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ben

Most banks have recently halted construction loans for speculative residential development. This has already grounded many projects - mostly in booming, sprawling cities like Vegas and Phoenix...but here in Portland as well. Hopefully this trend doesn't last long, and lenders will be able to distinguish the good projects from the bad.

Carlo

Brian: Why would you consider the lack of a central spine in the Pearl a "problem"? Just the opposite, it seems to me. The absence of a spine means traffic, parking, public transit, pedestrians and businesses can be spread evenly throughout the district, making the whole neighborhood an eminently more enjoyable place to explore (unlike, say, NW 23rd, where all the people and all the activities get funneled onto a single street -- a wonderful street, granted, but all the surrounding streets are dead by comparison). I imagine retailers would prefer to have all their potential customers concentrated along a single spine, but for everyone else the Pearl model seems clearly preferable.

As for the low ratio of families in the Pearl, that's a function of cost more than anything else. Families need space. And with living space going for $450 to $750 a square foot in the Pearl versus $200 a square foot in the suburbs, it's easy to see where most families will end up.

nathan

Brian,

I wonder: if the high end condo market does cool, do you think that will be good for mid-priced condo projects? Will developers be taking big risks if they serve a more affordable market?

Portland Pete

I think Portland will continue to attract 25-34s (whether it can keep them when/if they shack up and start families is another question). However, all the census data show that Portland itself is experiencing slow growth - an influx of creative class types, a slow exodus of others. The suburbs are booming compared to Portland. But that "boom" has to be put into perspective - megametros like Phoenix, Dallas and Atlanta add more people in a couple months combined than we do all year.

I wouldn't mind if the pace of building slowed down a little bit. It will take the edge off any eventual backslide when it happens. Nothing worse than overbuilding and then having angry property owners bitching every day to the Oregonian.

uoaaa181

http://www.planetizen.com/node/21010

ben

Kotkin is a hack with his head in the sand. Unless you love highways and sprawl, don't listen to his drivel.

Jeff Joslin

I think Portland Pete got a lot of it right in terms of trends leading others to Portland. There's another as well.

With ongoing inflation, there being no familial economic expansion beyond the double income, increasing construction costs, energy concerns, and other global uncertainties; we're looking for the most certainty and value acheivable.

Portland recently ranked high in Money Magazine's evaluation of urban environments for lifestyle and real estate investment. The reasons are simple - we continue to be significantly undervalued compared to other comparable environments. Coupling that with the quality of life present here has been responsible for a lot of inmigration - both of the creatives, and of those with large and transferable personal economies. Much of the River District and South Waterfront demographic is not local empty-nesters and downsizers, it's those coming from elsewhere to enjoy the lifestyle bang-for-the-buck available here.

To underscore this, I recently toured respective planning contingents from Seattle and New Westminster B.C. through South Waterfront. The Seattle folks commented that the same product in Seattle right now is running $1000/foot, or roughly twice that of current local pricing. The New Westminster visitors were even more stunned, as their comparables were running up towards $1500 U.S./foot.

Clearly, as long as this type of value gap continues, we'll continue to attract new neighbors from afar. For this reason, I suspect any dramatic national eroding bubble will be somewhat tempered by the desirability of the environment we continue to evolve here, and the relatively low costing the current local market supports.

Monty Bell

The Morrison Street lofts wins the award for the ugliest development in Portland. I cringe every time I drive by these condos as I can't quite figure out who on earth would want to live there. Seeing them being built, and also looking at some of the exterior finishing, it has to be some of the most shoddy construction I have seen in a long time.

mike conroy

I agree, I live a block from that eyesore. I think it looks like a 1980's bank from downtown Vancouver Washington.

Justin

I tend the think of the Pearl District as a glorified mall.

So if the Housing Bust causes condos to be built more slowly and allows neighborhoods to grow organically, then that is fine with me.

Ellen

Right on Justin! I'm all for organic growth. Which for Portland neighborhoods in general--not including those planned to grow tall i.e. south waterfront and CDB-- should be high density LOW RISE. Like Herbert Muschamp wrote in Sunday's NYT Magazine: "What is the modern skyline if not a reflection of male vanity?:

spex

In some cities (especially Miami, Phoenix, Las Vegas, and San Diego), speculators have bought from one-third to 80 percent of all downtown condo units, hoping to flip them for higher prices.

That created a higher artificial demand, which encouraged developers to build more condo units. They overbuilt, and now many units will not be sold, at least not at the prices developers and speculators had hoped.

Will that happen in Portland too? It depends how many (and what percentage of) units were purchased purely for speculation.

If the supply is far above true demand, expect prices to drop and few new units to be added in the next few years.

On the other hand, if demand is still higher than supply, prices can continue to stay high or even grow (more slowly than in the past, probably). New units can still be built if there is still more unsatisfied demand.

Does anyone know what the market is really doing?

Jennifer

Please check out this CNN report. Portland is 24% overvalued in terms of real estate prices. http://money.cnn.com/pf/features/lists/home_valuations/

It is the 11th most overvalued city in the study.

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