Six continual months of (minimal) Portland real estate price appreciation has slipped away in the last two month. The Case Shiller Index, released this morning shows Portland lost 2.18 points to end November at 133.26, essentially the same level as February of last year.
The Case Shiller Index reports “Portland Metro” as the seven county MSA and lags sixty days. RMLS reports a five county “Portland Metro” and the mid-month report features the previous month. In January 2000 the Index was reset to 100. Portland peaked at 186.51 in August 2007. In contrast, the Composite 20 Index peaked at 206.52 in July 2006. Both indices were almost identical in July 2010 at 148 and now the Composite 20 is five points ahead of Portland.
Portland was “late to the party” during much of the run-up and the beginning of the decline but appears to have fallen into the same groove as the national indices.
So is now a good time to buy or should I wait a year or so?
We may be seeing the bottom or near bottom of the market. I doubt overall market conditions are going to change significantly in the next year or two so if the market does drop short-term losses should be covered by a long-term outlook. If this is the bottom, the cost of ownership will rise from where it is now.
Inventory is WAY down. Region wide, we are at Summer 2006 levels.
In an area & price range I watch, it has been typical for a few years that there were about 350-400 listings on the market at any given time. Now there are 255 active listings and of those, 83 are short sales with offers pending bank approval so they are not really “available” but RMLS keeps them in the “available” stats.
In the last 30 days, 72 houses in the same area and price range went pending so depending on how you do the numbers there is 3.5 months of inventory or 2.4 months if you consider the short sales as NOT available.
If my area is similar to the region that would mean that the inventory number is being overstated by about a third. If we compare inventory levels in the height of the boom when short sales were non-existent, I’d say our inventory of actual “for sale” houses is at record lows right now.
Add these figures to the improving economy overall and I can’t help but think Sellers might start to gain some pricing power this spring.
Inventory in Bend, Oregon is the lowest we have seen since 2006. We have 3.5 months inventory of single family homes, and multiple offers on the good properties priced at market value are common place. Bend, as you know, was beat up more than Portland when the bubble burst, and it is widely believed we are on the road to recovery. We have observed minor price increases in numerous neighborhoods throughout the city of Bend, and both the locals and visitors alike are more confident about our economy than at any point since 2006. If Bend is on the road to recovery, then I don’t think Portland can be too far behind. Personally, I am just happy prices are no longer going down. Have a good year! Greg Broderick – Bend, Oregon.