I've been tracking resales in the Pearl, and it looks like about 3 or 4 months supply right now. I'm noticing prices sold are running somewhat below listed prices, and there is a fair amount of prices reduced on listings. I'd gauge the situation as slow or stalling.
The reason traffic looks slow here is that many (I'd guess about a third) units are not utilized or actually occupied(weekend places, vacation places, summer places, just raw speculation, etc). I have a friend who owns the Subway shop, and he talks about that too. His business has picked up lately only because the three projects going up nearby brings in the construction workers.
There are also a lot of units rented out, at rents far below expenses and interest. There are clauses in the homeowners agreements that limit rentals to 30% of the units, and I've noticed this issue has been on the agenda at the owners meetings, so think it's over that in my building. The garage in my building is usually about 50-60% full, even late weekday evenings, so another 25-30% may be empty units. It feels that way to me, living here? So I think about half the units in the Pearl involve some kind of "greater fool" speculation. I'd say rental cap rates are barely 3%, that's about what I pay for rent. If these owners are being reset on various toxic mortgages as is likely, than the negative cash flow bleeding is getting even worse. So it's all consistent will the nonsense being observed in other markets like Florida.
On new supply,
movingtoportland.net
the Metropolitan going up on NW 11th and Lovejoy will be 19 stories and 121 units, and the unnamed building on the "Cronin Block" next to Bridgeport Brewery, will be 15 stories and 244 units.
movingtoportland.net
I'm convinced about half are flippers, as was the case with the Pinnacle finished last May. The Pinnacle still looks about a third empty as far as occupancy (they've been sold just not occupied). Notice how small the deposits are in the 61 unit Casey that is going up, see link above. |
