I titled last month’s Case Shiller report, “Reasons Fear and Optimism.” The Portland real estate market didn’t fare well in October according to the report released this morning:
While the composite housing prices are still above their spring 2009 lows, six markets – Atlanta, Charlotte, Miami, Portland (OR), Seattle and Tampa – hit their lowest levels since home prices started to fall in 2006 and 2007, meaning that average home prices in those markets have fallen beyond the recent lows seen in most other markets in the spring of 2009.
Whereas Portland held out in the top three as the national market started to dive (with Seattle and Charlotte). Our city has fallen into the bottom tier with this month’s report. Today’s pricing is roughly the same as April 2005 for the Portland MSA which is the seven county area used to calculate the Case Shiller Index. David Blitzer doesn’t mince words:
“The double-dip is almost here, as six cities set new lows for the period since the 2006 peaks. There is no good news in October’s report. Home prices across the country continue to fall.” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “The trends we have seen over the past few months have not changed. The tax incentives are over and the national economy remained lackluster in October, the month covered by these data. Existing homes sales and housing starts have been reported for both October and November, and neither is giving any sense of optimism. On a year-over-year basis, sales are down more than 25% and the months’ supply of unsold homes is about 50% above where it was during the same months of last year [Portland’s inventory was 10.7 in October compared to 6.5 months in October 2009]. Housing starts are still hovering near 30-year lows. While delinquency rates might have seen some recent improvement, it is only on a relative basis. They are still well above their historic averages, in both the prime and sub-prime markets.
What it means for buyers: you have to weigh where the bottom is for the market and interest rates.
As a seller: you have to pay attention to the market feedback. Doing nothing is the worst possible scenario if your feedback is that the property is over-priced. A house that was over-priced yesterday will be more over-priced tomorrow. You have to get in front of the market price or you will never catch it.
The market determines price. Not you, me, or even the appraiser. It is the price a capable buyer is willing to pay and a seller is willing to sell for.