How is your neighborhood doing?

Trulia is a wealth of information, and one of my favorite features is their pricing heat map.

You can see recent price activity for individual neighborhoods to see which 'hoods are still hot, and which are fading fast.

I've included the data by zipcode here, as I can't fit it by neighborhood, but if you go here you will see it.

Just be careful, the amount of data in these analysis is small, so the margin of error is high and the trends can change quickly.

Any comments on why certain areas are holding their prices while others aren't?

Portland Market Dashboard - New Feature

This is something I've been thinking about for a number of months, and finally got around to putting together. It's a dashboard that shows which direction the Portland market is heading, based on a number of leading indicators. We use the same basic format at the company I work for to track the business (sales, inventory, revenue, units, etc)

There are a number of leading indicators that drive the increases or decreases in housing prices. They basically come down to supply and demand. Supply being the number of homes on the market, demand being the number of qualified, able buyers.

The top part of the chart shows the leading indicators, the bottom half shows the lagging indicators, or the results.

I will keep refining this and adding to it monthly and with it we should be able to predict when the market has hit bottom and is ready to rebound. I don't believe you can predict the bottom of the stock market, but I think we can predict the bottom of the housing market relatively easily. What will be harder to predict is how much prices lag the bottom, and when things actually pick up. We might bounce along the bottom for a looong time.

Portland Median Prices down 6.7% in August - RMLS Market Action

RMLS released their August sales data and in what shouldn't be a surprise at this point, median Portland prices continue to decline, falling 6.7% in August compared to last year. Average prices are also declining, falling 9.7% compared to August last year.

One major change to note is that the RMLS is now reporting the total time a property has been on the market, not just the most recent time since a re-listing. The change from 56 days to 121 days is largely due to this change, although some increase is due to more properties on the market and fewer buyers. This should help reduce the number of re-listings as re-listing a property will no longer reset it's time on the market, unless the property is off the market for over 30 days. Charles Turner talks about this in more detail on his blog.

Inventory in Months seems to have stabilized around 10 months of supply. I believe a "normal" market should be between 3-6 months of supply, but this is a metric that seems to change regularly.

The above chart also shows changes in th emarket by sub-region. This shows that some areas such as North Portland and NE Portland are holding up a bit better than areas such as Milwaukie/Clackamas. However take this data with a serious grain of salt, this is 12 month rolling data, not monthly data, so any significant changes are still being masked and areas such as N and NE Portland might be negative Year over Year, but won't show up for a few more months.

I'd love to see the RMLS report their data monthly instead of a 12 month rolling average. I bet it changes once the market picks up, as they'll want to highlight the increase. I'd like to see the change now.

Portland Exisitng Home Prices Fall 5.8% in June - Case Shiller

We're taking a break from a great discussion on renting vs. buying today to highlight the latest Case Shiller data.

The median price of existing homes in the metro Portland area fell 5.8% year over year in June 2008 according to Case Shiller, continuing the trend that began in July 2007. This is down 6.2% from the peak in July 2007.

The slight month over month gains we saw in April and May have now reversed, and the price index is down 0.3% from May.


The chart above clearly shows that 1. there was a bubble in Portland, and 2. it is now deflating. The chart and also shows a bit of a plateau over the winter as sales slowed and seller's held out that prices would rebound in the spring.

We've also seen the rate of decline slow a bit as peak buying season is in effect, but look for the decline to accelerate later in the year.

I predict we'll be down at least 10% year over year by the end of December. Any other predictions?

The chart above shows the price index over the past few years. You can see a slight increase in the median price the past two months which corresponds with the seasonality seen in previous years.
The above chart shows 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 nicely, still about a year behind the rest of the market. The San Francisco area has really fallen off the cliff and continues to plummet.

The above chart shows the price index over the past 8 years. Prices have now fallen back to the May 2006 level, but look to have stabilized through the summer buying season.

I've added one more chart, which shows the price changes for the past 20 years. We saw one previous bubble around 1990, and then the more recent bubble. Prices have not been negative in Portland since they started tracking the market until just recently.

ABOUT CASE SHILLER:
The Case Shiller data focuses on the change in price of existing homes, and tries to exclude the effects of remodeling, or major damage. It tries to exclude investment properties and foreclosures (which would make the data look worse) as well as transfers between family members. It's a much better indicator of how the price of the average or typical house has changed from year to year. For full details on their methodology see their factsheet.

Portland Exisitng Home Prices Plateau - Case Shiller

The median price of existing homes in the metro Portland area fell 5.2% year over year in May 2008 according to Case Shiller, continuing the trend that began in July 2007. This is down 5.9% from the peak in July 2007.

The chart above clearly shows that 1. there was a bubble in Portland, and 2. it is now deflating. The chart and also shows a bit of a plateau over the winter as sales slowed and seller's held out that prices would rebound in the spring. Have I mentioned I like charts?

We're also seeing a bit of a plateau right now as peak buying season is in effect. This is seasonal so don't expect it to continue rising all year.
The chart above shows the price index over the past few years. You can see a slight increase in the median price the past two months which corresponds with the seasonality seen in previous years.The above chart shows 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 nicely, still about a year behind the rest of the market. The San Francisco area has really fallen off the cliff and continues to plummet.
The final chart shows the price index over the past 8 years. Prices have now fallen back to the May 2006 level, but look to have stabilized through the summer buying season.

ABOUT CASE SHILLER:
The Case Shiller data focuses on the change in price of existing homes, and tries to exclude the effects of remodeling, or major damage. It tries to exclude investment properties and foreclosures (which would make the data look worse) as well as transfers between family members. It's a much better indicator of how the price of the average or typical house has changed from year to year. For full details on their methodology see their factsheet.

Portland Existing Home Prices Drop 5.2% in May - Case Shiller

The Case Shiller data was released this morning, and the median price for existing Portland homes fell 5.2% in May from May 2007.

The peak price was in July 2007.

Portland Existing Home Prices Continue to Slide in April - Case Shiller

The median price of existing homes in the metro Portland area fell 4.7% year over year in April 2008 according to Case Shiller, continuing the trend that began in July 2007. This is down 6.2% from the peak in July 2007.

The chart above clearly shows the bubble deflating, and also shows a bit of a plateau over the winter as sales slowed and seller's held out that prices would rebound in the spring.


The chart above shows the price index over the past few years. You can see a slight increase in the median price this month (April 2008) which corresponds with the seasonality seen in previous years.
The above chart shows Portland, Seattle, the San Francisco bay area, as well as the 20-city composite index. Portland and Seattle are tracking each other nicely, still about a year behind the rest of the market. The San Francisco area has really fallen off the cliff and continues to plummet.

The final chart shows the price index over the past 8 years. Prices have now fallen back to the May 2006 level, but look to have stabilized temporarily. Unfortunately 2 points don't make a trend, so we'll have to wait and see if prices hold through the summer.

ABOUT CASE SHILLER:
The Case Shiller data focuses on the change in price of existing homes, and tries to exclude the effects of remodeling, or major damage. It tries to exclude investment properties and foreclosures (which would make the data look worse) as well as transfers between family members. It's a much better indicator of how the price of the average or typical house has changed from year to year. For full details on their methodology see their factsheet.

Price Declines Hold Steady for May - RMLS

The May RMLS data was released last week (yeah, I know I'm late to the party, it's been a busy week and I certainly wan't spending Father's day weekend inside on the PC instead of playing with my daughter!)

The median price in May 2008 was 287,500, down 3.2% from last year, but up 5% from April's median price of $275,000.

I'll post more once I get more info from my source. I could use a second source if anyone has access to RMLS data that they'd like to share.

Portland Existing Home Prices Drop 4% in April - Case Shiller

Prices of existing Portland homes dropped 4% year over year in April according to Case Shiller, down an additional 1% from March. Prices have rolled back to the same level as May 2006, wiping out almost 2 years of gains.

More data later today once I have a chance to update the spreadsheets.

Median and Average Prices Drop in April

According to the RMLS data released late last week, both the average and median prices in the Portland metro area dropped last month.

The median price dropped 3.5% from $280k in April 2007 to $275k in April 2008, while the average price dropped 3.9% from $338.2k to $325k.

The chart above shows the forecasted appreciation if prices hold steady. We'll see -8.3% appreciation in July if the median price holds steady at $275k.

Inventory continues to grow as more sellers put their homes on the market. Sales pace has increased as it typically does in the spring, but is still well down from last year. This chart clearly shows the decrease in sales, and the corresponding increase in inventory.

The affordability index moved closer to neutral in April, likely due to the decrease in median price.
The spread of list to sales price also increased in April, likely due to sellers feeling more confident as the spring selling season hits.

Thanks again to Chris at Johnson Gardner for the charts and analysis. He's been swamped (as have I) and apologizes for the lack of more detailed analysis. Maybe if we scream loud enough he'll find a few minutes this weekend to crank them out.

I should be back to posting more frequently as my arm is healing nicely and I can type again.

Portland Home Prices Continue Falling - Case Shiller

The median price of existing homes in Portland declined 2.0% from February 2007 to February 2008 according to the S&P / Case Shiller Home Price Index, continuing the trend that started in April 2006 when price growth peaked, and increasing the decline that started in January. The median price declined 1.4% from January. None of this is surprising given the record high inventory levels, 40% drop in sales, and tightening of the credit markets.

The chart also shows what looks to be a small plateau at the end of last year. This is likely due to the seasonally slow months, and seller holding out for better pricing in the spring. When that didn't materialize buyer's relented and dropped their price.

The median price of existing homes in Portland is now lower than it was in June 2006, wiping out over a year and a half of appreciation.

This chart shows the median price over the past three years, making it easier to see the comparison to April 2006.

Nationally, the 20 city index declined 12.7% in February and shows no signs of slowing. While prices in other regions around the nation are well on the way towards correcting (see the recent National City report), Portland is just beginning its correction.

My advice for sellers? Look at where similar houses were selling in the Spring of 2006 (not 2007) and price 5-10% below that, or else you risk following the market down even further.

My advice for buyers? Look at where prices were in the Spring of 2006, and offer 5-10% below that. Or just wait, those prices will be here soon enough.

ABOUT CASE SHILLER:
The Case Shiller data focuses on the change in price of existing homes, and tries to exclude the effects of remodeling, or major damage. It tries to exclude investment properties and foreclosures (which would make the data look worse) as well as transfers between family members. It's a much better indicator of how the price of the average or typical house has changed from year to year. For full details on their methodology see their factsheet.

No Sign of a Turnaround - Feb Sales Data

The February sales data was just released, so let's start with the leading indicators, inventory and sales rate.

Overall inventory is up in Feb to 14,870 units, from 14,131 in Jan. More importantly, inventory is up 40% year over year, the same as in January. So no signs of inventory dropping.

The number of sales in Feb was up from 1084 in Jan to 1380 in Feb, which is normal as Jan is typically the slowest month. Sales in Feb 08 are down 29.3% from Feb 07.
Combine sales and inventory and you get months of inventory, which dropped from 12.8 months in January, to 10.8 months in February. Year over year months of inventory have more than doubled from Feb 07, up 102.8% in Feb 08.
So even though sales are down and inventory is up, the median price has managed to hold steady at $280k, up 0.7% from Feb 07. The market peaked in August 2007 at $300k, so today's price is down 7% from the peak.
In the last chart, if we assume prices remain flat at $280k, then by July we will see -7% Year over Year appreciation.

Overall the Portland market appears to continue softening, and it will be interesting to see how much of a bump we see in the spring. I believe that the contributing factors (speculating and cheap credit) that increased demand and led to the market run-up are effectively gone, and with the reduced demand we will eventually see prices drop.

If you find your dream house, bargain hard, you just might be the only buyer they see.

Portland Median House Prices Finally Drop as Sales Plunge 42%

A friend of the blog recently sent some preliminary February data:

1) Feb 2008 saw only 1,208 sales, down 42% from 2,087 in Feb 2007, but up from 1,084 in Jan 2008.

2) I would expect median prices to stay roughly the same in Feb 2008. My preliminary number is $276,600, slightly down from $280,000 in Jan 2008. However, looking back to Feb 2007, this would be the first period of Portland's downturn demonstrating negative year-over-year appreciation (Median $278,000 in Feb 07)

3) Given a conservative final sale pace range for Feb of 1,250 to 1,350 sales, look for inventory to fall slightly, A range of 10.6 months to 11.4 months"

A 42% drop would easily trump last months 32% drop, but given that the few last sales have yet to be recorded we'll probably end up closer to a 35% drop.

It also looks like we're headed into negative territory, finally. I'm tired of explaining to people that no, the Portland market is not still appreciating. We might finally have the data to show it on a year over year basis.

Again this is preliminary data, but it doesn't look like the spring bounce has started to materialize just yet, even with the fantastic weather we had in February.

Portland median prices continue to fall

The latest Case Shiller data for December 2007 was released today. The median Portland home price fell 0.6% from November to December, from 183.65 to 182.47.

Year over year growth slowed slightly from 1.3% to 1.2%, but is surprisingly still positive.Don't forget that this data is backwards looking, and almost two months old at this point. Given today's economic indicators I expect things will continue to get worse.

On the bright side I do believe that Portland is weathering the storm for a few reasons.

1. The urban growth boundary prevents the overbuilding that other cities have seen.
2. We have a lower than average foreclosure rate than other areas, but we are certainly not immune from risky, 100% financing.

33% off in Irvington - 2817 NE 24th Ave.

I stumbled across this bungalow this weekend, which is currently offered "subject to a short sale" at $450k, down from the previous selling price of $675k.

MLS ID# 7092039

Any tips from those in the know?

Sidelined Home Buyers Frozen by Fears

I caught this article today: Sidelined home buyers frozen by fears.

There are a couple great quotes that sum up the current lack of buyers:

"Rochelle Getzler, a housewife in Nassau County, outside New York city, and her husband, Abraham, have been on the fence for nearly a year, waiting for an opportune time to buy.I think it is too risky to buy right now," she said. "Yes, prices have come down, but they have come down from extremely high levels."

""I think home prices are going to continue falling, so I see no compelling reason to buy a home right now when we can hold off and buy at a lower price later this year or early next year," she said.

Economists tend to agree. Housing markets in some parts of the country will suffer drops of more than 30 percent before the housing crisis is over, according to a report in December by Moody's Economy.com."

""The economic fundamentals in housing are weak and I see no sign of a bottom," said Chris Mayer, director of the Paul Milstein Center for Real Estate at Columbia Business School in New York."

These quotes all pretty much sum up my current position for buyers. I see two strategies to play:

1. Offer X% lower than current asking prices, X being wherever you see the market bottoming out in the next 2-3 years.
2 Wait for signs that prices have stabilized, and might increase again, and start making offers then

Has anybody made any offers recently that were > 20% off asking price, and had them accepted?

What Would You Like to See?

The blog is starting to see some traffic, so thank you to all who are coming to visit and leaving comments.

My goal is still to find as much data as I can, and help paint a true portrait of the Portland real estate market. But I'd like to know what kind or information and analysis YOU would like to see. My current thoughts include:

1. Median pricing trends, predictions and drivers
2. Neighborhood pricing trends and drivers
3. Foreclosure statistics and locations
4. Pricing reductions
5. Inventory changes due to delistings (unlistings?)
6. Exposing real estate agent tricks and misinformation
7. Sub-prime and ARM loan information

Outside of market analysis, I'm also an architecture buff (and Portland is a fantastic place to be for interesting homes!), but not a fan of quick flips. Is there any interest in coverage of:

A. Interesting properties for sale
B. Bad flips

Let me know your thoughts, and if anyone has access to NAR data they'd be willing to share, please let me know.

Portland Home Price Appreciation Continues March South

The latest S&P Case Shiller data was released a few days ago, and the median price appreciation continued to drop in November 2007, down another 0.6% from 1.9% to 1.3%. It's still positive, but at this rate it will be negative within a few months, and I haven't seen any news that gives me any hope of things turning around.

Hey, we're now the ideal buyer!

According to this article in the NYT, "Sorting out the New Housing Market", we are now the ideal buyer! In other words: we're renters with flawless credit and enough cash for a down payment. We don't need to sell our house before buying one, and we don't need risky loans.

However we're really enjoying our freedom, knowing that we could move at a moments notice and not have to sell a house. Or that we could downsize and slash our rent if we wanted to cut costs. Or that we could live off that cash cushion for months. Plus we're living in a rental that would cost us 30% more to own. Let's just say that we're in no hurry to jump into a house.

Portland home price appreciation drops to its lowest level since Jan 2000

According to the latest data from the S&P/Case Schiller Home Price Index, the YoY growth rate for the median price of existing homes in the greater Portland area dropped to 1.9%, it's lowest level since January 2008. This is just the latest data point in a long slide that began in April 2006, and doesn't look like it will stop until it's well into negative territory.


Just looking at the chart should answer any the question "did Portland experience a bubble?" Yes.

Has it popped? Yes

Have we seen the bottom yet? Nope

Is it a good time to buy? If you plan to be here longer than a few years, it might be. I think I'll wait a few more months at least.

The data is located here for anyone else who is curious::

http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_csmahp/0,0,0,0,0,0,0,0,0,1,1,0,0,0,0,0.html

I'll be posting updates as the new data becomes available. Stay tuned.