Tag: deep-dive

Appraisal Deep Dive: Portland’s Starter Home Market (Q3 2025) — What $469k Really Buys

Q3 2025 RMLS data shows the Portland Region’s detached starter homes (5th–35th percentile) average $469k and are dominated by mid-century builds on larger lots—with new construction offering modern features but far less space. Appraisal and buyer insights below.

Yellow 20th-century bungalow in the Portland area typical of starter homes.
A classic early-20th-century bungalow in the Portland area—the type of modest, well-loved home that dominates today’s starter-tier inventory.
Via Canva Pro

Earlier this month, Redfin highlighted Portland as one of the stronger markets nationally for starter-home activity, defining starter homes as sales in the 5th–35th percentile by price. We adopt the same percentile convention here for consistency.

Redfin’s reported median of approximately $420,000 for Portland starter homes includes all property types (condos, townhomes, and single-family). Focusing solely on detached single-family residences—a popular choice across the region, including for many urban buyers seeking yard space and privacy over attached ownership—Q3 2025 RMLS data for the 5th–35th percentile tier shows an average close price of $469,000.

Few would be surprised that new construction plays a limited role in true entry-level pricing—after all, building costs remain elevated. Yet the data shows builders are still delivering a modest but meaningful number of brand-new homes into this tier (about 4.2% of starter sales, compared to 9.1% across the full market). This demonstrates that, through efficient design, infill strategies, and lot divisions, new product can compete in the lower price bands.

Local buyers want to know: how much home does a starter budget actually buy? This analysis examines square footage, lot size, build era, and location differences across counties—revealing a market dominated by mid-century homes with a modest but noteworthy presence of brand-new construction.

How Much Home a Starter Budget Buys by County

The table below summarizes Q3 2025 closed sales for detached single-family homes in the 5th–35th percentile across the core Portland Region counties (Hood River row excluded due to only two qualifying sales).

CountyAvg Close PriceAvg Yr BuiltAvg Total SFAvg Acres# of Sales
Clackamas$474,73819651,5530.279256
Columbia$457,10819831,7740.61758
Mult.$459,90919511,5910.163666
Wash.$488,95419761,4950.154323
Yamhill$453,52219811,5320.197113
Grand Total$468,59519631,5650.2031,418
Data: RMLS | Portland Appraisal Blog

Multnomah County drives nearly half the volume, delivering the oldest average build year (1951). Washington County posts the highest average prices and hosts the most new construction. Outer counties like Columbia and Yamhill provide newer homes on larger parcels, though with far fewer transactions.

Surprisingly, across the region, starter homes are very similar in average price. The standard numerical metrics which are easy to see in RMLS, (e.g. total square footage, lot size, year built, etc.), are not the primary determinant of value. As we shall see, what matters more is quality, condition, and overall site & functional utility. Buyers in the starter home tier make conscious trade-offs between older homes with larger lots and newer homes with little to no functional backyard.

Of all the standard numeric metrics, total square footage shows one of the stronger relationships with price in the starter tier—though the influence is still modest.

Scatter plot of Close Price versus Total Square Footage. The graph shows a slight tilt, indicate a noticeable though modest correlation between the two variables.
Close Price vs. Total Square Feet for Starter-Tier Detached Homes ≤ 0.5 Acres (Q3 2025 RMLS data – 1,380 observations).
Note: The Y-axis begins at $350,000 to allow for better viewing of the dataset.

Larger homes tend to sell for higher prices, though with considerable variation—most sales fall between 1,200 and 2,000 square feet. The very slight tilt to the right indicates a weak but present relationship between starter home size and close price. The coefficient of determination (R2) for this graph is 0.1253, meaning total square footage explains only about 12.5% of the variation in price. Since total square footage is often one of the primary determinants of value in the broader housing market, this is a big clue that the size of the home isn’t the primary factor for buyers looking to enter the starter home market.

The Historical Supply Pattern: Lot Size and Build Era

Portland’s entry-level inventory bears the clear imprint of the post-war building boom.

Scatter plot of Lot Size versus Year Build. The graph shows lot sizes rising up to the 1960s, where it begins steadily declining into the modern era, indicating the high cost of land and increasing lot splits.
Lot Size vs. Year Built for Starter-Tier Detached Homes ≤ 0.5 Acres (Q3 2025 RMLS data – 1,380 observations).

A polynomial trendline highlights the peak lot sizes during the 1940s–1950s post-war era, followed by a steady decline that began in the early 1960s and accelerated in recent decades. The pattern reflects an era when generous lots were standard, followed by shrinking parcels as land values rose, urban growth boundaries took effect, and lot divisions became common. Buyers choosing older starter homes today typically gain significantly more outdoor space than those selecting new construction.

New Construction: A Modest but Noteworthy Presence

While new homes account for only 4.2% of starter-tier sales, their ability to reach this price range in a high-cost building environment remains impressive.

SegmentAvg Close PriceAvg Total SFAvg Acres# of Sales
Existing$467,9961,5690.2071,359
New$482,3871,4790.10759
Grand Total$468,5951,5650.2031,418
Data: RMLS | Portland Appraisal Blog

New homes sell for only about 3% more than existing ones despite brand-new condition, but deliver less interior space and roughly half the land.

Buying a new home in the starter tier is akin to buying a new car on a tight budget: you gain the benefits of fresh systems, modern design, and warranty peace of mind, but often in a smaller package with fewer amenities compared to a well-maintained used model from a higher trim line.

CountyAvg Close PriceAvg Yr BuiltAvg Total SFAvg Acres# of Sales
Clackamas$489,80320251,6060.1548
Columbia$420,00020251,4580.1302
Mult.$450,82020251,0980.08818
Wash.$509,36620251,6990.07925
Yamhill$475,57820251,5400.2166
Grand Total$482,38720251,4790.10759
Data: RMLS | Portland Appraisal Blog

For buyers, this creates a clear choice: a brand-new home with modern efficiency but typically on a very small lot—often with minimal or no usable yard space, especially in Multnomah and Washington counties where most new construction occurs—or an existing mid-century home that generally offers significantly more land and outdoor space, albeit with the potential challenges of older systems and layouts. This trade-off is particularly relevant for growing families or those prioritizing play areas, gardens, or privacy.

Appraisal Insights and Challenges

One of the most revealing patterns appears when plotting close price against build year.

Scatter plot of Close Price versus Year Built. The graph shows virtually no correlation between the two variables, indicating start homes are driven by factors other than the year built.
Close Price vs. Year Built for Starter-Tier Detached Homes ≤ 0.5 Acres (Q3 2025 RMLS data – 1,380 observations).
Note: The Y-axis begins at $350,000 to allow for better viewing of the dataset.

The remarkably consistent price band across decades illustrates that chronological age has little direct influence on value in the Portland Region’s entry-level segment.

In this tier, actual age correlates weakly with sales price because buyers weigh multiple factors:

  • Functional obsolescence in mid-century stock (outdated floor plans, smaller kitchens/bathrooms, less efficient systems) is often mitigated by updates and strong location appeal.
  • Effective age and condition drive far more of the value than the original build date.
  • Lot size and site utility frequently favor older homes; the smaller parcels common in new construction require substantial negative adjustments that offset much of the credit for new condition.
  • Comparable selection remains within county, where abundant mid-century comps in Multnomah, Clackamas, and Washington provide solid support — but thinner volume in outer counties demands careful bracketing.
  • When appraising a new-construction home in this tier—where truly similar recent sales are still limited and down approximately 25% year-over-year in Q3 2025 (with Multnomah County off 48%)—appraisers typically rely on other relatively recent builds (often within 10 years) and apply appropriate adjustments for differences in site characteristics, size, and location.

The same pattern holds when looking at the data from a price-per-square-foot lens, but with a slight twist:

Scatter plot of PPSF (TSF) versus Year Built. The graph shows virtually no correlation between the two variables, but with a twist. There is a clear compression of PPSF for homes starting in the 1950s up to the modern era. This indicates a homogenization of the market following WWII. The only exception are completely brand new homes, where the PPSF widens again. This indicates new homes form a distinct submarket where location and site utility play a large role.
PPSF (TSF) vs. Year Built for Starter-Tier Detached Homes ≤ 0.5 Acres (Q3 2025 RMLS data – 1,380 observations).

From the 1950s onward, PPSF becomes progressively more compressed—older homes exhibit wide spreads driven by dramatic differences in condition, updates, historic appeal, and location premiums, while mid-era and late-20th-century stock tightens as market expectations and remodeling homogenize perceived value.

Brand-new 2025 homes, however, break this decades-long compression pattern. Their PPSF spreads out again, reflecting greater influence from location-driven land costs and builder-specific choices (e.g., finishes, lot configuration) rather than the uniformity imposed by age and updates on existing stock. In effect, today’s entry-level new construction reintroduces variation that mirrors pre-1950 homes—but for different reasons: land value dominance and strategic specs to hit price points, rather than condition swings. This underscores why new-construction starter homes often form their own submarket. Appraisers valuing them face a narrower but distinct comp pool.

These dynamics show that the starter home market is not uniform and the appraiser needs to carefully delineate the competitive market segment to avoid having to make large adjustments between disparate properties. One technique appraisers often employ is to use similar, but older sales when recent data is thin and make an appropriate market conditions adjustment.

Conclusion

The Portland Region’s Q3 2025 starter-home segment continues to rely predominantly on mid-century inventory on lots larger than anything new we’re building today—a pattern unlikely to shift dramatically in 2026 absent major changes in new supply. (Although the City of Portland is certainly trying to incentivize new projects with SDC waivers.) The modest foothold of new construction shows builders adapting through infill and efficient design, but at the clear cost of site size and outdoor space.

For buyers, the choice boils down to priorities: modern and low-maintenance on a small lot, or more space and yard with the realities of an older home. For appraisers, lenders, and agents, recognizing how effective age, site utility, location, and condition outweigh chronological age remains key to accurate valuation in this segment.

Sources & Further Reading

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Thanks for reading—I hope you found a useful insight or an unexpected nugget along the way. If you enjoyed the post, please consider subscribing for future updates.

CODA

Are you an agent in Portland who wonders why appraisers always do “x”?

A homeowner with questions about appraiser methodology?

If so, feel free to reach out—I enjoy connecting with market participants across Portland and the surrounding counties, and am always happy to help where I can.

And if you’re in need of appraisal services in Portland or anywhere in the Portland Region, we’d be glad to assist.

Appraisal Deep Dive: The Measure 50 Compression Trap and the 2024 MAV Reset Clarification

How pre-1997 Portland metro homes—especially those with veteran or active-duty exemptions—are facing sudden property tax jumps on sale or disqualification.

Exterior view of a well-maintained pre-1940 Colonial-style home in Portland, featuring a symmetrical facade, dormer windows, columns, red front door with wreath, and landscaped yard with steps leading to the entrance on an overcast day.
A classic pre-1940 home in the Portland Region – the type of property often benefiting from deep Measure 50 tax compression.
Photo: Portland Appraisal Blog

Table of Contents

  1. Introduction
  2. Understanding Measure 50: The Foundation of Tax Compression
  3. The Data: Tax Compression in the Portland Metro Market
  4. The Veteran and Active-Duty Exemptions
  5. The 2024 Rule Change
  6. Real-World Implications
  7. What Appraisers Should Do
  8. Closing Thoughts

Introduction

Imagine closing on a well-maintained pre-1940 Craftsman in an established close-in Portland neighborhood. The sale price felt fair, the taxes shown on the listing and county statement appeared reasonable, and the transaction cleared due diligence without issue. Then the next year’s tax bill arrives—$2,000 to $6,000 higher than anticipated. The increase isn’t due to a sudden spike in market value, but to a change in how Oregon counties now calculate Maximum Assessed Value (MAV) when certain partial property tax exemptions end.

This situation is no longer hypothetical. Oregon REALTORS first highlighted the risk in a December 12th, 2025 internal “Forms Tip of the Week” communication, alerting members that the loss of veteran or active-duty partial exemptions—commonly triggered when a qualifying veteran or surviving spouse sells the home or passes away without a qualifying successor—can lead to significant tax increases under updated guidance from the Oregon Department of Revenue.

While the veteran and active-duty exemptions (ORS 307.250 and 307.286) have drawn attention to the issue, the underlying driver is broader: the substantial tax compression created by Measure 50 for properties built or long-held before 1997.

Historically, when these modest partial exemptions ended, counties simply removed the discount and allowed the low underlying MAV to continue. The 2024 guidance change now enforces a constitutional requirement to reset MAV closer to current market reality upon disqualification.

The outcome: buyers may face permanently higher carrying costs they did not expect, sellers (including veterans and surviving spouses) can find their properties harder to market at full value, and appraisers encounter a marketability factor worthy of note when present.

This Deep Dive reviews the mechanics, illustrates the pattern with Portland Region sales data, and provides practical steps for identifying and addressing the issue in appraisal assignments.

Understanding Measure 50: The Foundation of Tax Compression

To grasp why the loss of a veteran or active-duty exemption can now lead to significant tax increases, we must first understand Oregon’s Measure 50 property tax system, approved by voters in 1997.

Measure 50 replaced the previous tax structure with two key values for each property:

  • Real Market Value (RMV): The county assessor’s estimate of what the property would sell for on the open market. This value can rise or fall annually with market conditions.
  • Maximum Assessed Value (MAV): A separate taxable value created by Measure 50. For existing properties in 1997, MAV was initially set at approximately 90% of the 1995–1997 RMV. Thereafter, MAV is generally limited to a 3% annual increase, with exceptions for major additions, improvements, or certain other events.

The Assessed Value (AV) is the lesser of RMV or MAV. Taxes are calculated by multiplying the AV by the local tax rate.

In high-appreciation markets like the Portland metro area, this 3% cap creates substantial tax compression over time. A home purchased or built before 1997 can have an MAV far below its current RMV after decades of strong market growth.

Scatter plot of annual property taxes versus year built for Q3 2025 single-family detached residential sales in the Portland Region, excluding new construction and data errors. Pre-1960 homes cluster tightly below $10,000–$12,000 in taxes; post-1990 homes show higher and wider spread, with a slight positive red trend line. Data source: RMLS via PortlandAppraisalBlog.com.
Annual property taxes vs. Year Built, excluding new construction and obvious data errors.
Note: Scatter plots are limited to properties with annual taxes of $21,000 or less to highlight the primary distribution and improve readability.

The scatter illustrates the effect clearly: pre-1960 homes are overwhelmingly clustered below $10,000–$12,000 in annual taxes, with the densest grouping under $8,000–$9,000. Properties on the far left (pre-1920 builds) often show the deepest compression, having benefited from the longest period of capped MAV growth. Post-1990 homes, by contrast, display significantly higher tax burdens, reflecting less historical compression.

When a triggering event occurs—such as disqualification from a partial exemption—the MAV can be recalculated using the Changed Property Ratio (CPR), typically around 0.54 for residential properties in Portland Region counties for the 2025–2026 tax year, applied to current RMV.

In the next section, we examine local sales data that quantifies the scale of this compression and illustrates why the reset can matter in real transactions.

The Data: Tax Compression in the Portland Metro Market

Q3 2025 sales data from detached single-family residences (SFR) in the Portland Region (Clackamas, Columbia, Hood River, Multnomah, Washington, and Yamhill counties) illustrates the scale of Measure 50 compression and why a MAV reset can create material differences in carrying costs.

The table below summarizes average sale prices and annual property taxes by approximate decade built. Flagged new construction is excluded due to frequently incomplete or preliminary tax assessments at the time of sale, which can distort the pattern of long-term compression. This brings the Q3 2025 dataset to 4,256 sales total.

Decade BucketAvg Sale PriceAvg Annual TaxesAvg Tax per $1k Sale Price
Pre-1940$671,295$6,396$9.33
1940–1959$607,466$5,766$9.53
1960–1979$640,000$5,783$9.16
1980–1999$714,535$7,367$10.31
2000–2019$761,061$7,685$10.10
2020+ (non-new construction)$924,420$8,016$9.12
Grand Total (excluding new construction)$688,838$6,665$9.68
Data: RMLS | Portland Appraisal Blog

Several patterns stand out:

  • Absolute tax burden increases with newer construction: pre-1980 homes average $5,766–$6,396 in annual taxes, while 2000–2019 properties average $7,685 and 2020+ non-new construction reaches $8,016.
  • Effective burden consistency: The Tax per $1k column remains remarkably stable at ~$9–$10 across all eras. This indicates the market prices properties assuming a similar overall tax load, regardless of age.
  • Pre-1940 premium: Outside recent construction, pre-1940 homes command the highest average sale prices ($671,295) despite paying among the lowest absolute taxes.
Street sign for NE Knott St in Historic Irvington, Portland, featuring the neighborhood's decorative column logo on a green and black background.
Street sign in Portland’s Historic Irvington neighborhood—one of the areas with many high-value pre-1940 homes exhibiting significant Measure 50 compression.
Photo: Portland Appraisal Blog (CC BY-SA 4.0)
Scatter plot showing sale price versus annual property taxes for Q3 2025 single-family detached residential sales in the Portland Region. Points form a strong upward trend from approximately $500,000 sale price at $5,000 taxes to over $4,000,000 at $20,000 taxes, with a red trend line indicating positive correlation. Data source: RMLS via PortlandAppraisalBlog.com.
Sale price vs. annual taxes, excluding new construction and obvious data errors.
Note: Scatter plots are limited to properties with annual taxes of $21,000 or less to highlight the primary distribution and improve readability.

This scatter shows a strong positive correlation, confirming the market efficiently incorporates expected tax burden into pricing.

Scatter plot of annual property taxes versus total square footage for Q3 2025 single-family detached residential sales in the Portland Region. Points cluster along an upward red trend line, with many low-tax outliers below the line. Data source: RMLS via PortlandAppraisalBlog.com.
Annual taxes vs. total square footage, excluding new construction and obvious data errors.
Note: Scatter plots are limited to properties with annual taxes of $21,000 or less to highlight the primary distribution and improve readability.

Here, numerous low-tax outliers are visible below the trend line—properties paying substantially less than size and location would otherwise suggest, consistent with Measure 50 compression.

Taken together, the data reveals a market that rewards older stock with lower absolute taxes without discounting sale prices accordingly. When a MAV reset occurs, absolute taxes move toward levels seen in newer comparable properties, creating the potential for noticeable increases in annual carrying costs.

In the following sections, we explore the specific veteran and active-duty exemptions and the 2024 guidance change that can trigger this alignment.

The Veteran and Active-Duty Exemptions

The exemptions at the center of the current concern are partial property tax reductions for certain military veterans, surviving spouses, and active-duty service members. With approximately 267,000 veterans living in Oregon (and over 114,000 in the Portland metro region), even a fraction of qualifying owners selling or changing status can affect a meaningful number of transactions.

The disabled veteran or surviving spouse exemption (ORS 307.250) provides a reduction to assessed value for homeowners with a service-connected disability rating of 40% or higher (or unremarried surviving spouses). For the 2025–2026 tax year, the reduction is up to $31,565 (service-connected) or $26,303 (standard), worth roughly $400–$700 in annual tax savings in Portland metro areas depending on local rates.

A separate active-duty exemption (ORS 307.286) offers a larger reduction (up to $108,366 for 2025–2026) for Oregon-domiciled service members on qualifying active duty outside the state.

Both are partial exemptions applied to the assessed value of the owner’s primary residence and tied to personal status. Eligibility generally requires a one-time application and VA certification (re-filing needed only if moving to a new property or certified by a private physician rather than the VA).

While the direct savings from these exemptions is modest ($400–$700/year for most veteran claims), the 2024 DOR guidance change treats their disqualification as triggering a full MAV reset—potentially closing decades of Measure 50 compression and leading to significantly higher taxes.

Active-duty cases (e.g., exemption ending upon return home) are less common and typically involve properties with less historical compression.

In the next section, we detail the 2024 guidance change and how it activates the reset.

The 2024 Rule Change

For decades, when a veteran or active-duty partial exemption ended, county assessors typically removed the reduction but preserved the underlying compressed MAV, allowing it to continue growing at the standard 3% rate.

This practice changed with updated guidance from the Oregon Department of Revenue, effective for disqualifications on or after January 1, 2024.

The DOR clarified that disqualification from a partial exemption triggers the constitutional requirement to recalculate MAV using the Changed Property Ratio (CPR)—the county-wide ratio of average MAV to average RMV for the property class. The new MAV becomes current RMV multiplied by the CPR (typically around 0.54 for residential properties in Portland Region counties for the 2025–2026 tax year).

This administrative enforcement of the existing constitutional language means the modest exemption savings ($400–$700/year) is no longer the only consequence. The reset can close much of the Measure 50 compression gap.

In the Portland Region data, pre-1980 homes average $5,766–$6,396 in taxes. A reset aligns absolute taxes closer to 2000+ levels ($7,685–$8,016 average), producing increases commonly in the $1,500–$4,000 annual range on typical sales, with $4,000+ possible in deeper-compression or higher-rate scenarios.

The change is statewide, though impacts vary by local appreciation and rates. Some counties have noted the potential for “significant increase” on loss of exemption.

In the next section, we examine the real-world implications for transactions and what appraisers should watch for.

Real-World Implications

The 2024 guidance change does not turn every pre-1997 home sale into a crisis, but it introduces friction that can affect negotiations, marketability, and reconciliation of comparables.

Typical tax increases fall in the $1,500–$4,000 annual range for properties in the Portland Region dataset ($600,000–$800,000 sale prices with pre-1980 build years). This translates to $125–$333 extra per month.

The Silent Car Payment

In late 2025 terms:

  • Average used-car payment: ~$532/month
  • Average new-car lease: ~$596/month
  • Average new-car purchase payment: ~$748/month

A $2,000–$4,000 annual increase ($167–$333/month) is less than a typical car payment but still noticeable—equivalent to a permanent, non-negotiable “utility bundle” that never goes away. For buyers already stretched in a higher-interest-rate environment, it can shift affordability and prompt renegotiation.

Outlier cases with deeper compression (often “sweet” pre-1940 homes in high-appreciation locations) can see $4,000–$8,000+ increases ($333–$667/month)—territory overlapping average used-car or new-lease payments. These are the transactions Oregon REALTORS described as producing “increases in the thousands,” sometimes requiring substantial seller concessions or risking fallout during due diligence.

The primary impact is often on marketability rather than outright deal death:

  • Savvy buyers (or their agents/lenders) anticipate the higher future taxes and adjust offers downward.
  • Sellers—particularly veterans or surviving spouses downsizing—may receive lower net proceeds (capitalizing a $3,000 increase at 6% equates to ~$50,000 less effective value).
  • Listings can linger if the low current taxes mask the post-closing reality.

For appraisers, this creates a new lens for outliers:

  • A comparable with an unexplained lower price, large concession, or extended days on market may reflect buyer reaction to a pending MAV reset.
  • Low-tax outliers in the grid (visible in the Taxes vs. Total SF scatter) could indicate compressed MAV or an active exemption—worth verifying via county records when material.

The change is statewide, but effects are most pronounced in areas with strong historical appreciation, like the Portland Region.

In the next section, we outline practical steps appraisers can take to identify and address this factor in reports.

What Appraisers Should Do

The 2024 guidance change introduces a marketability factor that appraisers in Oregon should consider when the subject or comparables involve pre-1997 properties, particularly those with potential veteran or active-duty exemptions.

Practical Checklist

  1. Verify Exemption Status Review county tax records and the preliminary title report (if available) for indications of an active veteran, surviving spouse, or active-duty partial exemption. Many counties list it on the property tax statement or online portal.
  2. Estimate Post-Transfer Tax Liability If an exemption is present and likely to disqualify on transfer (e.g., sale to non-qualifying buyer), note the potential increase. Use county assessor tools or CPR data to project the reset MAV (current RMV × CPR) and resulting taxes. Typical jumps in the Portland Region fall in the $1,500–$4,000 annual range, with higher amounts possible in deep-compression cases. Note that tax rates vary by code area.
  3. Comment on Marketability When Material Include commentary if the differential is significant: “The subject property currently benefits from a veteran partial exemption expected to end upon transfer, potentially increasing annual taxes by an estimated $X. This may affect buyer affordability and market reaction.”
  4. Reconcile Outliers with This Lens Low-tax outliers in the sales grid (visible in Taxes vs. Total SF analysis) may reflect compressed MAV or an active exemption—a “decaying asset” under the new guidance. Check effective tax rate (annual taxes ÷ sale price): ~0.6–0.8% may indicate compression; consider post-reset alignment (~1.1–1.3%) in reconciliation. Using a compressed comparable without adjustment risks overvaluing the subject’s marketability, as savvy buyers increasingly factor in the reset.
  5. Use Dual Scenarios if Appropriate For subjects with active exemptions, provide current and projected post-reset tax estimates in the addendum or comments to inform the intended user.

Resources:

  • County assessor websites (tax statements often flag exemptions)
  • DOR Veteran Exemptions page
  • MAV Manual for general mechanics

As resets propagate into closed sales (expected more visibly in 2026 onward), this factor may explain otherwise puzzling comparables. Early identification helps ensure accurate valuation and informed clients.

In the closing section, we look at the broader outlook.

Closing Thoughts

The 2024 DOR guidance change is an administrative enforcement of a long-standing constitutional provision, but its impact is only now becoming visible as disqualifications occur and 2025–2026 tax statements arrive. Larger effects are expected in the 2026–2027 cycle as more veteran-owned properties sell or change status.

The 2025 Oregon Legislative Session saw bills (e.g., HB 2361/SB 387 aiming to lower the disability threshold, HB 3287 to increase exemption amounts) intended to expand veteran benefits. While these efforts highlight recognition of the issue, none addressed the MAV reset trigger itself. The constitutional requirement remains unless amended or re-interpreted.

For appraisers working in the Portland Region and similar appreciation-driven markets, this issue adds one more layer to marketability analysis. Low-tax outliers in older properties represent a benefit that can evaporate on transfer—reliable today, but potentially “decaying” tomorrow.

Awareness helps everyone involved: appraisers reconcile comparables more accurately, agents counsel clients proactively, and buyers/sellers avoid surprises.

If you encounter real-world examples (anonymized comps with concessions due to reset concerns, or listings noting the risk), please share them for future updates. Documenting patterns strengthens our collective understanding.

Thank you for reading this Appraisal Deep Dive. Stay informed and precise in your work.

Quick Reference Cheat Sheet

Reset FormulaReal Market Value (RMV) × Changed Property Ratio (CPR)
Typical CPR (2025–2026, Portland Region residential)~0.54 (updated annually each October)
Reset TriggerDisqualification from veteran/active-duty exemption
Typical Annual Increase$1,500–$4,000 ($125–$333/month)
Outlier Increase$4,000–$8,000+ ($333–$667+/month)
Data: RMLS | Portland Appraisal Blog

Sources & Further Reading

Decorative text divider.

Thanks for reading—I hope you found a useful insight or an unexpected nugget along the way. If you enjoyed the post, please consider subscribing for future updates.

CODA

Are you an agent in Portland who wonders why appraisers always do “x”?

A homeowner with questions about appraiser methodology?

If so, feel free to reach out—I enjoy connecting with market participants across Portland and the surrounding counties, and am always happy to help where I can.

And if you’re in need of appraisal services in Portland or anywhere in the Portland Region, we’d be glad to assist.

Portland Real Estate Appraisal Brief – Friday, December 19, 2025: 1803 Fund Unveils Adaptive Reuse Plans for Portland’s Historic Grain Silos

The 1803 Fund reveals plans to preserve and adaptively reuse Portland’s historic grain silos into a public waterfront cultural hub while adding mixed-use development in lower Albina.

Iconic concrete grain silos along the Willamette River in North Portland, viewed from the east bank with industrial infrastructure and railroad tracks visible – December 2025.
Portland’s iconic grain silos along the Willamette River, as seen today from the east bank. Built in 1914 and long a symbol of the city’s industrial past, these structures are set for creative adaptive reuse while preserving their monumental presence.
Photo: Portland Appraisal Blog (CC BY-SA 4.0)

The 1803 Fund, backed by a generous $400 million pledge from Phil and Penny Knight and launched in 2023, has unveiled detailed plans for the adaptive reuse of Portland’s historic grain silos on the Willamette River’s east bank.

Located immediately east of the Moda Center in the Rose Quarter, the former Louis Dreyfus grain terminal forms the centerpiece of the three-acre Albina Riverside site. Renderings released December 2, 2025, show the iconic concrete silos fully retained and integrated into a new public waterfront cultural hub featuring galleries, event spaces, mass-timber pavilions, basketball courts, and terraced steps to the river.

Adjacent parcels along North Russell Street, known as The Low End, will introduce mixed-use development including affordable housing and commercial spaces, emphasizing pathways to community ownership.

Satellite map of the 1803 Fund project area in North Portland between Fremont and Steel Bridges, labeling Albina Riverside grain silos, The Low End mixed-use district, McCormick Pier condominiums across the Willamette River, and Moda Center/Rose Quarter – December 2025.
The project area spans the industrial waterfront between the Fremont and Steel Bridges. Satellite view highlights the silos at Albina Riverside, The Low End mixed-use district along Russell Street, and—for contrast—the vibrant McCormick Pier condominiums across the river.
(Custom Bing Map: December 2025)

Project Details and Restorative Goals

Architects AD—WO, MALL, and Wayside Studio have designed the silo conversion to preserve the structures’ industrial character while creating usable public spaces. Clusters of silos will be consolidated to form larger interior volumes for exhibitions and events, wrapped by outdoor terraces and overlooks.

The broader initiative addresses historic displacement in the lower Albina district through place-based economic strategies. Given the sites’ current industrial/mixed-use and absence of existing residents, beneficiary targeting employs legally compliant models—such as community-owned REIT shares prioritized for residents of the historic Albina area and descendants of displaced families—similar to Portland’s established N/NE Housing Preference Policy.

Market History & Appraisal Perspective

The valuation history of the former Louis Dreyfus grain terminal (now Albina Riverside) at 900 N. Thunderbird Way is a stark illustration of how industrial obsolescence can collide with urban redevelopment potential.

The Silo Valuation Saga

In 2013, the Louis Dreyfus Co. reportedly invested $21.5 million to modernize the facility for state-of-the-art grain loading. Yet, only six years later in 2019, the site sold for a mere $164,000—a figure that was lower than the median price of a two-bedroom home in Gresham at the time.

From an appraisal standpoint, this plummet was a textbook case of functional obsolescence. The terminal’s utility was crippled when Union Pacific ceased rail service to the facility, concluding that the tracks on the property no longer met modern engineering and safety guidelines. Without functioning rail, a grain elevator’s ability to move commodities evaporates, leaving behind a massive, specialized liability.

However, the site’s location at the east end of the Steel Bridge provided a unique baseline of value. Even when its industrial utility stalled, the property remained fully leased, generating approximately $325,000 in annual revenue. A significant portion of this income came from Lamar Advertising, which operates the city’s largest billboard on the silos’ exterior. This signage is a local icon, once famously proclaiming “Amazon.com wouldn’t fit here” before shifting to its current Portland Timbers branding.

The former Louis Dreyfus grain terminal on the east bank of the Willamette River in Portland, Oregon, viewed from 99W & N Interstate Ave. This photograph, taken in December 2025, shows the full silo complex with headhouse and conveyor structures, framed by foreground vegetation, prior to planned adaptive reuse by the 1803 Fund.
View of the historic concrete grain silos along the Willamette River in North Portland, Oregon, from 99W & N Interstate Ave. The billboard, Portland’s largest, is a familiar site to commuters.
Photo: Portland Appraisal Blog (CC BY-SA 4.0)

The property’s rebound began in 2021 when it sold for $2.9 million, and it was most recently listed for $6.5 million. This trajectory represents a total shift in Highest and Best Use. The market value is no longer tied to its “broken” industrial infrastructure, but rather to its potential as a 3-acre cultural anchor. With the 1803 Fund’s recent $70 million regional acquisition, the silos are being reclassified from an obsolete terminal to a cornerstone of “impact infrastructure.”

The Low End and the Power of Plottage

The 1803 Fund’s acquisition extends beyond the silos to include approximately 20 tax lots in an area historically known as The Low End, along the western edge of Russell Street. This area makes up about 7 acres. In appraisal, this is a masterclass in plottage—the increase in value realized by assembling smaller, disparate parcels into one cohesive master plan. By creating a 7-acre “blank canvas,” the fund has enabled a scale of development that the individual lots could never support on their own.

One factor currently suppressing the unimproved value of The Low End parcels is the presence of documented soil contamination. In industrial appraisal, these are often treated as “brownfields.” The 1803 Fund’s ability to absorb these remediation costs—estimated to be a multi-million dollar undertaking—is a key part of their $700 million economic impact projection. By cleaning these 20 tax lots, they aren’t just improving their own land; they are removing a significant environmental stigma that has capped property values in lower Albina for a generation.

In total, the fund now controls roughly 10 acres of land, split between the two sites.

The RMLS Data and Zoning Hurdles

From a residential appraisal perspective, this project is a “market starter” rather than a displacement. A review of RMLS data confirms zero closed residential sales within this core footprint for years, reinforcing its long-standing non-residential character.

The Russell Street parcels in The Low End benefit from flexible EX (Central Employment) zoning, which already permits a variety of mixed-use developments. The centerpiece of the project—the 16-story hotel—is planned for the grain silo site itself. This site is currently zoned General Industrial 1 (IG1), an “Industrial Sanctuary” designation. The 1803 Fund’s plan to place a high-density hospitality and arts complex here will require a significant rezone, making this a major test case for Portland’s willingness to pivot its waterfront from industrial heritage to civic future.

Industrial marine conveyor structures and docks at Portland's historic grain silos extending over the Willamette River, viewed from the west bank – December 2025.
Current marine loading docks and conveyors extend over the Willamette, barring public access. Future plans will replace these barriers with public terraces and riverfront steps.
Photo: Portland Appraisal Blog (CC BY-SA 4.0)

Takeaway

New public amenities and mixed-use housing will introduce net-new ownership opportunities in a transit-rich, close-in location currently lacking for-sale residential product. This transformation may support amenity-driven value uplift in adjacent neighborhoods such as Eliot and Boise.

McCormick Pier condominiums and residential waterfront along the Willamette River in Portland, viewed from the east bank looking west toward downtown – December 2025.
Across the river, McCormick Pier condominiums demonstrate activated waterfront living.
Photo: Portland Appraisal Blog (CC BY-SA 4.0)

Planning and permitting continue, with construction anticipated in coming years. Portland Appraisal Blog will continue to monitor progress of the project.

Sources & Further Reading

Thanks for reading—I hope you found a useful insight or an unexpected nugget along the way. If you enjoyed the post, please consider subscribing for future updates.

CODA

Are you an agent in Portland who wonders why appraisers always do “x”?

A homeowner with questions about appraiser methodology?

If so, feel free to reach out—I enjoy connecting with market participants across Portland and the surrounding counties, and am always happy to help where I can.

And if you’re in need of appraisal services in Portland or anywhere in the Portland Region, we’d be glad to assist.

Portland Real Estate Appraisal Brief – Saturday, December 6, 2025: Portland Eases Code for Single-Exit Four-Story Apartments

Portland’s code now allows single-exit stairwell apartments, raising the maximum unit count on infill lots and posing a compliance challenge for Portland Certified Residential Appraisers.

New three-story, 16-unit multifamily on 5,000 sq ft CM2 lot at 11 NE 55th Ave, Portland, exemplifying H&BU shifts in RM1/RM2 transitional zones post-single-exit stairwell guidelines.
Three-story, 16-unit apartment building on a 5,000 sq ft lot—an early example of the infill density now fully achievable in Portland’s RM1 and RM2 zones under current zoning and the 2025 single-exit stairwell provisions
11 NE 55th Ave, Portland, Oregon – December 2025
Photo: Abdur Abdul-Malik, Certified Residential Appraiser

Easing Regulatory Barriers to Mid-Rise Infill

The City of Portland’s Bureau of Development Services, in coordination with Portland Fire & Rescue, approved a final Building Code Guide (BCG 25–10) on October 22, 2025, that permits single-exit stairwells in certain apartment buildings up to four stories in height. This guide implements a provision already adopted within the 2025 Oregon Structural Specialty Code (OSSC), removing a significant regulatory barrier that often rendered mid-rise infill housing financially and physically impractical on constrained urban lots throughout the Portland metro area.

This code clarification aligns Portland with the practices of progressive code adopters, including Seattle and various international jurisdictions, which have successfully and safely utilized single-stair designs for decades. The change is particularly relevant for infill sites—common in Portland’s established neighborhoods—where lot width or depth previously made the mandatory two-stairwell design economically unfeasible.

The economic advantage is substantial: traditional two-stair designs can consume 13–16% of the total floor area for circulation (stairs and hallways). A single-stair “point access block” can reduce circulation space to as little as 6.5% of the floor area, effectively converting otherwise unusable common space into leasable or saleable residential square footage. The push to allow this type of construction illuminates the entangled intersection between safety, housing affordability, and building codes at a national level. This efficiency boost is key to making medium-density projects feasible in high-cost urban environments. The new allowance is expected to have a greater impact on Multi-Dwelling (RM) zones than on the R2.5–R20 zones, where unit counts are generally capped at six.

Appraisal Implications for Real Estate Valuation

The finalization of single-exit guidelines has direct implications for certified residential appraisers (CRs), lenders, and real estate professionals in the Portland region.

Multifamily Development and the CR 4-Unit Limit

The new guideline creates a direct compliance challenge for CRs. CRs are restricted to appraising residential properties containing four or fewer units.

The 16-unit apartment building at 11 NE 55th Ave provides a perfect case study: it is constructed on a 5,000 sq. ft. lot, which is a standard lot size for Portland. While this specific site is zoned CM2 (Commercial Mixed Use 2), it is a very common setup in transitional zones like RM1 or RM2 and makes for a warning of the complexities residential appraisers will now face on an increasing number of sites throughout the City of Portland. A comprehensive and thorough highest and best use analysis (H&BU) will be even more paramount for CRs going forward.

The Land Sale vs. Home Sale Trap (The H&BU Pitfall):

Here is what existed on the site prior:

Former single-family home at 11 NE 55th Ave in Portland’s CM2 zone, demolished to make way for a four-story, 16-unit apartment building on a 5,000 sq ft lot. Google Street View – circa 2021.
Single-family residence formerly at 11 NE 55th Ave (CM2 zone) prior to demolition and redevelopment into 16-unit multifamily
Portland, Oregon – circa 2019 (Google Street View archive)
Photo: Google Street View (public domain)

Note the home to the right of the subject. That neighboring home has RM2 zoning and still exists to this day. For the sake of illustration, let’s pretend the subject itself was located in the same RM2 zone. (The problem would also exist if it were in the RM1 zone.) I have always been wary of appraising properties in RM1 and RM2 zones due to the potential of unit density exceeding my license scope. However, in some select areas, a careful highest and best use analysis shows four units or less is still the market preference, or perhaps the only options feasible. Constructing an apartment building like the subject in an RM1 or RM2 zone was more difficult prior to the recent zoning change. A residential appraiser viewing the subject’s original home could easily come to the conclusion that the H&BU is still residential, as that conforms to the next door property. However, the financial data proves the site’s H&BU shifted long ago:

  1. Negative Value: The original house effectively had negative value, as the developer purchased the site for $650,000 in early 2024, intending only to demolish the structure and build up.
  2. Land Value: The $650,000 purchase price was solely a land sale based on the potential to build high density—a potential maximized by the single-stair allowance.
  3. The New H&BU: The resulting 16-unit asset, listed at over $3.3 million, confirms the H&BU is a multifamily property that requires a Certified General (CG) Appraiser.
Aerial view of cleared 5,000-square-foot lot at 11 NE 55th Ave, Portland, Oregon, in 2025, after demolition of former single-family home and prior to construction of three-story, 16-unit apartment building enabled by Portland’s 2025 single-exit stairwell guidelines
Vacant 5,000 sq. ft. lot at 11 NE 55th Ave following demolition, awaiting construction of new three-story apartment building
Portland, Oregon – 2025 (Google Earth aerial)
Imagery ©2025 Google, Map data ©2025
  • Pro Forma Income: Because the building is new and actively offering rental concessions (e.g., free rent) to tenants, the listing’s financial figures are projected (pro forma). It has a Projected Gross Annual Income of $256,005 and a Pro Forma Cap Rate of 5.17%—financial metrics based on achieving full market rents and directly tied to the single-stair design’s efficiency. Appraising such a property requires a lease-up analysis and would necessitate a Certified General Appraiser to determine both the As-Is and As-Stabilized values.
  • Risk Area (RM1 & RM2): The greatest risk for CRs lies in Transitional Multi-Dwelling zones (like RM1 or RM2). These zones can get complicated quickly, and the single-stair allowance now pushes the practical development cap far beyond the CR’s 4-unit limit, even on small parcels.
  • Required Due Diligence: CRs must perform careful due diligence when analyzing the H&BU of transitional or infill parcels. If the H&BU conclusion is a multi-unit property exceeding four units, the assignment falls outside the scope of a CR license, and the assignment must be transferred to a Certified General Appraiser.

This apartment building on the street (made possible by the single-stair allowance) has now greatly complicated any future appraisals for the adjacent home. The adjacent home sits on a lot the same size (5,000 sq. ft.).

Single-family home on 5,000 sq ft RM2-zoned lot immediately adjacent to new three-story, 16-unit multifamily building at 11 NE 55th Ave, Portland — illustrating highest-and-best-use risk for Certified Residential appraisers in transitional RM1/RM2 zones, December 2025
Adjacent single-family home on a matching 5,000 sq ft lot zoned RM2—identical in size to the 11 NE 55th Ave site now redeveloped with a three-story, 16-unit apartment building
NE 55th Ave (North Tabor), Portland, Oregon – December 2025
Photo: Abdur Abdul-Malik, Certified Residential Appraiser

An appraisal on this home would now need to take into account the potential to remove the dwelling and place a 16-unit apartment building on the site. The apartment building next door, even though in a different zoning, proved that such a structure is physically possible on a 5,000 sq. ft. lot. Now, with the zoning law change, such a structure is also much more likely to be greenlit following a formal review by the planning department. Even if all the structures on this street were residential homes, a CR can no longer assume four units or less is the H&BU if the zoning is RM1 or RM2.

Density Rules Every Portland Appraiser Needs Tattooed on Their Forearm

In most of Portland’s multi-dwelling zones (RM1–RM4 and RX) there is no maximum density—only minimums. The City’s own table spells it out clearly:

ZoneMaximum DensityMinimum Density (base)
RM1None1 unit per 2,500 sf
RM2None1 unit per 1,450 sf
RM3None1 unit per 1,000 sf
RM4None1 unit per 1,000 sf
RXNone1 unit per 500 sf
RMP1 per 1,500 sf (bonus to 1 per 1,000 sf)1 per 1,875 sf
Source: City of Portland Bureau of Development Services – Density and Lot Dimensions in Multi-Dwelling Zones (09/27/2024)

On a typical 5,000 sq ft lot with no overlays:

  • RM1 → minimum 2 units, no upper limit
  • RM2 → minimum 3–4 units, no upper limit

Highest-and-Best-Use Reality Check for Certified Residential Appraisers

Unless a site in RM1, RM2, RM3, RM4, or RX has obvious, insurmountable physical or regulatory constraints (steep topography, protected trees requiring preservation, environmental overlay zones, landslide hazard, historic designation, or similar), a credible H&BU analysis can no longer conclude that single-family, duplex, triplex, or fourplex development is the concluded use without first testing a multifamily pro forma that likely exceeds four units.

Doing so risks an incomplete analysis and, more critically, completing a valuation that falls outside the Certified Residential license scope.

Appraisers: be careful!

Land Value and Investment Properties

The zoning change also directly affects land value and the as-completed project feasibility by allowing for a more efficient and profitable building design. This local regulatory shift also aligns with supporting federal policy, such as the Federal Housing Finance Agency (FHFA) increasing the combined volume cap for Fannie Mae and Freddie Mac’s multifamily loan purchases to $176 billion for 2026.

Market Context

Portland continues to grapple with a housing shortage, making any code modification that reduces hard construction barriers on infill parcels a necessary and impactful step. The North Tabor neighborhood where this property is located is appealing for investors, characterized by an urban-suburban mix and a high proportion of renters. This demographic composition and investor demand underscores the high asking price for turnkey rental assets like the new construction apartment building in our case study.

For lenders, realtors, estate planners, and attorneys, it is crucial to recognize that the appraisal of these new single-stair buildings will require a deep understanding of the regulatory context. Appraisers must accurately reflect the specific size, unit count, and advanced fire-safety features required by the Building Code Guide 25–10 to ensure a credible valuation and appropriate comparable selection.

Sources & Further Reading

Thanks for reading—I hope you found a useful insight or an unexpected nugget along the way. If you enjoyed the post, please consider subscribing for future updates.

CODA

Are you an agent in Portland and wonder why appraisers always do “x”?

A homeowner, lawyer, or estate planner with questions about appraiser methodology?

If so, feel free to reach out—I enjoy connecting with market participants across Portland and the surrounding counties, and am always happy to help where I can.

And if you’re in need of appraisal services in Portland or anywhere in the Portland Region, we’d be glad to assist.