Northwest Still Leads U.S. Housing Market, but….

August 2nd, 2007

A couple studies released this week show the Northwest as the strongest housing market nationally, but still affected by national trends.

The first study, Standard & Poor’s/Case-Shiller 20-City Composite home-price index, tracks 20 U.S. metropolitan areas, and nationwide, the May results revealed a 2.8 percent decline in the annual home-price growth rate. Seattle weighed in at number one with 9% price growth; Portland took third spot with 5.7%.

Fifteen of the metro areas in the 20-city index had year-over-year price declines in May. The worst damage was done in Detroit (-11.1 percent). Charlotte, NC appeared in the top three with Portland and Seattle, with 7 percent price growth.

From the chief economist conducting the study, Robert Shiller:

“At a national level, declines in annual home-price returns are showing no signs of a slowdown or turnaround. Year-over-year price returns are continuing to either move deeper into negative territory or experience persistent diminishing returns.”

Additionally:

“If there is any positive news in these numbers, it may be that in both May and April, eight of the 20 markets showed positive monthly growth rates. This compares to only one or two of the 20 in the late winter and early spring. We need a few more months of data, however, to determine if this is the beginning of a national turnaround, since the national trend is still at a sharp deceleration.”

Here are the Case/Shiller results:

Seattle	9.10%
Charlotte	7.00%
Portland	5.70%
Dallas	1.80%
Atlanta	1.70%
Denver	-1.40%
New York	-2.30%
Chicago	-2.80%
Cleveland	-2.80%
Los Angeles	-3.30%
Miami	-3.30%
San Francisco	-3.40%
Minneapolis	-3.50%
Las Vegas	-4.10%
Boston	-4.30%
Phoenix	-5.50%
Washington, D.C.	-6.30%
Tampa	-6.70%
San Diego	-7.00%
Detroit	-11.10%

However, in an unrelated study, Portland shows signs of lagging prices. Bank of America Securities released their monthly agent survey (in which I often participate), showing that Portland’s buyer traffic was below expectations. Pricing cuts and incentives were more prevalent, and increased time on the market foreshadows future pricing challenges.

Comments from the survey:

“The entry-level market is being hurt most by tighter lending.”
“People have lost all sense of urgency.”

I concur.

Technorati Tags: housing, Portland, Oregon, national, Case, Shiller, Standard, Poor, price, appreciation, homes, sales, forecast, BofA

Photo by acidcookie, used under Creative Commons license.

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Related posts:

1. Portland Market Keeps Its Head Above Water
2. Portland Prices Run in the Red
3. Oregon Home Price Appreciation Leads Nation

Entry Filed under: Forecasts, Market Activity