Portland Prices Run in the Red
March 25th, 2008
January results of the Case-Shiller home price index report reveal the perhaps inevitable news about the Portland real estate market.
In Case-Shiller’s estimation, Portland can no longer claim to be an appreciating market. From January 2007 to January 2008, it’s year-over-year pricing change was -0.5%. It’s just the second smallest decrease nationally (behind just Charlotte, NC), but the the rate of price declines is accelerating.
Tom Cusack over at the Oregon Housing Blog reads into the data a little deeper and finds it to be the first time ever for a year-to-year decrease in Portland’s index. He also notes the January results to be the largest monthly decline in the study’s history and the sixth straight month of declines since the market’s peak in July 2007 (down 4.1% total).
Some believe that our downcycle is timed about 1 year later than other national markets.
Note that the Case-Shiller index lags the current market by 2 months. So, what do more current indexes of asking prices suggest? Altos Research sees a 1.3% decrease in pricing over past 3 months (see chart above).
If there is a nugget of good news in this, perhaps the affordability gap is closing. I will run preliminary sales figures for March around April 5 and we’ll see if the news is any more encouraging.
If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
Related posts:
- Northwest Still Leads U.S. Housing Market, but….
- Portland Market Keeps Its Head Above Water
- Portland Prices Rising, But Facing Uncertainty
Entry Filed under: Forecasts, Market Activity, National News
6 Comments Add your own
1. Uncle_Git | March 25th, 2008 at 1:02 pm
I wouldn’t be that surprised tot see the declines slow a little coming into summer - and accelerating again towards winter.
A lot of it depends on how much of our inventory is “must sell” inventory due to mortgage resets or carrying costs on investment properties. I really haven’t seen enough data on that to make a guess at this time.
Any guesses from anecdotal evidence on how the March sales will pan out ?
2. Ron | March 26th, 2008 at 6:32 am
Hmm, volume should be up over February — 1,050 closed sales through this AM, but a slew will record end of month. It won’t approach 2007’s 1,900 listings sold. Probably end the month at 10 months’ supply.
3. Uncle_Git | March 26th, 2008 at 11:06 am
Thanks for the info Ron - sounds like we are heading for another 20-30% down month YOY.
Do you think there will be any psychological impact on buyers now that Portland has headed into negative territory or do you think it’s a wash given how much media coverage there has already been with the falling market ?
4. Uncle_Git | March 26th, 2008 at 3:23 pm
Ron - with the “Discussion” my theory of PNW following about a year later in California’s footsteps caused, I thought you might be interested in this graph -
http://seattlebubble.com/blog/wp-content/uploads/2008/03/case-shillerhpi_westcoast200801-tn.png
It’s the case/schiller index with a date shift of 1 year for the PNW cities.
5. Uncle_Git | March 26th, 2008 at 3:24 pm
Whops date shift is 6 months not a year - still interesting stuff IMHO.
6. Ron Ares | March 26th, 2008 at 7:07 pm
UG,
I think the psychological effect has been in play now for a few months. Some of it is due perhaps to national media coverage, some of it from a frugality standpoint.
Case in point, I have 3 prospective buyers who have deferred their buying decision because: 1) they want to time the market bottom, or; 2) want more time to see how the economy shakes out, or; 3) want to make a good decision but realize they might take a loss if they have to bail out in less than 3 years.
I don’t think savvy buyers are going to be too affected by the news, because it’s been heading that way for awhile. If they are planning to put down roots, they’ll probably go ahead and commit (as other clients of mine have, nowhere near full list price though). The rest will probably look for a few months’ consistent performance (the ‘bottom’) before pulling the trigger.
On the flip side, perhaps the psychological effect will cause ‘casual’ home sellers to sit on the sidelines and keep the inventory at a reasonable level.
Leave a Comment
Some HTML allowed:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>
Trackback this post | Subscribe to the comments via RSS Feed