Market Update: Portland, Oregon Housing Market Q3 2009 Part 1

Here's Part 1 about the housing market in Portland, Oregon for Q3 2009.  Part 2 will appear on Sunday. 

HOUSING APPRECIATION

Portland State University issued their Third Quarter 2009 Real Estate Report indicating which areas showed appreciation during the most recent quarter of 2009 - Q3:

SINGLE FAMILY RESIDENTIAL

The National Association of Realtors® reports that 80% of the housing markets across the U.S. had falling prices in the single-family residential housing sector.

Portland, Oregon was not immune to those falling prices, and NAR® reports that Portland for the third quarter of 2009, had prices dropping by -12.2%.

"During the third quarter, 123 out of 153 metropolitan statistical areas reported lower median existing single-family home prices in comparison with the third quarter of 2008, while 30 areas had price gains.

The national median existing single-family price was $177,900, which is 11.2 percent below the third quarter of 2008; the median is where half sold for more and half sold for less. Distressed sales – foreclosures and short sales – accounted for 30 percent of transactions in the third quarter, which continued to weigh down median home prices because they sell at a discount relative to traditional homes. (Portland's median sales price dropped by -10.7% from $280,000 to $250,000 in October 2009).

“The decline in the national median price has moderated recently, and a shrinking supply of unsold inventory suggests we are getting closer to price stabilization in many areas, but we need a steady stream of financially qualified buyers to further reduce inventory and get us to a self-sustaining market,” Yun said. “Foreclosures will continue to come on the market, but rising sales from the expanded tax credit should stabilize home prices by next spring and help to stem future foreclosures."

In another recent report, across the entire Portland metro area, the market as measured by inventory, is the strongest in the $150,000 to $299,999 price range. That market segment has seen a robust sales pace over the previous 12 months (a 58% share) which has been propped up by the government's $8,000 First Time Home Buyer Tax Credit.  Homes price in the $350,000-$499,000 range have seen significant inventory increase in recent years, up to roughly 9-10 months of inventory in the Third Quarter of 2009 from only 7-9 months during the 2007 peak.  However, it is a marginal improvement over 2008 at the same time.  The most significant change in the market has been the houses over the $500,000 price.  Inventory at the peak of our housing market for that price point was at 12.6 months to over 20 months for Q3 2009.

CNN recently reported that we still have too many houses on the market for sale.  According to their recent report based on numbers from the Census Bureau:

"...a full-fledged housing recovery will remain elusive until the market can absorb all the houses and apartments that were built during the housing boom. And on that front, progress has been slow.

About one in seven housing units was vacant in the third quarter, according to the Census Department. This year has registered the highest reading since the government began collecting such data in 1965.

Part of the glut comes from a rash of foreclosures as strapped borrowers fall behind on their mortgages.

But rental apartments are emptying out at a record clip as well, as a spike in the jobless rate and a decade of subpar wage growth have sent many Americans back home to live with Mom and Dad."

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