Commute Versus Price, A Delicate Balance

Many people are facing a decision about a home that is impacted by the commute they will face when they own it. As prices rise the demand for houses further out from the city center rises. People often have to choose between a bigger and or better house out on the peripheral suburbs or something much smaller or lesser condition in close. Sometimes the magic is in the middle.

People that work in a place like downtown Portland have to carefully weigh the commute. Often times making a long drive in and out of work can seem like no big deal, but it will eventually start to become a drag on the quality of life. Living in a large spacious home in a suburban community like Hillsboro, OR or Woodland, WA can seem like a reasonable drive but a smaller home in Vancouver or SW Portland, might save an hour and a half each day. A lot can be done with an extra ninety minutes.

There may be other issues beyond the drive, schools, parks, and neighborhood quality may be of importance as well, but often these issues can be settled either in close or further out. The general advantage of going further out once someone is out of the inner city, is price.

Locally, Portland is the center of the urban core. In close to Downtown is mostly condos and apartments often in high rise buildings with limited parking and a fair bit of the city noise and issues. As you radiate out of the core you find an eclectic mix of many neighborhoods that offer the single family home with a yard experience but remain in very close to the city center. These are in high demand and are often excessively expensive. Moving out to the ten mile mark opens up NE Portland beyond I-205 and a sizable portion of Vancouver WA as well as Southwest Portland, parts of Tigard, and Beaverton.

Inside this ten mile circle, Vancouver is hard to beat. Traffic is better than most of the rest of the area in the ten mile circle and housing is still reasonable by comparison. There is something about bridges me thinks. Vancouver represents the magic in the middle for commuters to central Portland. A smaller home in the Heights might ultimately prove much better for quality of life than a really big house in Woodland.

Remember, a 30 minute commute versus a 60 minute commute is an hour each way saved! That's an hour a day, 5 hours a week, 21 hours per month. 260 hours per year. 520 hours, that's nearly 11 DAYS per year of extra time sitting in the car!

So if you want to get out of the city core but still want a reasonable commute and decent housing prices, look no further than America's Vancouver!

Housing and Jobs in Symbiosis

Our local housing market, like that of many areas, has been in a state of an abrupt climb in price. This has been largely driven by low rates and a short supply. Our area is also experiencing an influx of "migrants" from other states seeking to soak up the delicious Pacific Northwest. This however is not enough to sustain the rapid run up in home values.

Good paying jobs must be in abundance for the upward mobility of pricing to continue. We are starting to see a bit of a slowdown in the increase of valuations and frankly this is a healthy trend. What the area needs now is an increase in HIGH-PAYING jobs. Not just jobs, but good jobs. Factories, High-Tech, etc.

This area has a good bit of these, but demand is stripping away at supply for high-quality jobs as new people flood into the area. At some point housing will take a hit and it may be sooner than later. Generally a large housing crash needs more than just typical market trends. The events of 2008-09 were driven by major economic forces well beyond the normal scope of real estate trends and fluctuations. I do not see any major corrections on the near horizon but I do see a softening in the seller's market.

By this time next year we may be in a near neutral market with modest, healthy appreciation and sellers a little more willing to work with buyers. The current high median resale value is pushing many buyers out of the marketplace, and that will eventually erode the excessive demand.

Without an influx of new higher-paying employment opportunities the demand will falloff faster and if if falls too fast, that can lead to a buyer's market. Every local government agency should be hyper-focused on creating jobs int he private sector. Private sector jobs are good for every industry including the real estate market.

End of Summer Push for Buyers

The end of summer is near and buyers may be getting even more anxious. Many people prefer a move during summer months. Little or no rain makes for an easier move and often a move is disruptive during the school year when children are involved. Seller's may see a bit of a dip in activity as September comes to a close so the rest of this month and all of next could be the best time to unload your listing that may have sat unsold this summer.

Seller's that sell late in the summer gain the advantage of the seasonal bump and then purchase during a time that tends to slump a bit. Lately the slump has been a slowdown in growth rather than an actual lower price, but in any case the seller that wraps up their home now may gain a slight advantage at both ends with a top dollar sale and a less competitive buy.

Rates remain solidly low and hikes are coming. We have already seen the Fed move away from some of their market manipulation that led to temporary spikes in rates. These have since backed off a bit but may become permanent should the economy continue the track of positive growth.

Interest rates are the single most important factor in home buying unless one is paying cash. Even cash buyers are affected however as low rates bring a larger pool of potential buyers into the market. Should rates pop of a full point and stay there, the buyer pool will shrink and the upward pressure on pricing will subside.

Entry level always takes the biggest hit in a rising rate market. Sellers locally offer homes in the under $350k range are most vulnerable to a rising rate market. Although things are stable now, one never knows what might trigger a stiff rise in rates and both buyers and sellers should remain vigilant and take care of their real estate business now, why things are really good.