Portland Condo Buyers’ Guide 2020
Summer 2020 Portland real estate market provides an excellent opportunity to invest in a condo in Portland. We’re seeing a decrease in buyer activity and falling prices in response to COVID-19. Whether you’re a first-time buyer, a homeowner looking to downsize or in search of your perfect second home, here’s our definitive Condo Buyers’ Guide for Portland.
What is it like to live in a condo?
Condo owners enjoy many more amenities than the typical homeowner, from killer views atop high-rises to the privacy of a gated community with swimming pools and tennis courts. However, buyers must enter into HOA agreements carefully, and check the HOA’s financials to be sure that all of the shared costs will be covered.
From working professionals to families to retirees, there is no profile of your typical condo owner, but what owners do share in common is that they invest in a community, not just a place to live. When you buy a condo, you typically own the interior of the unit only — everything else is shared. Cost of maintenance of the exterior, roof, landscape, etc. is typically covered by the Homeowners’ Association (HOA), to which owners pay monthly dues (read our research article on the Average Condo HOA Dues in Portland in 2020).
Summer 2020 Portland Condo Market Conditions – Sales are Down 50%
This spring, we saw a market slowdown in March followed by rapid recovery across many sectors of the Portland real estate market. However, condos have not bounced back as quickly. Although there are currently fewer condos on the market than we would typically see, sales have also dropped about 50% from last year, as this RMLS chart shows.
The economic downturn following the pandemic could lead to a higher volume of condo inventory, as people offload condos used as second homes or decide to sell their primary-residence condo and buy a larger home. Prices have already fallen, especially for higher-end condos near downtown Portland the Pearl District.
What’s the best neighborhood to buy a condo in Portland?
There are condominiums and townhomes all over Portland and the surrounding metro area. Many high-profile condo towers have popped up in the past decade in downtown Portland, the Pearl District and South Waterfront. These condos have excellent views of the city, Mt. Hood and the Willamette River. Townhomes — which are built as attached neighboring units, not towers — are more commonly found in residential neighborhoods where tall multistory buildings are not allowed. They’re popular in Lake Oswego, Beaverton, Forest Grove, and anywhere that there’s a high demand for homes and limited space. And now, with Portland zoning restrictions around multi-dwelling units relaxed, buyers will have even more options.
Bottom line is, if you’re interested in owning a Portland condo or townhome, pick your neighborhood first, and our real estate agents will probably be able to find something that meets your need.
Step-by-Step Guide to Buying a Portland Condo
- Find a Portland real estate agent who is experienced in condominiums. Why? Entering an agreement with a Homeowners Association is not something to take lightly, and an agent who has read through hundreds of those agreements is your best interpreter and guide. They can also help you review the HOA’s financials and navigate the aspects of the home inspection, title search, etc. that are specific to condos. Our team has conducted hundreds of successful condo sales in Portland, and we’ve built a network of the best loan officers, inspectors, etc. to work with as well.
- Obtain financing. Condos can be a little trickier to get a loan for, because not only do you, the buyer, have to be approved, but the lender will also need to approve of the condo and HOA. It’s easiest to obtain condo financing if you’re living in the unit as your primary home. Most first-time buyers seek out an FHA loan, because it’s hard to beat that low 3.5% down payment! If you do plan to take an FHA loan, be sure the condo is on the list of FHA-approved units before you fall in love with it. Some condos don’t qualify for FHA financing because of a high number of non owner-occupied units, ratio of retail to residential space, underfunded HOAs, and other reasons.
- Start looking! Portland tends to see the most condos come on the market in summer and fall, but early summer is when prices are highest (generally). In the winter time, there may be fewer condos to look at, but sellers might be more willing to cut a deal. Find all Portland condos for sale here.
- Get the best data. When shopping for a condo online, use a website that accesses local MLS information direct, such as portlandhomesforsale.com or Homesnap. Sites like Zillow and Trulia get the same data but mix with with hundreds of other potentially conflicting data feeds, leading to outdated or conflicting information. When looking at condos online, photos and 3D virtual tours are good to check out, but the floor plan is usually what condo buyers say they find most valuable. Learn what you can online, and create a list of questions to ask in the in-person or agent led virtual tour.
- Make an offer. Be sure that your real estate agent writes an offer than is contingent on reviewing the HOA’s information. This should include the contract and bylaws, which can cover everything from parking to paint color. Be sure to also review prior meeting minutes, financial statements and other materials that can offer insight into how the HOA operates and what their challenges have been. If you find anything that you can’t live with, a properly worded contingency in the offer will allow you to withdraw it without penalty.
- Hang in there through escrow. It can take a little longer to close on a condo than on a standard home because the sale involves three parties instead of the standard two: The buyer, the seller, and the condo board (obtaining all the necessary HOA documentation and finances can sometimes cause delays).
- Congratulations! You’re a condo owner. Navigating the sometimes challenging process of purchasing a condo is worth it, especially if you’re making the transition from renting to owning. With a skilled real estate agent at your side, there’s no reason to shy away from condos in Portland — in fact, 2020 just might be an incredible year to invest. Buyers, in large, make the mistake of buying when the market is hot and prices are high. The Portland real estate condo market is down, so now is the time to buy.