Portland-area home values fell 3.5 percent during 2011 but are expected to stabilize and even post and increase in 2012, real estate search firm Clear Capital reports.
The California company forecasts a 1.9 percent increase in home values int he Portland-Vancouver-Beaverton area.
In the company’s rankings of 50 major metro areas’ home prices, that moves Portland from No. 27 in 2011 to No. 14 in 2012. Exactly half of the markets are expected to post home price increases. The Portland market is also among 20 considered to be stable in 2012, with a predicted increase or decrease of less than 2.5 percent.
The company also reported 15.5 percent of home sales in 2011 were bank-owned foreclosures
U.S. home prices fell 2.1 percent in 2011 and are expected to gain 0.2 percent in 2012 the firm reports.
The Seattle area was one of the hardest-hit markets in 2011, posting a 15.1 percent decline in prices. Clear Capital predicted the city’s real estate would lose 7.5 percent in 2012.
The Portland Metro Real Estate Market is still in recovery and many wonder how things looked back in 2011 compared to previous years. There is considerable good news. We’ve seen a higher percentage of pending and closed sales year over year along with a lower total time on market for homes on the market. Total listings are also on the decline showing that the influx of short sales and foreclosures are slowing. Sales price are still slightly lower however the 2nd half of a year saw them level out and in some areas even increase.
Comparing activity from 2010 with that of 2011, closed sales rose 4% and pending sales rose 6%. New listings fell 25.4%.
Total sales volume for 2011 was about $5.2 billion, down from $5.3 billion in 2010, and $5.5 billion in 2009.
Portland Metro Inventory is 5.3 months. This is the lowest inventory level since June of 2007 (5.0 months). Inventory is the ratio of the number of closed listings for a month divided by the number of active listings. There are fewer closed sales and fewer active listings than there were in 2007 but what it shows is that buyers have fewer homes to look at and compete for.
Sale Prices
The average sale price for December 2011 was down 6.2% compared to December 2010, while the median declined 5.8%. Compared to November 2011, the average price rose 0.5% ($259,400 v. $260,800) and the median fell 3.7% ($225,000 v. $216,600). For the year, the average sale price dropped 6.7% compared to 2010. The median price fell 7.9%.
Portland, Oregon will be the first city to use IBM’s new software called Systems Dynamics for Smarter Cities, containing 3,000 equations which collectively seek to model cities’ emergent behavior and help them figure out how policy can affect the lives of their citizens.
The program seeks to quantify the cause-and-effect relationships between seemingly uncorrelated urban phenomena. ‘What’s the connection, for example, between … obesity rates and carbon emissions?’ writes Greg Lindsay. ‘To find out, simply round up experts to hash out the linkages, translate them into algorithms, and upload enough historical data to populate the model. Then turn the knobs to see what happens when you nudge the city in one direction.’
One of the drivers of the ‘Portland Plan‘ is the city’s commitment to a 40 percent decrease in carbon emissions by 2030, which necessitates less driving and more walking and biking. After running the model, planners discovered a positive feedback loop: More walking and biking would lead to lower obesity rates for Portlanders. In turn, a fitter population would find walking and biking a more attractive option.
Oregon lawmakers seek to pass a bill that stops banks from claiming a loss on a short sale and still collecting the money later from the borrower.
Homeowners get the 1099 from the bank, pays taxes on the bank’s loss and is still collected on by the bank after the fact, typically through collection agencies or even lawsuits, thus they are being “double billed.”
Oregon State Representative Jason Conger told KBND talk radio that the House Bill makes the bank chose one option and not do both: “A bank still has the right under the contract unless they waive it to try to collect the residual debt from the borrower and this bill prevents the bank from reporting it as income to the borrower and trying to collect the debt.” Conger says to his knowledge this practice isn’t very widespread, but definitely needs to be dealt with.
Despite the slump, housing remains a good long-term investment—in the right markets
The era of get-rich-quick real estate is dead. The era of increasing long-term wealth in your home is back.
1. Portland-Vancouver-Beaverton, Ore.-Wash.
1990 Price: $130,590 ($78,200 in 1990 dollars)
2010 Price: $242,100
Change in Real Dollars: +85.4 percentPopulation: 2,241,841
Year Home Prices Peaked: 2007Notwithstanding recent declines, Portland area home prices (adjusted for inflation) remain significantly higher than 1990 levels. The median price rose quickly from 2004 through 2007, peaked at about $311,000 (in 2010 dollars) in 2007, and has since dropped by about 22 percent. Moody’s Economy.com and Fiserv predict prices will reach their trough in fourth-quarter 2011.
Historical data from the National Association of Realtors (and adjusted for inflation by Businessweek.com) show that in 18 of the 25 largest metro areas in the U.S., the value of homes purchased in 1990 had increased by 2010, often by double digits. And this in a year when real estate prices around the country have softened since their peak in 2006. These houses would have been worth even more a few years ago.
While that’s cold comfort for the many Americans whose homes have lost more than $1.7 trillion in value in 2010, according to a new report by Zillow.com, it underscores the fact that homeowners who buy for the long term have historically seen the value of their investment increase over the years. In inflation-adjusted terms, the median U.S. home sale price in the third quarter remains approximately 9.5 percent higher than in 1990, despite falling 26 percent from peak levels, according to calculations based on NAR data.
Says Greg Hebner, chief operating officer at Sorrento Capital, an Irvine (Calif.) asset management firm: “You should at least be looking at housing now,” especially as interest rates are low and homeowners can deduct mortgage interest from their income taxes. “It’s still a good game” if a buyer understands the risks, has consistent income, and purchases a house he can afford, Hebner says.
When Supply Is Limited
Based on data since 1968, nominal U.S. home prices have risen 5.5 percent annually and outpaced inflation by about 1 percent to 2 percent, says Lawrence Yun, NAR’s chief economist. The main reasons housing has grown faster than inflation, he says, are that more people wanted to buy in places with a finite supply of developable land, which drove up prices, and owners increased the value of their properties through home improvements.
Home prices followed this pattern through most the 1990s but started shooting up in the early 2000s. Between 2000 and 2006, nominal prices rose 89 percent, according to data from Moody’s Economy.com and Fiserv (NasdaqGS: FISV – News), a financial service company in Brookfield, Wis.
Economists from NAR, Fiserv, and Moody’s Analytics interviewed for this story expect home prices to continue to grow slightly more than inflation in the long term. Still, buyers are not likely to see prices skyrocket the way they did in the early 2000s, at least in the near future.
Business Week found Portland, Oregon had the Largest Gain since 1990
In an analysis of the country’s 25 largest metro areas, Businessweek.com found that the Portland, Ore. area had the largest real price gain since 1990, with the median sale price in this year’s third quarter ($242,100) up about 85 percent over 1990, in inflation-adjusted terms. Home prices in the Denver, Baltimore, and Seattle areas also made gains of more than 50 percent in that period.
The entire article can be found here.
