PDXOutsider, Other/Just Looking in Portland, OR

Is the price / sq ft data from the heatmaps calculated based on the inflated Realtor estimates of house size,?

Asked by PDXOutsider, Portland, OR Wed Apr 30, 2008

or on the more accurate assessor measurements? Realtors like to inflate the square footage by including unfinished basements and attics, whereas the assessors records exclude these. This obviously makes a huge difference. Can anybody from Trulia shed some light on this?

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Answers

22
Trusting a real estate agent / realtor for housing advice is like trusting Philip Morris for smoking facts.
5 votes Thank Flag Link Thu May 22, 2008
OK Ron, since you insist I'm wrong, let me show you an example as proof.

RMLS listing # 8037567, located at 5226 NE 21ST AVE.

It's listed at 2664 sq ft, but if you look at the assesor data on Portland Maps, it clearly shows 1146 sq ft for the main floor, 400 sq ft for a finished attic, and 1122 for an unfinished basement. Add them together and you get the 2664 which the RMLS lists, which obviously includes the unfinished basement (see the photos, this is definitely an unfinished basement suitable only for storage and not much else). I'm not saying that the space isn't valuable, but that it's not as valuable as true finished space, with walls, lights, flooring, etc. I'm pretty sure nobody here would call that livable space at the moment, therefore I believe it should not be included in the RMLS listing.

I agree with you that some people "finish" a space without reporting it., but I want no part of it. I've seen the results of this, and it's usually pretty poor. I'm not willing to risk my families lives to shoddy wiring or structural changes that are not to code, are you?

"Buyers I would advise to take the outsider's information with a grain of salt because it sounds like he might be misinformed. Now is the best time to buy in several years. This is just logic again PDX. It is the same as the stock market, buy low sell high. The inventory is high so buyers can negotiate a great deal and interest rate are still very low. "

Here your'e comparing apples and oranges. Yes you should buy when PRICES are low, not when they are high. Prices are at near record highs, and I for one believe they will fall further. It's definitely a better time to buy than last year, but I believe next year will be even better.

"The market in Oregon is not declining much and it likely will not."

I have two data sources (RMLS and Case Schiller) that show that prices have declined over 8% from their highs last year, and they are still declining. I'll wait. Real estate markets don't rebound quickly like the stock market, they flatline for a few years. It will be easy to find the bottom.

And finally, If I'm misinformed it's because most realtors I keep hearing from won't face the reality that the Portland market is overvalued and prices are dropping. I got tired of rely on their biased analysis, so I went and did my own. And my analysis says to wait.

Good luck weathering the downturn.
5 votes Thank Flag Link Thu May 22, 2008
I heard from Trulia, and the information is calculated based on assessor records, which I believe are more accurate.

The assesor records list the finished size in their summary. ALL the RMLS sites I see list the TOTAL size, including unfinished space. I'm tired of having to constantly go check the assesor records to know the true size of a house and I wish the RMLS would change their policy.

For other potential buyer's out there, come check out my blog where you'll get an objective view of the market, not the usual "it's always a great time to buy" spin.
5 votes Thank Flag Link Thu May 22, 2008
Forgot to add: if interest rates do go up from here that will likely accelerate the downward pressure on home prices. You can always refi to a lower rate at a later time, however you can never go back and re-negotiate a lower price after you buy the house.
4 votes Thank Flag Link Thu May 22, 2008
I notice all the "Now is the best time to buy!" "It's different here" cheerleaders are out in force here. They're strongly implying that the market is just about to turn around any day now and rocket upward. However, the downturn in the PDX area really only got started back about 9 months ago. In other areas it got going about a year prior to that. However, if you look at historic housing downturns the downturn lasts for several years. These are slow motion train wrecks. We have a ways to go yet before we hit bottom and then we'll bounce along at that bottom for a couple of years with a slow increase in prices after that. I suspect that here in PDX we don't hit bottom until about 2010 or 2011 (lots of Option ARM loans made here in PDX and those really start resetting in about 2010).

The looney loans are gone. Incomes in PDX can't support current price levels without that easy credit. Our economy here tends to be rather fagile (we were one of the last regions of the country to come out of the Tech Wreck - it was about 2005 before we made it out of that one) and we appear to be in a recession. Credit continues to contract. These are not bullish indicators.

I hope the "Real Estate Pros" here saved up a good amount of money during the good years so they can weather a few more bad years to come. Either that or they need to have a different profession they can fall back on for income.
4 votes Thank Flag Link Thu May 22, 2008
"Price/sq ft is totally mis-leading criteria. It compares McMansion on a lot size of a handkerchief with a modest house on several acres and McMansion comes out looking cheaper! What a joke."

Sam, I'm not comparing McMansions and bungalows. I'm comparing houses in similar neighborhoods in inner Portland. But I was trying to get at whether the heat map measures total size, or just finished size.

Squeezed, you're right, I've published the S&P data on my blog linked below if anyone cares to see it. I'm still waiting to buy, but doing my research in the meantime!
3 votes Thank Flag Link Wed May 28, 2008
On the contrary Skeptictank, the mls stats (which is what I base my housing advice on because it's real data) that track trends and actual market action is what I use to come to my conclusions. Many promote their own opinion of the general feel of the market based on the national report which isn't an accurate picture of Portland (not even close). The local market has staggered, no question; but many paint a much bleaker picture than is real. It's bleak compared to the mad rush and bidding wars which were a fairy tale turned nightmare for many for about 3 grand years. If a person knew what he were doing and didn't get in too deep just because of low interest rates he did ok. However, I might add, we didn't have as many of those bad loans around here as they did elsewhere in the nation, but those who didn't have a clue where extra money would come from going into those loans were hit hard. Additionally, Sellers have had to learn that they can't demand those same kinds of prices on their homes- it has taken a while to get that message across, therefore homes sat for quite a time compared to average time on the market in the "3 grand years".

Stats recorded and documented show the actual first decline in average sale price since August 2002 occurred in April 2008. And the first decline in median sale price fell slightly for the first time since May 2001 when comparing April of the current year to the same month the year prior. Average sale price dropped 3.9% and the median fell 3.5% but only in certain areas of the Metro area; specifically NE Portland as defined by RMLS and SE Portland as defined by the RMLS. One major factor in this price decline may be that a 51.2% (21 v. 43) decrease in the number of homes sold for $1 million or more, when comparing April 2008 with April 2007. Year-to-date, sales in this price range are down 31.9% compared with the same time last year. All other areas show the average sales price year to date are up month over month except for this last month as I indicated in NE PDX and SE PDX.

Everyone is entitled to an opinion. Thank you for yours. If I as a realtor, relied on my opinion based on a national report or doom and gloom skeptics (rather than actual stats that are researchable) I would not be much good to my clients. That's why we have to look at local (not national) documented statistical reports. Just as all speculators have known for years, the numbers don't lie...people do. I'll stick to the numbers and hopefully that will keep me on track. Yes, many are moving on to other jobs- the reasons are many; however, that isn't to say there isn't a good real estate market here. One thing is clear, people will go on buying and selling real estate. I hope it is done with a little less speculation and a lot more knowledge, accountability and carefulness.
3 votes Thank Flag Link Fri May 23, 2008
I guess I wasn't clear enough, I'm looking for the source of the data for the Trulia Heatmaps. I'm not trying to debate which is better, RMLS or Assessor.

Anybody from Trulia care to comment?

http://portlandrealestateoutsider.blogspot.com/
3 votes Thank Flag Link Tue May 6, 2008
I believe it's NAR policy (according to another agent) to include all listed areas in the sq footage calculations. Take this house:

http://www.cbseal.com/PropertyDetail.aspx?GroupID=37918523&a…

It's listed as 2422 sq ft. But if you look at the assesor records,

http://www.portlandmaps.com/detail.cfm?action=Assessor&p…

they show that 1000 sq ft of that is the unfinished basement.

I'm not saying the assesor records are perfect, but at least they call a spade a spade. Damp basements and attics with 4 ft celings are not what I would call "living space".

I also regularly see listings misrepresent neighborhoods, so the "Code of Ethics" doesn't seem to strict these days. If you know where I can report these rogue agents let me know, I'd be glad to.
3 votes Thank Flag Link Wed Apr 30, 2008
"my clients are makeing money on your backs"

So you think buying homes is about "makeing money" off of the less fortunate.

"The fewer people that realize that they are missing the boat the better for my clients that are seeing what is on the horrizon."

As a "pro" would you care to let us know whats on the horizon.


"believing the gloom and doom "

What gloom? Prices are dropping! Surely thats good news...right?


The RMLS is not for realtors it is for clients.

Wow that really cool!

But when I called and asked asked the lady at the RMLS if a private citizen could join she hung up on me. And then I noticed that there are only two options on the member search menu: realtors (TM) and appraisers.


http://www.rmls.com/RC2/UI/search_member.asp

What gives Bob?
2 votes Thank Flag Link Fri May 30, 2008
Case Shiller does indeed have a local index for portland which showed a 4% YOY decline for PDX. We are on track for 20+% declines by early 2009.

Unlike the RMLS (which is run by "realtors" for "realtors") the S&P Case-Shiller index specifically measures repeat sales. Also I am trying to remember the last time a realtor was punished for fudging an RMLS listing.
2 votes Thank Flag Link Wed May 28, 2008
Price/sq ft is totally mis-leading criteria. It compares McMansion on a lot size of a handkerchief with a modest house on several acres and McMansion comes out looking cheaper! What a joke.
2 votes Thank Flag Link Wed May 28, 2008
I wanted to jump in, although I see this is a lost cause in some regards because there are more variables than are being acknowledged. However, I'll givea couple scenerios from my own experience in looking at tax records. I have come across tax accessors records that show a home has under 1000 sf. It actually had an addition which was never counted. The tax records were very inaccurate; by aproximately 1000 additional sf. The homeowners were only paying taxes on the original square footage for YEARS. Another case,where a home we looked at to buy, showed the home as having more living square feet than it actually had because the square footage included unfinished garage square feet (which realtors are not supposed to include as livable sf), but because the tax records showed it that way it was listed that way. Unfinished basement square feet is often included on a listing because the tax records show it in some cases; however many of those basements are not even close to liveable (block walls, low ceilings, no heat and dirt floors in some cases). I'll reiterate my point- square foot determination is the BUYER's responsibility during due diligence. However a listing agent should protect their self by disclaimer. If listing agent uses the accessors records they should also indicate in the listing comments that it appears the sq. feet recorded is inaccurate and buyer should verify. Since Trulia gets square footage info the same way realtors do, the same applies.

To address whether to wait to buy or to buy now; there are stats available through the RMLS calculated monthly showing the market flow. There are various areas where the fair market value is down and there are areas where the market is still rising (appreciating). It totally depends on the type of home you are looking to purchase and when the current homeowner purchased. The higher dollar homes are harder to find buyers for now. The homes for investors are moving. But even with both of those there are variables (because any who purchased in the last two years at the height of the market are not seeing the equity growth). The market has been adjusting, however the stats clearly show a decrease in number of months of inventory month over month for the last 2 months. The pending and closed sales are still down if looking year over year, however, those who know a good deal when they see one are buying now rather than waiting because deals abound. Waiting to buy until the market ticks up is crazy; gambling that it will continue to go down is a choice that may come back to bite you. Waiting can do one of two things; get you a slightly better sale price and a higher interest rate or will give you a lower interest rate and a higher price. It won't be both by the way the stats are reading right now according to the RMLS data. Let me show you a real example of why buying now is a good idea.
Price now while interest is good:$210k price with 40K down@ 5.5% for 30 years = 965.00 P&I
Price later (if you can get it lower) while interest goes a little higher: $205K price with 40K down @ 6.% for 30 years=989.00 P&I
Same house in a couple months: 210K price with 40K down@ 6% for 30 years=1010.00 P&I
So any way you cut it NOW is the best time to buy. The sure bet is now. The gamble is to wait. And if you wait both the price needs to be lower and the interest rate needs to be lower to make waiting worth it.
2 votes Thank Flag Link Thu May 22, 2008
"you cannot joint our association without having a license, so you can't have access to the listing data either. "

Last I heard REALTORs (TM) just lost their RMLS monopoly in a recent court case. Gooodbye 6% say hello to Redfin.

"In my area for 2007 our stats actually showed a 1.5% increase in the average and median home sale. "
Its 2008, Ron.
1 vote Thank Flag Link Mon Jun 2, 2008
Realtors rely on county records for home size. Yor Realtor should check with the county. If you think the county is wrong have it checked proffesionaly.
1 vote Thank Flag Link Fri May 23, 2008
You have a point -some realtors include garage and unfinished spaces in square feet in sf reporting, thus giving an illusion of larger living sf., however you are mistaken to think the assessor office is a reliable source. We, as realtors, most often use the assessor's records as a point of reference only, but that has often been an inaccurate record due to unrecorded changes in many dwellings. It is up to the agent to instruct buyer to have the space measured themself for their personal satisfaction and as part of their due diligence as a buyer. Buyers due diligence is the only guarantee to their satisfaction.
Web Reference: http://www.junelizotte.com
1 vote Thank Flag Link Wed Apr 30, 2008
Hi Ian,

This has been issue for home buyers for a long time. In real estate it is so hard to compare homes because no two houses are alike (location, upgrades, lot size, maintenance of the property and so on). Most realtors use a disclaimer to protect them self against giving out the wrong information, but we (Realtors) are bond to disclose the most accurate information that we can. And if there is a discrepancy we usually state it.

My recommendation is to do your own do diligence when buying a home. That is, perform inspections and even get a profession to check the square footage if that is a concerned the information is wrong. The variance of sq ft. can differ from county records to city plans to appraisers. I would recommend calling your local building department, county records and compare it with what is listed on the MLS and base your price accordingly when writing the offer. If the numbers differ hire a 3rd party to calculate the sq ft of the property.

In most contracts you have a specified period of time to perform your do diligence of the property Checking the square footage could be one of many inspections you can done during this period.

I hope this helps.

Good Luck,

Greg Poulsen
Truckee / Tahoe Real Estate
http://www.TahoeHomeHunter.com
1 vote Thank Flag Link Wed Apr 30, 2008
Total Square Footage is as reported by the Listing Broker. For source of information and description of square footage, contact the Listing Broker. Square footage includes finished and unfinished areas (excluding attached garage) and is not intended to represent "legal" or "livable" square footage. The square footage is not inflated, simply stated to the best of the sellers and listing agents knowledge.

As for the assessors’ records excluding sq ft, this is incorrect. REALTORS pull the info from a few main sources, most of which are tied directly to the assessment for the home. In fact, REALTORS could be in jeopardy of losing their license if they did measure the property.

As for the assesors records exluding these, this is incorrect. REALTORS pull the info from a few main sources, most of which are tied diretly to the assesment for the home. In fact, REALTORS could be in jeoperdy of losing thier license if they did measure the property.
1 vote Thank Flag Link Wed Apr 30, 2008
Ian, what I'm saying is that the information that you see on trulia would be pulled directly from the RMLS I have listings that are on trulia, which I did not input on the trulia website. Trulia uses the local MLS information to formulate the heat maps, and other features on trulia. The RMLS is certainly not always accurate, but it's the best source for Trulia.com to use simply because it has the most accumulated information. I'm curious, are you trying to put together a market analysis, and figure pricing and time on market? or are you just curious about the info.

You can answer directly to my e-mail jgomes@prunw.com
if you're interested in finding out what your home is worth I do have the Property investment profile (PIP) it's free, and it shows you active pending and sold listings in your area, time on market, list price to sold price, and market appreciation. The report is generated off of my server and is relevant to your house, and your neighborhood specifically.
Also I could provide you with a complimentary market analysis via e-mail. Let me know if there is anything I can do to help you.
Web Reference: http://www.gomeshomes.net
0 votes Thank Flag Link Wed May 7, 2008
The information for sq footage would be coming from the MLS for the area. Often the square footage comes from the Tax records, tax records are often wrong, MLS info can often be incorrect due to human error or negligence of realtors.

my website has real time information on active and sold homes, you get free RMLS access, and map searches. It's very useful, I use it in fact.
Web Reference: http://www.gomeshomes.net
0 votes Thank Flag Link Tue May 6, 2008
That is why price per square foot is not a good measure of a homes value. Most MLS listings pull the square footage automatically from the tax assessors records (we don't add it ourselves) which do include basements and sometimes attics. The assessors number is not always accurate, especially with older multi story homes. Square footage will sometimes show up as a single total, and other times it will be broken down into square footage per level. Sites like this one use the square footage in the assessors data base and make no adjustments for unfinished vs. finished basements or attics because they have no record of whats finished and whats not (they also have no record of any remodeling which can add 10s of 1000s to the value). That is why these sites are valuable for an estimate but can often be way off the actual market value. They are far more accurate when it comes to large newer neighborhoods such as the Centex or Arbor developments. But once again, the owner may have paid for $30K in upgrades that Trulia would have no way of knowing about.

As a Buyers Agent I rarely look at price per square foot. The best valuation comes from looking at similar homes that have sold in the same area and in the last 3 months and adjusting for differences.
0 votes Thank Flag Link Wed Apr 30, 2008
"Realtors like to inflate the square footage...?" Hmmmm... we do? Actually, depending upon which city and county the property is located in, you will usually find that 10-30% of the properties have inaccurate measurements in the tax assessors records.

Realtors(R) are bound by state licensing laws and subscribe to a Code of Ethics which very clearly specify the importance of providing accurate information to the client, the consumer and all parties involved. To inflate the square footage strikes me as misrepresentation and/or fraud...
0 votes Thank Flag Link Wed Apr 30, 2008
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