Portland July 2009 Case Shiller Housing Data
By Charles TurnerAre we looking back at the bottom? Who knows? After peaking in July 2006, the Portland housing market dropped nearly 40 points by April of this year. May offered a minimal bump, June added one point and July added two more to get Portland back to 150.06. There is a three month lag in available data.
Will Congress extend, expand or let the First Time Buyer Credit expire?
NAR says it added 350,000 sales but others point out that it was at a cost of over $40,000 per each additional sale.
What will stimulate the middle portion of the Portland real estate market?
Sales between $500,000-$800,000 are still stuck in a rut. I’d be more likely to support something that addresses this segment of the market specifically (sure there are first time buyers in this segment but they are the exception). If Congress is going to expand, I’d propose adding those that sell and buy a primary residence using similar time frames as a 1031 Exchange as the qualifier (45 days to identify, six months to close) to the Credit. Jumbo loan availability will also help.
The debate is real. You have to be able to pay for these programs. You could add caveats or open it up in any number of ways. For now, we have to assume the first time buyers will have to close by November 30th to get the $8000 First Time Buyer Credit.
I guess we’d need to ask why there aren’t very many move up buyers buying in the $500-800K range. Could these folks be worried about their jobs? Their 401K/IRA/other investments? Could they be worried about the value of the $? Could they be worried about the direction the country is going? Is there going to be another expensive bailout? Are we making the needed changes in banking/Wall Street to prevent this from happening again? What about interest rates, they are bound to go up putting more pressure on the market. Wages have been stagnant for 10 years and healthcare cost continue to increase…gee, I could go on and on. Maybe I should have taken the blue pill!?!?!
I think we’ve been all living in la la land the past decade and are in for a major lifestyle adjustment. This house of cards is going to come tumbling down no matter how many housing subsidies aka credits we add. Like I said from the very beginning of this, it is not sustainable. The wages aren’t there to support all this.
Leigh has a very valid set of questions. Looking at the
Market Tracker graphs for 97229 on PDXBuyers, there is a big difference in the $500k-$749k range compared to the drops in the other segments (unit sales are the last of the four graphs). Shouldn’t the entire market have the same general concerns? The answer isn’t clear to me. Of course, some of the previously $500k-$750k houses have now dropped into the next lower segment.
The max price a buyer can make with 20% down and stay under a jumbo loan is roughly $520k. With that, they’ve got to have about $105k for the down payment and factor closing costs. Jumbo loans have higher payments (obviously), cost more (higher interest rates) and are harder to qualify for in general.