Builders, Land Development and the First-Time Home Buyer

Builders, Land Development and the First-Time Home Buyer

Builders, Land Development and the First-Time Home Buyer

The limited home inventory in Portland is tight and it’s getting tighter.

The real estate market downturn of 2007 caused most land development to come to a grinding halt. Now that the market has picked back up, builders are looking for new projects by purchasing existing homes (such as fixers, entry level etc.) to develop the land. Builders are now directly in competition with the first-time homebuyers for these homes.

How is this affecting home sales?

It’s increasing demand which increases market value if there’s competition for the house. Typically, builders can pay cash, close quickly and waive inspections as they are removing the existing house to build a more expensive home.

Is the City of Portland concerned?

Land use laws and urban growth boundaries direct development in Portland. If there’s a shortage of available land, builders are required to look at existing properties for development. I know several builders that weren’t interested in building in Multnomah county three years ago but they are now.

Tune in to KXL’s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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How Much Salary Does It Take to Buy A House Around Portland

How Much Salary Does It Take to Buy A House Around Portland

A survey by an outfit called HSH.com says you need to earn about $49,000 a year in Portland to cover the principal and interest payments on the average home in Portland.

That study was part of the third quarter numbers and they equate with the medium price sold in Portland at about $276,000.

Houses in Portland are not as affordable as they were a year ago. We have had appreciation somewhere at 15% in the last year which of course is good but it doesn’t mean that homes are more expensive and at the same time we’ve had interest rates go up a little bit so all that affects affordability.

The interest rate bounce around a lot they’ve definitely have gone up and it affected affordability. For every 1% rise in interest rates we lose $10,000 in house, so if you combine that with the market where home prices are going up, affordability is gonna go down. It’s a good reason to buy now.

Right now for loan rates, we got 30 year fixed at about 4.375 and they have a tendency to bounce around a little bit but they’re gonna stay right about there.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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