Ultimate Open House

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by Dana Tims, The Oregonian  

The flagging economy will suck some of the starry-eyed extravagance out of the 2009 NW Natural Street of Dreams.

Promoters insist the 34th annual show of luxury homes will survive the downturn, but houses will be smaller, far more energy-efficient and perhaps half the cost of last year’s edition.

And, with the exception of the two or three houses that show host Chad Eslinger had already planned to build at his 7-acre Bella Terra development in Lake Oswego, they will all be sold before so much as a single nail is driven.

“These are all just signs of the times,” said Eslinger, owner of Eslinger Builders, based in Lake Oswego. “The goal here is to bring this back closer to reality.”

Unlike recent years, when footprints for Street of Dreams offerings grew to 7,000 square feet and beyond, houses this year are likely to be closer to 4,500 square feet, he said. Prices that routinely tipped $4 million in the past will be closer to $1.5 million.

“When times get tough, you are forced to be more creative,” said David Nielsen, CEO of the Home Builders Association of Metropolitan Portland, which relies on the Street of Dreams as a major revenue source. “That’s definitely been the case this year.”

Among the firsts now under consideration, for instance, is the possibility of staging a multi-venue Street of Dreams. Chances of that happening would increase, Nielsen said, if no other builders step in and offer to buy lots in Eslinger’s Bella Terra development in southern Lake Oswego.

A second location might feature even smaller high-quality houses or, in what certainly would be a first for the Street of Dreams, urban-style condominiums.

Sponsors also will promote a sustainability theme. All houses will be certified as Earth
Advantage, indicating high insulating values, energy-efficient appliances, managed storm water runoff and related features.

When the Street of Dreams premiered in 1976, it was the first of its kind in the country. It has since been replicated by builders’ organizations in hundreds of cities across the country.
The Portland show has consistently proved a huge draw with the public, luring tens of thousands of people each August.

More recently, a staggering homebuilding market cast doubt on whether a 2009 show could attract enough builders to make it go. Some longtime show participants, including those who still haven’t sold houses built for past shows, have bowed out.

“I’d like to think there are willing participants to continue the Street of Dreams,” said Gerald Rowlett, whose Westlake Development Group already had a buyer for the $2¤million house it sold in last year’s show. “But if I’ve ever seen the conditions for a complete roadblock, this is it.”
Greg Heinze, whose Shelburne Development is still trying to sell the house it built for the 2008 Street of Dreams, welcomes the changes for 2009.

“The trends we’re seeing for this year are actually pretty favorable, since bigger and bigger houses are going the way of the dinosaur,” he said. “The Street of Dreams won’t evaporate, but it will definitely morph into different things.”

Is a “soft” market a good time to buy? Or is it a time when it’s smarter to just sit on the sidelines and wait and see where things are headed?

Here are some practical thoughts that you can add to your own analysis of whether to shop, buy or hibernate for a while.  Let’s look at both sides of the equation:

First, slumping real estate markets also go by another name — buyers’ markets. Boom real estate periods, by contrast, tend to be known as sellers’ markets because most of the advantages are with sellers, not buyers. Unlike the boom years of 2003-2005, home sellers and home builders today no longer have the upper hand. They can’t expect double-digit price increases year after year. Or long lines at sales offices or open houses. Serious buyers are fewer in number and a whole lot slower to sign on the dotted line. Builders have to sweeten their packages of concessions in buyers’ markets — offering discounts, free upgrades and other deals that they’d never consider during the boom years.

Many builders also offer discounted financing packages to make their houses more affordable in buyers’ markets. Often builders have special relationships with large mortgage lenders or they own a mortgage subsidiary themselves. That puts them in the position to create cut-rate mortgage programs and even custom-tailored financing solutions for buyers that would never have been possible during the boom years.

Finally, home builders — by necessity — are now more open to negotiating specific details of transactions with serious buyers. There’s no hard and fast guarantee that you’ll get everything you bargain for — after all, successful negotiations require

With home prices decreasing and interest rates holding at historically low levels, the number of potential home buyers nationwide who can afford to buy new and existing homes has reached the highest level in more than four years, according to the National Association of Home Builders’ Housing Opportunity Index (HOI).

According to the latest HOI readings,  56.1% of all new and existing homes that were sold during the third quarter were affordable to families earning the national median income of $61,500, far higher than the 40.4% of families who could afford homes at the peak of the housing boom.

“If there is a silver lining to this crisis, it would be that some housing markets have become more affordable with a larger inventory to choose from,” said NAHB Chairman Sandy Dunn. “But this is undeniably a crisis and Congress needs to act on a housing stimulus to get the market moving again.”

Everyone is painfully aware of the economic downturn affecting our region and country. What started as a housing slowdown has spread across many industries.

What is becoming more obvious to a lot of people is how much the housing industry impacts so many other industries. Fewer homes built or remodeled means fewer jobs for title professionals, loan officers, real estate agents, framers, carpenters, roofers, landscapers and dozens of other professions directly connected to the construction and sale of housing.

It also means less lumber is purchased, so lumber yards and loggers suffer. It means fewer building materials are transported across the state or country, so truck drivers and truck stop owners suffer. It means fewer marketing dollars are spent, so those who work for ad agencies, newspapers, TV and radio suffer.

The housing slowdown also affects government. Fewer homes mean fewer development approvals and permits are being sought, which means engineers, planners, architects and city and county staff in the planning and building departments suffer. Far less revenue coming in to the economy means we all suffer.

As one local elected official recently said, “I have long felt that the building of homes is one of the most effective job development tools that exists. It’s not only the labor to construct the home, but also the labor to manufacture all of the components, such as carpet, windows, appliances and so forth. It is great for the economy, and provides one of the most highly prized commodities there is — a home.”

The National Association of Home Builders recently released an annual study that estimates the direct economic impact of new residential and remodeling construction, including the number of jobs and the government revenues generated. In 2008, NAHB estimates that:

Construction of 1,000 new single-family homes creates 3,049 jobs and generates more than $89 million in tax and other revenues for federal, state and local governments.

Construction of 1,000 new multifamily rental units creates 1,155 jobs and generates more than $33 million in tax and other government revenues.

$100 million worth of residential remodeling activity creates 1,109 jobs and generates more than $30 million in tax and other government revenues.

Read more here….

New homes today are larger, far more energy efficient and have more amenities than ever before. The average new single-family home built in 2006 was 2,469 square feet, 45 percent larger than a typical home built in 1976.

The percentage of new homes with 2.5 or more baths in 2006 was 59 percent, compared to just 22 percent in 1976. Thirty-nine percent of new homes built today have at least four bedrooms, compared to just 23 percent for those built in 1976. Today, nearly 90 percent of all new homes have central air conditioning – vs. less than 50 percent in 1976.

More than 80 percent of modern homes have at least a two-car garage, up from 59 percent in 1976. And today’s homes are built for the wireless age, with high-speed data access, modular wiring systems and multiple telephone lines.

From Green Source Magazine, By David Sokol

Hennebery Eddy’s parking garage for the historic First Presbyterian Church in downtown Portland. Completed in 2007, the 170-spot structure burrows three levels below grade adjacent to the church, and its intensive green roof allows partial public access.

When church members purchased the neglected four-story building that sits where the garage is located today, they had envisioned planting a lawn on the roof. But the community didn’t have green design in mind originally. The structure was necessary for older congregants and families to participate in various church services, and the grass merely a placeholder for above-ground building expansion.

Eddy says the client began thinking greener, because his firm convinced the church that those features dovetail perfectly with its concern for “practical, thoughtful solutions that last long, are efficient, and don’t cost a lot to operate.” Materials are durable, ceilings painted white reflect light and reduce the number of fluorescent lamps installed by approximately 15 percent, a second-generation elevator saves energy, and ventilation turns on only when carbon monoxide sensors trip the switch.

The garden itself is designed to highlight the rose window that had been hidden by the four-story neighbor. Lawns, which the church daycare program uses, are framed by walking paths and boxwood, and furniture nestled into the garden’s sawtooth edge activates the public sidewalk. Hardscaping is graded so that stormwater drains toward planted spaces, although heavy precipitation travels to flow-through planters and stormwater vaults.

“Design the experience for the people who are going to be using it, and design the way it fits into the city,” Eddy says. “Then make the cars fit in the most efficient way you possibly can.”

The Oregonian, By John Kirkland

Dustin Micheletti said he and his wife Kesia moved to Oregon from California partially because of the lower housing prices. Still, he said would not have been able to afford a home had it not been for a program that will save the couple more than $150 in property taxes per month.

The program is the Single Family New Construction Tax Abatement program. Administered by the Portland Development Commission (PDC), it was designed to encourage home ownership in distressed parts of the city. The neighborhoods eligible for the program, called “Homebuyer Opportunity Areas,” are located throughout north, northeast and southeast Portland. Builders can apply to the PDC to have their new homes or condominiums qualify for the program, and buyers must do the same.

Generally speaking, the sales price of the home must be no more than $275,000, and the buyer’s annual income must be no more than $67,500. If all qualifications are met, the buyer pays property taxes only on the land the building sits on, not the building itself — a considerable savings, since the building is typically valued much higher than the land.

Ann Johnson, PDC loan production supervisor, said those who participate in the program usually pay a third or less of the normal property tax on a detached single family home. The tax abatement lasts for 10 years after purchase. After that the homeowner begins paying taxes on both the land and the building.

The PDC also offers tax abatement programs for certain multifamily developments along transit corridors, and for low-income housing held by charitable, nonprofit organizations.

Read the rest of the story here.  Learn more about the Portland Development Commission’s tax abatement programs here.

From The Oregonian by Connie Potter

After years of writing a check to a landlord each month, Adrienne Livingston decided to invest in herself instead. Last fall she bought a new two-bedroom condominium a couple of blocks from Clackamas Town Center.

“I didn’t want to pay another person’s mortgage anymore,” she said.

It’s a decision that a growing number of single women are making. One-fourth of all first-time homebuyers were single women, according to the National Association of Realtors’ 2007 Profile of Home Buyers and Sellers. Single women make up more than one-third of the growth in real estate ownership since 1994.

Even today’s volatile economy and uncertain housing market aren’t deterring women from having a goal of home ownership, said Michelle Puggarana, program manager for the Portland Housing Center, a nonprofit organization that helps first-time home buyers.

Single women come to the closing table with a variety of life experiences. Some have never been married; some are divorced or widowed. Some live alone, some live with children, friends or partners. But they share some common preferences in housing. According to the NAR, single women buyers tend to:

• Prefer two bedrooms or more
• Choose resales over new construction
• Buy in city rather than suburban areas
• Be unwilling to compromise on location or quality of neighborhood
• Prefer condos or townhomes with well-run homeowners’ associations
• Desire security and/or gated access
• Want proximity to stores, shopping and fitness centers

Read more….