Thursday, November 14, 2019

Northeast Portland Nehemiah Home Price Update: First Home Value Increased 717% Since 1992.

In 2014 I did two posts that included an Excel list of a total of 153 FHA insured new construction and rehab homes for first time home buyers in Northeast Portland that each also received $15,000 HUD Nehemiah Opportunity Housing grants from 1992-1996.  I provided two examples of how much market values had increased to that point. 

This updates the real market values of those two homes to 2019 based on the most recent property tax data.

First Rehab Home:
The first home was a rehab which sold for $65,000 in July of 1992. According to Portland Maps HERE the 2013 real market value was $286,620, an increase of $221,620/341% from the 1992 sales price. 

Now, in 2019 the real market value is $531,350 an increase of $466,350 /717% from the $65,000 1992 sales price. 

First New Construction Home:
According to news accounts at the time, the third Nehemiah home that closed was the first new construction home. According to Portland MapHERE the 2013 market value for this home was $209,730-- an increase of $137,730/191% from the 1992 sales price of $72,000. 

Now, in 2019 the real market value is $376,860, an increase of $304,860 /423% from the $72,000 1992 sales price.  

{The table pasted below shows the 1992-2019 values referenced above]. 

For some perspective, the FHFA Home Purchase only non seasonally adjusted price index for the entire Portland metro area from 3rd quarter 1992 to 2nd quarter 2019 increased by 315%, which is less than the change in sales price for these two Nehemiah grant homes in NE Portland. 

The 2019 increase from the original rehab sales price of $72,000 would be $481,000. With just a 5% down payment ($2,850 on a net sales price of $57,000) this would mean that every $1 in down payment returned $187 in increased value. 

The 2019 increase from the original new construction sales price of $65,000 would be $320,000. With just a 5% down payment ($2,500 on a net sales price of $50,000) this would mean every $1 in down payment returned $107 in increased value. 

NOTE: If you copy and paste any address from my Excel list into PortlandMaps you can retrieve current real market values (and assessed value/sales price histories) for any of the 153 Nehemiah properties. 

Nehemiah Homes also:
  • Had a Portland minority led non profit as the developer,
  • Had FHA insured mortgages and $15,000 Nehemiah HUD grant.  
  • Had lower property taxes during their first 10 years, likely impacting future rates of property tax growth. 
  • Had lower interest rates because of the use of the Oregon bond program, 
  • Benefited from City of Portland contributed operating support and fee waivers provided to NECDC, and
  • Benefited from Multnomah county donation of a number of foreclosed properties to NECDC.
Bottom Line: 
  • If you were fortunate enough to buy a Portland Nehemiah Opportunity Grant Program home in NE Portland, the return on investment was substantial. 
  • Nehemiah homes were substantially subsidized at all levels of government; not just by the HUD Nehemiah grant. 
  • New housing construction in areas of the city where new construction was then rare helped act as a catalyst for later development. 
  • Nehemiah helped created systems change with new programs like down payment assistance and new construction 10 year property tax abatement. 
  • Substantial numbers of minority home buyers were likely able to purchase a home, before gentrification accelerated. 
Originally created and posted on the Oregon Housing Blog.

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