House hunt: Can the average Portland family buy a home?

As Portland housing prices rise, the average family is getting shut out. 

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PORTLAND, Ore. – Every morning in her small, rented two-bedroom apartment in Southwest Portland, Tanisha Doyle checks her Redfin app for alerts about houses that have been listed and sold. She looks for updates throughout the day. At night, she scours Redfin again.

Doyle, a 34-year-old Nike talent acquisition coordinator, lifelong Portlander and single mother of three, is about to start her housing search.

“I’m super optimistic,” she said with a confident smile, from her slick office building in Beaverton. “No fear.” 

But Doyle is entering a market that is not accommodating to buyers like her, of which there are many. She fits squarely into the income bracket of the average Portland family and the city’s skyrocketing housing prices are pricing the average family out. As each day passes, the small family home Doyle is searching for becomes more difficult to afford.

“I work in Beaverton and I want to stay close to where I work. But as these home prices go up, Beaverton’s becoming less and less affordable for people like me,” she said.

The last time Doyle bought a home, in 2004, she paid $150,900 for a two-bedroom townhouse in the quaint Bridgeton neighborhood on the banks of the Columbia River. She sold it five years later, during the last boom. Since then she’s rented, while the housing market tanked and then rebounded to a level few were prepared for. 

 

Middle-income Portlanders priced out

In Portland the average family of four makes about $74,700 a year, according to the U.S. Department of Housing and Urban Development. With a 5 percent down payment and no significant debts or bills, the average family can afford a $330,000 house. That puts their mortgage payment at about $1,800 – which shakes out to 30 percent of the family’s income. Any more and the government would categorize the family as cost-burdened, without enough extra money for other necessities.

A few years ago, $330,000 could buy a home in most areas of the city. Now, it doesn’t get you close to the average price in the Portland city limits, which in April was $428,000, according to Regional Multiple Listing Service (RMLS) data. You can’t buy the average home in Beaverton, Hillsboro, Oregon City, Milwaukie or Tigard, either. In fact, the only nearby areas with average home sales prices lower than $330,000 are Yamhill County, Columbia County, the Gresham area, and the towns on the way to Mt. Hood.

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That’s a startling change in a short period of time. Home prices have shot up by 30 percent since 2014. The median family income, on the other hand, has only risen 7 percent.

 

 

 

Add to that a fevered market where cash buyers are snapping up houses and desperate families are bidding tens of thousands over asking prices, and you have a recipe for a city that could shut most people out of homeownership.

“A healthy real estate market should have six months’ worth of inventory. We have 1.2,” said Heidi Martin, lending director for the Portland Housing Center. “This is the worst I’ve seen it. Last year, we had an inventory problem but people were able to find houses. This year they can’t get their offers accepted. It’s painful to watch.”

At PHC, Martin helps prospective homebuyers like Doyle secure mortgage loans. The nonprofit offers people a fiscal boost through financial counseling and a down payment match program, which gives participants $3 for every $1 they save, up to $8,000. The PHC can also act as a mortgage broker, saving homebuyers some fees.

Martin boasts that PHC makes a homebuyer a day, which puts the number of people it’s helped buy homes over the past 25 years at close to 10,000. They work with people across the income spectrum and focus mostly on first-time buyers. But even with PHC’s extra help, people continue to get shut out.

“I have clients at every income level and they’re trying to purchase at every level of home, from the starter home to the half-million-dollar mark,” she said. “They’re all having problems. They’re all into multiple offer situations, where there are 10-15 offers on each house. They’re making a dozen offers before they get one accepted.”

Martin says she fears for Portland’s future.

“We’re going to turn into a little San Francisco,” she said. “Only the wealthy will be able to afford to live here and everybody else will be pushed out.”

PHC lending director Heidi Martin discusses the Portland housing market

Middle-income buyers looking for homes in the $300,000 to $350,000 range are having to make big concessions. Martin says the only homes in Portland that are priced that low are in outer Northeast and Southeast Portland. One client just purchased a 680-square-foot fixer for $325,000 in deep Northeast Portland.

“That’s what a starter home is now,” Martin said.

Other clients are pushing their commutes to the edge of what’s comfortable, looking in Oregon City, Southwest Washington, and Columbia and Yamhill counties.

“Our clients keep having to go out further in order to find affordable housing,” she said. “And it is so competitive that when you do find one, you generally are outbid by a cash buyer.”

High rents add to home buyer woes

Tanisha Doyle says it’s still difficult to comprehend how the city where she spent her whole life has turned into such a feeding frenzy for buyers.

“It’s crazy to see Portland go from a small town to a place where it’s cool,” she said. “I think at first it was exciting and then you start to feel the impact of what that means for you, when Portland becomes the desired place to move.”

When Doyle sold her first home, she rented a sprawling 2,200-square-foot home in the bucolic Beaverton neighborhood of Murrayhill. In 2012, she downsized to a 1,200-square foot townhouse, hoping to save money for a down payment so she could buy again. Then the rents started rising.

“The rent was going to go up $150,” she said. “I was not comfortable with that. I knew that I could do better.”

But when she started looking for another rental, she was shocked at how the market had changed.

“I remember one lease agent saying to me, ‘Every day I get faxed a new sheet of paper that tells me how much the apartments are going to be,’” Doyle recalled. “She said, ‘If you don’t get this apartment today, I can’t’ tell you what it’s going to rent for tomorrow.’”

According to Martin, the rent increases have made it even harder for potential homebuyers to squirrel away a down payment.

“Rental housing is as expensive as home ownership right now,” she said. “Even middle-income families have a hard time saving.”

Doyle spotted a small two-bedroom for rent on Craigslist and snapped it up sight unseen. Now, she’s paying a little over $1,100 a month – a steal, she says. She sleeps in the small bedroom and her three boys, 14-year-old M.J., 11-year-old Maasi and 10-year-old Mazeek, share the master.

It’s not ideal, Doyle admits, but in a few short weeks she’s hoping to be a homeowner again.

Preparing for the hunt

For months, Doyle has been driving by homes she sees online, hoping to buy one day. Thanks to the help of the Portland Housing Center, she is about to make her move.

She’s as prepared as she can be. Doyle is armed with $10,000 she saved with the help of PHC, along with some other savings. She’ll choose which mortgage is best for her with Martin’s help, then hire a PHC-recommended realtor. She’s looking at homes in the $300,000 range, somewhere in the Beaverton area.

Doyle’s heard the war stories. She knows it’s not going to be easy.

“If I have to buy in Cornelius or Forest Grove versus Beaverton, that’s going to affect our lives,” she said. “It’s going to affect everything we do, from the commute, to the family time we spend, to the trips we take. Everything.”

Prospective homebuyer Tanisha Doyle talks about her dream home and the concessions she may have to make

She’s also prepared to lose out on a home many times over before getting an offer accepted.

When Doyle bought her last home, her realtor advised her to make an offer within a week. She knows when she makes an offer this time around she’ll be playing a much different game.   

“I may love the home, it may be a perfect home, and maybe some cash buyer comes in and maybe the people who are selling the home want that cash buyer. That’s fine,” she said. “There’s something else out there for me.”

But the harsh reality of the housing market doesn’t stop Doyle from dreaming.  

“My dream home would be single family,” she said. “I’d like to have a backyard for the boys to play in, for me to do things in. My son has a basketball hoop that’s literally under his bed. It would be nice to put that up. A family neighborhood. Potentially, I’d like two stories.”

The boys have their dreams, too. They all want their own rooms. Maasi, the 11-year-old, would paint his room black, purple and gold. M.J., the 14-year-old, wants a room with enough space for a dresser and a desk. Mazeek, the 10-year-old, wants his own bathroom – and a specific request for his mom.

“A bigger room. We always get the bigger room because we have to share one,” he said.   

And Doyle’s ultimate wish? A house on a hill with lots of light.

“I like hills, that’s just my thing,” she said. “They’re great to walk up, they’re great for exercise, they’re great for views, and they’re fun when it snows.”

 

Note: We will check in periodically with Tanisha Doyle as she continues her housing search. 

 

Video by KGW photojournalist Gene Cotton. Interactive by KGW Art Director Jeff Patterson.  

Published June 2, 2017

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