Appraisals-What do they mean?

With record low interest rates, many home owners are taking advantage of refinancing right now. Depending on how long an owner plans on staying in the home, and how long the cost of refinancing takes to pay off, it could be a smart way to save a substantial amount of money.

What is not a good idea, is mixing up the amount an appraiser arrives at as a value for your home for the purpose of refinancing, with what your home may actually sell for on today's market. It is rarely the same number, often far from it. Appraisers have a different job than Realtors. They are contracted by the lender to assess the value in terms of refinance, purchase, for an estate, etc. Often the comparable properties appraisers use for these purposes are drawn from further afield than a Realtor would use. They employ numbers to assign value or take away value depending on the amenities. Example, minus 20,000 for no basement, or plus 20,000 for 600 more square feet than the subject property.

This is not how competent Realtors assign a market range. Our job is to represent a client in selling a property. I often go into neighboring properties for sale- see which have hardwoods and which have carpet.  Knowing the neighborhoods intimately, one knows which streets are busier, more sought after. In some neighborhoods, the difference of a block or two can mean $100,000 more or less in value. Working with buyers, I know what they assign more value to, and are willing to pay for. I don't look at "comparable" properties, I'm looking at "competing" properties.

Another tool I use is "absorbtion rate." By zip code, or neighborhood, I calculate at what rate the existing inventory of  available homes has been selling. This is an invaluable tool and allows one to determine where the property should be positioned in a very specific market.

The (true) cautionary tales are these. Owner Smith gets an appraisal for $525,000 for her home. She refinances and decides to take out $20,000 in equity for home projects. Smith loses her job and needs to sell. Her actual market value is $475,000. This owner now has a serious problem. Owner Jones gets an appraisal and refinances. His appraisal was $550,000. He decides to sell six months later, and wants to sell it at the appraised price. In the meantime, the market is declining. By the time he lists it at actual market price- several months later, opportunity and profit are lost.

No disservice to appraisers out there. I respect the work they do and they perform a valuable service. 

Let's just be clear that appraisers and Realtors have different jobs. When positioning your home for sale at today's market price, a savvy and honest Realtors assessment is what matters.

Cookbook Classic: Barbie, Easy as Pie.

Well, maybe not a classic, but a great addition to our campy vintage cookbook collection. As avid cooks, and owners of about 300 cookbooks, we picked up a fun vintage Chinese cookbook in San Francisco one year which turned out to be the start of a small collection of just-for-fun cookbooks. This includes the original Betty Crocker cookbook which I made my first fudge and doughnuts from (would I be crazy enough to make a roast at 16?)  a Campbells Soup cookbook, a Boy Scout cooking manual suitable for earning a badge, and anything else that makes us smile.

This latest addition was found at Powells, which actually has a small vintage section. Published in 1964, our latest find follows Barbie and her adventures in the kitchen, as you can see from this charming illustration by Clyde Smith. Don't you just love that he could portray mom's leg as disapproving? Complete with recipes, and who cares if we ever use them? Probably, friends will thank us if we don't.

Market Action 2-09

CLick here to download the PDF

As promised, here is the latest market action from the local MLS (multiple listing service), for February 2009.  A few encouraging notes- we are down to 16 months inventory from 19. Closed sales are up 17.3% from January's numbers and new listings are down. Looking at the DOM (days on market) we are still high at 153 compared to last years 84.

Interestingly, North Portland has the lowest inventory in the Portland area, and also the lowest DOM at 88, though closed sales are down from last years numbers. Lake Oswego and West Lynn are "leading" the average DOM at a whopping 195. With the Lake Oswego area at the highest average price of $520,000- this seems to be a reflection of the higher interest rates given to "jumbo loans" (financing over $417,000) which are costing borrowers 8% plus points, compared to a 30 yr FHA loan at 5% for loan amounts under $417,000.

In this competitive market it's clear that preparing your home and positioning it well on the market are imperative to a successful sale. My DOM for last year was at 45 compared to the average of 88.

Algue on Our Walls!

 

It all began with two boxes of Vitra Algue, bought at a garage sale.  Feeling adventurous after our wall mural, we bought the Algue, not knowing exactly what we would do with it, we decided to build a "sculpture" of sorts on a large empty wall that we lacked the perfect thing for. Our vision for the home is mid-century, but also playful and original.

We built the majority of it on the floor, and then with the help of several of my son's "volunteer" friends, we held it up while J drilled in directly into the wall through several of the Algue's holes. Once up, we added more as our artistic spirits took us. All in all, we estimate there are 100 pieces here. We can take it apart, and re-design or re-use as we're inclined.

I'd love to see how you have used Algue, and post it here on the blog.

Ladd's Addition & William Ladd

"No one will ever move here, it is too idealistic," a quote from the early 1900's, proves that Ladd's Addition was a unique neighborhood even at the time it was developed. Today, a much sought after area, it's streets were designed by William Ladd and a surveyor, and was probably modeled on Versailles, or east coast towns with village greens- where William Ladd hailed from, says speaker Richard Ross, a Ladd's resident and urban planner. Bordered by Hawthorne, Division, 12th and 20th Avenues, Ladd planned the diagonal streets wide enough for shady elms, sidewalks, and narrow deep lots without driveways, choosing the house transportation means in the alleyways behind the homes.  One marketing piece at the time, claimed the neighborhood would "appeal to the better class of buyer" with it's central rose garden and four smaller gardens set like jewels in the landscape. 

The Ladd Estate Company transformed the Ladd family's farmlands into the "Residence Parks" of Laurelhurst and Eastmoreland, and donated the land that Reed college rests upon. When William Ladd wasn't  developing real estate, he served a stint as Portland's mayor, owned a prominent downtown bank, and Oregon Iron Company in Lake Oswego, the primary supplier of iron products in the northwest.

If you love Portland history as I do, visit the AHC on SE Grand one weekend, and attend one of their lectures.

Short Sales and Foreclosures

 

Recent news reports are often discussing homes in foreclosure, but as a Realtor  I see more short sales at this time. Many of my clients see an online listing for a home, only to have me inform them that it's a "short sale."

A foreclosure is a home that has already been repossessed by the bank. The bank has become the seller. A "short sale" involves a seller that needs to or has to sell their home, but owes more money on the home than the home will sell for at market price. The seller may also have a second mortgage on the home. A common scenario would be that this seller bought their home in the height of the market and then have a change in employment or income, forcing a sale. 

To make an offer on such a home can be a complex transaction, as the buyer is not only making the offer to a seller, but to a third (or fourth) party that also must approve the sale. The sale price is below what is owed so the listing realtor or a mediation company must negotiate the loss with the third party. The process is byzantine and can easily last six months- third parties are slow moving and notoriously difficult to reach. The buyer will often not hear whether their offer has approval for weeks or months. Often, the third party does not sign a contract with the buyer until the last moments of the transaction. An inspection can be ordered by the buyer after approval of their offer, but the purpose for the most part will just be to know what they are buying, as the seller and the lender are already both too "under water" to make any of the usual negotiations for repair or price concessions.

It takes a special buyer to be able to buy in this time frame and undergo the emotional ups and downs. A normal transaction can often be challenging enough for the average buyer. For the sellers who are trying to salvage their credit and move along, the process is incredibly stressful. For the market, this process will keep the inventory at higher levels as a more typical transaction closes in 30 days from the seller accepting an offer.

As a Realtor there is no avoiding the current market, and I will continue to represent my clients best interests. I work with a professional short sale consulting company that will simplify the process as much as possible for my clients.

My hope is that there will be more oversight on the process to make it more transparent and streamlined for all parties involved.

The Best Seat in Town

Kevin Gibson inspires the menu at Evoe at Pastaworks on Hawthorne in a magical way. He showed equal respect to the delicate sweet scallops with grapefruit, a dish that would make any pescatarian swoon, as he did with the hearty pork belly. The pork had a lovely salty brown crust which melted away to surprisingly meaty interior, the pork made lovely bites with white beans just tossed with fresh scallions and herbs. And this was after our "starter" of tender razor clams with almonds over toasted bread drizzled in olive oil.

Belly up to the bar here and order off the surprisingly extensive chalkboard menu and wine list. Enjoy sipping your wine while you watch Kevin, and this particular afternoon, the companionable Jon Hart, prepare what I believe is dining at the top of the food chain in Portland.

Residential Architecture of Joseph Jacobberger

The Architectural Heritage Center of Portland just hosted a really terrific lecture about the residential work of Joseph Jacobberger. Although he designed numerous public buildings in Portland, including the Nortornia Hotel (currently the Mark Spencer) and St Mary's Cathedral, Jaccoberger designed 261 residences, half of them in Portland, and many still survive. His career in Portland began at Whidden and Lewis in 1890, but before long he started his own company, and designed well into the twenties.

More interestingly, his career spanned the era of Victorian ornamentation with its great outward show of wealth, into an era of regionally inspired architecture. Through him, Portland became part of the international movement towards a modern lifestyle without servants or formal parlors, our very popular Craftsman. With every home-  the smallest English cottage or a home for the Doernbechers, he was engaged in all aspects including the details of designing and choosing the colors for his stained glass windows. He made staircases into works of art, creating sculptural effects with rectangular pickets, screens and newel posts. The exterior of his homes display a grace and balance that too often lacks today. 

Where is This Home's Owner?

This home is simply spectacular, and requires a very special owner. A designer, architect, a writer, who is it? Winner of the Sunset Western Home Award 1967-68, it's an architect designed home, incredibly similar to another on Burton that was one of the most popular homes on the Street of Eames two years ago. Set on a very quiet street off of Sylvan, allowing one to live privately despite the two walls of glass connecting it to the wooded outdoors and surrounding decks.

It's meant for someone who lives very simply, with built-ins abounding for a very streamlined interior. When this owner is ready for company, open up the doors and let the party flow out to the decks.

For a private showing, please call me. A "Rummer" simply could not hold a candle to this home. 

Note: The picture of the front appears as if there is an opening in the roofline- this is an optical illusion- a mirror of the twin roof opposite the front door. RMLS # 8100801 Price has just been reduced to $775,000.

An Interesting Conversation

Anyone who has an interest in living more "green" has probably come across the term "greening up" which is to say, a corporate attempt to add value to a product by misrepresenting it's green qualities.

Christopher Leonard, President of the local Tualatin company Oak Grove Custom Cabinets, and I recently had an interesting exchange about whether he carried any green products at his business, and I found some of his answers surprising. This interview is compiled from two conversations.

K: What kind of wood products do you use? Do you use sustainable wood products?

Chris: With the exception of exotic woods from rain forests, the classic cabinet hardwoods we use come from trees harvested and processed in the US by companies whose viability depends on maintaining a renewable supply.  Alder, for instance, is a popular hardwood which comes primarily from the Northwest and grows very quickly.  Even if it doesn't have the green cache which bamboo does, for instance,  people in the industry recognize that the environmental cost of harvesting bamboo somewhere in Asia, combining it with petro-chemical resins, processing it into usable lumber, and then shipping it across the Pacific is probably greater than cutting up a local alder log.

K: There is also a lot of concern about formaldehyde contained in some cabinetry, trims and shelving, such as particleboard and VOC's from finishes.

Chris: This chemical (formaldehyde) occurs naturally in our environment through various organic processes but is often added to the glues used in the manufacture of plywood and particleboard products.  I suspect this goes for the adhesives used in flooring, carpets, paneling etc.  Our suppliers tell us the level of formaldehyde in modern products is significantly less than those used in the 60's and 70's which employed a different chemical structure (open vs closed cell) and the exposure from the products typically used in cabinet construction is extremely limited.  However, due to the overall concern, most manufacturers are switching to a new glue which has little or no formaldehyde.  Columbia Forest Products which lays up most of the veneers we purchase ran a story recently in which they described their new adhesive which is based on the chemical compound which mussells use to attach themselves to ocean rocks:  strong stuff!!  It is also possible to purchase other "low formaldehyde" products but we are told the term "formaldehyde free" is a bit misleading. 

K: Do your wood finishes contain VOC's?

Chris: VOC's:  This stands for volatile organic compounds.  In wood finishes, these are the chemicals in which the pigment in stains and solids in lacquers are suspended.  These solvents, such as toluene, xylene, and alcohol evaporate very quickly which makes them desirable in finishing processes:  they can be top coated within minutes and don't raise the grain like water based products.  Water based versions are also much more temperamental to apply, need warmer environments (expensive in winter).   However, the technology continues to improve in this area  as more pressure is put on the chemical manufacturers. 

K: It's not as simple as it seems- going out and buying bamboo for your flooring, or shopping someplace that is supposed to have green products.

Chris: The interest in "green" products is increasing significantly but so is the complexity of defining just what this means.  While promoting the concept, I always try to make sure we don't mislead our clients.   

Back to Dining Basics

Could I just be a little relieved that the seemingly endless stream of restaurant openings in Portland has slowed? We are so lucky that we have such a high standard of local food served here, and there are plenty of wonderful dining spots that one can visit time and time again having had a perfectly good experience with both food and service.

The Heathman restaurant is one of those places. J and I went there for our Valentines Brunch. It felt rather like our honeymoon in New Orleans having an occasion with a bottle of wine mid-day. They completely satisfied with the classic dish of sole almondine. the sole was sauteed, perfectly sweet and fresh, served with fingerling potatoes, dense and earthy. The bottom of the dish held a clear pool of browned butter that gave it's silky succulence to every bite. The perfect amount of lemon juice and fresh grapefruit slices added the needed brightness to this fabulous dish. 

Having gone back to the basics, I have to say I'm also excited about a new restaurant, the opening of Ping at NW 3rd and Couch, by the same owner of the yummy Pok Pok which totally rocked the Thai food scene when it opened several years ago. Ping is located in the old Hung Far Low building in Chinatown.

Energy IQ Part 3

We continued looking for ways to seal a house properly BEFORE insulating. If I can summarize a few ideas that stood out for me. "Put a lid on it" says it all. By stopping the airflow escaping through the top of the house, by proper sealing and insulation, one can control the amount of unconditioned (unheated or uncooled air) exterior air from entering the home. A law of physics dictates, one CFM in = one CFM out. In other words, if a leak under a door brings in a cubic foot of exterior air, that same amount of air will leave your home. The air you just paid to heat! That makes a whole lot more sense to me than being yelled at "Were you born in a barn?!" when I left a door open as a child. Another eye opener, fiberglass insulation batting is the least desirable of choices given that it often shifts, is installed improperly, and often has gaps. Dave Hutchins from Energy Trust taught the class, and has years of field experience. He gave me a few company names who he feels does exceptional work carrying out a customized Home Performance Review. They are Trade Ally contractors, so they can do both the review (which I hear can cost several hundred dollars) and/or the recommended work. Please give me a call if you're interested, I'd be happy to share.

Sharing the "Thanks"

I recently received the most lovely thank you letter from Barbara Hoven Hafdahl, the volunteer coordinator at the Parry Center. It's not just a thank you for me, but for everybody that was able to donate towards the childrens holiday party. It's such a wonderful program to support- in fact I just finished buying lots of little children's undies with some donations that came in a bit later. Please read it- it's sure to make you a little verklempt. If you weren't able to be a part of the giving last year, I'll definitely let you know in time for this coming holiday. Thank you for all your support!

The "Wall of Shame"

Years ago I went bowling with my children and three sisters in Nashville, where my sister Norma Jeanne was living at the time. NJ and her partner had a fun way of dealing with gutter balls and other horribly and embarassingly bowled frames- you were pointed towards the "wall of shame"- a nearby wall in the bowling alley, upon which you would place your head for a moment (think dunce cap). This seemed to provoke everyone that didn't laugh the first time at your clumsy ball toss, including yourself, to laugh all over again. When you came back to the lane, it was all behind you, and the next frame you could begin anew.

Beginning anew is what I would like to do after my second "Home IQ" class, sponsored by Energy Trust. The class is a five part series, two hours a week, that firstly, helps assess ones current energy use, then teaches what changes and improvements can be made with an existing home, an existing budget, and existing habits to save energy.

I've been to several classes on new Earth Advantage and LEED homes. and these homes minimally exceed current code by 15%- with substantial energy savings, but most of us need to work with what we have. And after all we are "re-using" an existing home, which is a good thing, right? So why did I have a premonition I was not going to score well on our home's energy use?

For one thing, we had an extremely inefficient electric radiant heating system, which I'm sure was the cat's meow in 1950, but was costing us a fortune every month, and still we were freezing, running around with space heaters before company came over to keep the frost off their noses in the winter months. Although this was the winter we changed it out- to an efficient system with a heat pump- why is our energy use still so high?

Here's where the "wall of shame" comes in-this chart shows our classes current energy use in therms (natural gas use), killowat hours (electric use), and then both converted to show our total energy use in BTU's. Although our home did fine in therms, compared to the rest of the class attendees, our electricity use was abysmal, my premonition proving true. There was some solace having more square footage than most to heat, but a fellow classmate's home was virtually the same size and used 82 million less BTU's a year less last year than we did. A waste of money and power.

I went home in quite a state and showed my husband J the numbers. Last week he killed (turned off) our hot tub. Is my blow dryer the next to go? Stay tuned and see how we can bring these numbers around. I'm using a tool called the Kill-O-Watt that measures the power usage of our appliances, computers, even phantom power usage. In the meantime, I do feel a little better now that I've confessed.

If you would like to take elements of the class with me, here is the the home-energy-tracking-sheet, where you can make your own calculations. It's quite easy to sign on to your account at PGE or NW Natural Gas and see your past years energy use.

Interesting Fact: Heat does not rise- it does follow cold. Imagine, with the proper sealing and insulation in your attic, or walls how less likely your heat is to follow the cold up into the attic, or outside.

Our Weekend Mural Project

 

After spending the holidays in the Bay Area, with J's very creative family (see Wertzateria), we come back to Portland determined to have a little more fun with our home's decor. Buying a Wallpaper magazine at the airport, I'm drawn to a picture of a mural in an asian restaurant. We've left a dining room wall bare since we moved into our home. We love our lighting and don't want to detract attention from that. Could a mural be the solution?

Easy for me to come up with ideas- but having an artist in the house who can actually realize them, is the best of all worlds. 

Within a week, J had produced a similar design on his Mac, and after projecting the image on the wall, "we"-the Queens "we"- made a few changes in proportions. J traced out the design, and after playing around with some paint color variations, we decided on a dilution of five parts white, to one part of the existing wall color, to produce what I would call a "shadow" of the asian inspired design.

Once the design was traced and the color chosen, it took us a few easy hours of painting in the lines- and we were done. Our next project is converting one of our kids rooms into a guest room. We're looking forward to having some fun with that project as well.

More pictures of the mural process.

Weekly "Ninja" Meeting

We are "ninjas". As I mentioned in my bio, a small group of colleagues and I meet every Wednesday morning at my office, sharing our wisdom and experience. Why "ninjas?" The name is silly, even if our business is not. It's modeled after a real estate company in Ft. Collins, Colorado, which I visited several years ago. Rather than compete within their office, they share knowledge, as mastery of the profession is one of their main goals. Mastery makes, to the outside eye, a transaction look easy. Effortless, like a ninja.

Whether the name make sense or not, the time I spend is invaluable. One of the topics we covered today was how important it is to include even obvious appliances, and fixtures into the purchase contract. While fixtures are supposed to be part of the sale, what constitutes a fixture? A chandelier? Yes, but what if it's not hard wired, and hanging by a hook? Custom mirrors- are they attached or hung? What constitutes the "sound system" that is advertised in the listing- the wiring in the walls, or the components as well? These issues may turn an otherwise cooperative relationship between the buyer and seller, into one of disappointment and contention.

Being pro-active when writing a purchase agreement is one way of making a transaction look easy.

A disclaimer- while I follow the ninja model, and that may bring higher expectations of me, do not expect any ninja wardrobe.

Energy Trust Free Home Energy Review

 

As part of my commitment to get our 1950's home on the path towards energy conservation, we just had a Home Energy Review performed by the independent, non-profit organization, known as Energy Trust. Of course we knew our single pane windows leak like sieves, but what else could be a cause of energy loss? One of the least expensive things we were told to do was to upgrade the insulation in the attic. Over time the insulation had been removed from some areas, and it was also greatly under insulated. The advisor figured we are at about R-18 or less and ideally should be around R-38. Energy Trust offers cash incentives for and array of energy saving improvements including our insulation project.

As part of their effort to create an immediate change in power usage, they left us with eight CFL bulbs, and offered to install two high performance shower heads (apparently a big improvement over the "low flow" ones from a few years back), for free. We've been slowly changing out our traditional light bulbs, so this is a big boost towards going green.

In the end, the advisor told us, (rather in the Southern manner of adding "bless your heart" after saying something a bit harsh) that our home was rather like "an old sweater with holes in it". Multiple energy leaks, and struggling to keep us warm. Our next step will be Home Performance Testing, a three to four hour review.

Strangely, I'm kind of looking forward to it. We don't have to do everything at once. Just baby steps, one at a time. I'll let you know how our 1950's "old sweater" holds up.

The December Portland Market

 

We have the latest sales figures in from our RMLS (regional multiple listing service), which I will be sharing with you monthly. Called the "Market Action", this report is often quoted from in the Oregonian, but usually not shown in its totality. Sales are down just over 30% from this time last year, and we have 14 months of inventory on the market, with an average of 122 DOM (days on market). If you bought in the last few years, and have to sell, obviously this is not good news.

The good news is, if you're a buyer, the rates are historically low- prices, desirable neighborhoods, and a large inventory are more within your reach. If you are a seller who is buying up, you will come out ahead. Say prices have gone down an average of 10% in the Portland area. Your house is now worth $300,000. Perhaps a year ago you could have sold for $330,000. You have a "loss" of $30,000. The home you would like to buy, assuming that is properly priced for todays market at $500,000, is selling at $50,000 less than it could have a year or so ago. In this situation, the same discounted sales price works to buyers favor.

People ask me often what I think about the market, or are surprised when I tell them that last year was my best year in real estate. One of the truths of this or any market, is this- people continue to have children and need to upsize, or downsize, move, get married, and any number of human situations that require a move. My job is to help people navigate their home needs successfully, no matter what the market is doing, and with my listing DOM last year averaging at 43 days, I would say my clients are doing just fine.

Food Rock Star Visits Portland

"Good food is like pornography, you know it when you see it," is how Michael Pollan opened up his lecture last night at the Schnitz as part of the Arts and Lecture series. Mr. Pollan, bestselling author of The Omnivores Dilemna, and most recently, In Defense of Food, spoke of American's susceptibility to food fads, unsupported "facts" and dietary guidelines eased into place by good old American marketing and industrial lobbyists. On the face of it, it's surprising that these rather humorless topics can draw in a sell-out crowd, but both Mr. Pollan's speaking and writing are based on genuinely interesting research and a witty style and presentation that often alternates making one think or laugh. He definitely has a mission, but does it without frothing at the mouth. Speaking of which- where does a food guru eat while in Portland? Yesterday, lunch was with Greg Higgins at Higgins Restaurant. 

Street of Eames

Portland mid-century design fans are marking their calenders for the fourth annual Street of Eames home tour on April 18th. A fund raiser for Project Return, providing school stability for children experiencing homeless situations, the Street of Eames has been a huge hit in Portland, raising $117,000 on the 2008 tour and selling out of tickets in less than an hour. Tickets this year go on sale mid February. As a 1950's homeowner, I must admit to my heart beating faster at the thought of walking through some of the most interesting mid-century homes in our city, gathering ideas for my own home, lusting after original architectural features, and enjoying being part of the starry eyed, adoring crowd that is the mid-century fan.

You can buy tickets now- at a price, or sign on to their email list and count your lucky stars for landing those sought after tickets.

Classic Eames Lounge Chair