Portland Existing Home Prices Drop 15.3% in March - Case Shiller

The March Case Shiller data was released today and March's median price for an existing home in Portland was down 15.3% from March 2008. (click on any chart to expand it to readable size)

The monthly change was down 2.1% from February, about the same as the 1.9% drop from January to February.

The median Portland home price is now down 20.8% from the peak in July 2007.


The chart above shows the price index for the past five years. I had to go beyond 3 years as we are now staring 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 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 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.

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. 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!

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

{Note, my apologies for the gap in posting. My folks were in town, then my company decided to give me a huge project to work on. I'm not complaining, I'd much rather be overworked right now than unemployed, but it has cut into my personal time}

ABOUT CASE SHILLER:
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.

Median Home Price Drop 14% in March - RMLS

The March RMLS data was released this week, and there doesn't seem to be much sign of a recovery just yet.

Ignore the mainstream media comments about sales being up. They always rise in the spring, the real measure is of course how they compare to last year. And in that comparison things are bad. Even the RMLS was unusually stoic stating:

"Portland metro area market activity continued to grow over last month, but fell short of reaching March 2008 levels."

There were 1184 closed sales in March 2009, down 30% from March 2008.

Sales were up 28% from February 2009, but they were up 22% from Feb to March 2008, and I'm sure they were up a similar amount in 2007.

A couple other highlights:

The March 2009 median price was $246,400, down 14% from $286,500 in March 2008.

3685 new properties were listed in March 2009, down 28.5% from March 2008. This is the one bright spot, as new listings fell to their lowest level in 10 years, signaling that the glut of inventory might eventually start clearing up.

Total inventory dropped 8%, from 15,388 to 14,208 in March 2009. This also signals that the bottom might be coming, as inventories shrink prices will eventually stabilize.

Unfortunately prices are still dropping like a rock with no sign of letting up, which is all most folks really care about. And given our 12%+ unemployment rate I don't see things getting better anytime soon.

March RMLS Data and Analysis

The March RMLS data was released this week and it's not as bad as I expected. A big thank you goes out to Chris at Johnson Gardner for help with the analysis. I thought I was a good analyst, but Chris is better. Click on any of the chart to enlarge them. On to the charts!



The median price in March was basically flat, up only 0.6% Year over Year, and up 2.7% from February. Year over year growth has basically been flat for three months now.

Inventory as measured by the absolute number of homes on the market rose again in March for the third straight month, nearing 15,900 units. So while inventory in terms of months has fallen since January as a result of a more accelerated (seasonal) sales pace, the total number of sellers on the market has increased. In other words, the rate of sales in the first quarter has yet to keep pace with new additions to the market. The rate of sales is down 39.1%, and I believe that the lack of buyers will eventually drive down prices.

The affordability measure in the metro area fell in March for the second straight month. This was partially the impact of a monthly increase and median prices [$280,000 in (Feb 08) vs. $286,500 (Mar 08] and a slight uptick in the average 30-year FRM.

The results of this figure are deceiving. This chart calculates the spread of listing to sales prices in an attempt to measure seller optimism (or reality). While the results for March indicate a narrowing spread, this was the result of a higher sales price and stagnate listing prices. This would indicate that on average--at least in March, that buyers came back to the sellers in terms of price and not vice versa.

Chris also added a couple cool new charts and some more detailed analysis this month.

This is a cool visual that scatter plots all sales under $1,000,000 by price and sq. ft. The trendlines would indicate that prices have in fact remained roughly consistent year over year.

This chart shows the distribution of sales by price cohort. Using $300,000 as a benchmark there was a slight 1.1% shift toward higher priced homes (Above $300,000) obviously accounting for the modest uptick in median price.

This chart displays the year-over-year change in sales pace by price point. This chart allows us to measure which cohorts of the market are seeing the biggest slowdown. The 56% decrease in homes below $150,000, and to a certain extent $200,000 to $300,000 is an indication of marginal or first time buyers either waiting it out or failing to get financing.

A summary of market activity by product type. (Note from Chris: Note that RMLS issued a section on condo appreciation that listed an average condo sales price of $336,500 for March 2008. I am fairly certain this is a miscalculation). Not how the average sales price in the market is no longer increasing. In my opinion this would suggest that tightening in terms of pricing is starting to occur.

This data differs from the data reported in the RMLS Market Action. The RMLS likes to report the last 12 months vs the previous 12 months, and based on this methodology it appears that the average price is still increasing. I believe our method here is more accurate, and more clearly shows changes in growth, both up or down.

It shows inventory in terms of months (using the Realtors calculation) by price point. Good luck selling your $600,000+ home.

This chart shows median sales price and sales pace by subregion. Next month we'll get to year over year changes.

Again a big thanks to Chris for all this analysis.