Portland's Old Town on cusp of a revival

As the University of Oregon and Mercy Corps start
Monday, August 13, 2007
RYAN FRANK
The Oregonian

Since time began in Portland, Old Town has been that rough patch in the crook of downtown where the Willamette River makes its northwest turn. It's been home for the rowdy men of the forest and shipyards and, in recent years, drug pushers who've kept their street corner grip even through downtown Portland's renaissance.

But the churn of change -- the kind that can transform an entire neighborhood -- is starting to shake Old Town's century-old brick.

With prodding from Portland's urban-renewal agency, the Portland Development Commission, developers have seen beyond Old Town's stigma of crime and urban decay. The result, all sides hope, will be that rare big-city neighborhood that the poor, middle-income and rich call home.

Workers are pounding away on the "Made in Oregon" building to spruce it up for future University of Oregon students. Following the Ducks, Mercy Corps last week got the city's OK to move its headquarters and learning center into the neighborhood.

And the Bill Naito Co., fresh from resolving years of bickering within the larger Naito family, is ready to reshape a string of Old Town properties into condos, apartments, a boutique hotel, an alternative health center.

Old Town's old-timers have seen promising signs flame out before, and this version has a long way to go to meet reality. But even they say this time looks different.

"I think we are starting to see the start of some real change," said Paul Verhoeven, Saturday Market's manager.

A new beginning

Old Town's recent action started where a decade-long Naito family fight ended.

After developer Bill Naito died in 1996, his brother Sam and the children of both men couldn't agree on much about the family business, including their key Old Town properties.

For nearly 10 years, their real estate sat fallow as their dispute raged and the neighborhood sputtered along with them. Investors steered into the Pearl District, which hems in Old Town to the west, and left the neighborhood to crack dealers and social service groups that serve the homeless and drug addicts.

But after a 2005 resolution, one side of the Naito family operating as Bill Naito Co. set out to reinvest in their real estate.

Then the University of Oregon came calling.

The university wanted to move into the Naitos' White Stag building where the "Made in Oregon" deer flies.

The university was searching for a new Portland campus in a historic building and in a part of town that needed a boost, said developer Art DeMuro, who helped the school search. DeMuro bought the White Stag building, and UO signed a lease in May 2006.

News of UO's move caused others to give Old Town a look. "They made it legitimate for others to come in," said Richard Harris, executive director at Central City Concern, an Old Town nonprofit that serves the poor.

Then Mercy Corps followed.

Like UO, the humanitarian organization wanted to be an urban pioneer and spark an area that needed help. (The group is now in Portland just south of downtown.) Neal Keny-Guyer, the group's chief executive officer, also wanted to be in a historic building.

Old Town fit both requirements. "I just love the neighborhood and the feel of it," he said.

Last week, the city's urban renewal agency agreed to help Mercy Corps rehab the Skidmore Fountain Building and build a new one next door on land owned by the Bill Naito Co.

After UO and Mercy Corps, Old Town caught the buzz that fuels any neighborhood revival.

That's when the Bill Naito Co. followed Mercy Corps.

Hope snowballs

UO and Mercy Corps' moves will bring students and workers to Old Town and, they hope, push out crime. Their decisions made the Bill Naito Co. feel safe sinking even more money into its Old Town real estate, said Lou Elliott, who manages the company's properties.

By early 2009, the company hopes to rebuild a block on Naito Parkway as the new home for Ankrom Moisan Associated Architects, the Oregon College of Oriental Medicine and 55 high-end condos.

Following that, the Bill Naito Co. plans four other Old Town projects over the next five years. In some projects, it hopes to restore a historic alley system into something similar to Seattle's Post Alley.

From there, developer David Gold has plans for new creative offices in blocks that border the Naito projects.

Some wring their hands about what progress means for the people who've always called Old Town home.

Gentrification in other parts of town has pushed out the less fortunate. But Harris of Central City Concern isn't worried.

Most of Old Town's social service groups hold the power because they own their land.

"We're not leaving," Harris says.

Home sale market improves for buyers

By Joe Mosley
The Register-Guard

Sellers kept the hot hand, but buyers began easing back into the Lane County real estate game in September as inventory improved somewhat after hitting a 2 1/2 -year low this summer.

New residential listings increased by 3.5 percent in September, compared with the same month a year earlier, according to the monthly report from RMLS, a Portland-based firm that runs the Lane County market's multiple-listing service.

The increase in new listings combined with a 2 percent drop in pending sales to push the county's inventory to 1,130 active residential listings at the month's end. At September's rate of sales, that translates to a 2.6 month supply of homes - up from the 2.2 month supply of July and August.

The national real estate market also remained upbeat in September, with sales of previously owned houses rising 3.1 percent from August to a total of 6.75 million, the National Association of Realtors said this week.

"The housing market just refuses to falter," said Joel Naroff, president of Naroff Economic Advisors, in Holland, Penn. "With mortgage rates quite low, there is little reason to expect demand to drop suddenly."

Sales of previously owned homes account for 85 percent of the residential real estate market in the United States.

Here's how the ongoing real estate boom played out in Lane County during September:

• There were 401 pending sales in the month, down 2 percent from the 409 of September 2003.

• Closed sales totaled 442, up 7.8 percent from a year earlier.

• New listings rose by 3.5 percent, to 529, compared to 511 in September 2003.

• The average sale price for September was $191,000, up 10.3 percent from the $173,200 average for the same month last year.

• The median sale price - the price with the same number of sales above and below it - was $162,400. That's 4.6 percent above the $155,200 median price from a year earlier.

Local housing market still hot

By Christian Wihtol
The Register-Guard

Hunting for a house was a nail-biting experience in Lane County in August, as the metro area's housing market continued to sizzle, the latest home-sales data show.

The supply of homes for sale remained at a 2 1/2 -year low in August, homes that sold in August were on the market an average of just 45 days, and prices held well above the year-ago level, according to the monthly report from RMLS, the Portland-based firm that runs the multiple-listing service for the Lane County market.

The national market in August also was hot, courtesy of low mortgage rates. Nationwide, sales of newly constructed homes in August jumped 9.4 percent, the biggest gain since the end of 2000, propelled by the lowest mortgage rates in four months, Bloomberg News reported Monday.

``We are in the midst of, I would say, the biggest worldwide housing boom ever,'' said Robert Shiller, an economics professor at Yale University.

Nationally, sales of new single family homes increased to a 1.184 million annual pace last month, led by surging sales in the West and South, from a July rate that was slower than first estimated, the Commerce Department said in Washington, D.C.

Here's what that boom looked like in Lane County in August:

• There were 517 pending sales in the month, up 25 percent from a year earlier.

• Closed sales for the month totaled 494, up 7 percent from a year earlier.

• New listings stood at 641, up 9 percent from a year earlier.

• The average sales price for August was $187,400, up 6 percent from a year earlier.

• The median sales price - the price with the same number of sales above and below - was $162,500, up 3 percent from a year earlier.

• The inventory for August stood at 2.2 months - that is, the month's inventory would last just 2.2 months if sales continued at their current pace - up from 3.1 months in August 2003, and 4.3 months in August 2002.

Nationally, increased sales of new homes and a drop in the supply of homes may add to builder backlogs and underpin construction through year-end, contributing to growth in the world's largest economy, experts said. The average 30-year fixed rate mortgage fell to 5.87 percent in August, compared with the 7.63 percent average during the past 10 years, according to Freddie Mac, the second-biggest buyer of mortgages.

"We've seen consistently good sales" for a number of years, said Joel Rassman, chief financial officer of Toll Brothers Inc. "Every home we have is sold before it's built. This is a very strong market with demand so far greater than supply." Toll is the largest U.S. builder of luxury homes.

If Toll, based in Huntingdon Valley, Penn., didn't sell a single home for the next 30 days, it would still take 11 months to fill existing orders, he said.

"Not only do we have the rest of this year in the bag, but we have most of next year" as well, he said.

Economists forecast new sales at a 1.155 million annual rate last month after a previously reported 1.134 million annual pace in July, according the median of 51 economists surveyed by Bloomberg News.

About 1.16 million homes will be sold this year, according to a National Association of Realtors forecast, surpassing the record 1.085 million in 2003. Sales rose to a record annual pace of 1.283 million in May, government data show.

Sales of new homes increased in three of four regions. They rose 6.1 percent in the Northeast to 70,000 at an annual rate, 13 percent in the South to 536,000 and 20 percent in the West to 356,000. Sales fell 8.3 percent in the Midwest to a 222,000 pace.

U.S. Treasury notes rose as surging oil prices fueled concern the economy won't grow as quickly as Federal Reserve policy-makers expect. The 4 1/4 percent note due in 2014 rose 1/4 , pushing down the yield 3 basis points to 3.99 percent as of 3 p.m. in New York.

Housing is an issue in this year's presidential campaign, with President Bush touting record U.S. home ownership as a reason voters should give him four more years in office. Democratic challenger John Kerry said Bush hasn't done enough to ensure that housing is available and affordable.

The median selling price in the U.S. dropped to $208,900 from $214,400 in July, reflecting a greater percentage of homes built for less than $125,000, the Commerce Department said. Prices are 9.7 percent higher than they were at the same time last year.

``Housing markets won't turn on a dime,'' said Yale's Shiller, whose book ``Irrational Exuberance,'' published just before the 2001-02 stock market slide, warned that equities were overvalued.

"The general sense is, at least in the cities that have been booming for a while, it is slowing down."

The inventory of new homes for sale dropped to a 4.2-month supply in August from 4.4 months while the number of new homes for sale rose to 404,000, the highest since October 1979.