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Portland Early Results – August 2008
We at the 12-month anniversary of the official peak of Portland’s housing price boom. In August 2007, homes sold for an average of $366,900 and the middlemost sale price (median) hit the $300,000 mark.
One year later, the results are very different. For August 2008, the median price is down 7% from last year’s peak, and the average is off 10%. Closed sales for the month are 32% below that of August 2007, continuing the year-long pattern.
Early Numbers for August 2008 vs. last month and 12 months ago:
| August 2008 | July 2008 | August 2007 | |
| Median Sale Price | $280,000 | $288,200 | $300,000 |
| Average Sale Price | $332,000 | $340,500 | $366,900 |
| Closed Sales | 1,743 | 1,831 | 2,554 |
IF there are hopeful signs for home sellers, it’s that the pace of new listings is down by a third from last year. Between that and a higher number of expired listings, inventory should shrink going into the fall.
On an unrelated note, Forbes thinks Portland is the 4th most likely city to see home price increases over the long-term, behind Albuquerque, Charlotte, and San Antonio. Full story here.
Please note these are ‘unofficial’ results and things can shift a little either way — the RMLS report should be out by September 15.
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5 Responses to “Portland Early Results – August 2008”
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From the same string of articles Forbes also thinks that Portland is the 5th highest increasingly unaforrdable city and the 6th best city in which to rent.
To me this says that while Portland might not see the extreme drop in home prices other West Coast cities saw, it’s better to rent than buy right now. High home prices are not sustainable without jobs and higher wages to support them as we see in other West Coast cities.
“IF there are hopeful signs for home sellers, it’s that the pace of new listings is down by a third from last year. Between that and a higher number of expired listings, inventory should shrink going into the fall.”
There is a saturation point, where the pace of new listings must go down. To go to the extreme, if every home were already listed, then new listings pace could only go to zero.
And with a higher number of listings, we can expect a greater number of expired listings.
I do agree, however, that the seasonal trend suggests that the listings have hit a 2008 peak.
JP -
Perhaps I should have said that listings are not growing, fueled by bank-owned properties, short sales, and other desperate sellers.
Expired listings that change agents or get relisted would show as new listings, which we’ve established to be below last year’s totals, so again, inventory is shrinking (slightly)…which is (some) hope for must-sell owners.
Ryan,
I think the research in some of these features is fingernail deep. Another said the 97213 zipcode (Rose City Park) is one of the 10 most overpriced areas in the US.
Ron-
When inventory was low, relative to day it was low two or three years ago, the increases in inventory come ‘easy,’ and essentially inventory can only go up. If inventory were close enough to zero, then it can only remain the same or go up. As inventory approaches a maximum (for example every property in the entire Portland Metro area), then inventory can only go down. The middle area is more interesting, as inventory can rise or fall. This is regardless of the bank owned properties, short sales, and other desperate sellers. I also understand that this analysis does not recognize the full dynamic of the market, but recurrence relations are beyond the scope of most real estate blogs.
What I find interesting is that both inventory and inventory in months has risen. Back in 2005 inventory in months was below 2. Today were are closer to 10. Average and median prices have finally started to come down.
My best guess, given all the available data, is that the only reason prices have not fallen faster is that the underlying debt is keeping people from selling. In areas where the lenders have accepted that selling for a lower price today is much better than a far lower price tomorrow, prices have fallen dramatically.
Just recently I was in Detroit, which has been impacted by many factors, including the downturn of the domestic auto industry, and I printed out a list of median home prices as published by housingtracker.net and housingwatch.com. Everyone I showed the list to could not understand how a “median priced home” could amount to $300,000 to $400,000, as is the case in so many West Coast communities.
The basic question I heard back was, Is the economy that much better out there? Another one was along the lines of, How much can an automotive factory worker make out there?
On the one hand some asked about opportunity, yet on the other hand they wondered how they could ever afford housing.
It reminds me of a question.
Which is better:
1. Buy low and sell high.
2. Buy high and sell even higher.
Of course buying high and selling low is a bad thing, as is buying low and selling even lower.