Tuesday, March 31, 2009

Portland Existing Home Prices Fall 14% in January - Case Shiller

The January Case Shiller data was released this morning and January's median price for an existing home in Portland was down 14% from January 2008. (click on any chart to expand it to readable size)

The monthly change was even worse, down 3% from December, beating December's month over month 2.5% decline.

The median Portland home price is now down 17.5% from the peak in July 2007.

The chart above shows the price index for the past three years. You can clearly see that prices have now dropped to levels not seen since July 2005 and they continue to fall.

The above chart shows growth rates for Portland, Seattle, the San Francisco bay area (the other areas I consider as closest to Portland) as well as the 20-city composite index. Portland and Seattle are tracking each other very closely, still about a year behind the rest of the market.

While the price index continues to fall everywhere, the growth rate (or decline rate) for the 20-City index as well as for the San Francisco Bay Area markets appears to have reached an inflection point. We need a few more months of data before calling it a trend, but it looks like there are signs of a bottom approaching for the Bay Area as well as the entire country.

This chart shows the price index for the past 8 years. I also added a line in pink this month that represents Portland's average 6.6% growth starting in September 2000. You can see that the current price index is now well below the historic growth line which tells me that our historic growth rate is not sustainable, given that it's nearly double the rate of inflation. Others will try to use this data to show we've reached the bottom (or passed it) I'm sure.

This chart is more for historical curiosity than anything. It shows the previous bubble in the early 90's, and also shows that Portland prices had never dropped over the past 20 years, until 2008. But as they say, past performance is no guarantee of future performance!

The S&P/Case-Shiller Home Price Indices measures the residential housing market, tracking changes in the value of the residential real estate market in 20 metropolitan regions across the United States. These indices use the repeat sales pricing technique to measure housing markets. First developed by Karl Case and Robert Shiller, this methodology collects data on single-family home re-sales, capturing re-sold sale prices to form sale pairs. This index family consists of 20 regional indices and two composite indices as aggregates of the regions.

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Anonymous said...

I, along with this great blog, have been following the real-estate market price history closely since 2004. Being a Portlander, I have been perplexed at why Portland always lags the nation by about 1-year. Any thoughts? My theory is that we are a somewhat isolated eclectic-thinking city and rightly/wrongly live in a bubble (related pun not intended). I know, after speaking with numerous real-estate agents, that they believe Portland is different, but that was also the line spoken by brokers from Las Vegas, Phoenix, (endless city list here), etc. Any rational person knows its all about wages and supply/demand, and thus Portland has a LONG way to go on the downside further, especially considering the now absence of California speculators influencing our "bargain" prices. Anyone arguing otherwise needs to simply drive around the Pearl district and get a feel for the sheer amount of unoccupied "shadow" condo housing that seems to not being officially listed. Just how many empty high-rise condos are there in the Pearl anyway? Please don't tell me that Portland is any different in geographical desirability than other downtown areas (i.e. San Fran, San Diego, etc.) or I will puke, similar to the nation's housing market... lol

PDX Outsider said...

I have a theory that it has to do with our major industries in the PNW. Intel, Microsoft and Boeing are all second tier suppliers. The airlines will see demand drop first, then later reduce orders which will affect Boeing. Same with PC's. Dell and HP see PC orders drop, which then affects Microsoft and Intel.

It's just a theory...

As for the shadow inventory, yes it's huge. I haven't been able to put a figure on it but condo inventory is way higher than the 14 months or whatever our current overall inventory is.

Anonymous said...

You can get an idea of the Pearl's shadow condo inventory by perusing some of the Pearl District realty building listings. Some of the not so obvious shadow inventory buildings are the one's that are still displayed using cartoon graphic imaging. Remember the hype regarding The Encore? Has Hoyt Street properties gone bankrupt yet? You would think the Oregonian would at the very least release stories about the condo-apartment conversions that have been quietly going on. Developers MUST be watching their housing boom bank accounts slowly drained... I am sorry, but I don't have any compassion for them due their blatant stubborn greed.

On a side-note, whatever happened to this blog's realtor troll who was boasting of their municipal bond portfolio and bargain housing speculation a few months ago? LOL.

Leo said...

"You would think the Oregonian would at the very least release stories about the condo-apartment conversions that have been quietly going on. "

There have been several articles, including a rather long one last weekend.

Anonymous said...

Don't subscribe to the paper and thus must have missed those. I do go to OregonLive each day. Must have somehow missed those story topics there. Surprising given OregonLive.com's very readable circa-1980 site layout. *cough*

Note to Oregonian: Hire a few PSU computer science graduates and create your own personal web site versus the template one you currently outsource. How cheap can you get...

bearlee said...

Check out this article about the CYAN:


Article states another 1,300 luxury apartments coming open in the next 5 months. Sure wish he would have listed the buildings. I am losing track.

bearlee said...

Update on two properties previously discussed here...

5789 SW Salmon bought for $35,950 in 1989, listed for $400k, then $350K, then $300K. Sign disappeared so thought it would be rented...NOPE. Foreclosed at $252K US Bank/Chevy Chase 02-27-09

235 NE 94th last sold for $232K 03-06-2007, closed 02-27-2009 for $90K

Anonymous said...

The already suffering retail/commercial market does not get any assistance from Sue Miller or Tiffany Sweitzer at Hoyt Street Properties as they run that company like thugs. No-one wants to lease from them as word has gotten around how they treat their tenants. They are white knuckling their little grasp that is left of their greedy heyday. Thankfully, there are some developers in the pearl with integrity.The Pearl needs fresh blood if its going to survive. It will come...hold on pearlites if you can...five to seven more years til we're back!!!
(The realtor trolls will disagree) Unfortunately for some that may be too long.