By Jon Bell, Portland Business Journal
Barry Schlesinger summed up the Oregon Convention Center Hotel project simply and succinctly at a ground-breaking ceremony this morning.
“Today’s been a long time coming,” he said.
Schlesinger, a partner and owner of the real estate-focused Schlesinger Companies, was referencing not only the nearly 30 years that it’s taken to make a convention center hotel a reality, but also to his family’s 11-year involvement in the project. His firm owns the land where the hotel will be built and is selling it to Mortenson, the construction and development company that will build the hotel.
“It took all of us working together to carry this project through the toughest real estate market I have ever seen,” Schlesinger said.
Schlesinger was one of the leaders and officials who took the stage at the groundbreaking ceremony this morning at the site, which sits just north of the Oregon Convention Center. Joining him were Portland Mayor Ted Wheeler, Tom Hughes of Metro, Dan Mehls of Mortenson, Karis Stoudamire-Phillips of the Metropolitan Exposition and Recreation Commission, Tom Lander of Mortenson and Kimo Bertram of Hyatt.
Each thanked long lists of people who have worked for years to bring the Oregon Convention Center Hotel to fruition. The idea for one has percolated since the Convention Center itself was built in 1989, but finances, politics and even some legal challenges kept the project from advancing.
But everything started to finally line up over the past year or two, and now, the 600-room, $240 million Hyatt Regency Portland at the Oregon Convention Center is on its way.
“We’re standing on the shoulders of many, many people and organizations … whose leadership and persistence and dedication brought us to this important moment, ” Wheeler said.
Though today’s groundbreaking was largely ceremonial, building permits have been issued and work is expected to get underway in earnest in the coming weeks.
The project is expected to create more than 2,000 construction jobs and an additional 950 hotel and hospitality jobs.
According to an analysis posted on Metro’s website, the new hotel is expected to attract between five and 10 new mid-sized conventions each year. It could also boost annual hotel business by 70,000 to 110,000 new room nights, kick up convention-related tourism spending to $600 million a year and generate more than $10.3 million in new state and local tax revenues.
Funding for the hotel will include $60 million in bonds backed by lodging tax revenue, $4 million from Metro, $10 million from lottery funds and $165 million from Hyatt and Mortenson.
It is expected to be complete by the end of 2019.
By Tom Banse, OPB
Home prices in the Seattle and Portland metro areas are rising faster than anywhere else in the country right now — about twice as fast as the national average.
The latest S&P CoreLogic Case-Schiller home price index increased by 11 percent year-over-year through September 2016 in the Seattle metro area, the fastest among the top 20 housing markets measured. The Portland metro area came in right behind Seattle with a 10.9 percent increase for single family home prices over the past year.
Professor Gerard Mildner at Portland State University’s Center for Real Estate said you can boil this down to strong economies meeting limited inventory.
“Unfortunately, we’re not building enough housing units,” he said. “I don’t think that is well understood. We’re building about 20 percent fewer housing units in the last three years as compared to 1990 to 2007.”
Mildner sees some signs that price increases may be tapering off, and there are a lot of new apartments in the pipeline. But he said the local political and regulatory climate suggests housing supply will remain tight over the medium term.
“I think we face a chronic problem,” Mildner said in an interview Tuesday. “People in this region will need to be high savers so that they can break into that market.”
If it’s any consolation, despite the eye-popping average sales prices in the Northwest’s biggest cities, the region still trails California’s major metro areas by a lot.
By Andy Giegerich, Portland Business Journal
A national apartment search company has offered an intriguing look at the way Portland's skyline has changed since 2007.
The company, RENTCafé, offers this well-crafted then-and-now glimpse at the city's skyline over the last nine years. The company used Google Street images to make the contrasts in the rapidly changing Rose City.
The company's blog features looks at the blocks currently containing such projects as Twelve West, First & Main and Cyan.
The then-and-now blog is part of RENTCafé's efforts to bring apartment availability updates to the masses.
Home values in May in the Portland region grew faster than any of the other 20 major metro areas measured in the monthly Standard & Poor's Case-Shiller home price index — the eighth straight month Portland topped the list, according to the list released Tuesday.
Local home values posted a 12.5 percent year-over-year increase in May, slightly higher than the 12.3 percent year-over-year increase the Portland market posted in April. The Portland area also posted a 12.3 percent growth rate in March.
The second- and third-highest ranked cities remained unchanged from April. Seattle posted a 10.7 percent year-over-year growth rate for the month; Denver's was 9.5 percent. Eight cities reported greater year-over-year price increases for May compared to April.
Homes across the country saw an annual increase in value of 5 percent in May, the same growth rate as April.
"Home prices continue to appreciate across the country," David M. Blitzer, chairman of the index committee, said in a statement. "Overall, housing is doing quite well. In addition to strong prices, sales of existing homes reached the highest monthly level since 2007 as construction of new homes showed continuing gains."
While the slim inventory of available homes likely accounts for the Portland price surge, the Regional Multiple Listing Service issued a report earlier this monthshowing the real estate market may be loosening.
Among other findings, the report showed housing inventory edging up slightly. It also showed prices jumped to an average of $412,000 in June, up from $402,500 in May and $369,500 in June 2015. The median rose to $362,000, up from $320,000 in June 2015.
— Allan Brettman
Portland Business Journal
Windermere Real Estate chief economist Matthew Gardner kicked off his discussion at Windermere Stellar’s 2016 Launch Meeting in Portland last week with a loaded question. Is the economy going to be better this year?
His quick response: Yes. And here's why.
With new jobs being so tied to housing, this is a biggie. We took our time in Oregon catching up with other markets but we’re finally there. While the creation of new jobs has declined slightly, it’s still looking good in all areas except for finance and construction, which have seen lackluster growth.
A lack of construction jobs means that building is more expensive. But it will get better. “The big story in 2016? Builders will break ground a lot,” said Gardner.
Markets that rely strongly on the growth of one company or industry can be quickly devastated if something unfortunate occurs for that industry. The good news is that there aren’t any “clouds on the horizon” for the big Portland companies like Nike and Intel.
Because of its election year status, 2016 will experience a somewhat flat economy. While inflation will rise modestly in 2016, Gardner reminds us that “politicians don’t want anything major to happen during election years. But political times always bring some uncertainty.”
But what about the housing market specifically?
Supply Will Remain Low
The low inventory we’re experiencing isn’t going to change anytime soon. “We’ve seen a modest increase in sales; however, we haven’t got the homes for sale that we need,” Gardner cautioned. What Gardner is worried about is the spread between the number of listings and sales. A slight increase in listings will occur, but unfortunately demand will outstrip what’s available.
Living Farther Out
Low supply means that people will be driving more. Being priced out of the closer-in areas, we’ll see people living as far away as Salem and commuting into Portland every day. With affordability being found in Yamhill and Marion counties, more development will occur farther out.
Slight Rise in Mortgage Rates
“I promise you that mortgage rates will go up, but not much, possibly to 4.5 percent,” Gardner said. “This just creates a psychological barrier. But not to worry, we still bought when rates were 18 percent.”
Healthy Decline in Price Increases
Gardner points out that according to the Case Shiller Index, we’re past the historic peak in price growth, which he believes is good. This slow-down won’t represent a value collapse; instead it’ll be a healthy decline of the price increases we’re currently seeing.
Millennials — the renter generation?
We “blame the Millennials” for our real estate market woes and ask why they aren’t in the housing market yet. It’s true that they’re having a harder time qualifying for a mortgage, their down payments aren’t readily available and as a generation they are less stable. But Gardner believes that they will buy in time.
“Rents are getting to be too damn much! Millennials inherently believe that owning a home is the most astute financial decision they will ever make,” Gardner said.
As the older millennials turn 30, they are getting married and wanting to settle down in homeownership. Safety, size and schooling are their big considerations, but Gardner pointed out that “they don’t want to become like the older generations — yet.”
In summary, the Oregon real estate market will do well in 2016. There will still be more buyers than sellers, pricing growth will slow — but in a positive, healthy way — and more building will happen but it will be farther away from Portland’s city center.
Brian Allen is co-owner and president of Windermere Stellar.
Home-price gains have leveled off in major cities across the country, though the Portland area has emerged among the metros where prices are growing most rapidly.
Home values climbed 1.1 percent from April to May in 20 major cities around the country, new numbers from the Standard & Poor's/Case-Shiller home price index showed Tuesday. They reached a level 4.9 percent higher than in May 2014.
In Portland, home prices were up 1.4 percent in May, reaching a level 7.4 percent higher than a year ago. Of the 20 cities included in the survey, only Denver, Dallas, Miami, San Diego and San Francisco saw larger year-over-year increases.
The index suggests that home prices have leveled off. But market observers suggest that without an infusion of first-time homebuyers, so far mostly absent from the housing recovery, there's little room for prices to pick up steam.
The perceived strength of the housing market has come from buyers competing for a small number of homes for sale, bidding prices higher. But even as prices have increased, there hasn't been enough new inventory hitting the market to meet demand, and that's constrained sales.
David M. Blitzer, chairman of the index committee, said that first-time homebuyers provide the liquidity for current homeowners to trade up. Until the first-time buyers begin to show up in force, the supply issues will continue, he said.
"As home prices continue rising, they are sending more upbeat signals than other housing market indicators," Blitzer said. "Over the next two years or so, the rate of home price increases is more likely to slow than to accelerate."
A long-expected increase in mortgage interest rates could further hold down home prices, said Stan Humphries, the chief economist at the real estate website Zillow.
"Enjoy summer while it lasts, because in just a few months, things could start getting interesting again," Humphries said.
The Case-Shiller index uses repeat sales of the same property to measure changes in home values over time. Each month's data uses a three-month rolling average, and it's released on a two-month delay.
— Elliot Njus
Home prices in the Portland area and major U.S. metro areas climbed in March, though at a rate that’s slowed from recent months. Prices rose about .9 percent in March across the 20 cities included in the Standard & Poor’s/Case-Shiller home price index released Tuesday. Compared with a year ago, prices were up 12.4 percent. In the Portland area, prices were up 1.3 percent in March and have increased by 11.8 percent from a year earlier. Portland was one of 13 cities in the index where prices are rising at a slower year-over-year rate than they were in March 2013, during the early part of the recovery.
February brought an increase in Portland-area home sales, along with a jump in prices, but it also saw a drop in contracts for future sales, perhaps due partially to a winter snowstorm that hammered the region. According to numbers released Wednesday by the RMLS, 1,467 Portland-area homes changed hands in February. That’s 6.6 percent more transactions than a year earlier and 5.1 percent more than in January.
But the number of home sale contracts reached in February dropped to 1,848, a decline of 13.2 percent from a year ago and 8.8 percent from January. According to RMLS the amount of times real estate agents accessed lockboxes on homes for sale dropped 36 percent the weekend of the snow storm.