Abdur Abdul-Malik, SRA, ASA

The Portland Pearl District Condo Market – The Last 10 Years (2015-2024)

The Pearl District is one of Portland’s urban core neighborhoods. Bordering the Willamette River, the neighborhood used to be dominated by warehouses and railroad yards but is now home to a variety of businesses, art galleries, and housing. The City of Portland offers the following description:

The Pearl is a young neighborhood, its most recent incarnation established in the early 1990s. Its modern persona is heavily influenced by the tenets of New Urbanism, which prizes mixed-use, walkability, diversity, human scale and conservation.

The purchasable housing stock type in the Pearl District can be described in one word: condominiums. Except for one small townhome development, the neighborhood has no other housing type. (All other housing is lease-only in apartment buildings.) So, how has the Pearl District condo market performed over the last 10 years? Let’s crunch some numbers and dig into the stats.

Note: We will only be examining the open market, defined as condo units advertised on RMLS. Off-market private sales will not be included in the following analysis.

PEARL DISTRICT SUMMARY STATISTICS

Taking the 35,000-foot view, we can see the average yearly prices have been steadily declining since 2016:

Average prices this year are essentially the same as they were in 2015. (Ouch.) The main reason for this decline is due to a couple of large high-rise condominium buildings being completed in 2016 and 2018. (We’ll talk more them later in this post.) For now, suffice to say, the completion of those projects has created a glut of units the market is still trying to digest. That combined with high mortgage interest rates and low volume has depressed average sales prices.

Here is that same info expressed in an average yearly price per square foot:

The contrast between 2015 and 2024 is a bit more pronounced when viewed from a price-per-square-foot vantage point.

Unsurprisingly, condo units have been steadily spending more time on the market before finding a buyer:

Units have been averaging 3-4 months on the open market before finally selling.

Volume has been trending downwards as the market struggles with the current high interest rate environment:

Finally, a look at the average size of the units each year shows no major swings and a general conformity in square footage:

2024 HASN’T BEEN A GREAT YEAR FOR THE PEARL DISTRICT

Using line graphs we can parse the data on a monthly basis for the last four years to see how 2024 compares to the previous three years. Let’s start with the average monthly sales price:

It should be noted the month of December 2024 is dashed as the month is not yet complete as of the post date and trends may slightly change depending on the remaining data. The year 2024 has generally underperformed the prior years. Interestingly, the months of May & June of the year 2022 were the lowest. This was right when the Federal Reserve began spiking the interest rates, with immediate effect on the market.

The following shows the monthly days on market:

2024 has pulled away from the previous years and units are having a much harder time selling.

The following shows the sales price to the original list price ratio:

A ratio above 100% is good for sellers, as it typically indicates a “hot” market with competitive bidding. 2024 has seen a sharp drop off since late summer.

Finally a look at volume:

It’s been neck and neck between 2023 and 2024, but it looks like 2024 will close the year with the lowest monthly winter volume over the last four years.

IMPACT OF MAJOR HIGH-RISE CONDOMINIUMS

Images of Cosmopolitan and Vista Pearl via Wikimedia Commons

The Cosmopolitan is the largest residential tower in the City of Portland. The building is 28 stories, has 343,560 sq. ft. of space, and 150 condo units. It greatly enhances Portland’s skyline. The tower was completed in 2016.

Vista Pearl is also an impressive building, with 21 stories above ground and 153 condo units. Vista was completed in 2018 and is STILL selling units that have never been occupied. (One unoccupied unit sold in early 2024.)

The following graph shows the number of condo units in active status versus the number of units in pending status (under contract) for the entire Pearl District for the last ten years:

When the number of pendings exceed the number of active listings that generally indicates a hot market where demand outstrips supply. The market did a fairly good job absorbing the units from the Cosmopolitan. However, when Vista Pearl came online, the market became glutted. The graph shows a sharp spike in active listings in 2018 when that tower was completed and the inventory levels have remained high ever since.

The two structures compete well against one another. Here is a graph of sales prices from the Cosmopolitan and Vista Pearl:

The flurry of initial sales for each building can be seen on their respective completion dates (2016 & 2018). The general range of initial sales prices were similar. The subsequent years show an intermixture of dots, indicating no clear dominance of one tower over the other. The edge does go to the Cosmopolitan in the rarified heights of luxury condo units. And the air gets quite thin above $3 million, with most of the sales in that range belonging to the Cosmopolitan.

The highest sale in the Cosmopolitan was a 4,472- sq. ft. penthouse unit on the 27th floor. It was originally designed as two condo units, but before the tower was completed the two units were consolidated, creating the largest unit in the complex, with panoramic views. The 27th floor penthouse initially sold for $5,441,294 in 2016 as a new construction. The unit later sold for $6,995,000 in 2019—which is a record on the open market for the last ten years in the Pearl District (the seller never dropped the price and waited 244 days to find a buyer). As of this post date, the unit is back on the market for a more “modest” asking price of $4,500,000. If the penthouse closes at that price, it will represent a 36% drop in value from the previous sale. Photos of the unit are currently available online.

A QUICK LOOK AT THE LUXURY CONDO MARKET IN THE PEARL DISTRICT

Let’s wrap up our survey of Pearl District condos by examining the luxury market. Here, we define the luxury market as condominiums that sold at or above $2 million. The following map shows where those sales occured:

The following table summarizes info about the sales:

Unsurprisingly, the Cosmopolitan is the clear winner, however, the Casey and Metropolitan complexes are close behind in average sales prices, with the Vista Pearl complex claiming 4th place in the luxury condo market.

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Question: When do you think the Pearl District will finally absorb all the excess inventory?

CODA

Are you an agent and wonder why appraisers always do “x”? Are you a homeowner that got a report and have a question or two about appraisal terminology or methodology? If so, please feel free to contact me. I enjoy interacting with various market participants and am always happy to help out where I can! And if you are in need of any appraisal services, feel free to reach out to us!

Why is an Appraiser Asking Me About an Old Comp?

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“Why is an appraiser asking me about an old comp?” In the course of my work, I have elicited that question from quite a few agents and brokers. One agent said, “I thought you guys could only use comps going back 6 months.” Another replied back to me: “Please, why you would use a comp from 2.5 years ago when there have been many[,] many sales in this development just in the last year?” When I told her why, she replied: “How interesting. Thank you for clarifying.”

Since this question keeps popping up, I thought it might be helpful to address it with a blog post.

The appraisal report is not for lending: The overwhelming majority of appraisal reports are written for a lending institution due to a sale or refinance—certainly over 90% and most likely approaching 99.9%. So, it’s understandable why an agent might be skeptical about an appraiser querying them about a sale they closed over a year ago or, sometimes, a few years ago. Is this appraiser clown going to screw up someone’s deal by using a dated comp?

No. Sometimes the report is not for lending and the effective date of value is not contemporary but is a point in the past. Examples:

Estate Tax: When a family member with property passes away an appraisal report with a valuation date as of the date of death is often needed. Sometimes years might pass by before this legal requirement is understood by the family and an appraisal report is ordered.
Legal Disputes: Problems can arise between neighbors that is brought to litigation. If someone is attempting to prove damages to their property multiple values may be needed: one contemporary and one prior to the start of the problem. A good example of this is a view encroachment by a neighbor. Views often add a considerable amount to a property’s total value and when a neighbor blocks a scenic view lawsuits can fly!

The appraisal report is for lending, but the property is complicated: The ideal appraisal report, for a lending job, would contain three sales that have closed within the last 90 days and those sales would match each and every attribute of the subject be they physical or locational. The real world is seldom ideal, and the property the appraiser is working on might have some unusual physical attributes or complicating factors. These factors might include:

A home with an owned solar system in a market where very few sales have solar.
An unusually large or unusually small house.
A home that is lakefront or riverfront.
A home on acreage in an area where few similar sales have occurred.
A home with some adverse locational influence like a cell tower, power lines, or a large water tank behind it.
A home in a small prestigious subdivision that has had few recent sales.
A home on a city lot that is divisible.
A home that is a borderline tear down.

There are many other reasons, but the above suffices to show how complicated things can get. The only way to figure out how much that cell tower looming over the backyard is affecting the subject’s value is to pull similar comps, even if they are dated, and examine the conditions of their sale. For one report I recently completed, a PGE power transmission tower was on the site. (The home was on about 20 acres.) I carefully followed all major power transmission lines within a radius that took in tens of miles. I finally found one property that had a transmission tower on it and phoned the agent. Even though the sale was five years old she had a vivid recollection of it—not surprising because it was an unusual sale for her—and we discussed the impact on value.

Keep in mind too, a report may have more than three comparables; sometimes a fourth, fifth, or even sixth comparable might be used to tighten the report and the developed opinion of value. (I’ve had to use nine comps on occasion.) A home selling right next door to the subject is about as good as it gets when it comes to bracketing location and might merit inclusion in a report even if it did sell more than a year ago.

An appraiser can account for time: Appraisers have a variety of analytical tools at their disposal and can adjust for time once the proper data analysis is performed. I frequently have to grid older sales since I specialize in the valuation of complicated properties. It is amazing how often a much older sale will line up with a sale that occurred just a few weeks ago once the proper adjustment is made. Doing this has allowed me to demonstrate with verifiable market data that a certain aspect of the subject really does not have a significant impact on value. This has prevented me from accidentally under-appraising a property—something the seller (and their agent) often appreciates!

It’s never good when an appraiser makes a wild guess about something. Data, even older data, can make all the difference in the world. So, if I, or another appraiser, reach out to you about an older sale, rest assured, we have a valid reason for doing so and your recollections might even help save a fellow agent’s deal!

Crestwood—Neighborhood Analysis of Single-Family Residential Homes (November 2019)

The Crestwood neighborhood is part of the Southwest portion of Portland and is one of the periphery neighborhoods. This neighborhood is largely residential with minor commercial and one city park (Dickinson). This neighborhood has a overlapping section with the adjacent Ashcreek, but that small section is omitted in the following analysis.

2019-11-30_21-10-51

Appraisers endeavor to take the measure of a neighborhood with a variety of tables, charts, and graphs. It helps them to frame the value opinion and see how the subject property relates to the neighborhood as a whole. Before we dive in, a…

Quick Note

The following information is based on detached single-family residential homes that were sold and/or listed on the open market as reported by RMLS—the primary MLS service for the City of Portland. Data was pulled from the year 2000 to the present date. The data export was checked, validated, and scrubbed of obvious errors using custom tools developed by the author. With that out of the way, let’s look at some neighborhood stats.

Neighborhood Statistics Overview

The following table summarizes important metrics for the neighborhood. Each column is independent of the others and the basement square foot column reflects only properties with a basement.

Approximately 3% of sales in the neighborhood were new constructions.

The following scatter plot shows all closed-sale detached single-family residences (with a red trendline):

DOS

The neighborhood suffered during the housing crisis, but has recovered with prices generally higher than they were before the crash. The following chart shows quarterly average and median sales prices over the last two years:

Percentile rank is a way of seeing price bands for the neighborhood. For instance, the 50th percentile, or median rank, shows that half of all sales since the year 2000 have been under $279,900. Prices are fairly clustered all the way up to the 90th percentile:

Percentile

The following table shows important marketing information for both the last two years and since the year 2000:

The “SP/OLP” label stands for “sales price/original list price” ratio. This is an important metric, as it shows what the particular property sold for relative to the original list price that was advertised. The “SP/LP” column tracks what the sales price was relative to the final published list price. This column, while not as important as the first one, still yields important insights as to the direction of negotiations. The “DOM” column tracks the days on market for all properties sold and listed and helps frame expected marketing time. Finally, the “CtL” label stands for “contract-to-list” ratio. It is the number of pending sales divided by the total number of listings. A low ratio means many properties are sitting on the open market waiting for offers. A high ratio indicates properties are being absorbed by the market quickly, commonly referred to as a “seller’s market.”

As of this post date, there are more properties under contract than waiting for an offer.

The following table more closely examines DOM as well as CDOM (cumulative days on market). CDOM is also an important metric as homes are often taken off the market and then subsequently relisted (typically at a lower price). The CDOM metric can give you a better idea of total expected marketing time. The table breaks out DOM & CDOM by price segment:

2019-12-01_0-36-08

Let’s wrap up the neighborhood statistics overview with the following table showing the sales terms in the market over the last two years:

2019-12-01_0-40-47

Conventional financing is predominant, with the majority of the remaining sales being cash buyers or buyers using FHA financing.

Let’s conclude our tour of Crestwood with a histogram analysis of the neighborhood:

Histogram Analysis

Age

Age

Most properties in the neighborhood are between 30-69 years of age.

Bathroom Count

Bath

A home with two full bathrooms is the most typical for the market.

Bedroom Count

Bedroom

The vast majority of homes are have either three of four bedrooms.

Garage Stall Count

Gar

Most homes in the neighborhood have a two-car garage.

Total Square Footage

Total SF

This metric includes above-grade living area and basement space for a combined figure. The median total square footage for the neighborhood is ~1,800 sq. ft.

Gross Living Area

GLA

Gross living area only consider non-basement living space. Often the market reacts more strongly to gross living area, usually applying a discount to basement space. Median gross living area is approximately 1,400 sq. ft.

Level Count

# of Levels

The majority of properties are two levels in this neighborhood, although a single-level is very common.

Lot Size

Acres

The median lot size for home in the neighborhood is ~9,150 sq. ft.

Sales Price

Sales Price

This histogram includes sales prices over a 20-year period. The median sales price over the last 20 years is: ~$280,000; and the median sales price over the last 2 years is: $437,000.

The highest sales price obtained in the neighborhood (on the open market) was $1,095,000 on 10/16/2018. The home was a new construction at the time of the sale and has 4,050 total square feet.

# of Sales

# of Sales

The number of sales in the neighborhood have been trending lower this year as compared to the previous two.

So, there you have it, a market overview for the Crestwood neighborhood!

Appraisal Reports

If you are a homeowner and are looking to sell your home, you would greatly benefit from a prelisting appraisal. Our firm will bring high-level analytics to your report and give you a sound understanding of the current market.

If you are an agent and need detailed neighborhood analysis, or analysis of specific areas or specific segments of the market, please contact us and we can generate a custom report to help you frame a listing price for your client!

Far Southwest—Neighborhood Analysis of Single-Family Residential Homes (August 2019)

The Far Southwest neighborhood is just that—far southwest! It represents one of the periphery neighborhoods of the City of Portland. The neighborhood is largely dominated by the Portland Community College Sylvania Campus. The campus was opened in 1968 and has approximately 28,000 students enrolled each year.

Aerial Small

Quick Note

Neighborhood Statistics Overview

The following table summarizes important metrics for the neighborhood. Each column is independent of the others and the basement square foot column reflects only properties with a basement.

Approximately 6% of sales in the neighborhood were new constructions.

The following scatter plot shows all closed-sale detached single-family residences (with a red trendline):

The neighborhood suffered during the housing crisis, but has recovered with prices generally higher than they were before the crash. The red trendline shows prices have leveled and have even dipped a bit. This is further borne out by a review of average and median sales prices over the last two years:

Percentile rank is a way of seeing price bands for the neighborhood. For instance, the 50th percentile, or median rank, shows that half of all sales since the year 2000 have been under $340,350. Prices are fairly clustered all the way up to the 90th percentile:

Percentile

The following table shows important marketing information for both the last two years and since the year 2000:

As of this post date, there are more properties waiting for offers than are under contract.

Let’s wrap up the neighborhood statistics overview with the following table showing the sales terms in the market over the last two years:

Sale Terms

While conventional financing is predominant, there is a substantial cash market.

Let’s conclude our tour of South Portland with a histogram analysis of the neighborhood:

Histogram Analysis

Age

Age

Most properties in the neighborhood are between 10-44 years of age.

Bathroom Count

Bath

A home with two full bathrooms and one half bathroom (powder room) is the most typical for the market.

Bedroom Count

Bedroom

The vast majority of homes are have either three of four bedrooms.

Garage Stall Count

Garage

Most homes in the neighborhood have a two-car garage.

Total Square Footage

TSF

This metric includes above-grade living area and basement space for a combined figure. The median total square footage for the neighborhood is ~2,400 sq. ft.

Gross Living Area

GLA

Level Count

Levels

The majority of properties are two levels in this neighborhood.

Lot Size

Lot

The median lot size for home in the neighborhood is ~10,000 sq. ft.

Sales Price

Sales Price

This histogram includes sales prices over a 20-year period. The median sales price over the last 20 years is: ~$340,000; and the median sales price over the last 2 years is: $437,000.

The highest sales price obtained in the neighborhood (on the open market) was $1,095,000 on 10/16/2018. The home was a new construction at the time of the sale and has 4,050 total square feet.

# of Sales

# of Sales

The number of sales in the neighborhood have been trending higher this year as compared to the previous one.

So, there you have it, a market overview for the Far Southwest neighborhood!

Appraisal Reports

Lake Oswego—Neighborhood Analysis of Waterfront Single-Family Residential Homes (July 2019)

Oswego Lake is a scenic and picturesque former channel of the Tualatin River. It is a natural feature, but has been enlarged due to a dam to its present size of ~395 acres. Lake Oswego-Small Many homes rim the lake as well as the smaller bays connected to it. Some of the properties surrounding Oswego Lake are among the more expensive in the Greater Portland Area.

Quick Note

The following information is based on detached single-family residential homes that were sold and/or listed on the open market as reported by RMLS—the primary MLS service for the City of Lake Oswego. Data was pulled from the year 2000 to the July 2019. The data export was checked, validated, and scrubbed of obvious errors using custom tools developed by the author. With that out of the way, let’s look at some neighborhood stats.

Neighborhood Statistics Overview

The following table summarizes important metrics for the neighborhood. Each column is independent of the others and the basement square foot column reflects only properties with a basement.

There has been relatively little new construction along the lake with ~3.8% of all sales/listings over the past 20 years having been new homes.

The following scatter plot shows all closed-sale detached single-family residences (with a red trendline):

Percentile rank is a way of seeing price bands for the neighborhood. For instance, the 50th percentile, or median rank, shows that half of all sales since the year 2000 have been under $1.29 million. Prices are fairly clustered up to the 70th percentile where the upper range begins to balloon:

Percentile

The following table shows important marketing information for both the last two years and since the year 2000:

As of this post date, there are more properties waiting for offers than are under contract.

Let’s wrap up the neighborhood statistics overview with the following table showing the sales terms in the market over the last two years:

2019-08-03_17-58-54

Unsurprisingly, there is a substantial cash market among waterfront homes.

Let’s conclude our tour of waterfront properties in Lake Oswego with a histogram analysis of the market:

Histogram Analysis

Age

Age

The median age for the waterfront market is 55 years; however, a substantial number of properties are 35 years old or newer.

Bathroom Count

Bath

Two to four bathroom homes are typical for the market.

Bedroom Count

The vast majority of homes have between three to five bedrooms.

Garage Stall Count

Gar

Most properties have either a two or three-car garage.

Total Square Footage

Total SF

This metric includes above-grade living area and basement space for a combined figure. The median total square footage around the lake is ~3,600 sq. ft.

Gross Living Area

GLA

Level Count

Levels

The majority of properties are two to three levels.

Lot Size

Lot

There are some acreage properties along the lake, however, the median lot size is 0.21 acres (~9,150 sq. ft.).

# of Sales

# Per Yr

The number of sales along the lake have been trending higher this year as compared to the previous two.

Sales Price

Sales Price

This histogram includes sales prices over a 20-year period. The median sales price over the last 20 years is: $1,290,000; and the median sales price over the last two years is: $1,765,000.

The highest sales price obtained among waterfront properties in Lake Oswego (on the open market) is $6,950,000 on 6/20/2000. The home is nearly 14,000 square feet; sits on 1.65 acres; has 7 bedrooms; 9 full bathrooms and 4 half bathrooms (powder rooms) and custom European-style architecture.

The highest listing was for $19,500,000. This was for the property on Jantzen Island.

Jantzen-sm

It is the only private island on Oswego Lake. The home sits on 5 acres, is 13,500 square feet, and is reachable by a gated private bridge. According to an article in the The Oregonian, the property was purchased for $2.2 million in cash back in 1987. $5 million was spent improving the property and it was listed on 9/08/2008 for nearly $20 million. It stayed on the market for that price for more than a year and a half before the listing was cancelled. It was relisted again about a half year later at a reduced price of $15 million, but it stayed on the market for over three years without selling. Had, it sold for even $10 million, it would have set a record for the Lake Oswego market.

So, there you have it, a market overview of waterfront properties on Oswego Lake!

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