Some Good and Bad in Portland’s Housing News
October 1st, 2008
In the midst of bailouts, presidential debates, bank takeovers, and other fear-inducing events, the Portland housing market continues to evolve. A few news items and notes:
September market activity may surprise some
Year-to-date across the Portland metro area, home sales have been running at about 65% of 2007 levels, month in and month out. September 2008, though, is on pace to come in over 80% percent of September 2007’s total.
Now, before someone starts calling August ‘the bottom’, the 1,600+ homes sold in September are more like January and February averages, and haven’t made much of a dent in the 17,000 active listing inventory still left for sale. Unless we see a significant number of expirations and canceled listings, many home sellers are in for a long winter. I will run preliminary numbers next week when most sales will be logged in RMLS.
A local news crew caught me yesterday for some comments about the local housing market given all the turbulence in the past few days. The summary is pretty thin and some of the advice and conclusions made me wince, but how much in-depth analysis can you squeeze into a 1:45 segment?
(The report is after the brief ad)
Link to KPTV News video.
I don’t think they used my best quotes or deepest analysis, but I will stand by the contention that people view Portland as an attractive location to live.
Case-Shiller shows declines of 6.6% in Portland
Standard & Poor’s Case-Shiller index for July came out on Tuesday, showing Portland’s prices in a 6.6% decline from the same period in 2007. As markets like Boston, Denver, and Minneapolis show signs of recovery, Portland and Seattle are showing some acceleration in the opposite direction, although they still rank as 5th and 8th respectively in the 20-city index. According to RMLS statistics, August median home prices were down 7.3% from the previous year, so expect Case-Shiller to continue to downgrade Portland.
Mortgage insurer finds Portland’s price decline risk to be ‘minimal’
PMI Group, a private mortgage insurer reports that the risk of significant Portland metro price declines is viewed to be among the nation’s lowest. They may be wrong, but for now, it should keep mortgage insurance rates low for buyers with less than 20% equity.
50,000 Subprime and Alt-A ARMs to reset
On Tom Cusack’s Oregon Housing Blog, he estimates up that 50,000 subprime and Alt-A loans will reset in the next 12 months on owner-occupied homes in Oregon and Washington. You’d think borrowers would have re-fied by now. Maybe they can’t.
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Entry Filed under: Communities, Forecasts, Market Activity, Mortgages, National News, Relocation
5 Comments Add your own
1. Uncle_Git | October 1st, 2008 at 2:38 pm
Tom’s numbers are pretty interesting - I’ve always contended that our reset blowup would be later than the rest of the country because we were late to the party.
Here comes the train…
It’s going to be really fascinating to see how we go through the winter - I’m seeing a bit more price movement to the downside lately - and the internet tracking sites seem to support this theory.
2. JP | October 1st, 2008 at 3:39 pm
What’s about 80% of 65%?
A: About 50%. In other words if the 80% estimate is correct, then sales will be about 50% in count as two years ago.
Also once you hit bottom you have no where to go but up. That being said, up would be more than 1.00 of last year’s sales. At 0.80 we are still falling, albeit not as fast, but we are bounded by zero.
3. Uncle_Git | October 1st, 2008 at 3:50 pm
JP has it correct - you can hit the bottom sales wise and prices still tumble for a long, long time - see for example So Cal at the moment - they’ve actually seen an uptick in sales YOY - but prices are still in freefall.
4. Ron Ares | October 1st, 2008 at 4:08 pm
I can always count on JP for some Stats 101. Makes me want to dig out the college textbook from storage so I can keep up
Here’s the raw unit sales in September:
2008: ~1,500+
2007: 1,866
My point was that unit sales had been down 35% month after month compared to the previous year. I would have expected to see a little over 1,200 homes given that trend and the seasonality.
I’ll know more about how pricing fared next week.
UG - you’re mixing your metaphors…trains and parties ?
5. Thesa Chambers, Broker Licensed in Oregon | November 11th, 2008 at 8:53 am
Ron - our market follows yours - with a large percentage of our buyers coming from your area for second homes - I think we both will see a better 2009
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