great south facing home with a balcony – enjoy Mt. Hood from the balcony!

By JAN BEHRS
SPECIAL WRITER

Park your bike at the end of the hallway. Or inside the lobby, in the secured bike-parking area.

Enjoy the three-mountain or city view out your floor-to-ceiling windows.
Fix yourself a snack in the efficient kitchen, where all the appliances are energy-saving models.

Then relish the knowledge that the money you formerly paid in rent is now buying you equity in your own home.

This is Killingsworth Station, a partnership project of the Portland Development Commission and Winkler Development Corp. The 57-unit building, four stories high, is certified Platinum by LEED (Leadership in Energy and Environmental Design), the highest industry ranking for greenness.

View full sizeMichael Wilhelm / Special to The OregonianAn electric-car charging station and a spot for a sharable Zipcar help promote a less fuel-gobbling lifestyle.

Located at the corner of North Killingsworth Street and North Interstate Avenue, it was designed for buyers committed to reducing their carbon footprint by living a sustainable lifestyle. It features solar-thermal hot water, stormwater management, high-efficiency heating and air conditioning, and sound-treated windows.

“This is the only LEED-Platinum-rated building in the U.S. with homes costing less than $300,000,” said broker Ben Andrews, who with wife, Heidi, and brother, Matthew, make up Willamette Realty Group, which is handling sales. “They’re expensive to build, but the partners’ goal was to make this the best, greenest building possible, with materials that will last. The architect, Armin Quilici of Vallaster Corl Architects, hit a home run with these floor plans, too, for most efficient use of space.”

The mixed-use building, with retail space on the first floor, is aimed at minimizing the need to own a car. Killingsworth Station boasts a larger elevator to accommodate bikes, an eco-roof-topped parking place for each resident, a Zipcar space and an electric-car port. It’s on the Interstate MAX line and close to amenities such as New Seasons, Fred Meyer and Portland Community College.

“Every home has 10-foot ceilings for more natural light, and, in the evening, the innovative light shelf at the 8-foot level bounces soft light into the interior of the room,” Andrews said.

Fifty-four units are one-bedroom, one-bath homes, starting in the $160,000s. The three two-bedroom units start at $275,000. Fourth-floor units have skylights and views of Mount Jefferson, Mount Hood and Mount St. Helens. The one-bedrooms there start at $181,000.

View full sizeMichael Wilhelm / Special to The OregonianClever design makes the most of an efficient living space, with high ceilings, 8-foot light shelves and floor-to-ceiling windows.

“These homes are going to appeal to people who may never have thought of owning a home,” Andrews said. “They might not have a down payment saved, but they’re going to find that when they consider car payments; first and last month’s rent; and cleaning, pet and security deposits, buying is a better deal.”

For first-time buyers (someone who hasn’t owned a home in the past three years), up to $25,000 in down-payment assistance is available, funded through the Portland Housing Bureau. (see accompanying info box) There’s also a limited property-tax exemption because the building is in an urban-renewal area.

Janet Pope, 46, was one of those who hadn’t considered buying her own home, yet will become an owner at Killingsworth Station within the next few weeks.

“I was content renting,” Pope said, “but this was such a wonderful property and the people were very upfront and honest answering my questions that I decided to see what I could do.

“With the down-payment assistance, there was no way I could pass up the opportunity. I love the up-and-coming area, the bamboo floors and the greenness of the building, plus having light rail right outside my door. My unit has a gorgeous view of the West Hills.

“Go check it out,” she said. “You need to see what all the hubbub is about.”

Model homes are open noon to 7 p.m. weekdays and noon to 4 p.m. weekends.

Jan Behrs is a Portland-based freelance writer. She can be reached at janbehrs@hotmail.com.

View full sizeMichael Wilhelm / Special to The OregonianThere are several places to park bikes, including a secure area in the lobby.

RESOURCES
• K Station Sales Office, 1455 N. Killingsworth St., 503-285-4463, www.killingsworthstation.com
• Ben, Heidi and Matthew Andrews, Willamette Realty Group, 503-290-4191; www.willametterealtygroup.com
• Jim Winkler, Winkler Development, 210 S.W. Morrison St., Suite 600, 503-225-0701, www.winklerdevcorp.com
• Portland Housing Bureau, 421 S.W. Sixth Ave., Suite 500, 503-823-2375, www.portlandonline.com/phb/
• Vallaster Corl Architects, 711 S.W. Alder St., 503-228-0311, www.vcarch.com

Welcome to KStation.

Winkler Development, PDC, Andrews Group and Mayor Sam Adams unveil KStation Condos

Willamette Realty Group invites you to join Mayor Sam Adams, the Portland Development Commission, Winkler Development Corp, Metro and the Portland Housing Bureau as we celebrate:

KILLINGSWORTH STATION GRAND OPENING
Monday, October 17, 2011
9:00 am
Killingsworth Station – NE Corner of Interstate Ave. & Killingsworth St.

Catering provided by DiPrima Dolci, a local café and bakery located on Killingsworth & Denver Avenue.

This is a great article from the Wall Street Journal – also consider all of the financing options at KStation, this truly is a once-in-a-lifetime opportunity. ~Ben

U.S. house prices have plunged by nearly a third since 2006, and homeownership rates are falling at the fastest pace since the Great Depression.

The good news? Two key measures now suggest it’s an excellent time to buy a house, either to live in for the long term or for investment income (but not for a quick flip). First, the nation’s ratio of house prices to yearly rents is nearly restored to its prebubble average. Second, when mortgage rates are taken into consideration, houses are the most affordable they have been in decades.

Two of the silliest mantras during the real-estate bubble were that a house is the best investment you will ever make and that a renter “throws money down the drain.” Whether buying is a better deal than renting isn’t a stagnant fact but a changing condition that depends on the relationship between prices and rents, the cost of financing and other factors.

But the math is turning in buyers’ favor. Stock-oriented folks can think of a house’s price/rent ratio as akin to a stock’s price/earnings ratio, in that it compares the cost of an asset with the money the asset is capable of generating. For investors, a lower ratio suggests more income for the price. For prospective homeowners, a lower ratio makes owning more attractive than renting, all else equal.

Nationwide, the ratio of home prices to yearly rents is 11.3, down from 18.5 at the peak of the bubble, according to Moody’s Analytics. The average from 1989 to 2003 was about 10, so valuations aren’t quite back to normal.

But for most home buyers, mortgage rates are a key determinant of their total costs. Rates are so low now that houses in many markets look like bargains, even if price/rent ratios aren’t hitting new lows. The 30-year mortgage rate rose to 4.12% this week from a record low of 3.94% last week, Freddie Mac said Thursday. (The rates assume 0.8% in prepaid interest, or “points.”) The latest rate is still less than half the average since 1971.

As a result, house payments are more affordable than they have been in decades. The National Association of Realtors Housing Affordability Index hit 183.7 in August, near its record high in data going back to 1970. The index’s historic average is roughly 120. A reading of 100 would mean that a median-income family with a 20% down payment can afford a mortgage on a median-price home. So today’s buyers can afford handsome houses—but prudent ones might opt for moderate houses with skimpy payments.

For example, the median home in the greater Phoenix market, including houses, condos and co-ops, costs $121,700, according to Zillow.com. With a 20% down payment and a 4.12% mortgage rate, a buyer’s monthly payment would be about $470. Rent for a comparable house would be more than $1,100 a month, according to data provided by Zillow.com.

Of course, all of this assumes mortgages are available—no given now that lending standards have tightened. But long-term data on down payments and credit scores suggest conditions are more normal than many buyers think, according to Stan Humphries, chief economist at Zillow. “If you have good credit, a job and a down payment, you can get a mortgage,” Mr. Humphries says. “There’s more paperwork and scrutiny than five years ago, but things are pretty much like they were in the ’80s and ’90s.”

Not all housing markets are bargains. Mr. Humphries says Zillow has developed a new price/rent ratio that uses estimates for each individual property rather than city medians, to better reflect the choices facing typical buyers. A fresh look at the numbers suggests Detroit and Miami are plenty cheap for buyers, with price/rent ratios of 5.6 and 7.7, respectively. New York and San Francisco are more expensive, with ratios of 17.6 and 17.2, respectively. The median ratio for 169 markets is 10.7.

For investors seeking income, one back-of-the-envelope way of seeing how these numbers stack up against yields for other assets is to divide 1 by the price/rent ratio, resulting in a rent “yield.” The median market’s rent yield is 9.3% and Detroit’s is 17.9%.

Investors would then subtract for taxes, insurance, upkeep and other expenses—costs that vary widely. But suppose total costs were 4% of the purchase price. That would still leave a 5.3% rent yield in the typical market. With the 10-year Treasury yield at 2.2% and the Standard & Poor’s 500-stock index carrying a dividend yield of 2.1%, rents for residential housing in many markets look attractive.

A few caveats are in order. First, not all transactions are average ones. Even in low-priced markets, buyers should shop carefully. Second, prices could fall further. Celia Chen, a senior director at Moody’s Analytics, expects prices to drop 3% before bottoming early next year and rising slowly thereafter. “If the economy slips back into recession, however, we could easily see a 10% drop,” Ms. Chen says.

And property “flipping” can be dangerous even when prices are rising. That is because, absent a real-estate boom, house price gains simply aren’t that exciting. Research by Yale economist Robert Shiller suggests houses more or less track the rate of inflation over long time periods.

Houses aren’t the magic wealth creators they were made out to be during the bubble. But when prices are low, loans are cheap and plump investment yields are scarce, buyers should jump.