Why I’m Shunning Portland And Sitting Tight In The Bay Area

I visited Portland for the first time recently and fell in love. With the city that is, not a new man. The immediate appeal of the place may be one reason Portland is one of only three cities out of 20 in the US that has seen a rise in house prices over the past year (the other two are Seattle and Charlotte, NC).

Overall though, of course, prices are down — by 7.7% in those 20 spots. The Bay Area is hurting less than others with just a 0.2% fall but there’s no doubt it’s feeling the pain with 38.1% fewer homes sold this past December compared to December 2006. This all according to the National Association of Realtors as reported in today’s San Francisco Chronicle. (Another report, by S&P Case-Shiller, puts the decline at 10% — either way it’s only going one way.)

So I do feel sorry for anyone working in real estate right now. But I can’t help feeling a little gleeful too that these gloomy numbers spell good news for “moi”. As Karl Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley, puts it: “It’s a good time to be a buyer.” (And with a job title like that, he must know what he’s talking about, right?)

With this in mind I am sitting tight. Homes are coming on the market and I’m dutifully visiting them. Some of them are even tempting. And their prices are definitely lower than they would have been a year ago. But I’m taking a wait-and-see approach. I don’t see people falling over themselves to put offers on these homes. Rosen reckons it will take a year and a half before the market improves “in any meaningful way”. My challenge is to strike before it starts improving.

Meantime, I’ve noticed that flipping has gone out of fashion. Who wants to take on a fixer-upper as a investment opportunity in these uncertain times? I visited this $779,000 Oakland house at 6450 Regent Street (above) in the Elmwood yesterday. It’s been on and off the market for a while and is a sad-looking brown-shingle duplex, but I think it could be turned into something pretty nice — a SFH with some good original features — and it’s in a great ‘hood. I’m not taking it on — too scary. But someone out there will and I can’t wait to see the results.

Other Berkeley fixers for those who are braver than me:

1620 Josephine Street: 4/2.5 house in north Berkeley with “tons of space” but needs to be “decluttered and repainted”. Price: $900,000.

418 Avon Street: 2/1 cottage in lower Rockridge which needs “a lot of love”. Price: $449,000

5788 Vicente Street: 4/2 Oakland house with a motivated seller that “needs work”. Price: $700,000.

[Portland picture credit: www.legendsofamerica.com]