19 Comments Add your own

• 1. JP  |  September 15th, 2008 at 7:08 pm

  It’s quite disappointing that RMLS changed the time on market without continuing the existing system or restating the old numbers.

  In any event, did you notice that the number of sales is off by 30.7%? Total sales volume [= average price * number of sales] is 907 Million and 586 Million for 2007 and 2008 respectively. This means that total sales volume is down 35.3% (representing the combination of lower average price and the decrease in the number of sales).

  The other day I was asked how many agents are there in the Portland metro area. In fact, the person was wondering how many agents a month’s sales were spread. The point was simple, if there are more than 1,770 agents, then many agents would be happy to have a sale, and if some agents sold several properties, then it might be that a small fraction of the agents had an income. More importantly, wonder how many agents are trying for sales that never happen.

  The winter months are going to be rough if this trend continues.

  By the way my guess of 183 was a bit high. How long does it take on average between offer acceptance and closing? If this takes more than 31 days on a given property, does (can?) the market time clock reset?

  .

• 2. Ron Ares  |  September 15th, 2008 at 7:20 pm

  JP -

  The clock stops ticking when an offer is accepted, regardless of how long it takes to close. A good question (that I don’t have an answer for) is what happens if a property is sale pending for 31+ days and the sale fails? I assume they start the clock again when the property is active again.

  The change RMLS had to make was to tie the market time to the tax record, not the listing ID. Apparently, this was more challenging than it seems and going back in history isn’t in the scope of the board’s charter for this project. If I learn more, I’ll share it.

• 3. Jeff Johnson  |  September 16th, 2008 at 10:18 am

  So, will this end the “get a new listing number and reset the clock” game? Everyone played that one that had a dog of a property or wanted too much for it. If you were a sucker who came along, not knowing any better, you were drawn in not knowing better.

  That was such a HUGE loophole you could fly a jumbo jet thru it. It was shady, slimy, and cooking the books.

  Result 1: Speculators will be driven out of the market and stop the driving up of the prices if they know they will have say 6 months of holding costs. This screws up most flippers and developers margins. They simply won’t make any money.

  Result 2: Setting reasonable expectations for Sellers & Realtors, for the sales cycle. This will calm everyone down.

  THIS SHOULD HAVE BEEN DONE A LONG TIME AGO !!!!!

  To further refine this number, To ask for a cherry on top if you will, It ought to INCLUDE how long it takes to close the house.

  These days, with financing options in the crapper and getting worse, this should be taken into account too. It would force Realtors to remind Sellers to take the offer that has the strongest Buyer, not necessarily the highest price.

• 4. not_too_shabby  |  September 17th, 2008 at 9:12 am

  How come the Portland market numbers as a whole are reported differently than the area breakdown, ie year over year median and average comparisons verses 12 month appreciation for the city and area breakdown? I think it’s pretty obvious to people who have been following the market that prices aren’t appreciating in Lake Oswego, yet people who look at this only casually might think home prices are still on the rise which is clearly not the case.

• 5. DK  |  September 17th, 2008 at 10:52 am

  I can’t speak for Lake O, but North Portland is doing really well. I suspect the 3.8% appreciation is accurate. Of course this makes sense considering that the median price in NoPo is $200K less than Lake O. Further, transportation costs are much lower for NoPo. There’s gold in NoPo I tell you!

• 6. JP  |  September 17th, 2008 at 4:11 pm

  not_too_shabby-

  We don’t know how many sales were in each area. We need that data to reconcile from one system to the other.

  Do a web search on “Simpson’s Paradox” for more information.
  For example:

  http://plato.stanford.edu/entries/paradox-simpson/

  In any event, the total numbers represent a weighted average. If only one home sold in Lake O, but thousands sold in the other areas, then the appreciation of Lake O is not significant. I understand that Lake O had 80 sales represented out of the 1770, or about 4.5%.

  .

• 7. vulture  |  September 18th, 2008 at 7:03 am

  The 200-300% YOY increase in foreclosures in nopo shows *real* strength.

• 8. DK  |  September 18th, 2008 at 10:53 am

  Vulture, I need more details please. I own three properties in NoPo. Rents are up 20% in 18 months. We have the lowest DOM even with the new numbers. Where else can you get a nice place for $250K, 5 miles from downtown on the max line? NoPo continues to be the best performing neighborhood in PDX.

• 9. Paul  |  September 19th, 2008 at 12:17 pm

  Statewide foreclosure numbers are a little scary, the Portland Business Journal reported on a 23% increase from Q1 to Q2 of this year, but that is statewide.

  RealtyTrac watches foreclosure data, but I haven’t seen a neighborhood by neighborhood analysis:

  http://www.realtytrac.com/states/Oregon.html

• 10. Paul  |  September 19th, 2008 at 12:23 pm

  DK - The rent to price relationship is very interesting now. The Fed has done some research on what these trends tell us. The recent run up in house prices has not been mirrored in rent increases, this tends to signal a slowing of house prices moving forward and a rapid rise in rents at the same time. A game of catchup of sorts.

  A 20% increase in rents may be a sign that the housing market is trying to correct the ratio of price to rents. But as it is in real estate it is all local, so it can always be a special case.

• 11. bearlee  |  September 20th, 2008 at 7:30 am

  Speaking of rentals, the Wyatt remains 50% vacant, the Ardea (aka 3720 Bond) is dark as can be, and the 2121 Belmont is mostly vacant. Think there might be some pressure on rent $$$? Oh, and the ASA/Lovejoy just south of the Wyatt will be move-in ready soon. Then there is the Alexan in SoWa. And what will happen to the Atwater Place (SoWa) that is only 30% sold?

  It will be interesting to see how this plays out in the rental market which no doubt will affect home sales and pricing.

  These are definitely interesting times.

• 12. scone  |  September 21st, 2008 at 7:24 am

  Why is the PDX region still showing any appreciation, anywhere? Are we that far behind the curve, and still waiting for the hammer to fall? Dare I even hope that will we will come out of this with only a flesh wound?

  Thanks for posting this, Ron. If not for you I would have no clue about my little boondocks, Columbia county).

• 13. Ni  |  September 22nd, 2008 at 3:28 pm

  For buyers looking for deals, this is an amazing time.

• 14. bearlee  |  September 22nd, 2008 at 6:05 pm

  Whatever Ni, most sellers are too close to being upside down in their loans to lower their prices, especially after tacking on the 6% realtor fee. I am seeing houses purchased in the late 80’s for $30-50K and now are listed as short sales. Funny thing is, I think their listing prices are still too high, especially when it’s obvious the home equity loans weren’t used for updating/remodeling.

• 15. uncle_git  |  September 23rd, 2008 at 8:20 am

  This is about the worst time in history to be buying.

  Prices are still massively inflated and credit is continuing to tighten driving more buyers to the sidelines *at these pricing levels*.

  Next year is going to be the year we follow California into the weeds. I can’t see a single economic indicator that tells me this is getting anything but worse in the coming few years.

  This is the standoff that happened in every market - with buyers unable to pay the bubble level pricing and sellers “Not going to give it away”

  Pretty soon San Diego will be cheaper than Portland - what does that tell you ?

• 16. Ron Ares  |  September 23rd, 2008 at 8:52 pm

  Great comments all…thanks for chiming in. Sorry I haven’t been actively participating on the back end…

  Bearlee and Uncle G beat me to the punch…I’m not too certain what NI’s point was…

  Certainly, there are big write-downs on individual properties, but it isn’t across the board yet. Inventory pressure and distressed sellers will continue to accelerate declines. Stubborn sellers will need to go away for awhile, because no one is going to pay 2007 prices for your home with all the uncertainty lingering.

• 17. Ni  |  September 24th, 2008 at 10:37 am

  I should have clarified that this is a great time to buy relative to the 2005-2007 period. I saw Centex homes drop their property price by 100K (20%) relative to last year in Beaverton. They were able to get last year’s buyers to honor their contracts by offering them the same price cut. You forget that interest rates are still
  near an all-time low.

  The way for sellers to move inventory in new developments now is to guarantee buyers (on paper) that if they drop the listing price for similar units under construction, then they will do the same for buyers who
  bought it at a higher price.

• 18. Uncle_Git  |  September 24th, 2008 at 4:05 pm

  Given that builders are hacking prices and undercutting resale properties I think you see where it’s going.

  Builders lead the way down in every correction as they don’t want the carrying costs etc.

  Any builder who isn’t building is just slowly going out of business - they need the churn and with the current lending problems that means cutting prices.

  FWIW - the new conforming loan rates for a 30 year fixed jumbo at Wells Fargo are now 9%…

  So nothing requiring a mortgage of over $415k is going to be moving - get ready for the squish down with more higher priced properties sitting and the pressure on the high end increasing.

  https://www.wellsfargo.com/mortgage/rates

• 19. Portland Oregon Real Esta&hellip  |  October 31st, 2008 at 11:14 am

  [...] Shows PDX down 7.6% over 12 months Consistent with what you’ve read here, the August 2008 Case-Shiller home price index for Portland dropped 1.3% from July, and 7.6% from [...]

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