Buying a house in hot East Portland housing market east of 82nd and 205
Portland housing market has grown tremendously in the last few years. After a surging demand and lack of supplies in our local housing market, our median price for detached single family homes is at $440,000. However, the median annual household income in the Portland metro area is around $75,000. With that median household income, the mortgage limit allows one to afford a home up to $335,000 with 20% down. A $300,000 home would be more of a comfortable choice for most people in the median income level with normal expenses in life. So where are these homes that sell around $300,000? You won’t find it in any core inner city neighborhoods. What about in the metro suburbs? You may be able to find a very few houses in Aloha or Hillsboro for $325,000 but nothing less unless it’s a fixer upper. You can find a lot more detached single-family homes with 3 bedrooms and 2 baths in East Portland neighborhoods east of 205 and in some Gresham neighborhoods for $300,000 or less. Anything that is newer or updated with 1,400sf or more will cost at least $310,000 even in those neighborhoods. Given the current market situation, a lot of people have been making the plunge buying homes east of 205. In fact, the housing market east of 82nd and 205 is so hot these days, any good inventories don’t stay past 10 days on the market.
A lot of Portland families in the median income range decide whether paying $1,500 to 1,600 a month for a small apartment in a “cool” neighborhood is worth it or not for the lifestyle. Maybe it is for a while for young professionals but eventually people think about their changing life needs and the dream of owning a home. People can still buy condos and townhouses for less than $300,000 but the ultimate property type desired by many is the detached single-family homes because that type of homes with a private yard can accommodate a family with kids so buyers like to invest in something that can last in their foreseeable future. If you do buy a home for $300,000 with 20% down your monthly expense will be more around $1,800-1,900 with mortgage, property tax, and home insurance. More and more people are finding that to be worth the extra cost. Use this calculator at bankrate.com to understand your mortgage affordability with your income.
So what’s been happening in some East Portland neighborhoods? Right now, with the aforementioned budget, you may still be able to buy a house with 1,000sf with 2 bedrooms and 1 bath between 82nd and 205. Lents neighborhood has been exploding with demand. If you’re lucky, you may be able to find one in south Montavilla neighborhood near PCC north of Division. There are more options south of Foster but housing value is higher around Lents Park closer you get to Division. However, be prepared for the hot market. Get your mortgage pre-approval letter in hand before you look and work with a realtor who can put together an offer really quickly. Your best bet in winning these homes is to snatch up after a day or two before you face competition. Most sellers review offers as they come in unless they purposely anticipate a bidding war from the start. So be the first one to put an offer in for listed price and hope for no other offers before your offer expires and also write a nice cover letter. Have your realtor check the listed price is not overpriced first of course.
If you go east of 205, you will see more options. You can afford bigger homes with 2 bathrooms. However, anything desirable with updated finish will not last. In 2-3 days of being on the market, those homes get snatched up and there are multiple offers. It’s crazy what’s happening out there but it’s the way of the economy. If you’re home hunting east of 205, Powellhurst-Gilbert is another hot neighborhood with desirable residential pockets in the neighborhood. In the north, Parkrose, Argay, and Wilkes also offer lots of quiet residential neighborhoods. 122nd Ave is a major commercial road for some of these neighborhoods. It’s a bit rough but offers lots of amenities and you can still live in a quiet residential neighborhood away from the busy street in a house you like. It’s a tradeoff for many people. Additionally, there are new construction houses that offer HOLTE tax abatement through the City of Portland for qualifying buyers who buy in qualified developments in certain areas that are to be revitalized. For some the word revitalization can mean gentrification and different groups of people clash in this topic given that Portland housing market has been on fire in the last few years. The rising real estate value has been good news for some but not so good for many.