Portland Condo Developments: What’s New and What You Need to Know
The Appeal of Portland Condo Developments
Portland’s real estate market is notoriously competitive. Between offers coming in $100,000 over asking price, and sales closing in less than a week’s time, homebuyers have been challenged by local market conditions for some time now. Portland’s condo developments, however, play an interesting role in the local real estate market.
Similar to houses, condo units provide buyers with the most coveted benefits of owning a home: equity and tax breaks. But unlike houses, condos are (almost) maintenance-free.
Weekly responsibilities that face many homeowners, such as mowing the lawn, cleaning a pool, or annual duties like repairing the roof or touching up paint, are incorporated into a homeowners association fee (HOA). And in Portland, condo developments offer an additional advantage to buyers: condo units are a more affordable buying option in a fiercely competitive market.
An Up-Swell: Growing Interest in Portland Condo Developments
Over the past year, Portland's condo boom has gained traction with both buyers and developers alike. According to the Portland Business Journal, "Condos that reach the market are being snapped up quickly. Condos spent only 34 days on the market on average in 2016, down from 37 days in 2015 and 95 days in 2013.”
As the percentage of interest in condos increases, it’s important to look at who’s buying in Portland right now. For the most part, Millennials and empty nesters comprise most of Portland’s condo buyers, and given the fierce competition in the home buying market, this buyer persona makes sense. Debbie Thomas, a real estate agent for a new condominium in Portland’s Overlook neighborhood, claims that there’s a “pent-up demand for sale property” – especially among younger buyers.
Rachel Heisterkamp, a Millennial Portland buyer who has been touring Portland condo units, shares the frustration of paying rent without accruing equity. “I’m ready to start paying my own mortgage, not someone else's,” she shares, “and condo units are an attractive option for a starter home.
Are Portland Condo Developments the Answer to Portland's Real Estate Crisis?
If condos are cheaper and more readily available than homes, does that make them an across the board solution to Portland homebuyer woes? Not quite.
It’s important to consider the success of condos from a developer’s perspective. Before a condo hits the market, developers must invest millions of dollars in properties. And some Portland developers, such as VWR Development, have found that condos are not successful in every neighborhood. Recently, the group found condos lucrative for buyers in the Overlook Park area, but condos in the Sellwood area were converted back to apartments due to an absence of sufficient buyers.
Another factor: price. Portland condo developments tend to show strong sales when they align closely with either end of the price scale, affordable to expensive, but condos that align with the median price range don't tend to fare too well.
Looking at research from Portland developer VWR Development, "Condos priced at $300,000 to $500,000 spent on average only 27 days on the market in 2016. Luxury condos of $1 million to $2 million spent 46 days on the market. Condos priced between $700,000 and $999,000 sat on the market longer, 53 days on average.”
Overall, for condos to provide a solution for buyers, there must be an intersection of locational success, developer investment, and buyer interest.
Real Estate Forecast: The Future of Portland Condo Developments
Portland’s condos are a trend to watch. The city’s fabric is changing quickly, especially in growing areas like the SW Waterfront and the NW Industrial area off Naito Parkway, and developers are already eying these areas as ideal condo locations. Portland suburbs, too, are moving ahead with building condos and urban housing.
In Milwaukie, the City is working to secure bids for a mixed-use, condo building that "that [will] maximize the city’s desire to help revitalize downtown.” Condos are not only real estate alternatives, but also a part of the city’s urban and social growth. While real estate trends change quickly, Portland condo developments are here to stay – at least for the foreseeable future.
You’ve Got Options: Leveraging the Mortgage Credit Certificate for Your Portland Condo
Buying a condo in Portland can present some difficulties, and we believe homebuyers deserve all the assistance they can get. With that in mind, we want to introduce you to a mortgage program that’s been around for decades: the Mortgage Credit Certificate, available through Options Financial. Much of the public remains unaware of the program, but taking advantage of it means potential money saving and tax credit benefits for you.
Many loan officers are also unaware of the savings that can be leveraged via the program for qualifying buyers. The Mortgage Credit Certificate requires special certification, which we have, and are able to provide to our clients.
If you haven’t owned a home or condo in the previous three years, you meet certain income and purchase price restrictions, and you plan to live in your new condo as your primary residence, you could qualify for substantial savings. Learn more about the Mortgage Credit Certificate from Options Financial today.