Wednesday, July 1, 2009

Portland Prices Continue to Slide in April - Case Shiller

The April Case Shiller data was released yesterday and April's median price for an existing home in Portland was down 16% from April 2008. (click on any chart to expand it to readable size)

The monthly change was down 0.6% from March, much less than the 2.1% drop from February to March 2009. Don't take this as a sign that prices are stabilizing, this is just the typical spring "bounce" as flowers bloom and sellers get a little crazy.

The median Portland home price is now down 21.3% from the peak in July 2007, and prices continue to decline.

At this point if I would predict prices will continue to decline through 2009 and well into 2010.

The chart above shows the price index for the past five years. We are still looking at the same prices seen back in June 2005, almost 4 years ago

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 still tracking each other very closely, however in April Seattle saw a slight uptick in prices, while Portland prices continued to decline. This might reflect Oregon's record unemployment, or just a momentary anomaly. We'll have to wait and see if it turns into a trend.

While the price declines for the overall market appears to have hit bottom, Portland and Seattle price declines continue to set new records. The price declines in the SF Bay Area also seem to have bottomed out and are now slowing. Prices are still declining, just not as fast as in previous months.

February was 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. The 20 city index peaked in July 2006, while Portland peaked a year later in July 2007.

This chart shows the price index for the past 8 years. I also added a line in pink 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. But it's likely that we'll over correct before getting there.

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!

The above chart is a new addition. It shows how Portland is faring compared to other cities. Our maximum price decline is still below average, but as we all know Portland was late to this party, a party most homeowners didn't want an invitation to. I predict we will be worse than average shortly.

{Note, my apologies for the slow posting. Work has continued to keep me busy and I'd much rather be overworked right now than unemployed, but it has cut into my personal time}

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.

1 comment:

PDX Outsider said...

The previous comment was deleted as it was a shameless spam attempt to advertise a new housing development.

Hey, if you want to advertise here, contact me! My rates are obscenely low and you obviously want to reach this audience. But don't think you can just sneak in an ad.