Portland Real Estate Market Activity - April 2008

Like the rest of the nation, Portland is feeling the effects of the housing hangover and we may be taking our medicine over the next several months in the form of sliding prices and lingering inventory.

Portland Realtors are getting their market update from RMLS and the results mirror my early reporting.

When compared to April 2007, closed sales are down 39% and the average sale price is down nearly 4 percent to $325,000. The average sale price in March was $336,700 and $342,800 in February, so the month-over-month declines continue.

If there was a plus side to April results, it was pending sales — up almost 7% over April of 2007 March 2008.

One change in reporting from RMLS is their abandonment of the methodology for measuring overall Portland appreciation as a 12-month rollup of sale prices compared to the previous 12 months. You’ll start seeing year-over-year monthly comparisons as the ‘new’ appreciation measure.

At the current pace of sales, the housing inventory (16,370 listings) nudged back above 10 months (10.3). Homes are taking, on average, 82 days on market to sell, year-to-date.

Here are year-to-date sales results by market area, sorted by average sale price:

Source: RMLS, May 2008.

*12-month appreciation is calculated by comparing the most recent 12 months’ average sales prices to the previous 12 months’ results.
**DOM or days on market may exhibit reporting inconsistencies and should be used to analyze trends only.

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2 comments May 16th, 2008

Portland Condo Market Update - May 2008

A recent reader prompted me for a condo update for Portland and it’s time to oblige.

Interestingly, the inventory of condos and townhomes has not ballooned with the slower sales market. In fact, since my last update in August 2007, the market contains just a couple hundred additional units. It’s not an insignificant number, but clearly, developers have cooled their jets, even converting some projects to luxury apartments while existing inventory is absorbed.

On the other hand, it’s not likely that all units available are marketed in RMLS. From a developer’s standpoint, there is little value in listing a multitude of identical units — thereby showing a surplus in supply and a weak bargaining position. So, consider this report a high-volume sample, just like the other reports I’ve done.

As of May 12, there were 3,896 active condo/attached home listings throughout the Portland metro area. The average list price is $329,000 for 1,344 square feet. In the August 2007 snapshot, the area had 3,675 listings at an average 1,336 sq. ft. and list price of $333,300.

In the past six months, the average list price is down just 2%–bringing the average price per square foot down to $245.

Like last time, I first rolled up condos and attached homes in the same analysis, then broke them out separately. The tables below show 1) Condos and Attached Homes together; 2) Condos only; and 3) Attached Homes only. All sorted by average list price:

Please note, this is just a snapshot as of May 12, 2008 of the active listings in the local multiple listing service. It may not include inventory sold by owner or through developer sales groups. Every effort has been taken to ensure accuracy, but is not guaranteed.

With a quarter of the active listings located in the City Center, I’ll be back later in the week with and update on downtown sales and active listings.

Add comment May 14th, 2008

April Showers Bring…More Showers

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.

7 comments May 2nd, 2008

Portland Real Estate Activity - March 2008

For March 2008, the Portland-area real estate market showed its normal seasonal increase in activity, but continues to lag behind 2007’s pace by nearly 33% in sales volume.

A slower rate of sales plus a consistent pace of new listings entering the market means more inventory. April started with 15,412 active properties in the multiple listing service. It’s taking on average 83 days to sell a home in the Portland market (vs. 65 in March 2007). A couple higher-priced markets (Lake Oswego/West Linn and NW Washington County) are now over 100 days on average.

You would expect pricing to be affected by higher inventories and longer sales cycle, and it has…although not on par with other national markets. Comparing year-to-year, March’s average sale price of $336,700 is virtually the same as last year (336,300). Median prices are even, too ($286,500 vs. $286,200).

Below are the year-to-date results through March 2008 for average and median sale prices, appreciation, and time on market (or DOM*), sorted by average sale price. (Remember, the appreciation numbers are a 12-month rollup compared to the previous 12 months and may not reflect recent months’ price declines.)

Source: RMLS, April 2008.

Appreciation percentages are based on a comparison of average price from the last 12 months (04/01/07 - 03/31/08) with 12 months before (04/01/06 - 03/31/07).

* Note: DOM or days on market may exhibit reporting inconsistencies and should be used to analyze trends only.

5 comments April 17th, 2008

Portland Real Estate Auctions Becoming Commonplace?

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.

2 comments April 15th, 2008

Market Talk with The Oregonian

I had an opportunity to talk with Dana Tims for today’s “Dealing With The Downturn” feature in the SW Weekly section of the Oregonian, which covers Tigard, Tualatin, and Sherwood.

Tims interviewed a homebuilder, supplier, remodeler, homeseller, and real estate agent to gauge how each sector is adapting to a slower housing market.

Here is the text, in case the link goes away:

Trying to adapt to the new housing market
A builder, a Realtor, a seller, a remodeler and a supplier discuss their strategies
Thursday, April 10, 2008
DANA TIMS
The Oregonian Staff

Until recently, a vibrant housing market provided many of the jobs and much of the income that stoked the southwest suburbs’ economy for the past half-decade.

Much has happened in the past year to erase the double-digit profits that home sellers were taking for granted.

The number of houses on the market, for instance, has increased almost sixfold since 2006, giving buyers the upper hand.

Houses are lingering on the market far longer than they did two or three years ago. The multiple offers and bidding wars common among prospective buyers as recently as 2005 have been replaced by sellers trimming asking prices 10 percent and more to keep buyers from shopping elsewhere.

Some areas are feeling the pinch more than others. Below are brief profiles of five people and their accompanying market sectors. Each is trying to find new strategies for coping with the downturn.

The Realtor
Ron Ares jumped from his job as marketing director for a high-tech company to a family-run real estate business in West Linn three years ago. That may as well have been a lifetime ago.

“Inventories were half of what they are now, full-price offers were commonplace and if buyers didn’t have all their ducks in a row, they were likely to miss out on houses that were selling the same day they came on the market,” said Ares, a Tigard resident who specializes in the southwest suburbs. “It was one open house, one advertisement and ‘Katie bar the door.’ ”

The market hit its peak, in terms of median sales prices and number of houses sold, last July or August, Ares said.

Ultimately, he expects that this year will see a considerable dip in closed sales when compared with 2007, but the drop will be less than the 35 percent chalked up so far this year.

Successful agents — that is, those not among the nearly 1,100 Portland-area Realtors who decided not to renew their licenses at the beginning of 2008 — need to pay close attention to the market and be willing to expand their skills sets, he said.

Some agents, for instance, are focusing on so-called short sales, where the balance owed on the mortgage is more than a house’s market value. The endeavor involves negotiating with lenders, who may be willing to settle for less to avoid foreclosing.

In Ares’ case, he is working only with longtime lenders who have endured down cycles before and know how to source solid loans.

“What I’m telling clients is, if you need to sell and don’t want to get stuck, look at what the peak pricing was and take 5 percent off the asking price,” Ares said. “Otherwise, they’ll just be chasing the market down.”

Read the full interview for how the other interviewees are coping with a slower real estate market.

1 comment April 10th, 2008

Sneak Peek at March 2008 Results

The March numbers are still trickling in, but stable enough to draw some early conclusions as to the state of the Portland metro real estate market.

Sales
Compared to March 2007, residential sales are down 39%, continuing the 2008 trend of being 30-40% off last year’s monthly pace.

Average / Median Price
Despite the slow sales performance, pricing is up (!) ever-so-slightly up from March 2007. Average price was $337,200 vs. $336,300 (March 2007). The median is up $1,000 from March 2007 ($287,000 vs. $286,000). Note, however, that the average sale price in March is down about 2% from February’s result.

Pending Sales
Perhaps the bright spot, pending sales (homes under contract) are roughly equal to this time last year (within 100 units) at 2,960 pending. AMENDED: Like sold inventory, pending sales are actually down about 40% from March 2007–RMLS contacted me regarding a difference in reporting methodology.

Inventory
Around 15,700 homes are now being offered, somewhere around 9.5 months at the current pace of sales. March 2007 showed just 10,577 homes.

Market area data available next week.

Photo courtesy of draggin, used under Creative Commons license.

8 comments April 9th, 2008

Portland Prices Run in the Red

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.

6 comments March 25th, 2008

Portland Market Activity - February 2008

Although sales activity picked up in February throughout the Portland metro area, the fact remains — a bulge of housing inventory continues to pile up.

As I mentioned the other day, only a little over 1,300 properties changed hands in the Portland metro area in February, leaving 10.4 months available inventory on hand — over 14,400 residential listings. For the year, closed sales are down almost 30% from this time in 2007.

The inventory overhang is having an effect on prices. Comparing the year-to-date median price of $280,000 to this time last year, it’s up a little (from $277,000 in 2007), but remember, the market was at $290,000 YTD back in July 2007. However, it isn’t the precipitous double-digit decline some have predicted.

Year-to-date, the average sale price was $342,800, up from $323,800 this time last year. Average time to market a home was 85 days (vs. 66 in Feb. 2007).

North Portland appears to be the darling market area right now. At just 55 days average time on the market and only 17% fewer sales than last year at this point, it’s perking right along. Yamhill County and Lake Oswego / West Linn are off to particularly slow starts with respect to volume (down 46%).

Below are the February 2008 results for average and median sale prices, appreciation, and time on market (or DOM*), sorted by average sale price. (Remember, the appreciation numbers are a 12-month rollup compared to the previous 12 months.)

Source: RMLS, March 2008.

* Note: DOM or days on market may exhibit reporting inconsistencies and should be used to analyze trends only.

25 comments March 14th, 2008

Early Results for February Market Activity

The exceedingly slow January results have raised some concern for those those in, about, or around the local real estate market.

Well, early (and unofficial) results for February show more of the same. The sales pace is picking up some, but does not compare well with February 2007 reports.

Just over 1,300 homes sold in the Portland metro area in February (although some stragglers will add a few to that number over the next couple days). In 2007 and 2006, the sales numbers were 1,899 and 2,038 respectively (over 32+% higher).

Additionally, the year-to-year comparison for median (or middlemost) price is just about flat at $279,000 compared to 2007. The monthly average price is around $347,000 (up from $326,700 in 2007). With the lower sales volume, it suggests that higher priced properties are pulling the average up.

Another interesting note, final sale amounts are running about 90% of the original list price on average. Sellers, get realistic about your pricing. This isn’t July 2007 anymore.

Remember, these are not final, official numbers released by the RMLS. But Excel pivot tables make quick work of just 1,300 sales. Come back around March 15 for final numbers and breakdowns by market area.

Technorati Tags: RMLS, market, activity, February, home, price, sales, average, median

1 comment March 4th, 2008