S&P/Case-Shiller Report (July 2007-July 2008 Y.T.D.)

According to the latest S&P/Case-Shiller report,  Portland home prices were down -6.6% from July 2007 to July 2008 year-to-date. Portland ranks 5th as having the least depreciation. Nationally, home prices experienced a drop of -16.3%. Depreciation rates for housing prices are as follows:

-1.8%=Charlotte (having the least depreciation in home values)
-2.5%=Dallas
-4.7%=Denver
-5.4%=Boston
-6.6%=Portland
-7.4%=New York
-7.8%=Cleveland
-8.2%=Seattle
-8.2%=Atlanta
-10.0%=Chicago
-13.1%=Minneapolis
-15.8%=Washington, D.C.
-16.7%=Detroit
-19.4%=Tampa
-24.8%=San Francisco
-25.0%=San Diego
-26.2%=Los Angeles
-28.2%=Miami
-29.3%=Phoenix
-29.9%=Las Vegas (having the highest depreciation in home    values)

Also, another recent S&P/Case-Shiller Report said (reprinted in part):


“In most markets when excess supply develops, prices fall quickly to clear the market. A decline in a regional economy or a simple glut of condominiums can lead to a marked increase in the number of listings, newspaper articles and “for sale” signs, which can trigger a shift in consumer psychology, accelerating a demand decline.”

“Housing downturns have also been characterized by “sticky prices.” That is, sales and starts drop but prices are slow to respond.”

“Indeed, value is determined in a stochastic process in which buyers and sellers search for exchange terms that will lead to a sale. Sellers see the worth of their property as embodied in comparable sales at the peak. “Sarah sold her house next door for $455,000 two years ago, and my house is identical except for the new kitchen I added. Mine must be worth at least as much as hers”. i.e. sticky prices.

“However as long as the foreclosure auctions continue to account for a significant portion of the observed transactions, prices will continue to fall until the market clears out inventory.”

The above is exactly what I’m seeing in our Portland real estate market and supports what I’ve been saying in my other posts.  Sellers are stuck or as the S&P/Case-Shiller report indicates”…sellers are embodied in comparable sales at the peak”. In other words, the sellers are still “expecting” the prices that were obtained when our market was “hot”.  Our real estate market is not at its peak….and as stated above, until all the foreclosures are gone, and our inventory is reduced, prices will continue to have a down-ward spiral no matter how long a seller is willing to wait for his overpriced listing to sell.

In addition, I recently read Dave Ramsey’s 3 Step plan to cure our country’s financial problems.  Frankly I like it better than anything else I’ve seen.  I’ve read and heard where people have criticized Dave Ramsey for being old fashioned or hokey, but I have to say his fundamentals are strong in that people should save, pay off credit card debt, use cash.  In the past the Wall Streeters and credit card companies have lured in their potential victims.  Now, however, perhaps we should all be listening to Dave Ramsey instead.

The bail-out bill, or rescue bill or whatever you want to call it, has been adopted.  Time will tell whether it was a good or bad plan.  This country needed something, but I don’t know if that was better than nothing. However, I wish they would have listened or thought of the likes of this plan instead.

Average and Median Home Prices in Portland, Oregon (August 2008):

Here are the most recent statistics we have (August 2008) for average and median prices in the Portland area.  Our September stats won’t be available from RMLS® until October 15, 2008:

AREA (Month of August 2008)

Median Price

Average Price

North Portland

$255,500

$272,100

Northeast Portland

$292,000

$331,400

Southeast Portland

$260,000

$281,600

Gresham/Troutdale

$247,500

$261,000

Milwaukie/Clackamas

$281,300

$324,100

Oregon City/Canby

$273,800

$312,800

Lake Oswego/West Linn

$447,500

$549,500

West Portland

$413,300

$478,400

Northwest Washington County

$364,500

$401,000

Beaverton/Aloha

$245,000

$261,700

Tigard/Wilsonville

$315,000

$337,900

Hillsboro/Forest Grove

$266,700

$281,100

Mt. Hood/Govt. Camp/Wemme

$214,300

$245,700

Columbia County

$194,500

$216,400

Yamhill County

$215,000

$283,600

Marion/Polk Counties

N/A

$225,500

North Coastal Counties

N/A

$345,400
CURRENT PREVIOUS
Existing Home Sales 4.99m ▲ 4.89m
New Home Sales 512,000 ▼ 525,000
Housing Starts 975,000 ▼ 1.008m
Building Permits 969,000 ▼ 982,000
HMI 88.2 ▲ 83.0
Existing Home Prices $208,600 ▼ (annually) $222,700
New Home Prices $231,000 ▼ (annually) $245,000
(For more local and national real estate news, click on my monthly newsletter – JUNG’S JOURNAL – on my website www.bettyjung.com).