Portland Real Estate

March 15, 2010 Portland Real Estate Market Action By Brian Porter

The real estate market in Portland is showing signs of life. Closed sales in Feb. 2010 were up 18.4% compared to Feb. 2009; however this increase in sales came at a high price for sellers and property owners: a 9.3% decrease in the median price of a home over the past 12 months ($235,000 from $259,000).

Many people as starting to say that we have reached the bottom, and even the conservative economists like Karl Case, the co-creator of the S&P Case Shiller Home Price Index recently said, “I would bet even odds that we’re at a bottom and that we are going to see improvement in the coming months”. (Bloomberg).

Just to put a perspective on the market swings of the past few years, consider the following facts: The market in Portland peaked in about July of 2007 when the median price of a home reached $302,000. In other words, the market has pulled back about 22% from the peak, and we have not seen the median price of a home at this level since May of 2005 ($230,000).

So we are back to 2005 prices. The bubble has burst. The market has reacted.

Looking forward is always more challenging than looking back. However, one interesting statistic is that homebuilders are on a tear. The S&P Supercomposite Homebuilding Index is up about 14% this year, and the economy is projected to grow 3 percent this year (Bloomberg). These are positive signs for the real estate market; however, if interest rates spike, the apparent improvement in the real estate market could be short lived.

Portland Real Estate Report

For July 2009, As Reported by RMLS Market Action

Closed sales in the Portland metro area for July 2009 eclipsed last July’s total by 8.6%, marking the first time samemonth closed sales have increased since April 2007. Pending sales also grew 8.3%. New listings dropped 25.4%. Comparing July 2009 with June 2009, closed sales increased 11.9%(1,988 v. 1,776) and pending sales were up a slight 0.3% (2,170 v. 2,164). New listings fell 8.2% (3,907 v. 4,257).

Inventory was down to 7.3 months, dropping for the sixth consecutive month, down from 10 months last July.

Inventory is falling at a time where it has historically risen. Along with an upswing in closed sales, the drop can be attributed to the fact that the number of homes on the market (14,503 in July) has seen little fluctuation in 2009.

Year-to-Date
Comparing January-July 2009 with the same period in 2008, closed sales are down 18.7% and pending sales decreased 10%. New listings dropped 23.4%.

Sale Prices
The average sale price for July 2009 was down 15.2% compared to July 2008, while the median sale
price declined 13.3%. See residential highlights table below. Month-to-month, the average and median sale price were mixed when compared with June levels; the average sale price was down 3.7%($288,600 v. $299,800) and the median sale price was up 0.04% ($250,000 v. $249,900).

Percent Change of 12-Month Sale Price Compared With The Previous 12 Months Average Sale Price % Change: -11% ($303,700 v. $341,100)

Median Sale Price % Change: -9.1% ($259,000 v. $285,000)

Residential Review:

Metro Portland, Oregon June 2009 Reporting Period

June Residential Highlights

This June, same-month pending sales were up for the first time since December 2006 in the Portland metro area, and inventory reached its lowest point since August 2007. Comparing June 2009 with the same month in 2008, pending sales were up 8.4%, while closed sales decreased 5.4%. New listings also dropped 18.3%.

Further, comparing June 2009 with May 2009, closed sales increased 24.5%(1,776 v. 1,427) and pending sales were
up 10% (2,164 v. 1,967). New listings also rose 9.7% (4,257 v. 3,879).

Inventory fell to 8.2 months, dropping for the fifth consecutive month and reaching it’s lowest point since August 2007. Active listings typically rise at this time of year, but were virtually unchanged since May (14,491 v. 14,493). Conversely, actives increased 10.1% from May to June in 2007, and 4.2% in 2008.

Second Quarter Report

Comparing the second quarter of 2009 (April-June) with that of 2008, closed sales fell 15.3% (4,625 v. 5,461) and pending sales dropped 3.2% (5,784 v. 5,972). New listings decreased 23.8% (12,165 v. 15,973).

Sale Prices

The average sale price for June 2009 was down 14% compared to June 2008, while the median sale price also dropped 13.5%.

Month-to-month, the average and median sale price were mixed when compared with May levels; the average sale price was up 2.9% ($299,800 v. $291,400) and the median sale price was down 0.04% ($249,900 v. $250,000).