The fall was steep and painful for Randy Sebastian.
For 19 years, the Portland-based homebuilder made a killing building as many as 300 upscale homes a year across Portland, Bend and Seattle. Then in 2007 the subprime mortgage crisis took hold, nearly toppling Sebastian’s empire and sending his company, Renaissance Custom Homes, into bankruptcy.
Now back on his feet, Sebastian is building again. Except this time he’s running into a new problem, one that is limiting the ambitions of Portland homebuilders: available land.
Homebuilders across Portland are building far fewer homes than they did before the recession. A big part of the reason is the still-haunting memories from the nation’s 2008 economic collapse, but they’re also finding a lack of available land on which to build.
This has broad ramifications for not only homebuyers, but for everybody that owns a home in the metro area.
The region’s surging residential real estate market — Portland’s double-digit home price gains last year outpaced Seattle’s — is largely a function of supply and demand economics.
There are far more people buying homes than there are homes to buy.
Metro, the regional planning agency, says that 7,277 new homes need to be built each year to accommodate the 1 million newcomers expected to move to the region by 2035. Area permitting agencies approved just 5,640 single-family home permits in 2013, according to the U.S. Census Bureau. While the number of permits being issued is inching up, it’s not happening fast enough to meet demand.
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