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Owning a home in a major metro seems like a fantasy to many buyers, and downright laughable in places such as San Francisco and New York City. But in Portland, OR, a developer has come up with a housing project for buyers without much cash: a small-home community in East Portland that's in reach for those making $15 an hour.
The development is ramping up sales on 450-square-foot "detached condos" that start at $175,000. According to realtor.com data, the city ranks as one of the country's 30 hottest real estate markets with a median sale price of $285,000.
And the median number shows no signs of a dip. Housing prices have already climbed 8% from a year ago, so these small homes with small prices are more than a bargain: They're a steal.
There's just one catch: You can't be in a rush to move in anytime soon. The 13 planned houses aren't built yet.
"We're hoping we have the units done by August. We'd like to have half of them presold. I think we'll make that easily," says listing agent John Miller.
Miller says the price alone drew interest as soon as he posted the listing. After all, $175,000 to $190,000 for a 450- to 500-square-foot home "is pretty killer even though they are small," he says. The agent notes that the mortgage could end up running around $700 a month, well under the $1,000 average rent in the city.
Here's what you get for your money: an open floor plan, one bedroom, a full kitchen, a full bathroom, stained concrete floors, a storage loft, a vaulted ceiling, skylights, on-site parking, outdoor storage, and gardening space.
The eco-friendly homes feature radiant floor heating, Energy Star appliances (including a stackable washer and dryer), and soy-based foam insulation. Translation: Your utility bills will be low.
The development also plans to provide a communal building that can be reserved for meetings or other events.
While there are other small-home projects in Portland, Miller notes, "This will be the first one of this scale."
One of the reasons the development is possible: It's outside the trendy neighborhoods. "It's in East Portland, which is not as built-up as other parts of Portland," Miller says. Even if hip restaurants aren't down the street, the development is just three blocks from the light rail, a Safeway, and a Target.
"If you're looking to buy real estate in a booming market, that's where you want to be," developer Robert Bart says.
Bart builds accessory dwelling units, Portland's answer to housing density. The city allows small second homes to be built in a homeowner's backyard as a rental property.
He built eight backyard units before being approached by Miller about a development. The agent had experience with affordable housing, having run a nonprofit that focused on such projects.
"I always wanted to do small-home communities," Bart says. "My impetus of getting into small homes is the value small homes embody."
Bart says he's drawn to their sustainable design and "creating an investment opportunity for the middle class."