All Forum Posts by: Kevin Jorgensen

Hi @Derrick Aragon, long time no chat. But I'm curious if you saw the OEA article that showed the new starts goal will climb from 24k - 30k? https://oregoneconomicanalysis.com/2017/12/14/why-...

Wondering if that would alter your prediction on ~2021 being about the point where starts will catch up to demand. The article also mentions that the catchup increase of an additional 6k was due to an under calculation of the shortfall in starts.

Thanks!

Kevin

Thanks @Mike Nuss

I spent some time poking around the OEA site, and came across the following article: https://oregoneconomicanalysis.com/2017/12/14/why-...

It mentions that the housing starts across the state will increase from 24k/year to 30k/year to account for migration and what appears to be a miscalculation of shortfall since the recession.

From that I'm more inclined to believe in the slowing rate versus a drop in the near term. I couldn't tell where OEA predicated starts would match demand, but I've sent a request to see what they think that may be.

Appreciate the feedback.

Kevin

Hi @Neal Collins

Is a new construction. I was in talks about the house, and in the third week of the talks the price raised 75k due to ‘design studio’ decisions.

My conundrum has always been that a down cycle in three years, even 20% drop, could still mean less buying power if rates go up.....my current home I naively bought at the peak in 2006, so hesitant to buy second home now with what feels like another peak (keeping first as rental).

I recently had a house I was looking to purchase jump 75k in one week. It was enough to put me off buying and back into the research process. I came across this article (https://www.realestateconsulting.com/where-are-we-...) that points to Portland as being on the verge of a downturn 

If the proposed phase 4 / 5 can take up to 3 years combined, I'm back to "predicting the future" and determining if today's lower rates and higher costs trump tomorrows potentially lower costs, but likely higher rates.

I've asked about opinions on the Portland market before, and generally have heard that prices will stagnate but not drop until perhaps four years from now once starts outpace the need.

Any other research I should consider before deciding if I should/should not buy high with low rates?

Basic question. If I have 35% equity in current residence, can I get approved for loan on new home and still pull equity out for the down payment? Or will that reduce the equity in first home so much that I won’t be approved? I.e have 200k equity New loan DP needs 150k Leaving 50k equity in house valued at 450k. Or do I need to wait until current home has closer to 60% equity before renting out? Thanks Kevin

Yes I left out several details that would help beyond vague theory. My home is 2000 sqft, avg for the neighborhood is 3350. Flow should work well with a conversion of a closet to stairs to get down to crawl space. Space above garage easily becomes a 4th bedroom. Also considering removing a kitchen wall and opening it up to the family room. Don't know about hvac though we do have a model that can push air for a larger home. Rent in the area is ~1.2k/sqft. New rooms would be proportional to other room sizes and the house has been fully updated already. Though the master bath and bedroom are small. To expand those I'm going into kitchen space, or garage, or going outside of the foundation.

Hello I've been away playing the crypto market for fun but am now back with a new question. My home currently would sell for ~225-250/sqft But it doesn't really pay to be a landlord where I'm at (Beaverton, OR). Instead of selling and buying a new home, i recently am considering expanding the sqft of my home (over the garage / in the crawl space). Depending on the crawl space in looking at a 20 to 40% increase in sqft......as I see it, as long as the total construction costs are less than 225/sqft I add instant equity....am I wrong? I figure that since I'm not expanding the foundation of the home then costs shouldn't be a nightmare. But I'm inexperienced here. Plan would then be to hold the house as primary until a later date when using it as a rental made better financial sense. In the meantime I could put other after tax investment cash into crowdsourced REI. Thoughts?

Derrick Aragon thanks Derrick, I'll play around with numbers while I evaluate real estate. Will send my ideas your way to help me decide if I'm rational or not. :)

Anthony Varela hi Anthony, that's correct . It's essentially understanding that a sellers market now may be better than a buyers market in 5 years. Decline in Affordability may be leveling off, but for this area, I think we'll see better than average appreciation that won't be decimated by a recession. Plus just heard that the rate hike won't be as aggressive as earlier proposed. Might just see one more rate hike this year.

Thanks @Derrick Aragon I appreciate your breakdown.

I really liked the idea of buying in early on the development, was not a strategy that I was aware of. Carrying two mortgages though would certainly complicate the financing, I agree. I could clearly see utilizing that for condo-rental property, or possibly vacation rental property even.

I had recently discovered the Oregon Economic Analysis office which has some very interesting data.

So I looked at the predicted population growth per year for ages 25-64 for 2018-2026 and compared that with the predicted number of housing starts (~steady 23k per year) and came up with a similar timeline of 2022/23 being where the housing starts catch-up. 

They also had an article on the housing inflection point for Oregon, where he argues that prices will soon level off, and won't drop until the next recession due to lower demand. 

As far as a national level recession forecast, many economists seem to predict around 25% for this year. But this happens to coincide with research that I've read indicating that historically, in any given year, the odds of a recession are ~25% (usually due to Fed adjustments of the rate - outside of clear over grown bubbles like the dot.com or previous housing bubble)

BiggerPocket just echoed your sentiment on the CA > OR movement, I'd be surprised if that slowed in the short term.

As far as the big companies, overall that appears strong, but as an FYI from the hospitals perspective (for whom I work for) - there are no expansion plans that I'm aware of, and we're a long ways from any job growth due to ACA. Scrambling for efficiency and acquisitions right now, not growth.

All in all, it seems like affordability might stop it's rapid decline and level off a bit, then eventually become better when the next recession hits......so it seems to depend on how far out I believe the recession will be.....the further out it is, the more protected I am from losses if I purchased into the Phase 1 of these large developments near me.

Tough decision, but at least I'm feeling a bit more informed.