Wednesday, April 29, 2009

Portland Existing Home Prices Drop 14.4% in February (updated with analysis) - Case Shiller

The February Case Shiller data was released yesterday and February's median price for an existing home in Portland was down 14.4% from February 2008. (click on any chart to expand it to readable size)

The monthly change was slightly better this month, only down 1.9% from January as compared to the 3% drop from December to January.

The median Portland home price is now down 19.1% 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 well past the prices seen 3 years ago, and have hit levels not seen since July 2005.

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 rest of the country.

February is the first month where the price decline didn't set a new record for the SF Bay Area and for the overall 20 city index.

This chart shows the price index for the past 8 years. I also added a line in pink this month that represents an average of 5% growth starting in January 2001. You can see that the current price index is now below the 5% average growth line. An over-correction is to be expected, but we are also probably correcting to a more reasonable 3-4% long term growth rate, or about the rate of inflation.

This chart 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!

What else would you guys like to see? Any predictions on when/where we'll see the price bottom?

Please feel free to distribute these charts as long as you leave the footer!

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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commercial real estate said...

at least it is much better...portland home prices are much reasonable offer than others..

PDX Outsider said...

Huh? I think you have a typo in there somewhere. Are you saying prices are much more reasonable? Yes, I'll agree to that, but they're going to get even more "reasonable".

If you're saying they're more reasonable than "others", which others? San Francisco? Salem?