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Portland-area home prices increased from April to May but are still down from a year ago, according to the most recent figures released by the Regional Multiple Listing Service.
Sales also increased from April to May, prompting ReMax branch manager John Van Loo to express cautious optimism that the worst of the real estate market slump is ending.
“It looks like we could be at the bottom of the decline,” said Van Loo, who is also chairman of the RMLS board of directors.
Median home prices in the seven-county area that included Portland increased 4.5 percent from April to May, rising from $280,000 to $287,500. That is 3.2 percent less than the $297,000 median price in May.
Despite the increase in prices, sales activity picked up from April to May. Closed sales were up 17.8 percent and pending sales grew 2.6 percent, according to the RMLS report. These figures are both more than 30 percent below May 2007 levels, however, the report said.
The average time a home stays on the market dropped to 72 days compared with 79 days for the year to date, according to the report. The average time in May 2007 was 53 days, while the year-to-date average was 60 days a year ago.
“I don’t think we’ll be out of this slump until next year, but I’m personally hopeful that sales activity will increase and home prices will hold steady for the rest of this year,” said Van Loo.
The Portland-area housing market is continuing to do better than most of the rest of the nation, however. According to the National Association of Realtors, median home prices across the country in May fell 8 percent to $202,300 compared to the year ago. The association does not publish month-to-month figures.
“When you look at the rest of the country, we’re actually in pretty good shape here,” said Van Loo.
Of course we expect this from the RMLS. What this doesn't reflect is all the properties that have been languishing on the market for far more than the median days to sale, which are dropping their prices weekly or monthly to try to attract buyers. The fact is, there's still a lot of way overpriced properties out there. What sane person will pay $350,000 for a house that still requires $100,000 in improvements?
The uptick may reflect that some properties are now priced at a more realistic level that buyers are willing to step into the market ON THOSE PARTICULAR PROPERTIES. As a buyer, I'm extremely cautious, because I still see too many sellers hoping for 2007 prices in a market that has been described by economists as one of the most overvalued markets in the nation.
(email verified)
Tue, Jun 17, 2008 at 09:54 AM
How do you figure this is an "overvalued" market??? Have you seen the projections of the population increase for the Portland metro area for the next 20-30 years?? We will have 50% more people living here in the next couple decades. All that will do is increase demand for new homes and will drive up prices even more. And being that the NW is a desirable place to live, there won't be many people moving out of here. So get used to those $350,000 houses that need another $100,000 in renovations...or just move to Kansas and get yourself a mansion for $150,000.
(email verified)
Tue, Jun 17, 2008 at 10:29 AM
Pitar -
The relationship between housing value and expected population growth don't quite jibe. Take for example the market in the SF Bay area. It's expected to grow by 25-30% by 2030, yet its real estate prices have declined in the past year. Solano County is expected to grow by 27% in 2030 now faces one of the highest foreclosure rates (resulting from declining value) and drops in RE prices in the double digits. Even in desireable areas of SF Bay (eg the Peninsula), declines in real estate prices are evident. As many suggest, Portland is about a year behind the rest of the nation, so a 3-4% drop in values reported by even local realtors is to be expected and may increase, even in desireable neighborhoods.
I regard Portland as overpriced based on the number of median income households that can afford a median priced house, which for the Portland area is still below what is regarded as economically healthy for a region. When average people can't afford an average house, a region can't sustain itself well.
My source of info for the "overvalued" info is the National City Housing Valuation Analysis (https://www.nationalcity.com/main/micro-site/economics/commentary-analysis/pages/housing-valuation-analysis.asp
(email verified)
Tue, Jun 17, 2008 at 11:00 AM
COOL! I'm going to get another equity loan or maybe refi again and buy one of those real inexpensive used SUV's now, woohoo! Maybe a Quad or two and a new boat!
Happy days are here again!
If it doesn't workout, I'm sure my fellow taxpayers won't mind bailing me out :)
(email verified)
Tue, Jun 17, 2008 at 11:13 AM
"...When average people can't afford an average house, a region can't sustain itself well..."
Welcome to America.
Portland - brace yourself, Trib grumblers - with it's awesome public transit infrastructure, will continue to grow as the nation learns to love "walkable urbanism." The same planning that the chorus of PDX haters love to excoriate will in fact continue attracting buyers with money and those who want an alternative to going broke in the soon to be crime plagued and half abandoned wastelands of the suburbs.
Buy now if you can. If you can't get ready to watch from the sidelines...
(email verified)
Tue, Jun 17, 2008 at 11:15 AM
I'm a builder and our sales and traffic are way up since May 1st.
(email verified)
Tue, Jun 17, 2008 at 11:51 AM
I agree that we will continue to have a large and steady inflow of Buyers from all over the country. Our experience as Realtors working in close-in Portland neighborhoods is that we have a steadily increasing number of out-of-state Buyers who are 1. retiring here to be closer to family and/or friends, 2. retiring or moving their business here because they "did their research" and, after visiting, confirmed this is a great city to live in, 3. Younger Buyers from major cities where they can now only afford to rent (primarily CA and East Coast) move here to purchase their first home while still retaining, via the web, their current clients and/or employment, 4. Former Portlanders/Oregonians who made it somewhere else and are now heading home. We have also seen clients take pay cuts in order to relocate here and others settle for smaller homes than they had in less expensive markets.
People moving to the area LOVE it here and do what ever they can to make it happen. Unfortunately, that means that some local people with less skills, education or income see their opportunity to live close-in slipping away due to this competition and appreciation.
(email verified)
Tue, Jun 17, 2008 at 01:09 PM
When you buy a home you should work the price down as far as you can. What I find is that most people are more concerned with what I can afford a month, than the overall cost. I would plan to save as much money as possible and still enjoy life once in a while. I prefer to be able to retire at the age of 45 than wait until I'm 65 or older. This is getting value for you money. So the money can stay in your pocket.
The future is really hard to predict at this point. If the energy prices keep going up it will continue to empty out our wallets. The housing market will not align with people incomes. So be smart buy smart.
(email verified)
Tue, Jun 17, 2008 at 01:57 PM
"...So be smart buy smart..."
In other words, close to mass transit infrastructure and jobs...
(email verified)
Tue, Jun 17, 2008 at 02:26 PM
Sales always increase month-over-month during this time of year. Too bad the Tribune didn’t mention that obvious point.
Portland is now one of the most over-valued cities in the nation. Don’t take my word for it. National City Economics releases the data quarterly and they called the NW ‘the next shoe to drop.
Here is what the report says
(email verified)
Tue, Jun 17, 2008 at 02:28 PM
Oh yeah, I keep forgetting about LIGHT RAIL! Of COURSE I'll be able to buy that $600K condo on my barista salary of $11/hr...because it's close to LIGHT RAIL. PDX home prices will start shooting up once againt at 10-15% annually while salaries remain flat because...that's right, because LIGHT RAIL is here.
Economics doesn't matter! Light rail! Walkable/sustainable/planned growth/Halliburton is evil/LIGHT RAIL!
(email verified)
Tue, Jun 17, 2008 at 04:54 PM
Once OHSU delivers on the thousands of high tech. downtown jobs they promised to bring to the city, this place will take off!
The rest of the city can shrivel up and blow away!
(email verified)
Tue, Jun 17, 2008 at 06:51 PM
Don't be surprised, because our local economy is more stable than the rest of the country. I know its hard for some to realize, but unlike in 2001, the tech industry is going along just fine and that's what drives the PDX and Seattle market. I know a lot of people at high tech jobs in Hillsboro that are putting in overtime lately... but more than that those companies are not laying off. Intel is rather stable and that's the big reason. 13,000 jobs with average salary at 90k.
(email verified)
Tue, Jun 17, 2008 at 07:22 PM
National unemployment rate: 4.8% (FEB 2008)
Oregon's unemployment rate: 6.4% (FEB 2008)
PORTLAND's unemployment rate: 5.7% (FEB 2008)
Whatchu talkin' 'bout Willis?
(email verified)
Tue, Jun 17, 2008 at 09:16 PM
Thank you Data Dave.
Oregon's unemployment is always above the national average. Largely due to the fact that our minmum wage is higher than the national average. Also because our, tax first ask questions later, government runs any successful business out of the state by attacking their bottom line. Portland being the worst culprit of this. The govt for some reason has it in their heads that business will pay extra to be located here. Like Portland can offer things other cities can't.
(email verified)
Wed, Jun 18, 2008 at 08:34 AM
Dave- WatchU talking bout Willis???
http://online.wsj.com/public/article/SB121297383453256039-9zi5H7PwXrbRETNXUOHi5RGoABA_20080708.html?mod=tff_main_tff_top
(email verified)
Wed, Jun 18, 2008 at 02:26 PM
You might want to UPDATE your data Data Dave!
Wall Street Journal june 9th 08.
"But partially as a result of the growing software and Internet companies, Oregon's economy has so far remained relatively stable. Its unemployment rate of 5.5% in April was up from 5% a year earlier, mainly because of a construction-industry slowdown. The national unemployment rate in April stood at 5%.
"We're seeing, increasingly, the non-manufacturing side of the business moving here," Mr. Ayre says."
(email verified)
Wed, Jun 18, 2008 at 02:32 PM
Gee - who would have thought a REALTOR would give a rosy sales report about local real estate sales - based purely on his word? Right! And I have a bridge I want to sell you too.
(email verified)
Wed, Jun 18, 2008 at 03:21 PM
The most recent projection was for Portland region real estate prices to drop about 10% each of the next two years. That includes Vancouver. Of course that is on average and its likely price fluctuations will vary according by neighborhood. Its anyone's guess where prices will hold up best, but I would bet that houses close to job centers and transit will do better than the ones that require a long commute every day.
(email verified)
Thu, Jun 19, 2008 at 08:45 PM
Too funny how they always like to say the market is up when it obvious it's down. They think by saying it's up that they will brain-wash us into thinking it is and that it will make us all go out and take action, then bringing the market up. Do they really think we are that stupid to brain-wash! We all need to start protesting about these horrible HIGH GAS PRICES that is such a scam from the oil companies that has allowed them to make history all time HUGE PROFITS that George Bush has just allowed for his oil buddies. The housing market certainly isn't going to get better with house high gas and food prices have gotten. All such a scam!
Shame we have such corrupt people in business and government!
(email verified)
Fri, Jun 20, 2008 at 08:52 AM
Any time you project growth rates out 20-30 years at even a rather low rate (1.3-1.4% per State of Oregon economists) it leads to astounding numbers. Call it the shock & awe effect. Projections are for Oregon to grow at roughly 53,000 people per year & if you figure Portland will get 60% that equates to about 32,000 new residents per year which also includes any rise in newborns. This is a puny growth rate in comparison to many other cities in the western US. So I doubt we are going to have a huge tidal wave of new residents.
Also in regards to the recent increase in prices as reported by the RMLS. I believe this is in part due to the seller concessions being paid in this market, which used to be the exception & is now the norm. Figuring most of these concessions are 3-5% that takes care of most if not all of the price increase. As a retired appraiser I find it quite disturbing that the RMLS doesn't take the time to publish theses seller concessions. I used to see many sales (in the 1980's through the early 2000's) with seller concessions & the sales agreement stating the commission was to be paid only on the net sales price. I also had appraiser friends at other companies call the listing agents after the sale & ask if any seller concession were paid. The majority of the time the realtors stated no seller concessions were paid (lying to protect the sales price). This is an obvious attempt by realtors to manipulate prices. If the realtors were pedaling stocks they would be indicted. Let's see some regulation of realtors in regards to these type of practices so some creditability can be restored to the industry.
One last thing the actual number of listings still keep increasing. So after this seasonal uptick is over watch for the active listings to reach 20,000 plus. Combine this with rising interest rates, tighter lending standards & sky high real estate prices the picture doesn't look very rosy.
(email verified)
Sun, Jun 22, 2008 at 11:23 AM
Thousand of people in the housing markets have lost their jobs. Lives ruinned. And I have never seen so much glee from people. I cannot understand why some of you almost rellish in the fact that this sector of the economy is down... You know the type of people, rubbing their hands together in joy when hearing about someone's problem. I just don't get it.
(email verified)
Tue, Jun 24, 2008 at 07:37 AM
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Re: Portland home prices, sales edge up
A realtor expressing optimism about the housing market? Who would've expected THAT?!?!
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(email verified)
Tue, Jun 17, 2008 at 09:07 AM