Despite anti-California stickers, numbers suggest migrants are good for economy

Despite anti-California stickers, numbers suggest migrants are good for economy

anti california
Realtor Quinn Irvine says somebody plastered a “no Californians” sticker on one of his For Sale signs in North Portland.(Courtesy of Quinn Irvine)

Luke Hammill | The Oregonian/OregonLiveBy Luke Hammill | The Oregonian/OregonLive
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on September 11, 2015 at 5:00 AM, updated September 11, 2015 at 5:02 AM

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After publication of a story about Portlanders slapping “no Californians” stickerson For Sale signs, the Internet exploded with reaction.

The post generated more than 1,000 comments. It was published as far away as Hawaii. And a healthy contingent of readers seemed to share the stickers’ sentiment: citing Portland’s rising housing prices, 44 percent of respondents to an unscientific poll said they supported the actions of whoever is responsible for them.

But a look at the numbers suggests that the influx of Californians and other transplants is good for Oregon’s economy.

Josh Lehner, a senior economist with the Oregon Office of Economic Analysis, penned a post titled “Migration (In Defense of Californians)” on the agency’s blog. In it, Lehner points out that “Americans have been moving to Oregon in droves since Lewis and Clark and are likely to continue to do so.” Nearly half of Oregon’s American-born population, Lehner wrote, came here from another state.

“Migration is vital to Oregon’s economic health,” wrote Lehner, himself a transplant from the Great Plains. “It is one of the two primary reasons Oregon outperforms the typical state during an economic expansion. The other being our industrial structure. … Our state’s ability to attract skilled, young working age households is a huge economic benefit. We rank quite well on the brain gain spectrum (the opposite of the brain drain).”

Lehner went on to say that job growth corresponds positively with migration. And he debunked the idea that everybody is coming from San Francisco – the majority of California migrants are coming to Oregon from Los Angeles and San Diego, Lehner wrote.

Oregon DMV data shows that the percentage of driver’s licenses surrendered in Oregon that come from California is historically low. Less than 30 percent of the licenses have come from California every year since 2008, compared to over 35 percent in the mid-2000s.

The percentage of licenses coming from California does appear to be rising faster than the percentage of licenses from everywhere else.

Elliot Njus of The Oregonian/OregonLive contributed to

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Former NBA Star Damon Stoudamire Is Selling Portland Mansion

Damon Stoudamire

Kirby Lee/WireImage

Retired NBA star Damon Stoudamire is selling his massive home in West Linn, OR. The Portland-born point guard played in the league for 13 seasons for four teams, most notably his hometown team—the Trail Blazers.

Listed for $1,375,000, the 7,795-square-foot home sits on almost 2 acres of land. The style is traditional with touches of Mediterranean flair in the archways, columns, and spiral staircase. The five-bedroom home has a large chef’s kitchen and lots of living space.

The massive master suite has a built-in TV nook, fireplace divider, and separate lounge area. The master bath has a soaking tub, tray ceiling, and block glass–enclosed walk-in shower. Both areas have large windows that overlook the tree-lined property.

Circular driveway and front entry

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Stoudamire spread

Outside, there’s even more space to entertain and kick back, including a large patio, an in-ground pool, and a tennis court. And while we didn’t spot a basketball court, there’s certainly room to add one.

The massive master suite

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The master suite

Stoudamire, the 1996 NBA Rookie of the Year, recently spent a couple of seasons as assistant coach at his alma mater in Arizona, but now he’s headed to an assistant gig at the University of Memphis.

Outdoor party space

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Outdoor party space
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Yard, 21-story building at Burnside Bridgehead, begins to take shape (photos, video)

Yard, 21-story building at Burnside Bridgehead, begins to take shape (photos, video)

Luke Hammill | The Oregonian/OregonLiveBy Luke Hammill | The Oregonian/OregonLive
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on August 21, 2015 at 5:00 AM, updated August 21, 2015 at 8:07 AM

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Drivers across the Burnside Bridge and along Martin Luther King Jr. Boulevard have likely noticed Yard, the hulking apartment building that will eventually rise 21 stories above the Willamette River’s eastern banks.

Thirteen floors are now complete, reaching about 145 feet into the air and offering impressive views of downtown Portland and the east side.

Project developers Key Development Co. and Guardian Real Estate Services announced Wednesday that 57 of the building’s 284 apartments – or 20 percent of the total – will be more affordable workforce units reserved for Portlanders making up to 60 percent of the area’s median family income.

Yard, 21-story East Burnside apartment building, takes shapeThe view from the 13th floor of Yard, the partially completed 21-story building at the eastern edge of the Burnside Bridge.

The companies’ agreement with the city comes after Portland officials planned to raise from $1 million to $3 million a cap on property tax breaks awarded in select neighborhoods to developers who include affordable housing in their projects.

Kevin Larkin, the Yard project superintendent for builder Andersen Construction, said Thursday that the building would be ready for occupancy in July of next year. The first four stories are dedicated to parking, and the fifth floor is slated to house a spa and restaurant. The upper stories are for apartments.

The ground floor also will have a 4,000-square-foot restaurant, Larkin said.

Yard is part of a boom in development at the Burnside Bridgehead. Nearby, theBlock 75 mixed-use project is competing with Yard for skyline prominence. And theso-called Dumbbell, a visually striking combination of retail and office space, is moving through the city’s review process.

Larkin, who has much experience in the Portland construction business, said the “challenge factor” in building Yard “is definitely there.”

“The views from this one are right up there, the views heading down the river in both directions,” Larkin said. “It makes for quite the panoramic shot.”

— Luke Hammill

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Portland-area home prices climb 7.8% year-over-year

Portland-area home prices climb 7.8% year-over-year

home sale
A house is shown for sale with an offer pending in North Portland on June 24, 2015. (Elliot Njus/The Oregonian)

Luke Hammill | The Oregonian/OregonLiveBy Luke Hammill | The Oregonian/OregonLive
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on August 25, 2015 at 11:38 AM, updated August 25, 2015 at 11:41 AM

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Portland-area home prices grew faster in June than they did nationwide, according to the Standard & Poor’s/Case-Shiller home price index released Tuesday.

From May to June, housing prices swelled by 1 percent nationally and 1.5 percent in the Portland area. The year-over-year increase was 4.5 percent nationally and 7.8 percent in Portland. Only Denver (10.2 percent), San Francisco (9.5 percent) and Dallas (8.2 percent) posted larger increases from June to June among the 20 cities surveyed.

Miami (7.7 percent) and Seattle (7.4 percent) were right on Portland’s tail.

David M. Blitzer, managing director and chairman of the index committee, said in a statement that national price gains “have been consistent as the unemployment rate declined with steady inflation and an unchanged [Federal Reserve] policy.”

Blitzer added that housing starts and sales have been “the missing piece in the housing picture.” Sales of existing homes reached an annualized rate of 5.6 million in July, Blitzer said, which is the strongest figure since 2007.

“Housing starts topped 1.2 million units at annual rates, with almost two-thirds of the total in single-family homes,” Blitzer said. “Sales of new homes are also trending higher. These data point to a stronger housing sector to support the economy.

“Two possible clouds on the horizon are a possible Fed rate increase and volatility in the stock market.”

Svenja Gudell, chief economist at the real estate website Zillow, said in an email that the housing market “has largely remained on the same course.” The national monthly climb in prices – which was 1.2 percent between March and April and again between April and May – continued to level off, which Gudell characterized as “a steady slowdown.”

That’s mostly positive for the market, Gudell said, and will “eventually lead to more inventory and more stable growth.”

Bill Banfield, vice president at mortgage lender Quicken Loans, echoed the theme of consistency.

“The song remains the same for home prices – modest monthly increase and steady yearly growth,” Banfield said in an email. “This is expected to continue as long as the pattern of eager buyers chasing a small housing supply persists.”

July was a record-setting month in the Portland housing market, according to a recent report from the Regional Multiple Listing Service, with 3,452 homes sold. The average sale price through July was $351,600, a 6.1 percent year-over-year increase, that report showed.

— Luke Hammill

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Developer Mark Edlen, two more condo properties join chorus of plumbing defect lawsuits

indigo apartments
Indigo at Twelve West is shown from the Pearl District in an April 15, 2010, file photo. ( Jamie Francis/staff/file)

Elliot Njus | The Oregonian/OregonLiveBy Elliot Njus | The Oregonian/OregonLive
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on July 09, 2015 at 6:40 AM

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Homeowners in two Northwest Portland condo properties have teamed up with executives from the prominent Portland development firm Gerding Edlen to sue a supplier over plumbing parts they say are falling apart prematurely, causing leaks.

The homeowners associations at The Vaux condominiums in Northwest Portland and the 937 condominiums in the Pearl District have filed a suit along with the owners of a high-end apartment and office building, Indigo at Twelve West.

They’re jointly suing Victaulic Co., a Pennsylvania company that sold valves installed in the building’s plumbing systems, collectively seeking $23.5 million in damages. The suit claims not only that the parts are disintegrating, but that Victaulic knew — or should have known — that its products wouldn’t hold up.

It’s the latest in a series of lawsuits against Victaulic, which supplied valves for many Portland condo and apartment buildings built in the 2000s. Four condo owner associations in Portland had previously sued, claiming the rubber used in valves and gaskets is disintegrating.

The newest case brings some added firepower to the collection of homeowners associations. Indigo was developed by Portland-based Gerding Edlen and is owned by a company controlled by two of its top executives, Mark Edlen and Kelly Saito. Gerding Edlen has developed billions of dollars worth of apartments, condos and offices.

In cases that have gone to trial, residents claimed the disintegrating rubber at times caused water to cascade into homes and sent black particles into their drinking water. It’s also prevented shut-off valves from functioning, inhibiting other repairs.

The lawsuits have cast a pall on sales of condos in downtown Portland and the Pearl District. Banks typically won’t approve mortgages for condos in buildings tied up in litigation. Sellers have to find cash buyers — and usually accept a lower sale price.

Victaulic has disputed the claims that the rubber it used is to blame. It’s admitted at trial that the parts are disintegrating prematurely but argued they were improperly installed in incompatible water systems.

Anne Cohen, a Portland attorney with Smith Freed & Eberhard who has represented the company, declined to immediately comment Wednesday.

Managers at the Indigo apartment building are going so far as to deliver bottled water to residents until the Victaulic valves are replaced.

In a message sent to residents at Indigo on Tuesday — the same day the lawsuit was filed — and obtained by The Oregonian/OregonLive, Edlen said the building’s owners were seeing evidence of black particulates in the water supply.

“While the manufacturer of the plumbing parts represents that its product is safe, we’re not satisfied with that and we remain concerned,” the message said.

Indigo’s managers are planning to deliver five-gallon bottles of water to residents on demand until the parts are replaced, Edlen said. The building — where a studio apartment rents for $2,295 a month and penthouses go for more than $6,000 a month — will also discount rents 10 percent while the invasive repairs are completed.

Michelle McClure, an attorney at Landye Bennett Blumstein LLP who is representing the owners of Indigo, The Vaux and 937, declined to comment. She’s also represented owners at other buildings that have sued Victaulic.

Other lawsuits have had mixed results.

Homeowners at The Elizabeth Lofts in the Pearl District settled with Victaulic out of court. They had sought $3.1 million in damages in Multnomah Circuit Court, but the settlement terms weren’t disclosed.

Owners at The Edge Lofts took Victaulic to trial in 2014, seeking $1.5 million to cover the costs of six leaks since 2010, including repairs in damaged condos and replacing the building’s plumbing system. But a jury awarded only $114,000.

Owners at the Benson Tower won $2 million in damages in a trial in January, even though that building hadn’t had damaging leaks.

A case involving Avenue Lofts in the Pearl District is still pending. A jury trial is set for March.

— Elliot Njus

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Homebuilders as confident in business prospects as in 2005

Builder Sentiment
In this photo taken April 13, 2015, a worker helps to frame a new home at a housing tract in Las Vegas. The National Association of Home Builders/Wells Fargo releases its monthly index of builder sentiment on Thursday, July 16, 2015. (AP Photo/John Locher)

The Associated PressBy The Associated Press
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on July 16, 2015 at 9:13 AM

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U.S. homebuilders’ confidence in the market for new homes is back up to levels not seen since the height of the housing boom a decade ago.

The National Association of Home Builders/Wells Fargo builder sentiment index released Thursday rose this month to 60, the highest level since November 2005.

The latest reading is unchanged from May, which was revised upward one point from 59. July’s reading is up from 53 a year ago. Readings above 50 indicate more builders view sales conditions as good, rather than poor.

Builders’ view of current sales conditions and their outlook for sales over the next six months also rose. A measure of traffic by prospective buyers fell slightly.

“As we head into the second half of 2015, we should expect a continued recovery of the housing market,” said Tom Woods, the NAHB’s chairman.

The builder survey follows a report last month showing sales of new homes accelerated in May to the strongest pace since February 2008 after a sluggish start to the year. Sales rose 2.2 percent to a seasonally adjusted annual rate of 546,000. All told, new home sales are up 24 percent through the first five months of this year. June home sales data are due out next week.

Strong job growth and relatively low mortgage rates have fueled the increase in sales. Borrowing costs are low by historical standards, though they have been rising in recent weeks.

Mortgage giant Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage increased to 4.09 percent from 4.04 percent a week earlier. The new level is the highest since last October.

The big question is whether the heightened optimism will make builders willing to build more homes on “spec,” or before they’re sold. Builders typically invest in putting up more spec homes when they feel good about the likelihood that the homes will be snapped up sooner, rather than later.

“We’ve been seeing a lower amount of speculative building than we usually do,” said Stephanie Karol, a U.S. economist at IHS Global Insight.

More spec-home construction would also help alleviate a drop in the number of new homes for sale.

Rising demand has caused the supply of new homes to dwindle to about 4.5 months, compared to the six months’ supply generally associated with a healthy market. Many builders also struggle with shortages of labor and land ready for home construction.

Builders broke ground on fewer homes in May, though the pace of construction remains significantly higher than a year ago. Housing starts are up 6 percent through the first five months of the year. They reached a seasonally adjusted annual rate of 1.04 million homes in May. Home construction figures for June are due out Friday.

While builder optimism may be back to housing-boom levels, the pace of home construction remains far below. In June 2005, housing starts hit a seasonally adjusted annual rate of 2.05 million homes.

The latest NAHB index was based on responses from 268 builders. Its measure of current sales conditions for single-family homes rose one point to 66, while builders’ outlook for sales over the next six months rose two points to 71. A gauge of traffic by prospective buyers dipped one point to 43.

Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to NAHB data.

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Is the rip-roaring housing industry about to falter? A hot market only goes so far

Is the rip-roaring housing industry about to falter? A hot market only goes so far

Housing Market Challenges Ahead
This June 4, 2015 photo shows a sign in front of a home for sale in Roswell, Ga. The U.S. housing market has sizzled this summer and raised hopes that housing will finally help accelerate a U.S. economic recovery now in its seventh year. Yet sales have improved so fast that many see signs that housing will likely lose momentum, for reasons ranging from too few homes for sale to the preference of some would-be buyers to keep renting to a still-slow pace of house construction. (AP Photo/John Bazemore)

The Associated PressBy The Associated Press
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on July 24, 2015 at 3:59 PM

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WASHINGTON — The U.S. housing market has sizzled this summer, lifting expectations that home sales will finally help drive an economic expansion now in its seventh year.

Or will it?

Signs are emerging that housing’s momentum may be destined to falter in coming months. Analysts note that some of the key foundations needed to sustain a brisk pace of home-buying in the long run appear to be missing.

The U.S. economy had only just begun to derive strength from housing for the first time since the Great Recession began in 2007. If home sales flag, that strength would fizzle.

The main problem is also the simplest: There just aren’t enough homes available. Robust demand has failed to draw many sellers into the market. And few in the industry foresee a flurry of home listings arriving soon.

Other pressures will also likely slow sales. Steadily rising home prices can put ownership out of reach for some. What’s more, builders are increasingly focused on apartment construction rather than single-family homes.

And then there are mortgage rates, which have crept up from recent lows and made it incrementally harder for some would-be buyers already struggling to afford a purchase. Some buyers are rushing to finalize deals for fear that rates will keep rising — a trend that could depress demand later this year.

“What we fear is next is if interest rates rise and prices rise,” said Deborah Heffernan, a Boston-area broker. “That combination will definitely eliminate people from the market.”

Early this spring, buyers leapt back into the market. Mortgage rates were just slightly above their 2012 lows, and nearly two years of solid job growth had generated millions of new paychecks.

Sales of existing homes have surged 9.6 percent in the past 12 months, according to the National Association of Realtors. In June, they hit an annual rate of 5.49 million, a pace last achieved before the recession began. And sales of new homes have jumped 21 percent through the first half of 2015, the government reported Friday.

But an unusual trend has taken hold: Stronger home sales have yet to motivate many people to put their homes on the market. Listings for existing homes have barely edged up in the past year. And the pace of home building remains subpar compared with previous economic expansions.

With buyer demand outstripping supply, the national median sales price for homes last month reached $236,400, the highest ever recorded, the Realtors said.

For many would-be buyers, those higher prices are manageable if mortgage rates remain ultra-low. In June, the average 30-year fixed mortgage was 3.8 percent. The average has since topped 4 percent as the Federal Reserve has moved toward raising a key interest rate from its near-zero level. When the Fed last prepared to curtail its stimulus efforts in 2013, rates spiked and home sales sank.

Though only modestly up, the higher mortgage rates are having a dampening effect, according an index of buyer demand released Thursday by the national real estate brokerage Redfin. It expects a slowdown in the growth of sales and prices as buyers pursue less expensive homes.

“Interest rates are having an effect,” said Nela Richardson, chief economist at Redfin. “It’s making buyers a bit more conservative.”

In some key markets, prices have begun to stagnate as buyers seem to be retreating. A majority of homes in Chicago, Phoenix, Los Angeles, New York and Washington, D.C., either lost value or basically flat-lined during May, according to a study by Weiss Residential Research.

Weiss’ analysis points to a contributing factor for the shortage of available homes: Many homeowners can’t find affordable homes themselves and so can’t list their own properties for sale.

“The reason why demand is high relative to supply is that homeowners are having a hard time moving up,” said Allan Weiss, founder of Weiss Residential Research. “There is gridlock.”

In addition, many Americans remain squeezed by sluggish pay raises and have chosen to continue to rent. And some who do want to buy are unmoved by the limited selection and have decided to wait, said Tony Smith, a real estate broker in Charlotte, North Carolina.

“Buyers are leaving the market because they don’t have anything to buy,” Smith said. “Some of them get frustrated and sign another lease.”

Indeed, home ownership is declining, and renting has surged. Fewer than 64 percent of Americans own homes, the lowest level since 1989, according to the Census Bureau. The share of people under age 35 who own has dropped to around 35 percent from a high of 44 percent in 2004.

Marina Rodriguez, a 26 year-old dental hygienist, recently signed a lease on a one-bedroom apartment in suburban Chicago.

“The idea of buying is a little scary — it’s a huge financial obligation,” she said. “I would rather rent and travel and be year-to-year then be locked down.”

Builders are tapping into the rental market. Nearly all the 7.4 percent increase in June building permits came from apartment complexes, the government said last week. The three-story townhomes that Chicago-based REVA Development Partners once sold to first-timers and empty-nesters are now being rented.

“There has been a fundamental shift in people’s attitudes toward home ownership,” said the Matt Nix, the firm’s principal.

There’s also evidence that construction is topping out, a potential blow to overall economic growth. The American Institute of Architects said its index that tracks billings for houses and apartments has reached a four-year low. There’s often a nine- to 12-month lag between drawing up blueprints and a groundbreaking, a sign that builders view the current demand as short-lived.

“What we’re seeing now is going to hit construction in 2016,” said Kermit Baker, the institute’s chief economist. “It does look like that market is getting close to peaking.”

— The Associated Press

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