-
Your Hosts
Brought to you by Lori Ares, home-buyer specialist and broker licensed with M Realty LLC. Read more...
Contact: (503) 936-4192
And by Ron Ares, re:PDX founder / editor and marketing specialist.
Follow Along
Subscribe in a reader
Portland Real Estate Market Activity – October 2007
Portland’s October 2007 real estate market results reveal no major surprises. Slower pace of sales, longer market times, and…confoundingly, higher sale prices.
The only significant trend change was a decrease in new listings, the first dip in homes placed on the market since February 2006.
The average market time is 64 days (vs. 47 in 2006), and the average sale price is $339,300, up 6.7% over the same 12-month period from a year ago. The median sale price is up 7.3% to $287,500. At the current pace of sales, it would take 8.4 months to sell the existing inventory (vs. 4.6 months in October 2006).
Oversupply is having the greatest effect on Happy Valley (at -1.7% appreciation over 12 months). From month-to-month, most other market areas are holding firm or showing small gains in pricing on a year-to-date basis.
Year-to-date results by market area:
| Area | YTD Avg. Sale Price | YTD Median Sale Price | 12-Mo. Appreciation |
| Lake Oswego / West Linn | $560,400 | $465,000 | 3.8% |
| West Portland | $463,900 | $379,800 | 3.7% |
| NW Washington County | $418,400 | $385,000 | 2.7% |
| Tigard / Tualatin / Sherwood / Wilsonville | $375,600 | $339,900 | 5.4% |
| Milwaukie / Clackamas | $337,600 | $300,000 | -1.7% |
| Oregon City / Canby | $330,500 | $302,900 | 3.7% |
| Northeast Portland | $321,700 | $282,500 | 5.9% |
| Hillsboro / Forest Grove | $298,400 | $270,000 | 8.7% |
| Beaverton / Aloha | $289,500 | $260,000 | 3.8% |
| Southeast Portland | $286,600 | $250,000 | 8.9% |
| Gresham / Troutdale | $281,500 | $259,900 | 8.8% |
| Yamhill County | $282,900 | $250,000 | 8.2% |
| North Portland | $265,800 | $252,000 | 8.5% |
| Columbia County | $255,900 | $240,000 | 13.0% |
Appreciation percentages are based on a comparison of average price from the last 12 months (11/01/06 – 10/31/07) with 12 months before (11/01/05 – 10/31/06). Source: RMLS, November 2007.
[tags] Portland, Oregon, real estate, homes, houses, price, average, median, appreciation [/tags]
Comments
10 Responses to “Portland Real Estate Market Activity – October 2007”
Leave a Reply
Ron – Are you calculating the 12 mos with average or median prices?
Paul -
The appreciation column is for Average sale price.
What is confounding about the price increases? Have you looked at the rate of change of the median prices? what about the rate of change of standard deviation of median prices? Of the homes that are selling, how many are new vs existing? Of those new homes that sell, what is the dollar value of incentives offered to buyers in lieu of price discounts.
The prices in real estate are sticky, sellers are reluctant to lower them. This is exactly the way we would expect to see a slowing market behave. And it is how the market behaved, generally, in many of the places where prices have turned down. (Not saying we should expect a giant price correction here, just that we are following the general trends with an offset timeline).
I suspect you will see that the average is increasing because there are fewer entry-level and mid-level homes selling and you have a larger ratio of jumbos among those homes still closing. It doesn’t take much with the drop in volume to have illusionary avg. price increases. Statistics is unfortunate that way.
Something else I haven’t seen anyone bother to calculate off the latest RMLS data: how many new homes were listed, and how many listings expired or were pulled? We are in the slow season, so it makes sense that in a over supplied buyer’s market that existing home listings among those who are not forced to sell will decide that now isn’t the time, and pull back rather than discount their asking price.
cheers.
Good questions, Stevelle.
It’s just that I’ve been waiting and waiting for the offset timeline to finally catch up. The slowdown (as I see it) started last fall, but the month-to-month pricing has increased in almost every market area. Small increases to be sure.
So, we’re all speculating…even the economists that are paid to make forecasts in our local area (and say that appreciation is irrational as I heard quoted this week). The appreciation numbers are 12-month rolling averages vs. the previous 12 months, which on one hand, may mask some issues, but on an apples-to-apples basis with other national markets, appear stronger.
With respect to other measures, I would like to do more analysis on the RMLS data but my sample sizes are so limited (per RMLS rules).
the other thing to consider is that most of this appreciation happened in the past. Remember that early in the year the YoY appreciation was in the 7 to 10% range. Not it’s in the 3% range. Since midsummer the appreciation has slowed and in fact month over month data is starting to show depreciation. I think when we look back on the data we’ll find that the peak of prices in the PDX area was in June or July of 2007.
For a peak at where we’re headed look at what’s happening in California – they are about 18 months ahead of use.
Some good data here for you -
http://housing-watch.com/regionview.aspx?city=Portland&pct=50&g=m
http://www.housingtracker.net/askingprices/metro/Oregon/Portland-Vancouver-Beaverton/
Both sites pull directly from the MLS and both are showing YOY depreciation – small for now – but you can clearly see the trend.
Portland is going down just like every other market – just we arrived late to the party and will be late to leave. My best guess is PDX will be down 20-30% by the time this thing is over – bringing prices back to historic normals when compared to income. Before anyone scrams un-possible – it was possible to double in 3 years – it can surely backtrack half ot that in the next 3 once credit dries up.
Check out the action on FRE and FNM today – another brutal credit tightening is in the making.
Uncle Git: I tend to agree. We’re probably going to see at least a 20% decline from where we are by about 2010. Could be worse if we get a nasty recession out of all of this.
Anybody know how much economic activity in Portland was driven by Real Estate (or related activities like building and mortgage brokering) over the last 4 or 5 years? I’m guessing it was a substantial contributor to the local economy – with that going away, what happens? And with credit getting even tighter, a lot of that activity is bound to go away.
BTW: anyone in the mortgage biz know what’s happening with PMI rates? Seems like the PMI rates have to be rising a good bit here due to all of these defaults – that’s gonna hurt anybody who isn’t putting 20% down (and those 80/20 piggyback fraudulent schemes that were used to avoid paying PMI are pretty well gone at this point).
I believe starting in September of this year, Market Action started showing median price change using a 12 month rolling average. Previous to this, they measured price change by comparing median sale in the same month of the prior year. This new method masks in averages the declining market. Is it a coincidence that if you attempted to calculate September’s median price change using the previous method (same month of prior year) you show depreciation? Does it bother anyone else that we’re breathing our own exhaust?
New wave of mortgage failures could create a nightmare economic scenario
…In the months ahead, millions of other adjustable-rate mortgages like Colombo’s will reset, giving them a higher interest rate as required by the loan agreements and leaving many homeowners unable to make their payments. Soaring mortgage default rates this year already have shaken major financial institutions and the fallout from more of them, some experts say, could spread from those already battered banks into the general economy…
http://www.katu.com/news/business/11787801.html
So Ron, what is your take on this article? I really cannot see how one can separate the housing market from the economy.
I do not wish rough times on you all but I hope your significant others have more secure jobs, maybe in health care?
bearlee