Portland Prices Rising, But Facing Uncertainty

November 28th, 2007

The morning Oregonian trumpets “Portland home prices stable while most cities slide.”

Certainly, Portland has fared well versus other major metropolitan markets. A 20-city index by Standard & Poor’s/Case-Shiller Home Price Indices shows a 4.9% drop in home prices nationally when looking at September 2007 vs. September 2006 results. By comparison, Portland’s market showed a 2.2% gain–third best in the nation. Seattle and Charlotte, NC topped the list at +4.7%.

But trends show, just like being late to the pricing run-up, Portland will eventually feel the effects of national mortgage constraints and economic uncertainty — making additional downward pricing pressure inevitable.

Perhaps looking at different indicators than closed sales will give some advance warning. The chart below, by independent researchers Altos Research, shows a steady decline in asking prices over the past few months. Other readers have pointed at similar charts here, and here.

Please note, these studies look at asking prices and come from ‘public records’, but none really document their source (it is not provided by RMLS directly).

Nevertheless, the leading indicator of median asking price may serve as the canary in the coalmine, foreshadowing more precipitous declines in actual sale price. We’ll see…

The Oregonian article goes on to talk about reasons why the Portland area has been more immune to drastic price cuts–all things I’ve been saying about livability, affordability (compared to other West Coast cities), moderate job growth, and a minimum of haphazard over-building (Buena Vista and downtown condo developers excepted).

But in 2008, we’ll need continued national economic confidence, some mortgage reform, and ongoing in-migration from other markets — just to keep prices flat.

Otherwise, home sellers might want to sharpen that pencil, and buyers might have better deals ahead yet.

Technorati Tags: Portland, Oregon, homes, housing, prices, appreciation

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Related posts:

1. September 2005 Market Activity
2. REALTOR Association Predicts a Strong, Balanced Market in 2006
3. Week Links - April 27, 2007

Entry Filed under: Market Activity, National News