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This Willamette Valley Multiple Listing Service’s year end report.

Here’s the link to my comparison of the average sales price of the local Portland areas for 2010 and 2011.

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“Portland Home Price drop 8.4%“

The first headline is by Eliot Njus of the Oregonian (print version, I can’t find it online).  The second is Wendy Culverwell’s of the Portland Business Journal.  Both headlines refer to yesterday’s release of the July 2011 Case Shiller Index.  The two articles are an complete study in contrast.  The Oregonian article leads with the Index being up, though barely, for the fourth consecutive month and then discusses the fact that over the last 12 months the Portland real estate market has dropped 8.4%.  The Business Journal story is all about the twelve month decline in the first half of the story.

The Business Journal story was a part of the DailyUpdate email I get daily from the Biz Journal yesterday afternoon.  I had this comment, posted on their site yesterday:

The headline is a half truth because dread sells. Portland home prices drop 8.4 percent [OVER THE LAST 12 MONTHS]. That’s really not news (your headline reported 9.6% last month). It takes half of the article to get to the Case Shiller Index being up for the fourth consecutive month. That’s the news. Why isn’t it the headline? Try being positive, just once. The market, which won’t stop no matter how good or bad it is, will take years to recover (and it may or may not be starting right now as Blizer states). Short sales and foreclosures made up 35% of sales in the second quarter of 2011 in Portland Metro. That sucks (for lack of a better term) but it also means that 65% of sales were non-distressed. A lot of the news is bad, but not all of it.

There’s no saying when the Oregonian story went to press as it was on my doorstep this morning but it was nice waking up to a more balanced headline.

The Case Shiller Index is released the last Tuesday of every month for the month two months prior- yesterday’s report was for July.  “Portland” is the seven county MSA from Yamhill to Skamania County and everything in between.

Portland Real Estate Headlines | Presented by the Turner Realtors Team

Depending on where you sit determines your outlook. As I’m writing this as a commercial for the Pacifica Condominiums ran on the evening news “Auction prices 67% below original asking…” As a buyer, that’s great news/an opportunity. The Pacifica Auction takes place April 10th.

Those of us that bought property after February 2005, all other things being equal, have negative equity according to the Index.  The Index reports on a seven county MSA and areas in the outer areas have been harder hit.  Short sale and foreclosures will remain a part of our market for quite some time.

If you’re moving up (selling and buying bigger) you’re going to take a hit selling low but make that up on the buying bigger property.  Downsizing is tougher as the loss on your sale will outweigh the “gain” on the purchase.  Those are broad statements so looking at the individual situation remains as important as ever.  The reasons the real estate market hasn’t stopped is that each person has individual needs in the market and there are still opportunities for some.

Total real estate listings in Portland: Active 5835/1158 pending = 19.8%

$0-$199,999: 1542 active/307 pending = 19.9%

$200,000 – $399,000: 2589 active/551 pending = 21.3%

$400,000 – $599,000: active: 887 active/pending 187 = 21.1%

$600,000 – $799,000: active 316/pending 55 = 17.4%

$800,000 – $999,000: active 152 active/pending 20 = 13.2%

$1,000,000 and up: 188 active/pending 16 = 8.5%

It doesn’t show anything revolutionary but is a good reminder that breaking down market segments is important.  We’ve been saying that the $600k-$800k market  had at least picked up for us and this seems to confirm that statistically.

I’ve also started to break down inventory by RMLS area for Portland.  Five areas make up Portland and we can see that they do not mirror the larger metro market other than they are all increasing.  City of Portland inventory, at 9.3, is a month shorter than the Metro but the smaller neighborhood areas lag or lead the city and metro rates.

Median sale prices are down from July 2009 but active sales prices are up.

Click to for larger image

Did you get your Market Tracker report on Sunday?  Market Tracker is emailed automatically from our system for any of the RMLS area zip codes on the first Sunday night of the month.  We can set you up for up to ten zip codes.  Use the “additional comments” portion of the form to let us know which ones you would like included in the report.

The other report that we offer is the Property Investment Profile.  The report is more property specific than the Market Tracker report.  It uses a small radius around a specific property and tracks active and sold listings in the neighborhood and has listing details.  In larger condo complexes we can report on a specific building.  Request this report using the same form.  Click here for a  Property Investment Profile for the Henry Condominiums.

We never share your contact information or email address with any third parties.  You can read our privacy policy on the TurnerRealtors.com website.

Inventory dropped between April in May Portland Metro and four of the five Portland RMLS areas.  Metro’s inventory is the lowest it’s been since August 2007.  Pending sales dropped by 50% in the same period which may be a precursor to an inventory bump next month.  Tax Credit eligible transactions need to close by the end of June so that may counter that a little.

The average sales price for the metro area is $275,500 and the median price is $239,000.  That’s down from May 2009 where the average sales price was $291,00 and the median $250,000.

At the end of the day, consistency of the data is what matters; there’s nothing wrong with either RMLS Market Action, Case Shiller or other reports as long as methodology remains the same.

The Case Shiller Index uses the Portland MSA, the 23rd largest in the country, for its reporting on the Portland real estate market. It encompasses seven counties. The is a map of the Portland MSA on last week’s post. A drive from the southwest corner of the MSA to the northeast corner would be over 140 miles.

RMLS, according to Market Action: “Statistics reflect reported activity for the greater Portland, Oregon metropolitan area, to include Multnomah, Washington, Clackamas, Yamhill, & Columbia counties; Lane, Douglas, Coos & Curry Counties in Oregon; portions of other Oregon Counties; and Clark, Cowlitz & Pacific Counties in Washington.”

So how local do we need to be? How broad of a brush stroke answers your questions? Case Shiller Index numbers are national news. RMLS Market Action stats are big news here each month An appraisal looks at houses within a half mile of a property.  Market data is readily available for zip codes as well.

If we take RMLS Market Action from April, the report shows Portland has a 7.3 months inventory, the ratio of active listings to closed sale. But if we take a closer look at the five RMLS areas that make up Portland another picture is painted:

This means if the theory that the shift from a seller’s market to a buyer’s market at six months is accurate, four of the five Portland areas were in a seller’s market in April and the fifth, West Portland, is more of a buyer’s market than the overall picture shows . When May’s numbers are published, I’ll run the same calculations.

The most important consideration is that you understand what the data is reporting for any given report.

Our model projects the biggest price declines in Las Vegas, Seattle and Portland, due to high homeowner vacancy rates and/or rising mortgage delinquencies. Conversely, we expect modest house price gains in Cleveland, Minneapolis, San Diego and San Francisco.

The report does not appear to be online except “for those permissioned” at https://360.gs.com.  I am not one them; the report was emailed to me.  Goldman Sachs used Case Shiller data for their findings which lags three months.

Given the excess supply in the housing market and rising delinquencies, our model suggests that the composite 20-city Case-Shiller index will fall by about 3% over the next year and another 1% over the following year. This projection is weaker than the current consensus forecast of a 0.4% drop in the national Case-Shiller index in 2010 followed by a 1.6% increase in 2011.

Goldman states that their findings are more pessimistic than the consensus.  But there’s a second part of Case Shiller that is equally important: Case Shiller uses the seven county Portland MSA in their reporting [previous post on Case Shiller Methodology].  That means that a house in Klickitat (Skamnia County), a house in Sheridan (Yamhill County) and one on Council Crest are all in Portland according to the report.  It’s 137 miles from Sheridan to Klickitat using Google Maps.  You have to decide what is local enough for you when looking at real estate.  It doesn’t mean that Case Shiller data is bad data.  It means that we have to understand what we are looking at; both with good reports and bad reports.

The Portland MSA- crinorthwes.org