Sunday, March 16, 2008

No Sign of a Turnaround - Feb Sales Data

The February sales data was just released, so let's start with the leading indicators, inventory and sales rate.

Overall inventory is up in Feb to 14,870 units, from 14,131 in Jan. More importantly, inventory is up 40% year over year, the same as in January. So no signs of inventory dropping.

The number of sales in Feb was up from 1084 in Jan to 1380 in Feb, which is normal as Jan is typically the slowest month. Sales in Feb 08 are down 29.3% from Feb 07.
Combine sales and inventory and you get months of inventory, which dropped from 12.8 months in January, to 10.8 months in February. Year over year months of inventory have more than doubled from Feb 07, up 102.8% in Feb 08.
So even though sales are down and inventory is up, the median price has managed to hold steady at $280k, up 0.7% from Feb 07. The market peaked in August 2007 at $300k, so today's price is down 7% from the peak.
In the last chart, if we assume prices remain flat at $280k, then by July we will see -7% Year over Year appreciation.

Overall the Portland market appears to continue softening, and it will be interesting to see how much of a bump we see in the spring. I believe that the contributing factors (speculating and cheap credit) that increased demand and led to the market run-up are effectively gone, and with the reduced demand we will eventually see prices drop.

If you find your dream house, bargain hard, you just might be the only buyer they see.


Ray said...

great info... thank you for taking the time to post this.

squeezed said...

Nice graphs!

But you should make clear that the future 08 data is an estimate. Perhaps change the color and post a note on teh graph.

PDXOutsider said...

Thanks, I was planning on doing that, but my excel skills ran out, and I'm fighting the flu and having trouble sitting up.

I'll update them once I'm back up and around.