October 2003 Newsletter
by Susan Marthens
Contributors Gail Mann and Teresa Kirsch

In This Issue

1. Portland Home Market - August 2003 Residential Highlights

2. Cost of Residential Homes in the Portland Metro Area for August 2003

3. Long-Term Mortgage Rates

4. Portland Weather

5. Community Profile - West Linn

6. Remodeling Your Oregon Home

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Portland Home Market

August 2003 Residential Highlights

The Portland metro area certainly saw some simmering temperatures in August, but the area's real estate market boiled well over the activity of August 2002.  New listings climbed by 7%, pending sales by 18.2%, and closed sales climbed 25.9%.

Year-to-Date Trends

The market for the year to date exhibits upwards trends for almost every measure of activity.  New listings entering the market between January 1 and August 31, 2003, rose by 4.7% over the same period in 2002.  Closed sales rose by 9.9%.  Pending sales show the steepest climb-up 12.1%.

Affordability

The average sale price of a home in the Portland metro area during the 12 months ending in August 2003 was $218,600 – evidence of a 6.1% appreciation from the average price of $206,000 during the 12 months immediately prior.  Median sale price showed a less pronounced rise of 5.2% ($183,000 v. $173,900).

Cost of Residential Homes in the Portland Metro Area

For Period August 2003

Area

Average
Sales
Price

Percent
Appreciated
 **See note

North

6.5%

Northeast

7.3%

Mortgage Rates Falls Four Weeks in a Row

October 2, 2003 

In Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 5.77 percent, with an average 0.6 point, for the week ending October 3, 2003, down from 5.98 percent last week. Last year at this time, the 30-year FRM averaged 6.01 percent.

The average for the 15-year FRM this week is 5.10 percent, with an average 0.6 point, down from last week's average of 5.30 percent. A year ago, the 15-year FRM averaged 5.40 percent.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 3.72 percent this week, with an average 0.6 point, down from last week's average of 3.77 percent. At this time last year, the one-year ARM averaged 4.29 percent.

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

"Plummeting consumer confidence in September led markets to believe that the lack of job growth is wearing on the economy," said Frank Nothaft, Freddie Mac chief economist. "That brings about the fear that the lack of growth could trigger another lull in the recovery, causing interest rates to tumble this week.

"We may see a market reaction to the release of September employment numbers due out tomorrow. It could potentially alter the momentum of mortgage rate change in the near future."

Portland Area Mortgage Rates

In early October, Washington Mutual Bank was offering 5.75 percent for a 30-year FRM (APR of 5.80 percent) with zero points. Another lender, US Bank's rate in early October was 5.88 for a 30-year FRM (APR OF 6.02 percent).  Both of these rates are for a $150,000 loan with 20% down. 

You can learn more about mortgages by visiting Professor Guttentag website.

To check on local mortgage rates go to Bankrate.

Portland Weather
Tracking the Moisture and Sunshine

Water Year:  October 1 - September 30

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

September Weather

Our first rains of the season occurred in early September when we had almost a week of gray and rainy weather. Then it reverted back to summer with more dry and warm weather until the end of the month when the temperature cooled.

The early September rains brought smiles to the faces of many Portlanders. We are not used to sustained periods of hot weather and this summer has tested our tolerances for heat.  The rain not only halted the 50,000 acre B&B fire in Central Oregon, but it cooled things down in Portland.  Brown lawns turned green, and the leaves from trees and shrubs perked up.

Summary of the Water Year

It is officially over - our water year.  We were about 3.5 inches short of the average rainfall, and if we hadn't gotten a good burst of rain in April and May, we might have called it a drought.  It was also hot and dry during the summer setting many records.

Community Profile - West Linn

West Linn is home to 23,090 residents and is one of the fastest growing communities in the Portland metro area.  The 7.5 square mile area has a good mix of older homes and established neighborhoods along the Willamette River to the soaring views of the area's luxury hilltop homes.

With Portland eight miles to the north, many who live here make their living outside the city limits. Called the City of Hills, Trees and Rivers, among West Linn's special assets are its dedicated parks (17 of them) and open spaces, where residents and visitors can stroll among Douglas firs and take in panoramic views of the Willamette and Tualatin rivers, with Mt. Hood, Mt. Adams, Mt. St. Helens and the Cascade range as a backdrop.

The one thing that West Linn is lacking is an established older downtown commercial area.  One with sidewalks with an old-fashioned grid design.  So West Linners shop in malls and stores along the major roads.

Education and Family Income

The 2000 census figure for a median family income in West Linn was $83,250. They edged Lake Oswego out of first place for the highest family income in the metro area.  West Linn's residents are also among the best educated in Oregon, and this is reflected in their schools.  With almost 7,000 of their citizens under 19 years of age, the community has a strong interest in the quality of their schools.

Online Maps of the City

For some of the best maps (aerial, parks, contour, parade route, creeks, etc.) of the area, visit the City GIS website.  The maps offered by the Geographic Information System (GIS) at the City of West Linn are a program under the Engineering Division of the City of West Linn's Public Works Department.

History

In the 1860s, Willamette Falls was a lovely sight for those who lived and worked on the Willamette River's shores. The falls -- between Oregon City and what's now known as West Linn -- cascade 40 feet over a horseshoe-shaped basalt ridge. But for river men, the falls were anything but pretty. They were dangerous and a nuisance, interrupting river traffic attempting to travel to or from Portland. That all changed in 1873, when Willamette Falls Locks opened at the edge of what's now the Bolton neighborhood of West Linn, allowing boats and their cargo to safely go around the falls.

The 130-year-old locks are a lasting link to West Linn's past. The locks continue to operate, allowing river traffic to pass -- though these days the locks' four chambers are operated by hydraulics and not by hand (as they were until the 1940s). Operators of government vessels, passenger boats, freight and towboats, log rafts, pleasure craft and jet skis may use the locks for free, both north and south of the falls. The locks are on the National Register of Historic Places.

Even aircraft have passed through the locks.  The enormous "Spruce Goose," built by Howard Hughes and flown just once, was transported by barge through Willamette Falls Locks in 1993, on its way to its home at the Evergreen Aviation Museum in McMinnville.

West Linn Neighborhoods

West Linn has 11 neighborhood associations. Each is made up of citizen volunteers. They elect officers, adopt by-laws and establish geographical boundaries. Each association is entitled to identify its own interests and set its own agenda. Neighborhood associations do not levy dues. Membership in a neighborhood association is open to anyone who lives, works or owns property within its boundaries. 

Homes

Can't decide between a historic neighborhood or an area of new homes?  Then West Linn may be the place for you because many of the neighborhoods offer a blend of both.  Historic homes are mainly found close to the river.  Many West Linn homes built along the river in the 1800s are beyond rejuvenating so people buy the home for the lot, remove the old home, and build a new one.  Right next to an historic home - perhaps built by a river captain or timber baron. This is especially true if your historic home is in the Bolton neighborhood along the river.  This area has all the physical characteristics that many people desire (meandering streets, mature trees, river views, etc.).

The Willamette neighborhood offers 12 city blocks of historic residential and commercial properties, many from the 1885 - 1915 period.  An additional 28 homes elsewhere in the City are designated as historic landmark structures. 

Newer homes are concentrated in the hills.  These hill homes have all the amenities desired such as formal dining rooms, entertainment centers, 3-car garages, and monster kitchens.  Plus many have views.

For example, this 3,796 square foot hill home is on the market for $589,900 in early October.  It offers 4-bedrooms, 2.1 baths, a 3-car garage, fireplace, and bonus room.  It was built in 2002 and the square foot price is $155.40.

Links

• City of West Linn
• West Linn Schools
• West Linn Neighborhood Associations  Eight of the 11 have a website.
• West Linn Parks and Recreation  Check out the skatepark.
• City Newsletters  Dating back to January 2001 in PDF Format.
• 2000 Census Demographic Report (PDF Format)

Remodeling an Oregon Home

In the June 2003 MTP issue, we wrote about home financing and suggested that one should obtain financing before you begin house hunting. That simple and easy step is called getting "pre-approved" (i.e., how much you can borrow and a commitment from a lender). In June the topic was "finding a home to buy."  Most of that article was about "finding the neighborhood" where you want to buy a home.  In September, the issue dealt with the legal stuff in buying a home in Oregon.

This month we will talk about remodeling.  So much has been written about this topic that there is little we can add so we will concentrate on remodeling for Portland living.

Rules for Living Well in Portland

Three simple rules for Portland:  windows, lighting, and warm colors.  Our gray winters can be long and dark with many days of only nine hours of daylight.  When you come home, you'll want to "flip the switches" and flood the rooms with overhead lights as well as lamps.  Warm wall colors add cheer.  Big windows and lots of them can divert your attention from the rain to the lights of the city and neighborhood. Don't forget skylights where appropriate.

It's January, and you've put in a long day at work.  It's been raining most of the day, and you're tired.  All you can think about on the drive home is your inviting home and a relaxing evening. You walk into your warmly painted home, turn some lights on, get a fire started in the fireplace, pour yourself a glass of wine if that is your style (Oregon Pinot Noir is recommended), and rehash the day with your family. You can see the lights of your neighbors' homes and that cheers you up.  You "pat your self on the back" for installing all those big glass windows last summer.  Your mood slowly changes and life looks better.   Sure, the wine helps.  But you're collecting the rewards of all the planning and work you've done on the house. 

Planning

Plan, plan, and then plan some more.  Solicit ideas from people whose design and tastes you like.  Visit remodeled homes and even new home "models."  Hiring a designer or architect can be costly, and you may be disappointed in their ideas and plans.  Style is so individualistic that what one person considers "pleasing" might   horrified looking at the same design.

We certainly have been disappointed a couple of times with the advice we received from an architect so we stick with this rule:  Only hire them by the hour so you're not stuck with them. Hiring an architect to do a "walk-through" and then sketch some "rough" drawings can reap many benefits at a small cost.  If you really like their results from the preliminary engagement, you can then hire them to do the entire plan.

Should You Get a Building Permit

Yes, by all means.  It will pay should you decide to sell the home as you will have to divulge this information (i.e., whether you obtained a permit for the work).  Permits cost money and getting one is often frustrating and aggravating (i.e., it can turn an avowed Liberal into a radical Libertarian).

It's one of those things in life that's so easy to avoid but the consequences can be severe when it come time to sell the home. Another hazard is that you may be denied homeowner insurance.  Insurance companies are getting real picky these days. Not having gotten a permit will not necessarily kill a sale, but it might complicate it greatly.

Don't Ever Make an Important Remodel Decision Under Duress

Making a major remodel decision quickly or under duress will come to haunt you.  You will live with it every day because it is so visible. It is a constant reminder that you made a mistake, and you will be angry at the person responsible every time you look at it whether that person is yourself or another.

It usually happens when you have hired a contractor or craftsman and they want an answer "right now" so they can proceed with the work.  It could be a simple thing like grout color for the bathroom tile.  Don't let them bully you and don't fall for the "extra charge" if you make them wait for the decision.  Be firm and pleasant and put the "monkey on their back" by requesting why they never told you about it until now. If you do make a change from your original contract, you should expect to pay extra, however.