Is the South Waterfront area a risky investment? I heard there are many units that need to be sold but aren't

Asked by Pam H, Portland, OR Sat Jun 28, 2008

selling? With all the hypes of the area being 'the next pearl', the idea seems a bit overachieving to me. I'm hoping to keep the place for at least 5 years, do you think things will change for the better then?

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Tom Inglesby, Agent, Portland, OR
Tue Jul 8, 2008
Pam, 5 years is a great time table before you sell. South Waterfront is going to be slow because there was no infrastructure there like the Pearl. Some of the building are converting to high end apartments which will bring more people so shops will open and activity will pick up and light rail might be done by then. If you are trying to sell you would be lucky to get your purchase price unless it was a very special location and layout but most are similar plans. Good Luck.

Tom Inglesby, Broker
RE/MAX Equity Group
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William Metz…, , Portland, OR
Fri Jul 4, 2008
Will things change for the better in five years: I doubt it. If all had to go on was PDX economic statistics, I'd say "probably," but we're at the mercy of the national and international scheme of things. The reason, simply, is financing, and there isn't much for condos right now. The few lenders who are doing condo loans will write down the appraisal for different reasons, including number of days on market and number of unsold units in a building. It's possible (and I don't know of any) that a project with too few sold units could get repossessed by the construction lender and the remaining units written down substantially or converted to rentals.

When the California real estate market dropped following the savings and loan failures in the early 1990s, it took years to come back. That could easily happen here.

Pearl District condos in buildings that are 60% or more occupied are looking good to me. Also, look at the edges of the NW 23rd area. If you look hard, you might find something interesting (be really careful of conversions). Those areas remind me of some of the neighborhoods in San Francisco (I used to live there), where values don't fall that much even in slow times.
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Tom Heinicke, , Portland, OR
Wed Jul 2, 2008
Hello Pam,

I agree with Dirk Knudsen below. It is risky. But that same risk can provide some interesting opportunities, such is the nature of risk & return. If you are interested in a more controversial look at the South Waterfront, that embraces risk, take a look at this recent posting on my blog:…
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Carla Muss-J…, , Portland, OR
Sat Jun 28, 2008
Hi Pam,

I'm an Exclusive Buyers Agent working in the Metro Portland area. I've sold in the Pearl, South Waterfront, someof the re-habbed older buildings, etc. (as well as working the entire Metro PDX area). But for the sake of your question, there are buyers who bought at the height of the market, where waiting lists were the norm PRIOR to ground being broken. No one questioned if anything would go "off" kilter on that . . . i.e., the bottom dropping off. Same thing for homes, single family detached in the "burbs." I always tell people that I really don't have a crystal ball, but the main objective in buying is to know what you can afford, where you want to live, how long you are going to hold on to the property. If you buy what you can afford, then the down-turns will be already factored in and considered. If you buy where you want to live, you'll be happy in your HOME and not want to look for anything for a while . . . you're happy living there! The longer you live in a property -- any property -- the better off you'll be. The NAR states that property values double ever 10 years. The unfortunate side to the current market is that I see some sellers who just purchased, or maybe purchased in '05. Their values aren't nearly what they would have liked to have realized. But these are "homes" and if people continue to want to play "stock market" or "personal piggy banks" then sometimes there are more risks involved -- I knew one seller who had THREE mortgages on his place!! Talk about being 'top heavy."

Personally, I like the South Waterfront area. And since it's not far from the Pearl, it's really a matter of a 10 minute trolley ride to the nice restaurants,or shopping at the Pearl. Many of my clients like the water front, and the views on some of the units are truly unique.

The plus to having units that aren't selling is the old motto: Buy low, sell high. Hey, if you can find a great deal, and it works for you . . . then you're already ahead of the game.

You can check out my website for home buyer tips, and I've added the South Water Front site, just in case you haven't seen that link. I've been to a few of their association meetings, and I really think that most of the owners are there for the long haul, love where they're living and have a "hands on" approach to their association. Which is a good thing

Carla Muss-Jacobs, ABR, CEBA, e-PRO
EBA Porltand, LLC
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Dirk Knudsen, Agent, Hillsboro, OR
Sat Jun 28, 2008
Yes it is risky. if you are looking for a value go to the Pearl. The South Waterfront while a neat idea is ahead of its time. Having said that if there is a value or just a great buy than go for it. This market will be back and up 30% in the next 5 years according to many economists.

Gor my money I would go Pearl District. There are some great values and it is hard to argue that the Heart of the city is not better than a converted ship yard in the South Waterfront.

Best Wishes to you Pam.

Call me if I can get you a daily list of the best deals in both markets.


Dirk Knudsen
re\max hall of fame
#1 rated Re\Max Team in Oregon
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Robyn Kimura…, Agent, Mercer Island, WA
Sat Jun 28, 2008
Are you looking for an investment or a home? If you're looking to purchase a place that you are going to be living in for a few years (at least), then now might be a good time to buy, as there are several units available for negotiation. The waterfront has a great vision, it's just going to take a bit of time to reach. If you are looking for an investment, probably not the way to go at this point.
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