Leo, post the story...then tear it apart later in the post or in another post after. Posting a link and then ripping into something both leaves the rest of us without the context of what the heck you are talking about, it also shows that there is some bias on your end to see the market tank being you again select the pieces that are of interest to you, usually pieced together to show a 'dire' housing situation. I'm all for you stating your opinions, and pulling the 'facts' together to suit your point, but not posting the story is weird.
PDX prices fall again; still No. 3
Posted by Ryan Frank, The Oregonian May 27, 2008 07:37AM
Categories: Housing economy
Portland-area home prices dipped further in March, registering a 4 percent year-over-year decline, according in to the Case-Shiller index.
That said, the Portland region continues to outperform the rest of the country. Of the 20 biggest metro markets, Portland had the third-best performance. Somehow, Charlotte remained in the black with a .8 percent increase. Dallas saw a bit of price growth from February to March and surpassed Portland for the No. 2 position. Seattle trails Portland at 4.4 percent.
For Portland, the index brings more of the same. Both the local RMLS stats and the Case-Shiller index have been showing the same trends since late last summer. Prices have been consistently edging down since about August. In April, the RMLS report for new and existing homes showed a 3.5 percent year-over-year decline. Who knows where it will end up but my guess based on talking to people in the industry would be between 7 and 10 percent sometime this summer.
Nationally, the market still stinks. The national index for the first quarter and the 10-city and 20-city composites all set new records for 20-year-old index. The national index is off 14 percent in the first quarter of 2008 compared to the same period in 2007. During the 1990-91 housing recession, the national index bottomed out with a 2.8 percent annual decline.
Six of the 20 biggest markets are reporting at least a 20 percent year-over-year decline. The worst markets: Las Vegas (25.9 percent), Miami (24.6) and Phoenix (23). You'll notice that all three of those markets were speculators markets during the boom. The Rust Belt cities with the deep economic problems aren't as bad off. Detroit is down a lot but still just 18 percent.
UPDATE: I didn't have access to the historical figures from home when I wrote this morning. So here's another number to chew on: The Portland region is already 6.5 percent off its peak. The Case-Shiller index for Portland peaked in July 2007 and home prices are already down 6.5 percent from that level. (The Case-Shiller figures are an index based on 2000 prices. So the index doesn't really compare to actual prices. In March, the index was at 174.39. That's 74 percent above the 2000 baseline of 100 but 6.5 percent below the peak of 186.51)
The RMLS figures show the region is down 9 percent to $275,000 from the August 2007 peak of $302,000.
Sammy14: I'm not saying Portland didn't have speculators in the single-family or condo markets. Clearly, there were speculators in both. You're right, the condo market here got hit hard with investors and speculators. Some of those guys are now paying the price for mistiming the market. But what I'm saying is that the speculators in those Sun Belt markets were a bigger factor in driving up pricing than they were here. I could be proven wrong by the time this thing is over. The bigger issue here seems to be builders who forgot the market fundamentals and tried to build more housing than the market could support. (See Happy Valley and Clark County.) Those are huge factors in the oversupply in both places.
Sammy14: Sure, there were too many condos built for the market demand. Yes, some of that supply came because the PDC subsidized it. And yes, many of the downtown condos were built by Homer Williams or Mark Edlen. Outside of those deals, there was fraud and crazy financing. Yes, prices rose higher than underlying incomes could support.
I'd agree that the problem also involves price. But it's all connected. I've been covering real estate now for nine months. I started just as the mortgage market fell apart in August. But from what I've learned in just nine months, Portland's troubles boil down to this:
Builders saw bottomless demand from buyers and continued to build even as the market weakened starting in 2006. When the mortgage market stalled, it zapped the investors and the marginal borrowers out of the market. That left the builders and market will more condos and single family homes than the demand could support. The result: We're stuck with 10 months of inventory and slow sales rates. That oversupply has and will continue to drive down pricing.
http://blog.oregonlive.com/frontporc..._still_no.html
Prev
Linear Mode
