Portland Real Estate Ignores National Trend
By Charles TurnerThe sky may be falling in real estate markets across the country but Case-Shiller reports again that Portland and Seattle aren’t following the national market:
Home prices fall at fastest rate in 13 years
Case-Shiller index shows prices down 1.5% in past year
By Rex Nutting, MarketWatch
Last Update: 1:05 PM ET Apr 24, 2007WASHINGTON (MarketWatch) — U.S. home prices continued to fall in February, with prices down 1.5% in 10 major cities compared with a year ago, according to the S&P/Case-Shiller home price index released Tuesday.
Home prices depreciated year-over-year for the second straight month, falling at the fastest pace since late 1993. A year ago, prices were rising 14%…
Never fear:
Prices fell year-over-year in 13 of the 20 cities, led by Detroit (down 7.8%), San Diego (down 5%), Boston (down 4.7%) and Washington (down 4.3%). On the other hand, prices have risen 10.6% in the past year in Seattle, 7.7% in Portland, Ore., and 7.3% in Charlotte, N.C.
We still like our market for being the lowest priced major west coast market, having property prices protected by the Urban Growth Boundary and being a nice place to be. We can’t predict whether Portland will get on the national train and decline or if lending rules will torpedo the market…
Ultimately we will join the national trend. As usual we’re just a bit late to the party. Yes, real estate markets are local, but in this case the credit tightening is on a national scale so I don’t see PDX escaping.
Here’s a good site:
http://www.housingtracker.net/
It shows inventory in PDX up 2.6% in the last week alone and up about 8% in the last month. Click on the Portland link for lots of info on medians, 25th, 50th and 75th percentiles. It shows median price down by 0.2% over the last month (not hugely significant, but not up either). That 7.7% you quote is appreciation over the last year. As the year goes forward less of the higher appreciation from 2006 will be included in that number. Remember, places like San Diego and FL were heading down a lot earlier than we did so their yoy appreciation is going to be more negative at this point.
Two houses in my little cul-de-sac are now sit empty. In one case a marriage is leading to a consolidation of households (good news – I believe they are prepping that one for sale). For the other I’m not sure why but it’s been empty for about 3 months now – I don’t believe it’s a foreclosure.
Sales down + inventory up + tightening credit = prices moving down.
Remember, the tightening of loan qualification standards really started in earnest in the last week of February and has continued till now.
I’ve been hoping to see your monthly post on “RMLS Market Action Mar.” as you have for the past few months. Any chance of getting that?
Have to agree with TIP – the record shows what happened in the prior year. A good economist can project, based on current trends, what will happen in the immediate future.
Inventory is indeed very high in many Portland areas. 64 official listings are in Forest Heights alone, although that doesn’t include “For Sale By Owner” or “Off-market 3 days to get new RMLS number”.
The web listed just a few potential foreclosures in Portland late last year. That number now has grown exponentially.
The apparent sellers’ strategy now is to list a house well over its market value and then begin to come down in $5K-$10K increments. Can’t fault them for that – I’d probably do the same thing in their situation.
Economists are predicting PDX’s prices will fall: http://money.cnn.com/2007/04/09/real_estate/forecast.moneymag/index.htm
In addition, PDX’s inventory has grown an astounding 87% in the last year! http://www.realestatejournal.com/buysell/markettrends/20070425-hagerty.html
I can’t remember a recent year that Money didn’t come out with their report with the exact same prediction for Portland: over priced and prices would fall.
They don’t seem to take into account people moving into the state who don’t flinch at our prices.
JJ- I’ll work on getting some March RMLS Market Action stats up.
I can’t remember a recent year that Money didn’t come out with their report with the exact same prediction for Portland: over priced and prices would fall.
Money’s PDX June 2006 – June 2007 Forecast
http://money.cnn.com/magazines/moneymag/moneymag_realestate/states/
+ 7.5%
See also Money’s ’05-06 forecast of +9.8%
http://money.cnn.com/2005/05/12/real_estate/re2005_100markets_0506/
Maybe I have my source wrong; it might have been Smart Money. Each year they put an index together with a set of ratios and Portland always comes out overpriced.
Meant Ralph, not JJ- RMLS Market Action to follow.
This market needed an 83% increase in listings. With 1.3 months of inventory last year buyers had little option and sellers held all the cards. This is a healthier market though it doesn’t feel that way for sellers.
In the December ’06 of Smart Money PDX was listed as a mildly overvalued market, using a ratio comparing home price growth to wage growth. It made no predictions or forecast that prices would fall.
Portland is #6 and Seattle is #5 on the list of most overpriced housing. The analyst bases his figures on the median income of the cities in the survey.
Why is it that realtor-reported YOY sales numbers always show far higher appreciation than MLS asking price statistics. Are we supposed to believe that the vast majority of homes are selling for higher than asking?
Currently we are now at only a +2.5% YOY, according to:
http://housingwatch.com/regionview.aspx?city=Portland
Houseg tracker (which uses census statistical boundaries) reports only 1.4% appreciation:
http://www.housingtracker.net/askingprices/Oregon/Portland-Vancouver-Beaverton/
This represents an enormous decline over the double digit increases in ’06. I predict *NEGATIVE* YOY in June or July.
I am up north of Portland in WA. I am looking to relocate to Portland. I noticed that in WA state, real estate stats are out in the news and available from the NWMLS at the beginning of the month for the most recent past month. Thus in early April, the March stats are out.
Gotta wonder, why are the MLS stats are 2 months behind in Portland. It is a secret or does the local MLS not want buyers and sellers to know the up to date market trends?
It seems like with computers, the data all over the nation could be posted very quickly after the data is reported. Which is at the beginning of the month. I don’t think that WA is special.
I’m seeing the same trend I saw two years ago in Sacramento. The number of listings and for sale by owner signs has risen significantly, well above normal levels for just our typical spring home-buying season. I predict we will see record listings and long wait periods for activity this summer in the Portland area. Several informed sellers know what is coming and they want to cash out at the top…but that opportunity has already passed us. Those that must sell or planned their nest-egg on their home may have a rude awakening. Good luck you buyers!
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