor.com. Professor says the commitment fees, in particular, are new to this latest, particularly competitive round of refinancing. Some banks and mortgage companies, he said, worry that consumers may switch lenders because the Internet gives them access to a wide range of information about loan terms and rates. "Some borrowers have become very shrewd," he said.
Mortgage rates have fallen to levels not seen since the mid-1960's, largely because of the Federal Reserve's moves in recent years to loosen its credit policies to keep the economy moving. By early in September 2002, 30-year fixed-rate mortgages fell to 6.15 percent and 15-year mortgages to 5.56 percent, according to Freddie Mac, formerly the Federal Home Loan Mortgage Corporation.
Good Faith Estimates
So they post their low rates and lure in customers, lenders and mortgage brokers are also required by law to provide "good faith" estimates of closing costs, to give borrowers an idea of the type of fees they will be expected to pay. Some lenders may break down their fees, but others may bury them in the mortgage documents or simply add them to the loan amount, experts say.
Mark Oleson, the director of the financial counseling clinic at Iowa State University in Ames, said many clients are drawn to loans advertised as having no fees, when in fact the fees are rolled into the principal of the loan at the closing, becoming subject to interest. "People think these are free loans but the appraisal, title search and origination fees show up on the back end and can cost as much as $2,500," Mr. Oleson said.
The federal Department of Housing and Urban Development is proposing rules for the closing process to discourage surprise costs and keep lenders to their up-front good-faith estimate. HUD officials say they will be accepting public comments until the end of October, when the agency is expected to act on the proposal.
Mr. Guttentag advises borrowers to calculate the total cost of their loan and how long it will take to pay off that cost instead of trying to break apart the myriad fees. An oft-quoted rule of thumb is that closing costs should not exceed 2 percent of the loan value, but Mr. Guttentag says that such a simple yardstick does not necessarily work with today's more complicated loan products. In some "no cost" or "low cost" deals now being offered, borrowers get a higher interest rate and the bank assumes the closing costs. In other deals, borrowers pay points to get a lower rate. (A point is equal to 1 percent of the total loan amount.)
Mr. Oleson said more borrowers should take on shorter-term loans even if that means increasing their monthly payments. "I think that's where the true value of refinancing lies," he said. "In fact, I'd be less concerned about fees and more interested in trying to do some serious damage to that loan balance." He also advises consumers against using a refinanced loan to consolidate other debt like credit cards by increasing the loan amount. Unless there's a change in spending behavior, consumers could run up their credit card bills again.
Whatever the deal, consumers should be willing to negotiate, and stand their ground, before signing on the dotted line.
Many banks, including Washington Mutual, say they tell prospective customers to first approach their current lenders or mortgage brokers because that can be the quickest and least expensive route to refinancing. (After all, the lender already has the pertinent paperwork handy.) To keep their customers from going elsewhere, many lenders will refinance a 30-year loan at 15 years, or even 10 years, even though the shorter terms are less profitable for the bank.
Trend is to 15-Year Loans
Brad Conner, manager of real estate lending for Bank One in Phoenix, said that "there is an increasing movement to 15 years in order to shorten the loan without increasing payments." "People like to plow that savings right back into a shorter term," he added.
Consumers seeking to refinance small loan amounts, usually $60,000 or less, may be out of luck: many lenders say they consider such amounts too small to refinance. It may not be cost-effective anyway: borrowers will pay the same fees whether the loan amount is $50,000 or $500,000. The average appraisal fee is around $270, for example, while the title insurance fee is around $450, according to a survey last year by Bankrate.com, which tracks mortgage rates and fees.
To save money on your title insurance, HUD suggests asking your current insurer if the policy can simply be reissued. Mr. Oleson says you can shop for an appraiser, too.
Dan King, president of the Millennium Funding Group in Portland, Oregon, says now is a good time to negotiate the cost of a loan, and to save money. For a fee of one point, he said, you can borrow $200,000 for 30 years at 6.5 percent, for a monthly principal and interest payment of $1,264. Or, you can avoid points and pay a rate of 6.75 percent for a payment of $1,297, or $33 more a month, he said.
"If you stay in the house less than five years, you're better off paying the higher rate and avoiding the points," he said.
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Klamath River - Third Largest Population of Pacific Salmon
Classic Western Water Battle Rages on The Basin
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My interest in the Klamath River peaked when my husband returned from one of his Klamath River fishing trips in June and told me he met a young man (Jim) on the river who was kayaking the entire 254 miles of the river for a research project. My husband said Jim looked tired but only had a few more days to go before he reached the Pacific Ocean. He was impressed with not only Jim's kayaking skill but his determination. So was I.
My plan was to write-up the Klamath Basin for the October Moving to Portland newsletter. It seemed a safe thing to do as the "water politics" from the 2001 drought were subsiding. Now the national news tells us differently.
The water struggle between the farmers, environment folks, fishermen, and Native Americans during the Oregon drought of 2001 made for almost a perfect media story as it pitted families who were losing money farming against the Indian tribes, fisherman, and others trying to save some fish. The fish won that first round and water was reduced for agricultural purposes and diverted to the fish. Early this year, the Bush administration changed the policy and rerouted more water for agriculture. The drought was over, but water was still scarce.
As of Late September 2002, Thousands of Klamath River Salmon are Dead.
More Water For the Fish
Now the news tells us that over 10,000-12,000 salmon have died in the lower river (California) the last few days. Without clear scientific proof, the evidence points to low and warm water in the river. The fish are susceptible to disease under these conditions. So the water priority is again being changed by the government. More water for the fish. Nothing is more politically charged than watching thousands of floating dead fish on the six o'clock news. The farmers plight drew politicians to the area last year, but there were never Congressional hearings on the rights of the about 3,000 members of the Klamath tribes, said tribal chairman Allen Foreman. Being photographed with dead fish might not be for everyone.
For more than 100 years groups in the western United States have fought over water. During the 1880s, sheep ranchers and cattle ranchers argued over drinking water for their livestock on the high plains. In 1913, the city of Los Angeles began to draw water away from small agricultural communities in the Owen Valley, leaving a dusty dry lake bed. In the late 1950s, construction of the Glen Canyon Dam catalyzed the American environmental movement.
From its headwaters in Oregons Cascade Mountains to its mouth on Californias north coast, the Klamath River is a beautiful battleground.
History of the Basin
Once, courtesy of the U.S. Bureau of Reclamation, it let the desert bloom in the high, arid Klamath Basin straddling California and Oregon. It also nurtured generations of fishermen, producing the third largest population of Pacific salmon after the Columbia and Sacramento rivers. The Klamath Project dates back to 1903, when the Reclamation Service (now the Bureau of Reclamation, a branch of the U.S. Department of the Interior) investigated the possibility of converting rangeland, wetlands, and natural lakes into irrigated farmland. Construction began in 1906, the first water deliveries were made in 1907, and the project was completed in 1924. The Bureau of Reclamation supplies water to the farmers at the cost of delivery, without charging for the water. Fodder, barley, oats, potatoes, and wheat are the principal crops on the 225,000 acres of irrigated land. In addition, the irrigation dams control floodwaters, and the Link River Dam supplies hydroelectric power.
Now the 254-mile-long Klamath drains a way of life, because it never had enough water to support all the people who wanted to use it the farmers, the fishermen, and the Native Americans for whom it is physically and spiritually the center of the world.
It is a symbol in the national debate over endangered species and living proof of natures limits. Farmers and fishermen who depended on the rivers false promise want compensation for the governments well-meaning interference in the natural order of things.
The prosperity of the farmers at its upper limits has come at the expense of the Native American tribes and salmon fishermen downstream. And now farmers are getting a taste of the broken pledges the Indians have lived with for 150 years.
Farmers lost much of their water last year when the federal government concluded the Endangered Species Act forced it to protect two species of fish the Lost River and short-nosed suckers found nowhere but in the Klamath Basin, as well as threatened salmon runs downstream. The science behind that decision has since been called into question by the National Academy of Sciences.
The Yurok and Hoopa Indians are in a lawsuit over the governments siphoning of tributary water from the Trinity River to feed Central Valley farmers crops.
The Town of Bonanza Oregon
The severity of the 2001 drought is underscored by the town of Bonanza, Oregon. Famous for its natural springs, and entirely dependent on wells for drinking water, the towns water supply is now contaminated with pesticides, fertilizer, and manure. The water quality is so bad its not even safe to bathe in, much less drink. The problem stems from a very low water table. The drop in underground water levels is caused directly by the drought and indirectly from the increased irrigation from underground aquifers to compensate for the lack of water from Upper Klamath Lake. As the water table drops, clean water stops flowing from the springs and wells, and dirty water from fields flows into the water beneath Bonanza.
Everglades of the West
Andy Kerr writes that the "The Klamath Basin was, and still is, the Everglades of the West. It had over 350,000 acres of shallow lakes, marshes and meadows. The skies were once darkened by the flight of pelicans, geese, swans, ducks and other birds. Beaver were abundant, as were grizzly bear. Numerous salmon stocks each year swam 254 miles from the Pacific Ocean to Upper Klamath Lake and then farther to spawn in the headwaters of numerous rivers. The 10.5 million-acre watershed of the Klamath River Basin was, arguably, one of the most productive wildlife areas in the world."
 Eagles migrate in large numbers during January and February every year to the Klamath basin to feed on wintering populations of waterfowl. As many as 1,000 eagles make this the largest wintering area for the species in the lower 48 states. Wintering waterfowl populations can be two million or more. The scavenging eagles primarily eat waterfowl that have succumbed to avian cholera, a disease that does not often affect the eagles. Eagles will occasionally also take live birds. A popular annual bald eagle conference sponsored by the Klamath Falls chapter of the Audubon Society draws 400 or more people from all over the country. The Klamath Basin also supports the one of the largest nesting population of bald eagles in the west.
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Pink Martini
Portland Band Brings Out Second Recording
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Nearly five years ago, a large Portland, Oregon, ensemble named Pink Martini did that most enviable of things in the music world: they came out on their own one-record label with an album that became an instant, international classic.
Though the recording of Sympathique have been called "lounge music," "Big Band pop," and even "cosmopolitan rumba" by various pundits, the album is happily unclassifiable. It may have elements of various popular musical styles, the depth of classical music, and the wonder of something that sounds fresh each time it is heard.
Instrumental influences for Pink Martini include Ravel, Chopin, Nino Rota, and half a dozen others. Vocally, the album is a musical journey around the world. There are the requisite few songs in English, such as the little-heard "Amado Mio," from the classic film noir Gilda, and the more familiar "Qué Será Será" and "Brazil," all done in refreshingly unexpected arrangements. But there are also tunes sung in French (the title song), Spanish ("La Soledad," and "Donde Estás, Yolanda?"), Japanese ("Song of the Black Lizard"), and Greek ("Never on Sunday"). Of the dozen songs on the album, only a couple are originals (including Lauderdale and Forbes' title track).
Sympathique, which means "likable" in French, is simply one of those rare records that one seems never to tire of. Part of the reason for the longevity of the album is the excellence of the musicianship, the extremely good taste in the selection of material, and the perfectionist overseeing of bandleader-pianist Thomas Lauderdale.
Lauderdale, the band's founder and artistic director was raised in rural Idaho. Growing up he listened to Ray Charles, Roger Miller, and the Morman Tabernacle Choir." Now in his early 30s, he has been playing classical piano since the age of six and has been a solo guest artist with several major symphony orchestras. While at Harvard (where he graduated cum laude with a degree in Literature and History), Lauderdale met and befriended China Forbes, a talented singer-songwriter, who can apparently sing in any language to which she applies her mind and tongue.
Having originally commuted from New York for Pink Martini recording sessions and performances in the Pacific Northwest, Forbes finally made the commitment to move to Portland several years ago. Since that time, the band has become more stable as a performing unit, and their successes have been impressive. Pink Martini now plays extensively, and often, throughout Europe and the U.S. The title song of their debut album has been featured on a couple of national music compilations, and became a radio hit in France, where it was featured on car commercials, and got nominated for a French "Grammy."
The band has played with soul legend Al Green at the William Morris Agency's Centennial Anniversary in Los Angeles. They sat in with Ringo Starr and Elton John on the song "Twist and Shout" at a benefit show at the Cannes Film Festival (where they have become regulars). They recorded music for the George of the Jungle television cartoon series. And perhaps most tellingly of all, they are the subject of more than a few "fan sites," in more than a few languages, on the World Wide Web.
All of this gives rise to the question that Lauderdale and Company hear with monotonous regularity, "When is there going to be another Pink Martini album?" It's finally out. Some favorite cuts included vintage Serge Gainsbourg, house remixes of Shirley Bassey, Little Jimmy Scott's "Someone to Watch Over Me," and Francis Poulenc's chilling opera Dialogues of the Carmelites.
"Why another album is taking so long is pretty simple. You have to face yourself in the morning, and at night," says Lauderdale, without a trace of irony. "And the great thing about recording for Heinz Records (the label owned by Lauderdale, and named after his gigantic, music-loving dog) is that you don't have to be in a hurry. I do have a pressing sense of urgency to the members of the band to get a record out," admits the bandleader. "But I have to balance that with being able to live with myself."
Part of his deliberation comes from wanting to maintain a very high level of quality in the songwriting, Lauderdale says. "It's almost like we're recording another first album," he says. "Except for this one, most of the pieces we've written or written with friends. It's problematic," he continues, "because every piece on the last album was every one of the composers' masterpieces. [Jay] Livingston and [Ray] Evans wrote 500 songs, but 'Qué Será Será' was their best. 'Never on Sunday' was the best song of [Manos] Hanjidakis. And Ravel, what's better of his than 'Bolero'? There's a lot to live up to.
Lauderdale says one of the stumbling blocks to finishing the new album is that, after coming back from a European tour in the late summer of 2001, he was able to hear with "new ears" the material the band had been recording. To him it sounded too fast, too loud, "too much, and not enough love," he says. "Everything we had made made me nervous and tense. It didn't sound patient [like Sympathique]."
Some of the music for the new album is reminiscent of the first Pink Martini disc. Some of it is entirely new and different, such as a whimsical 1930s-styled instrumental which one could imagine emitting from a Victrola, and which Lauderdale wrote with New York artist Patrick Abbey. Renowned jazz and classical conductor Norman Leyden plays the clarinet on the piece. "Ultimately, one of the things I like best about what Pink Martini has been able to do," says Lauderdale, "is to truly appeal to people of all ages. I can't stand labels on the music. I think the whole 'lounge music' label is irksome. I know our music appeals to a broad cross section of listeners, because I see them at the shows."
"Music for me is like a dinner party," he adds, "You don't want to sit down next to people who all think the same way, and talk about the same things. Each of us wants a huge tapestry of influences in our lives. That makes it so much more interesting. And that's what I want for the music."
Heinz is the Final Judge
Lauderdale says he has a simple formula for judging whether his music has hit the mark, and one gets the feeling he's only half joking in his admission. "Ultimately, it's about children and dogs," he says. "I know of people who put on Sympathique to lull their two-year-old children to sleep. And when I audition a new musician, I can tell if they're going to work out by the way Heinz reacts. If he starts howling, it's a bad idea. If he rolls over on his back, I've got a winner."
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