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We're seriously tightening the belt at our house. My wife's job ends in a few months so we need to save up now.

What are we doing? Baking our own bread. Making all of our meals at home. Taking our lunches to work. Biking to work or telecommuting when possible. Growing a vegetable garden. Actually, all of these steps are pretty easy and quite healthy.

posted 5 years, 1 month ago
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Dominic is painting a rather rosy picture of Oregon real estate. The latest Case Shiller index shows home prices in Portland were down 2% compared to a year ago and down close to 6% when compared to the peak last July.

Portland is just a bit late to the downturn party.

posted 5 years, 1 month ago
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A lot of us in the IT field got introduced to downward class mobility in the early part of this decade. Our household went from making about $100K/year in 1999 to making about $5K in 2002 and not much more in 2003. Last year we finally got back to making close to what we made in 1999. It's been a rollercoaster ride.

posted 5 years, 1 month ago
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why are people feeling squeezed? Mostly it's due to home prices which got way out of line with incomes. Traditionally the rule of thumb was that a borrower shouldn't be spending more than 25% of their income on housing. In recent years, however, with the runup in prices lenders loosened those standards and allowed borrowers to spend up to 35 to 50% of their income on housing. People were allowed to borrow more than they would have in the past. Now many recent home buyers can't afford to do things like eat out.

Many Portlanders now realize that this runup in prices has effectively priced a lot of them out of the housing market.

The reason gas prices are going up so much is because the Fed is trying to prop up home prices and they're doing this by devaluing the dollar. All of us are now paying the price for this speculative bubble.

posted 5 years, 1 month ago
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My economic outlook? Dismal. It looks like we're entering the most serious recession since the one in the early 80's. Why? Because there was to much speculation in homes in recent years that led to home prices getting way out of line with incomes. It's going to take many years to correct this imbalance and in the meantime up to a $Trillion is being destroyed. There's way too much debt in the system and it's going to take a long time to pay it all back.

posted 5 years, 1 month ago
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As a Gen-Xer I notice a lot of antipathy towards the boomers especially among the 20 & 30 somethings. It seems to me that we'll see some sort of inter-generational conflict due to the perception among the young that the boomers have "ruined things" both economically and ecologically.

posted 5 years, 2 months ago
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Just last week I changed my registration from Republican to Democrat. I voted Republican from Reagan until the 2004 election when I voted for Kerry. Why? George W Bush and the Neocons have devastated this country with their war in Iraq and their trashing of the constitution- this is not conservatism - conservatism avoids foreign entanglements and preserves rights.

I plan to vote for Obama in the primary and in the general election. McCain and Clinton are just more of the same. I also plan to vote for Democratic candidates across the board in order to punish the Republican party; hopefully this will convince the Republicans to rethink their disasterous direction.

I would also add that I will not vote for Hillary if she is the candidate - I will vote for a third party candidate in that case.

posted 5 years, 2 months ago
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Problem is that Credit Union mortgage rates generally aren't very competitive.

posted 5 years, 2 months ago
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The other thing to consider about these "assets" is that many of them were not really worth what people thought they were. Houses are a good example: they got overpriced due to a frenzy and various Wall St. "financial innovations" - now we're seeing home prices come back to more reasonable valuations. You also have to wonder about stock valuations at this point too. Are they valued based on false assumptions about the economy?

Still, even if we have more assets (stuff) does that really help us? In the 70's it was fairly easy for a one-breadwinner household to buy a home - my parents did it. Now it's just about impossible. Are we better off now because we have more stuff?

posted 5 years, 2 months ago
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"lowest priced market on the west coast"

However, you also have to consider that job opportunities are not as good in Portland as they are in other West Coast cities like Seattle or San Francisco. We don't have the number of high paying or even family wage jobs that Seattle has, for example. Seattle has a much more diverse economy than Portland has. Remember, Oregon was one of the last states to come out of the last recession.

posted 5 years, 2 months ago
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$650/month is fairly low rent. If you bought at this point your monthly outgo for housing would at least double (and then add property tax to that). There's no rush to get into a house at this point: we'll likely see continuing declines for the next year or two. At that point we'll likely bounch around the bottom for a few more years. Historically, housing downturns tend to last for several years. Look at what happened in CA in the early 90's: prices peaked in 1990 and then fell and did not get back to that peak again until 97 or 98.

In the meantime live as frugally as you possibly can and save up as much money as possible for a downpayment.

posted 5 years, 2 months ago
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I recently saw a scary statistic about pay option ARMs: over 70% of borrowers that have them pay the minimum payment every month.

posted 5 years, 2 months ago
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http://portlandhousing.blogspot.com/
http://portlandrealestateoutsider.blogspot.com/

posted 5 years, 2 months ago
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Mr. Dunn mentions that we had very little subprime loans in Oregon - however, in the PDX area in 2006 over 30% of loans made were Interest Only loans. While it's true that these loans are not subprime, they are still dangerous loans in which the borrower can end up owing more on the home every month. Interest only and pay option ARM loans are not subprime loans, they're Alt-A loans (between suprime and prime).

posted 5 years, 2 months ago
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Debt is not wealth. Debt requires income to service it. Having more "assets" does not mean you can service your debt if you lose your job, for example.

posted 5 years, 2 months ago
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The Realtor's argument is a strawman: We're not talking about one person deciding to lower the price of their home to make prices more affordable. We're talking about a whole market falling in price. So while my house is probably worth about $20K less than it was last summer, when I have to buy another comparable home it is also probably worth about $20k less as well.

posted 5 years, 2 months ago
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Regarding the moving "close to work argument": Lots of people in the metro area work in the 'burbs: Intel and Nike are good examples.

posted 5 years, 2 months ago
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What is a Valley Individual Development Account? Is it some way that people who live outside of Portland can save up to buy a home? Why isn't it more widely available?

posted 5 years, 2 months ago
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Just to clarify my comments: as a homeowner who bought long ago it really doesn't matter to me if my home drops in value as long as all of the other homes in the same market are dropping at the same rate. I don't look at my house as a piggy bank: I would never get a HELOC or borrow against equity in my house. Also, I need to live somewhere: if I sell my house and buy another in the same market it's really a wash.

Falling prices can actually help homeowners if that translates to lower property taxes... though I suspect that the counties won't be quick to adjust property taxes downward.

posted 5 years, 2 months ago
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Prices in Portland got way out of line with incomes. Historically, the median price home was about 3 to 3.5X the median income. Median family income in Portland is about $60K now whereas the median home price is close to $300K making the price to income ratio close to 5X. For the sake of first time buyers both now and in the future, prices need to come down closer to the low $200K range in order to restore affordability. It looks like that process has started here in Portland. In the longrun this correction will be a very good thing for most of us - and I say this as a homeowner.

posted 5 years, 2 months ago
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