Friday, July 17, 2009

Portland Prices Down 13.5% in June - RMLS

June sales data was released yesterday according to the Portland Business Journal, and the average sales price for June was down 13.5% from June 2008, about the same as last months drop.

Closed sales were only down 5% from June 2008, which sounds like the rebate might be having and effect as well as reducing inventory.

More analysis later, TGIF! Enjoy the weekend folks!

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eln said...

Talked to a realtor I know- he mentioned that the market is now very pinched for the people looking for lower end homes- between 200-250g's.
I'm not interested until stabilization is here/eminent. I've been following this blog, Clint's blog, others and am really starting to wonder when the second round of banks/people who are holding on to homes until the market "turns around" will break. I suppose we (who are tired of renting) have to wait until the numbers make sense (same to buy as it is paying rent)?

PDX Outsider said...

eln, just sit tight. If you don't like your current rental, find a better one. Renting is still cheaper than owning.

Historically renting has been more expensive monthly than owning, because you're paying for flexibility and not having to take on the risk of maintaining your property.

As for when will the low end "break"? People will break when they need to sell. If they really need to sell and they get no offers, they will either lower the price, rent it out, or go into foreclosure right?

If you're seriously looking I would look for bank owned properties. Not short sales, but ones that have gone back to the bank. The banks don't want to own these places, and they aren't emotionally attached to them. They do want to cover their costs, but at some point will just cut their losses and sell.

Keep waiting, prices are still dropping and sellers will only get more desperate.

Anonymous said...

We are in the market right now and it's just depressing. We have a 720+ credit score, fairly low debt (student loans of 48k that we're slowly chipping away at) and a 55k income, but the banks won't approve us for more than 150k. There is NOTHING worth buying in that price range, unless we want to live in a crime ridden neighborhood that is. Oh well, guess we'll keep renting.

eln said...

tks outsider, we plan on doing just that- waiting, waiting, waiting, until it is safe to go out again. Regardless of how long we plan on keeping once we buy (indefinitely), we will continue to hold until the marked has formed a "W-L", more up, more down, then hopefully flat.

PDX Outsider said...

Anon July 21...

According to my basic calculations that sounds about right.

According to the 28/36 rule, your PITI payments should be about $1283 a month. Subtract $300 a month for taxes and $75 a month for insurance and you get a payment of $908. That's the payment I calculate for a $160k mortgage at 5.5%.

I imagine your student loans are probably $500 a month? Do you really want to be paying 38% of your monthly income for debt payments?

There must be some good $200k houses out there, and if not there will be soon. Of course this assumes you have a 20% down payment, right?

Leigh said...

Anonymous, be grateful the bank won't approve you for more. Yes, I'm the big downer on these blogs but I'd like to think that I'm encouraging folks to reconsider buying too much mortgage. We bought too much 10 years ago. Needed two incomes, weren't able to save for the rainy day and boy did it pour. Sure, I'm a worse case scenario but think about: Lay-offs two years after purchase, childcare expenses, furnace went out right after putting it on the market, water heater needed replacing and the roof was due for a complete tear down with bids ranging from $7K-18K and that was 3 years ago. Are you handy? Great if you are especially if you buy a beautiful old house.

Just have a plan, that's all I ask. The tax breaks and ther 'pride and joy' of home ownership aren't worth the life of debt.

Keep saving, pay down the student loans. Good luck, Leigh

PDX Outsider said...

I couldn't agree with you more Leigh, what's the point of stretching to buy a house you can't afford? It's not worth it.

In the year since we bought our place we've had to replace the roof, a chimney, and now a retaining wall. The roof we expected. The others? Expensive surprises. Good thing we still had savings even after buying.

Leigh said...

My nephew in Lincoln, Nebraska thought he and his partner did everything right buying their home for $72K, could you imagine? They figured in costs to replace the windows, paint the entire place, replace the front porch, redo the kitchen etc but they didn't predict, nor could they, the broken water line from the street two years after purchase ...$5,000! So on the credit card it goes:O(

Just be prepared for all that goes into home ownership. We were soooo naive when we bought. It's a huge 'investment' which is why these blogs are soooo wonderful. Educate yourself. Do the math.

Renting ain't so bad. It's kind of fun to call the maintainance guy when something starts leaking and to see someone else doing the yard work is very cool. But then, we aren't very handy and I hate yard work. Spent every Saturday growing up chasing my brothers with the wheel barrow as they mowed the 3 acres!

To each his own.

Anonymous said...

A new house is usually a better deal than a used one.
They are rarely priced much higher but when you figure out the energy savings from more efficient systems and insulation combined with the lower maintenance/replacement costs they are a better deal. Since most systems in a house last around 20 years, you should do the math to create a reserve account. This might add hundreds of dollars a month to your actual payment. If you need to put $600/month into a $200,000 house you could afford a $300,000 house's payment and live in a nicer house.

PDX Outsider said...

As with anything it's a trade off. I like the details, architecture and craftsmanship of the older houses. I just don't feel newer houses are built as well. So I'm willing to trade off upkeep for character.