Four factors driving down Pearl condo prices
Local broker says it's not all about safety problems
We asked Chris Mackovjak, a broker with Realty Portland and a longtime member of the Pearl District Neighborhood Association, to comment for yesterday’s post about residents moving out of the district as condominium values drop. His thorough and rapid response suggested that he had thought about this issue before.
By Chris Mackovjak
That [two-fold trend] is correct, and the cause is multi-faceted. Here are the four drivers, three of which are primarily related to Portland, while the other is national.
1. Safety and livability concerns have caused people to leave the Pearl and downtown. The same concerns have caused would-be buyers to hold off.
2. Demographics. Condo owners in the Pearl tend to be older, and they are starting to sell their condos to move into retirement communities. There isn’t a large group of buyers coming in after them, so more sellers competing for fewer buyers lowers prices.
3. Property taxes. Condo taxes are notoriously disproportionate to values. A condo that sells for $350,000 could have property taxes of $8,000, which hurts affordability.
4. Homeowners Association dues and special assessments. This is national and a big driver. Higher monthly costs reduce how much buyers can qualify for, putting downward pressure on prices.
My short take is that condos are undergoing a structural repricing based on these factors.
That’s the negative side. Here’s the positive:
The impression of buyers is that safety and livability are improving downtown. I sold four condos in the last few months to out-of-town buyers, and they love Portland. They love the people, the nature, the food and the lifestyle, and they’re excited to be here.
Portland is still one of the best lifestyle cities in the country, and I expect we’ll start to see people moving here again. I’m also starting to see more locals, especially those downsizing, explore moving downtown again. All-in-all, I’m still bullish on the Pearl.