to fund deals, there’s more money out there than there are houses. And corporate investors are taking up whatever excess inventory there is at the entry level price point. “Local investors aren’t buying at the foreclosure auctions because the institutional investors are still taking the few that come up,” he said. “They buy them at the foreclosure auction, fix them up, and rent them out.”
during the first quarter of 2019, down 56.64 percent from the previ- ous quarter and down 52.88 percent from the same quarter of 2018. “It’s too hard to make flipping work,” Williams added. “Individual investors who are willing to market are still finding success. But we’re not on the scale with the larger
ATTOM reported that only 4.8 percent of Boise homeowners were seriously underwater while 27.7 percent were equity rich. The median home price in the Boise metro area for the quarter was $254,379, up 1.6 percent from the previous quarter and a 5.6 percent increase from a year ago, a 110 percent increase from the area’s post-recession bottom in the first quarter of 2011. PORTLAND: A GOOD PLACE FOR BUSINESS For people looking for a low- er cost of living and a busi- ness-friendly environment to find jobs, Portland is a good alternative. That includes doing business as a real estate investor. In 2018 Forbes named it the third best place for business and ca- reers, citing a large influx of highly educated Millennials, and calling it one of the most environmentally friendly cities in the world along with a cost of living that is 13 per- cent above the national average. With a population of nearly 2.5 million people, the metro area is home to Nike’s world headquarters and Intel Corporation. According to the Portland MSA Economic & Population Outlook for April 2019, published by the North- west Economic Research Center (NERC) at Portland State University, job growth, which has been trending upwards for nearly a decade, is pro- jected to continue its upward trend this year although at a slower pace. Likewise, the NERC outlook reported a slowdown in net migra- tion to the Portland metro after two strong years in 2016 and 2017. For 2019, population growth in Mult- nomah County (Portland is its county seat) is projected to be 1.28 percent. “People are coming here with really good salaries, or good equity
from the year before, but down 12.5 percent from 10 years ago. Proper- ties that were flipping were bought for a median purchase price of $211,639 and sold at a median price of $249,844 for a gross return on in- vestment of 18.1 percent and taking an average of 215 days to flip. “We’re seeing some investors getting them under contract and then putting them back on the mar- ket selling them on the MLS with- out putting anything into them.” As of the first quarter of this year,
from the sale of a home elsewhere, or both,” said Dr. Gerard Mildner, academic director of the Center for Real Estate at Portland State Uni- versity and an associate professor of real estate finance. While unemployment in the Portland metro area has remained unchanged over the past year at 3.7 percent in April 2019, and popula- tion numbers and job opportunities are expected to continue to grow, Mildner sees the area’s housing situation directly affected from three perspectives. First, a lack of available land supply, due in large part to a de- cades-long experiment with urban growth boundaries. “The urban growth boundary is a line that goes around the city and it takes an act of the city council to move it. Anything outside of it is not open for development,” said inves- tor and Realtor® Sharon Wenger with MORE Realty. Second on Mildner’s list is the area’s inclusionary zoning regula- tion aimed at promoting permanent affordable housing. Lastly is the state’s recently passed rent control law, which directly affects landlords. “This law is likely to cause mom and pop landlords to do their best to increase rents up to 10 percent right now knowing that this may be their only chance,” Mildner said. “The rent control regulation goes down to four- unit buildings while the inclusionary zoning regulation covers buildings that are 20 units or bigger. Yet despite these regulatory restrictions, he believes investors will continue to see Portland as a place of opportunity. “What investors have realized is the return in the secondary markets is better than in primary markets. They all feel the need to have a little bit of Portland in their
portfolio. Real estate is a respect- ed property type and in secondary markets it is much more afford- able,” he noted. Like many others, Wenger was one of those investors who sold off her California portfolio before relocating to Portland. “As an investor I’m of the opinion that there’s always a deal some- where. You just have to look for it,” Wenger said. “People are moving here from all over the place.” A veteran investor, Wenger has worked on both sides of the aisle, utilizing both a buy and hold strat- egy and flipping properties as well. Although using hard money loans to finance flips in Portland hasn’t worked out for her. “I think buy and hold is the safest strategy,” Wenger said. “I tried a few times doing flips using hard money. People I know who are doing flips are now saying they’re not going to do them. It’s almost impossible to find a house cheap enough to put money into and make money on the other side. There’s no safety margin.” According to ATTOM, flips ac- counted for 4.4 percent of all home sales in the Portland metro area for 2018, down 12.8 percent from the previous year and down 24.5 percent from a decade ago. Still, investors who successfully flipped a property paid a median price of $267,000 to purchase the property and sold it for a median $360,000 in 2018, a 34.8 percent gross return on investment. It took an average of 188 days to flip a property in 2018. Total distressed sales — REO sales, short sales and third-party foreclosure auction sales combined — in the Portland metro area were down 23.4 percent on an annual basis for the first quarter of 2019. The median sales price for a
According to data released by AT- TOM Data Solutions, there were only 98 properties with foreclosure filings Properties with Foreclosure Filings Qtr-Yr Boise City, ID Portland-Vancouver-Hillsboro, OR-WA Seattle-Tacoma-Bellevue, WA Q1 2018 208 764 820 Q2 2018 188 708 782 Q3 2018 231 513 799 Q4 2018 226 746 1,139 Q1 2019 98 687 820 PROPERTIES WITH FORECLOSURE FILINGS markets like Memphis or Indianap- olis. We don’t have the population.” For all of 2018, only 3.5 percent of total home sales were flips, ATTOM reported. That is up 2.7 percent
BOISE CITY, ID
PORTLAND-VANCOUVER-HILLSBORO, OR-WA
SEATTLE-TACOMA-BELLEVUE, WA
Properties with Foreclosure Filings
Boise City, ID Portland-Vancouver-Hillsboro, OR-WA Seattle-Tacoma-Bellevue, WA
1,200
1,139
900
820
820
799
782
764
746
708
687
600
513
300
231
226
208
188
98
0
Q1 2018
Q2 2018
Q3 2018
Q4 2018
Q1 2019
90 | think realty housing news report :: august / september 2019
thinkrealty . com / hnr | 91
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