Here’s a look at what’s happening along SE Foster Road, as the area gentrifies and the economy weakens …
Because their family has purchased and managed properties in the area for many years, attorney Joel Grayson says they’ve seen a lot of change along SE Foster Road.
Story and photos by David F. Ashton
People who own and manage businesses along SE Foster Road got a realistic evaluation of the real estate market in the area on January 22.
Attorney Joel Grayson, with Maylie & Grayson Attorneys at Law, is in a good position to comment – he said he started buying real estate in the area when he was 24 years old. Currently, his firm specializes in real estate transaction law.
“We’ve purchased and built a number of commercial properties,” Grayson began, as he spoke at the Foster Area Business Association meeting at Bar Carlo. “We tend to buy and hold properties, and we manage all of our own properties.”
The “we” of whom he spoke was not the “editorial we” – Grayson then introduced his partners – his daughter, Janet Grayson, also an attorney with his firm, and his son Jay Grayson, an agent with John L. Scott Real Estate.
Janet Grayson, also an attorney, lays out the state of real estate along SE Foster Road.
The state of real estate
Janet Grayson began, “It’s no secret about what is going on in the real estate market around the country. We’re seeing declines in market values; many properties are not selling. Using even using data from ‘comparables’ [sales of similar properties in the same geographic location], sellers may be unrealistic about their asking price.”
And, the recent stringent financial qualifications for buyers have been creating problems, Janet added. “Many potential buyers can’t qualify for lending.”
Regarding commercial leasing, she said tenants along Foster Road are finding more reasonable rents. “It’s a good time to look for a favorable lease, as landlords struggle to find renters. Many commercial properties have been sitting vacant because owners are unrealistic about their lease rates.”
Distressed properties on the rise
“They’re seeing an increase in foreclosures and short sales,” Janet continued. A “short sale”, she explained, is when a lender reduces the amount due on a property in order to make a real estate sale go through.
“We’ve been consulted about ‘creative’ sales. We’re drafting a lot of contracts [of sale] right now. Sellers like the monthly stream of payments [from selling on a contract], because buyers don’t have the money to get into a loan. This is especially true on the residential side,” she commented.
Joel added, “We’re seeing a lot of lease-option deals; people who don’t have the down payment can get into a property. In the past, there was double-digit interest rate. Now, rates are low, but it takes a big down payment to qualify for a loan.”
Real estate agent Jay Grayson talks shares the metrics of real estate sales.
‘For Sale’ signs up for months
“We can paint a rosy picture about the real estate market,” said real estate agent Jay Grayson as he joined in the presentation. “It depends on which side [of the real estate transaction] you’re on.”
Jay distributed a report that showed higher-priced commercial and industrial properties – in the $2 Million range – have been on the market for well over 450 days. Average listings, those selling in the $500,000 range, have been taking about 100 days to sell.
“We’re seeing serious price decreases,” Jay said, “unless the seller is ‘up against the wall’, and owes too much on the property.”
His sister added, “It’s a good time for real estate brokers give sellers a dose of reality. There are not a lot of good comparables, because of the rapidly changing market.”
“We’re advising brokers that they should focus on taking listings from realistic sellers,” added Joel. “Otherwise, they will languish, unsold, for over a year. Pricing is a big deal.”
Joel Grayson says he looks for SE Foster Road to become more upscale in coming years.
Looks for Foster Road’s fortunes to ascend
“I think things along Foster Road will pick up,” opined the senior Grayson. “My grandfather built our [law office] building here; I grew up in southeast Portland, and been here [investing] for 30 years. When I purchased our building, the area was – well, horrible. It has slowly stabilized and moved up a few clicks. We haven’t seen a dramatic increase in values – but, in the last seven or eight years, we’ve seen some prices double or triple.”
Janet added, “The Foster Road area has changed over the last five years – for the better. New restaurants and coffee shops have come in to the area. This is a good sign. It helps [improve the image] of the area.”
“It isn’t just good new businesses that will make the area better,” Joel said, taking up the thought. “Having more owner-occupied homes is going to stabilize the area – and then, will help it improve. The new businesses here are catering to these younger people who have bought homes in the area.”
To learn more about the Foster Area Business Association, contact The Support Group through its website, www.tsgpdx.com — or call (503) 774-2832.
© 2009 David F. Ashton ~ East Portland News