Posts filed under 'Forecasts'
Anyone hoping for a spring bounce to the Portland area real estate market will likely be disappointed when ‘official’ numbers are released around the 15th.
Except, perhaps, active buyers looking to time the market to their advantage.
As of this afternoon, April 2008 unit sales were running at about 57% of April 2007’s result. By the time all the April lingering data gets entered over the next few days, the result will likely just reach the 60% mark. (Pending sales for April 2008 are down 38% from last years monthly total, so May’s sales result will look familiar.)
And it seems the doldrums are starting to have their effect on sales pricing (finally). The average sale price for the current results is $324,300 (vs. $336,700 last month and $338,200 last April). The median will come in around $275,000 (vs. $286,500 last month and $285,000 last April).
Inventory is growing, with active listings up 1,000 from the beginning of April to start May with 16,400 homes.
The numbers will likely change a little once RMLS scrubs the data, but you get the idea.
Photo by jekkyl, used under Creative Commons license.
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May 2nd, 2008
One test for the health of the Portland metro real estate market is the mix of sub-prime vs. traditional (or prime) mortgages. In a recent National Association of Realtors survey, subprime loans account for only 9% of homeowner mortgages, but they comprise 54% of foreclosures nationally.
The survey, which includes data from the Mortgage Brokers Association, reports that as of early 2008, 32% of homeowners across the U.S. have their homes paid in full, and of those with a home loan, 53% are in a prime mortgage and the balance are in a sub-prime (9%) or FHA/VA loan (6%).
Here’s a look at how Oregon compares to the nation and California by mortgage type:
Mortgage Mix
| Paid in full |
32%
|
24%
|
29%
|
| Prime mortgage |
53%
|
65%
|
60%
|
| Subprime mortgage |
9%
|
10%
|
7%
|
| FHA/VA mortgage |
6%
|
1%
|
4%
|
Foreclosure Mix by Mortgage Type
NAR says the Oregon foreclosure rate is 0.7%, while California foreclosure rate is at 2.2%. Here are the mortgage types that foreclosures are coming from:
| Subprime Mortgages |
54%
|
61%
|
55%
|
| Prime mortgage |
37%
|
38%
|
38%
|
| FHA/VA mortgage |
9%
|
1%
|
7%
|
Does this mean Oregon will continue to outperform national and Californian averages? Maybe, maybe not. But certainly the mix of mortgage products is encouraging.
Source: 2008 State-by-State “Mortgage Market Conditions” Reports, NAR.
Photo by denn, used under Creative Commons license.
April 24th, 2008
The National Association of Realtors has released its 2008 State-by-State “Economic Impact of Real Estate Activity” Reports. These reports evaluate the total economic impact of real estate related industries on the state economy, as well as the direct and subsequent expenditures that result from a single home sale.
Their net result? The average home sale in Oregon drives an additional $81,600 in state income (presumably most of which is taxable). Here’s their numbers for Oregon (based on 2006 results):
Real Estate’s Economic Contribution in Oregon
The Real Estate Industry accounted for $27,675 million or 18.3% of the Gross State Product in 2006.
Economic Contributions are derived from:
- Home construction
- Real estate brokerage
- Mortgage lending
- Title insurance
- Rental and Leasing
- Home appraisal
- Moving truck service
- Other related activities
When a Home is Sold in Oregon…
Income generated from real estate related industries is: $25,776
Additional expenditure on consumer items such as on furniture, appliances, and paint service is: $5,171
When a Home is Sold in Oregon…
It generates an economic multiplier impact. There is a greater spending at restaurants, sports games, and charity events. The size of this “multiplier” effect is estimated to be: $14,854
Additional home sales induce additional home production. Typically one new home is constructed for every 8 existing home sales. Therefore, for each existing home sale, 1/8 of new home value is added to the economy which is estimate in the state to be: $35,800
The Total Economic Impact of a Typical Home Sale in Oregon
Median Priced Home in Oregon: $286,400
Total Income Derived from a Sale of a Home: $81,601
So, while the market may be going through a necessary correction period, a prolonged slump will create a real drag on the state’s economy.
Data: NAR Research Department, April 2008.
April 21st, 2008
Auctions aren’t new around here, but on the heels of two high-profile auctions by Buena Vista Homes comes yet another large-scale sell-off of homes.
This time, it’s not by a single builder, but several builders, agents, and owners. On May 4, 2008, over 60 pre-owned homes and new construction will go on the auction block, in an event put on by The Taylor Group, a local real estate broker. They’ve created a website, www.properties2auction.com, designed for this auction, and as a platform ostensibly for more local (and not-so-local) auctions.
In the May 8 round, a mix of townhomes, general single family homes, and luxury properties for bid are located in Portland, Lake Oswego, Beaverton, Tigard, Gresham, Wilsonville, Vancouver WA, Sunriver, Bend, and on the coast. I saw a Street of Dreams home or two on the list. It appears several smaller builders are looking to clear the books of stale inventory, like Buena Vista did earlier.
Similar to the Buena Vista auctions, buyers will need a $5,000 cashier’s check for a bidder’s paddle, enough funds for a 3% earnest money on a winning bid, and a healthy stomach for risk to participate. Inspections and due diligence must happen prior to the auction, and each property offers several times for such inspection.
The live auction takes place at the Hilton Hotel at noon on May 8. Buyer and Seller agents can participate in this and future auctions. More information on the FAQ.
April 15th, 2008
To date, excessive foreclosure activity in the Portland metro area has been kept bay, perhaps due to generally stable housing prices and less participation by Oregonians in riskier subprime mortgages than other national housing markets. (Note, I’m not saying we’re immune–just less affected.)
RealtyTrac.com is the default oracle for foreclosure information–showing Oregon at #24 nationally for foreclosure activity with 1,415 in January, up double that of January 2007.
Recently the the Federal Reserve Bank of New York has released an interactive mortgage map for owner-occupied (non-investment) homes, tracking subprime and Alt-A loans.
Users can start with a view of the entire U.S. and drill down to state, county, and zipcode levels to view various risk areas such as percent of low FICO score loans, resetting adjustable rate mortgages, delinquencies, and foreclosures.
These interactive charts show the “regional variation in the condition of securitized, owner-occupied subprime, and alt-A mortgage loans” according to the Mortgage Bankers Association.
You can check out the map here (or click the image). and read more about the Fed’s foreclosure resources for consumers.
To be honest, I did not see a lot of variation within the metro area to note. The data is to be updated monthly, so perhaps we’ll see more activity as ARMs reset and local housing inventory remains high. Perhaps the non-owner occupied properties are the lion’s share of defaults and won’t be reflected on the Fed’s map. A couple disturbing Oregon trends: 35% of subprime loans have had 1 payment late in 12 months, and 41% of subprime ARMS are resetting in 12 months.
(Hat tip to Mike Rohrig and Scott Bridwell.)
April 7th, 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.
March 25th, 2008
Ok, a misleading title…
Sales results for January 2008 were released by RMLS this afternoon and let’s just say that buyers sat on their wallets in the first month of the new year. At the current rate of sales, the housing inventory at the end of January would take nearly 13 months to sell.
Folks, that is the highest inventory ratio since January 2000. There’s more to the story, of course. Come back on Monday for more in-depth analysis.
Until then, have a good weekend 
February 15th, 2008
…for now. The rest of the nation….not so lucky.
According to today’s Case-Shiller Index release, Portland is only one of three markets in its 20-city index that showed 12-month positive growth in home prices.
At 1.3% growth, Portland joins Charlotte, NC (2.9%) and Seattle (1.8%) as the only shining spots nationally.
Miami, San Diego, Las Vegas, Detroit, and Phoenix have fared the worst in the past year, with a range of 13% to 15% decline in home values.
Pricing has flattened in the metro area, and S&P’s experts believe Portland will join the ranks of the declining values in the next few months. (January’s sales results from the multiple listing service should be out in a couple weeks.)
Grisly details at MSNBC.
Portland’s relative good news covered by Ryan Frank’s Front Porch blog coverage.
Technorati Tags: Portland, Oregon, homes, house, real estate, prices, sales, Case Shiller, index
Photo by nature.net, used under Creative Commons license.
January 29th, 2008
Quick post today…the U.S. Census says Oregon’s population grew 1.6 percent between July 2006 and July 2007–the 11th highest growth rate in the U.S. during that time period.
Positive net in-migration certainly aids the housing market…better than the outflow experienced in Michigan.
From the Portland Business Journal:
The state’s population rose 56,371 to 3,7457,455, the government said in its annual population estimate. Oregon ranks No. 27 in population.
The Census Bureau also projected the Jan. 1, 2008, (national) population will be 303,146,284 — up 2,842,103 or 0.9 percent from New Year’s Day 2007.
In January, the United States is expected to register one birth every eight seconds and one death every 11 seconds.
Nevada is now the fastest growing state by percentage, taking over for Arizona. Texas added a half-million new residents, but California remains the most populous state with about 37 million people.
Technorati Tags: Oregon, population, ingress, migration, Census, housing, homes
December 27th, 2007
A sampling of Portland-related real estate links from the last week or so. Forecasters and prognosticators are making the rounds. I’ll share additional notes next week.
Home Builders Association of Metropolitan Portland forecast
Analysts Jerry Johnson, John Mitchell & David Ludwig address the Home Builders Association of Metro Portland. Net message: A slow 2008, perhaps slower than 2007, but a strong rebound in 2009.
Ryan Frank of the Oregonian covers the HBA Forecast. KGW’s coverage of the same event
Portland prices defy national trends
The front-page article in the Oregonian this week that buoyed some spirits.
Jeffrey Kempe, local real estate broker, drags us into his Conversation Pit with timely thoughts about green building, the upcoming Buena Vista auction, and a significant change to Oregon state law as it pertains to sales by out-of-state homeowners.
Yet another New York Times article
The NYT continues its love-fest reporting on the Northwest, this time on the coastal town of Manzanita.
(I should mention the previous NYT article which documented the in-migration phenomenon surrounding Portland quoted my recent clients Richard & Lila. Cheers and hope you are enjoying the new digs!).
Technorati Tags: Portland, Oregon, real estate, news, stories, reporting, links
November 30th, 2007
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