Late to peak, Portland real estate market still mired in downturn
Real Estate Market Report: Portland, Ore.
By Mary Umberger, Monday, June 13, 2011.
While housing markets around the country were sinking several years ago, Portland, Ore., was a holdout, relatively speaking. It has, unfortunately, made up for lost time.
Recent data tell the tale: In the Standard & Poor’s/Case-Shiller 20-City Home Price Index for March, Portland’s housing market was one of a dozen metros around the country among those tracked by Case-Shiller that hit their lowest points since home values began sliding more than four years ago. On a year-over-year basis, Portland prices dipped by 7.6 percent, pushing them back to levels last seen in fall 2004.
In the insult-to-injury category, Zillow.com also reported in early May that Portland houses have lost 30.6 percent of their value since the bubble peaked in 2007, slightly outdoing the 29.5 percent loss of value it reported nationwide. The valuation website also estimated that 36 percent of Portland homeowners are underwater, owing more on their mortgages than their homes are worth. Nationally, it said 28.4 percent of homeowners were in that boat.
Those numbers join a raft of other data chronicling difficult times in Portland’s housing market. Yet, though real estate agents queried by Inman News certainly didn’t deny the effects of the downturn, they did report market activity — bidding wars, even — for homes in certain sectors and demographics, almost always preceded by some variation of the phrase “aggressively priced.”
And if there is some silver lining to the downturn, they said it could be that pricing was opening the door to first-time buyers. Further, cash buyers and those buying distressed properties have become very visible in the marketplace, the agents said.
Trulia.com reported in mid-May that the average list price for the Portland market was $343,093, down 4.6 percent from one year earlier.
Some encouragement has come from the employment sector: Oregon’s joblessness slide is slowing, after a 25-month string of reports that put unemployment in double-digit ranges. The rate fell to 9.6 percent in April, down from a peak of 11.6 percent in June 2009, according to the Oregonian newspaper, which said other employment data suggested that the state’s economic recovery is gaining momentum.
Still, as with metros across the country, all talk of economic recovery revolves around real estate.
“The housing market appears to be the biggest threat to a sustained economic recovery in Oregon,” according to a state Office of Economic Analysis forecast issued in May, which opined that though it saw signs that the Oregon housing market had hit bottom, prices probably had further to fall.
The culprits in declining prices, as usual, are foreclosures and a swollen inventory of homes for sale, though there are some positives to report in both. Portland’s Regional Multiple Listing Service reported that inventory in April dropped to a 7.2-month supply, a notch better than one year earlier and a world of improvement since March 2009, when it was a hefty 12 months.
However, RMLS also said closed sales were down 17 percent from one year earlier, and pending sales were down 33 percent. Average and median sale prices fell by 5.2 percent (to $267,300) and 8.4 percent (to 219,900), respectively. Total market time in April was 153 days, vs. 127 days in April 2011, when the homebuyer tax credit was in effect.
Foreclosure rates also have shown some better numbers: RealtyTrac, which compiles foreclosure data, reported that one in every 211 homes in the metro area was in some stage of foreclosure in the first quarter of the year, for a total of 4,298. That was down nearly 18 percent from the year before, and 32 percent from the previous quarter. However, industry analysts said a similar improvement in national figures likely was caused by a temporary freeze on foreclosures by major lenders.
Portland metro area market data
|Portland, Ore., metro area|
|Population (2010)||2.2 million|
|Population growth (2000-10)||+15.8%|
|Total closed sales (2010)||18,926|
|% change closed sales (April 2010-April 2011)||-17%|
|% change closed sales (April 2009-April 2010)||-6.6%|
|Sales rate per person (per total population, 2010)||1 sale per 116 people|
|Median sales price (April 2011)||$219,900|
|% change median sales price (April 2010-April 2011)||-8.4%|
|Foreclosure filings rate (Q1 2011)||1 in 211 units|
|% of sales distressed (2010)||26%|
|% homes affordable to median-income
households (Q1 2011)
|% unemployment (April 2011,
not seasonally adjusted)
|Rent vs. buy ratio (Q2 2011)||18|