Tales of a red-hot building market

Two thousand construction jobs were added last year; real estate values drive up Eugene revenue; all-cash offers shake up Portland market; building owners brace for energy reporting rules.

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Our roundup of the state’s real estate news:

Two thousand construction jobs added

Oregon was one of 41 states that added construction jobs between March 2014 and March ’15, with the Beaver State adding nearly 2,000 jobs.

From the Portland Business Journal:

“While the year-over-year data remains relatively positive, it is troubling to see so many states losing construction jobs during the past month,” said Ken Simonson, the association’s chief economist. “As energy firms cancel or delay projects and Congressional action on transportation and other infrastructure measures remains stalled, many construction firms appear to be reducing headcount, at least temporarily.”

According to the AGC, California added more new construction jobs (46,300 jobs) between March 2014 and March 2015 than any other state. Other states adding a high number of new construction jobs for the past 12 months included Texas (39,300 jobs), Florida (37,400 jobs), Washington (18,900 jobs) and Illinois (16,600 jobs).

In Eugene, the city government is using the increased real estate values to bolster revenue.

From the Register-Guard:

The city’s financial situation has improved, according to [city manager Jon] Ruiz’s budget for the fiscal year starting this July 1, largely because of growth in the assessed value of property, which leads to greater property tax ­revenues for the city. Rising real estate values rebounded to pre-recession levels in the current fiscal year, according to the proposed budget, and they’re expected to grow by 4 percent in the coming fiscal year.

And because of that, Ruiz’s proposed $516.5 million budget budget — 4.5 percent larger than the current plan — doesn’t include a budget gap.

Before, Ruiz was forced to shift stopgap solutions to ensure city operations were paid for.

All-cash offers shake up Portland market

A wave of new residents, limited supply and uncertain sellers are making cash the preferred form of payment for houses in Portland.

The Portland Tribune reports:

But an InvestigateWest analysis shows Portland’s affordability also is being pressured by investors so bullish on this city’s single-family housing they’ve bought properties by the dozen on the heels of the recession, driving up prices and rents as they go.

Traditional real estate investors — flippers, remodelers and developers, companies that to some extent have always been here — have been joined by hundreds of private investors and new private equity firms out to make money for investors through real estate. The increasing pressure of these buyers in the traditional real-estate market after the Great Recession’s foreclosure sales dried up has helped to distort the Portland real estate market, bidding up prices and making it more difficult for would-be homeowners like the Buris. Once the American dream, homeownership is increasingly a securitized asset that is outside the reach of ordinary Portlanders.

The companies are making it difficult for ordinary people to buy homes, InvestigateWest claims.

Building owners brace for energy reporting rules

Owners of commercial buildings of more than 20,000 square feet in Portland must now report energy use annually.

Portland Business Journal writes:

The decision makes Portland the 12th city in the nation to mandate energy reporting in commercial buildings. The rules will be phased in during 2016 and 2017 and exempt residential properties, nursing homes, places of worship, parking structures, K-12 schools, industrial facilities and warehouses. Typically, building owners cut energy use by 7 percent simply by looking at the feedback.

“Portland has set a goal to cut carbon emissions 80 percent by 2050,” said Portland Mayor Charlie Hales in a release. “Tracking energy use and investing in energy efficiency saves money for the building owners. And for the city as a whole. Last year alone, the city saved $6 million on its own energy bills.”

Fewer than 100 of the city’s 5,000 commercial buildings have earned Energy Star certification.



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