Portland Real Estate Blog

The February RMLS Market Action report on the Portland real estate market came out this morning.  When I ran the Multnomah Country report yesterday I said that I thought that inventory would remain fairly static as there is an increase in listings and an increase in activity.  Note the importance of methodology: my report shows and increase in active listings while RMLS reports a decrease in new listings.  My report was also more localized (Multnomah County only).

Today’s Market Action report:

“Comparing February 2010 with February 2009, closed sales increased 18.4%. Pending sales also jumped 45%, and new listings rose 12.4%.

When comparing February 2010 with the month prior, January 2009, closed sales grew a slight 2.9% (1,015 v. 986) and pending sales were up 20.5% (1,850 v. 1,535). New listings, on the other hand, dropped just 1% (3,902 v. 3,937).”

Both Case Shiller and RMLS put today’s home values at roughly June/July 2005 prices from their latest reports.  Case Shiller’s latest report was released at the end of February for December.

We’ll know some time in April what Congress is or isn’t going to do with the Home Buyer Tax Credit.  We have to operate under the assumption that it will expire on April 30th (must be under contract (accepted offer)) and closed by June 30th.  It was extended November 7th- just 23 days before the prior expiration.  April 30th is a Friday which bodes better than what would have been a fairly useless last week of November had it expired just days after Thanksgiving.  There is very little to be found on the Internet even just talking about the subject of an extension.  I still feel that the Credit has been a good thing for real estate but not the make or break for it.

In PSU’s Quarterly & Urban Development Journal 2010 First Quarter report, “Housing Market Analysis,” Scott Aster publishes a graph that further emphasizes that real estate local.  Three of the RMLS areas studied appreciated during the first quarter of the year.  The rest were all in a state of decline.  North Portland is the only area that was positive over last year overall.

It’s also important to note that different studies use different methodologies.  Keeping in mind that Case Shiller reports lag three months, that report has shown the market as being fairly flat recently.

The Portland State University Center for Real Estate recently published their Quarterly & Urban Development Journal 2010 First Quarter report (76 page pdf).

I’ve just started scanning through then entire report but can see the Scott Aster’s “Housing Market Analysis” and Cliff Hockley’s“Condominium Financing: FHA Rule Change Controversy” deserve a closer look and discussion.

When we talk about the Standard and Poor’s Case Shiller Index we are most often talking about the National index (there are 10 and 20 city composite indices) or the Portland index from the Home Price Value report (as I wrote yesterday).  Case Shiller also publishes a more targeted report which breaks each reported MSA into three tiers:

S&P Indices publishes supplemental tiered price data for 17 of the metro areas it covers. Tier breakpoints – price levels that divide recent sale prices in each market into thirds – are calculated for the period covered by the latest, most up-to-date index points. A closer look at these data shows, as was the case with aggregate home prices, that MSAs did not behave the same across and within tiers.

In Portland, Low Tier houses had the highest increase since 2000 and has remained higher than the other tiers.  In both San Francisco and Atlanta, the Low Tier had the highest (or close to) peak but now lag behind the Mid and High Tiers and the Aggregate.

The monthly Case Shiller report (what is Case Shiller?)was released yesterday for December 2009.  Standard and Poor’s website was having server problems yesterday and the report was unavailable for some of the day.  Portland’s real estate market ended the year flat with a slight drop to 149.95 from November’s 150.38.  The questions we can’t quite answer are 1) are we looking at the bottom in April/May and 2) is Portland starting to trend with the national market?  It has oft been said, accurately, that Portland lags about a year behind the national market.

I expect we’ll see continued seasonal increased activity and a push to come inside of the $8000 First Time Home Buyer Credit and $6500 Buyer Credit’s April 30th deadline with the assumption that it will not be extended (again).  If the Credit is not extended, we won’t have a clearer picture of whether the market can support itself until the end of summer.

[graphs and text updated 11:50AM 2.18.10 thanks to an astute reader]

In my post yesterday about January’s 2010 RMLS Market Action report I said that I would go back through previous reports to see if there was a trend in inventory levels between January and the previous December.  There is a seasonal New Years Inventory Spike (NYIS).  Every year since 1999, there has been an increase.  The smallest increase was between 2002 and 2003 (12%).  The NYIS had a higher unit increase this year compared to last year but the percentage increase was lower last year.

It’s still a large increase, even historically, but put in context it is to be expected.  The optimists or pessimists might not want to hang their hat on it as it is just a part of the analysis of our real estate market.

Portland real estate inventory nearly doubled in January.  Inventory is a ratio of closed sales and active listings.  3937 new listings were taken in January compared to 2104 in December and closed sales declined compared to the previous month pushing inventory up.  Between December 2008/January 2009 inventory increased 36% and this year’s Dec/Jan increase was 67%.  In the next couple of days I’ll go back through previous years and take a look what Dec/Jan has looked like historically [percentages corrected 2.18.10].

The highlight graph doesn’t tell us a lot by itself so I’ve added December’s here as well.  Median and average price is down.  What can’t be seen and will take some research, if it possible to glean at all, is whether listing prices have come down.  From what we are seeing, properties coming on the market are more appropriately priced for the market.

According to RMLS Market Statistical Reports in Multnomah County:

• There are 4804 active listings.
• There are 3135 single family detached listings worth a total of $1,115,941,000.  The average price is $355,962 and the median price is $260,000.
• There are 1580 active condo and attached units for sale.  The average price is $333,465 and median price is $244,900.
• 436 units sold in January.  112 for cash, 200 using conventional financing and 109 using FHA (as reported by the listing agent).
• 183 of them had three bedrooms.
• They sold for an average of 91.01% of the original asking price and 96.54% of their listing price at time of sale.  Average time on market was 133 days.

The Case Shiller real estate report was released this morning for November 2009. Overall, results were mixed with relatively small gains and losses nationally. Portland’s Case Shiller Index is now 150.38, up half a point from October’s 149.88. Only five of the twenty tracked markets saw gains. Four cities hit new lows in the last four years of reporting. Portland’s low was 146.85 in April. Portland’s current index puts prices at July 2005 levels.

The following graph just show Seattle and Portland’s Case Shiller Index since January 2004.

We’re getting a better look at how 2009 wrapped up with yesterday’s release of RMLS Market Action. For the year, there were fewer closings than in 2008 but not by much (18,955 down from 19,132). The rolling 12 month average sales price was down 12.1% to $289,000 (median down 10.8% to $247,000).

Compared to 2008, December 2009 was a great way to finish the year. Closed sales were up 52.6% from the previous snow battered month a year ago. 2008 ended with a record high 14.1 months of inventory that has now dropped nearly in half to 7.7 months. Sales were slower than November but that would be expected.

RMLS Market Action is one of the three sources I usually write about that cover Portland real estate. Market Action is released mid-month of the following month reported. The Case Shiller Index has a three month lag so we won’t see December ‘09 until the last Tuesday of March. Prudential Northwest Properties Market Tracker reports are released the first week of the following month and are emailed to subscribers. You can also look at the graphs from the reports on our PDXBuyers.com website.