News To End The Year On

Notice I didn’t qualify whether it was good or bad news.

October Case-Schiller Index

At one time eagerly anticipated, but now dreaded, the last Tuesday of each month brings the S&P/Case-Shiller Index, which measures U.S. home prices going back to 1988.

In looking at October 2008 results, Portland joins the double-digit loss club, along with Seattle and Atlanta as first-timers. Portland showed a 10.1% year-over-year decline in home values when compared to October 2007.

The national average is -18.0% for the 20-city index, taking average prices back to March 2004 valuations. It is the sharpest annual decline yet in the study’s history. Las Vegas, Phoenix, and San Francisco are all down over 30% in value over 1 year.

The Case-Shiller data (looking at data compiled from 2 months back) shouldn’t be a shock to regular readers. Similar results have been reported here using the multiple listing data. I would expect November and December reports to show similar trajectory into the negative.

December performance

As the year closes, the early warning indicator of low pending sales numbers from the past few months is showing up as corresponding low closed sales for November and now, December.

As of December 29, only 674 homes had sold throughout the Portland metro area and only 688 homes became sale pending during the month. November had 1,041 closed sales by comparison, which was the lowest number since 1993.

Perhaps there will be a significant month-end crush of closings due to last week’s weather, but I suspect the total sold count will be well under 1,000 homes. I will run early December numbers around January 5.

UPDATE 9:15 am - Nifty chart from NY Times (login required), hat-tip to Ryan Frank at The Oregonian’s Front Porch blog.

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1 comment December 30th, 2008

A White, Albeit Slushy, Christmas in PDX

Merry Christmas to you and yours from re:PDX.

As you can see from the NASA image below, we’ve been under the weather (coined the Snowpocalypse by PDX Twitter users).

About 12 to 18 inches of snow, ice, snow, ice, and now some thawing–which will lead to some unstable Christmas travel in and around Portland.

A fitting end to a, frankly, weird year. More on that after Christmas.

For now, enjoy the Eve and the Day, count your blessings, cherish your loved ones, and receive tidings of comfort and joy from yours truly.

Hat tip to PAgent at OurPDXNetwork for the NASA image and link.

Add comment December 24th, 2008

Portland Real Estate Results - November 2008

RMLS released the November 2008 report and it corroborates what I had reported last week — weak unit sales and falling sale prices.

Year-over-year average sale prices are down 10.5% from 1 year ago, and the median value is off by 7%. As a percentage of 2007’s rate, the total number of sales is down 32% (consistently all year). Fortunately, new listings are down 8.3%, but that doesn’t help the absorption rate much. At this pace of sales, the market has 15 months of active listings–easily the highest that I could find in RMLS records going back to 2000.

Closed sales in November were the lowest since February 1993 and pending sales for the month were the lowest since 1997.

From the peak market of July / August 2007, median and average sale prices are off 12-13%. Values are roughly equivalent to March 2006.

November 2008 Market Activity, vs. October 2008 and November 2007

Here’s how Portland’s various market areas break down, year-to-date:

Source: RMLS, December 2008.

* Total Market Time - the number of days from when a property is listed to when an offer is accepted on that same property. If a property is re-listed within 31 days, Total Market Time continues to accrue; however, it does not include the time it was off the market. The old Average Market Time measured the days a listing number was active–not taking into account re-listings.

1 comment December 15th, 2008

Early Peek at November 2008 Market Results

I took an early snapshot of Portland’s November real estate market activity and it was pretty meager.

Only 1,015 homes sold in the month. That is the fewest sold in any given month going back to February 1993. This isn’t just a seasonal pattern. By comparison, for the Novembers in 2005-2007, home sales averaged 2,173.

The median price will come in around $266,000, the lowest median price going back to March 2006. The average should end up around $309,000. These numbers are 12-13% off the peak pricing of July - August 2007.

I will explain next week why (and for whom) this is good news.

RMLS will publish final numbers late next week or around the 15th, so come back to hear about pending sales, active inventory, and more.

Photo by Liquid Paper, used under Creative Commons license.

19 comments December 5th, 2008

CBS’ The Amazing Race Sprints to Finish in Portland

Hardly real estate oriented news today, but Portland scenery voyeurs will enjoy seeing extended coverage of our fair city this weekend as the season finale of CBS’ The Amazing Race airs Sunday, December 7 at 8:00.

The footage was shot back in May, but my in-depth DVR scanning on the tightly edited preview for this week shows scenes in downtown, plus the big sprint to the finish at what appears to be Pittock Mansion.

My contact with the Pittock Mansion Society would neither confirm or deny the rumor.

From the CBS site:

Racers are challenged with a course used to confront fears in Oregon’s most dangerous business: logging. One racer helplessly watches from the ground as their teammate struggles with a fear of heights up above. Teams ride a 2,000 foot zip line across the Columbia River. Racers compete neck and neck in a nail-biting competition that tests their memory of events from the entire race. Teams beg Portland locals to help them find the place where “the magic is in the hole.” After a race of nearly 40,000 miles across five continents, one of three final teams will cross the finish line first to be declared winners of THE AMAZING RACE and take home 1 MILLION DOLLARS.

7 comments December 3rd, 2008

Thanks

To all my family, friends (both virtual and real), clients, and re:PDX readers,

I hope you will all pull yourself away from the news of bailouts, recessions, layoffs, housing slumps (and today, terrorism) to cherish a day with your family and friends in the beginning of a season that will certainly highlight our real blessings unlike any before.

Add comment November 26th, 2008

A Busy News Day

Before the nation falls into a tryptophan-induced coma, there sure was a lot of real estate and mortgage chatter today.

First, the September 2008 Case-Shiller study reports home values down 17.4% over 12 months in its 20-city sample. Portland was down 8.6% from a year ago, and another 1.3% from the August numbers–the 7th ‘best’ ranking in the study. Home prices in Portland are down 9% from the peak of July 2007. According to the numbers, the Portland area has given back all value earned since February 2006. Read Case-Shiller report here.

Then the FHFA (Federal Housing Finance Agency, formerly OFHEO) put out their numbers, showing Portland down only 2.64% for Q3 vs. the same quarter in 2007. There are significant differences in the two studies, but I don’t have time to highlight them. (Here are some reasons why the Shiller and OFHEO numbers differ.)

Finally, mortgage rates reached the year’s lowest levels upon news of the Fed’s $500 billion buyup of mortgage-backed securities from Freddie, Fannie, and Ginnie. I heard from my normal list of trusted lenders, then from another half dozen of which I have never met, that rates had plummeted today. Can’t blame the latter for the spam–good news is hard to come by. I heard conventional and FHA rates could be found as low as 5.25% APY.

(Note to local lenders who send 2+ megabyte newsletter attachments with rates, I heard this first from Rhonda Porter in Seattle, via Twitter. Check it out. My email inbox will thank you.)

Photo by toddheft, used under Creative Commons license.

Add comment November 25th, 2008

NAR Releases Q3 Numbers

The National Association of Realtors released their 3rd quarter numbers. The nationwide median price is down 9% from the 3rd quarter 2007.

A handful of metro areas showed some appreciation, but in the Portland metro area, prices are down 9% from their August 2007 peak. The map below is consistent with what has been reported here.

From their release:

Four out of five metropolitan areas recorded lower home prices in the third quarter from a year earlier, while existing-home sales fell in 32 states from the second quarter, according to the latest quarterly survey by the National Association of Realtors®.

In the third quarter, 28 out of 152 metropolitan statistical areas showed increases in median existing single-family home prices from the same quarter in 2007; four were unchanged and 120 metros experienced declines.

Add comment November 19th, 2008

The Clock is Ticking for FHA Changes

Anyone considering a home purchase or a refinance using FHA programs needs to be aware that HUD has announced that changes are coming January 1, 2009. I’ve received notes from several local lenders and want to pass them along.

Loan Limits
HUD has posted 2009 loan limits for FHA loans, and in the Portland metro area, those limits are falling from $418,750 to $362,250 on a single-family residence. Counties affected are Multnomah, Clackamas, Washington, Yamhill, and Columbia. The higher loan limit was a temporary program from Stimulus Package earlier this year, but HUD has set the limit at 115% of the area median price. Note that higher loan limits are available for 2-4 unit properties.

Down Payments
FHA loans are popular for their 3% minimum down payment, but that changes to 3.5% in January. That takes a down payment on a median-priced Portland home at $275,000 from $8,250 up to $9,625.

Cash-Out Refinances
Although no date has been set for this change, the loan-to-value ratio for FHA refinancing with cash out will fall to 85% from the current 95% level. So, on median-priced Portland home of $275,000, the max loan amount would be $233,750.

More at the FHA homepage.
Photo courtesy of The Rocketeer, used under Creative Commons license.

4 comments November 18th, 2008

Portland Real Estate Market Results - October 2008 Final

Final numbers for the Portland metro area real estate are available today from RMLS. My thoughts about the results:

A one-month rise in median and average pricing: Well, it’s a small sample (only 1,465 homes sold in the month), so I’m not surprised to see the prices tick up. The median and average sale prices were up 3.0% from September. But one month does not make a trend.

Declining Inventory: Slowly, ever so slowly, homes are selling, expiring, or being withdrawn. The metro area ends the month with 750 fewer homes on the market than in September. Still at the pace of sales shown last month, there are over 11 months of housing inventory available.

Warning Signs: Pending sales, down to just 1,248—a 25% drop from a month ago. Although part of the seasonal pattern, there were also 10% fewer sales compared to last month.

Central neighborhood continue to outperform suburbs: North, Northeast, and Southeast Portland markets show the shortest market times (< 100 days) and the best price stability. North and Northeast Portland, along with Lake Oswego / West Linn, and Downtown / West Portland show 12-month rolling average appreciation when compared to the previous 12-month period.

October 2008 Market Activity, vs. September 2008 and October 2007

Here’s how Portland’s various market areas break down, year-to-date:

Source: RMLS, November 2008.

* Total Market Time - the number of days from when a property is listed to when an offer is accepted on that same property. If a property is re-listed within 31 days, Total Market Time continues to accrue; however, it does not include the time it was off the market. The old Average Market Time measured the days a listing number was active–not taking into account re-listings.

8 comments November 14th, 2008