How will we know when we've hit Bottom in Portland?

The most common question that is often handled by our team is:  What is happening in the market?  What we really believe they are asking is:  When will the market hit bottom (and start getting better)?  Here are some guidelines that will be indicators that we have hit bottom here in Portland:

• Portland, Oregon as a real estate market is traditionally a laggard behind the rest of the  nation. What you see happening in other major markets will typically hit Portland 12-18 months later.  Take a peek at Las Vegas, Los Angeles, Phoenix, and other major Western markets to get a feel today of what will happen 12-18 months from now.
• A market that has hit bottom is normally characterized by a large number of investor purchases.  Let's go back to Las Vegas as an example.  According to a recent article from DQ News, the absentee owner purchases were 43% of the sales in January 2010.
• Foreclosure rates are also another indicator.  When you see foreclosure rates going down, you can be assured a recovery is soon to follow.  In the Las Vegas article, foreclosure rates were down 36%.
• Building permits are also a good indication of recovery.  When new housing starts are on the increase, that means builders have confidence that they can sell their products.
• Inventory is the key indicator for most real estate markets.  However, with a high number of foreclosures, you could have low inventory AND decreasing home values.  In Portland we are seeing about 25% of the closings are bank controlled.  That number is on the increase.

These are all factors, along with other economic indicators (jobs, consumer confidence, interest rates, etc) that will determine whether we have hit bottom.  Currently, Portland with 12 months inventory and 1% price declines per month is a buyers market.  Contact our team to get a more detailed analysis of your real estate situation.

Case Shiller Report 2/23/2010 for December 2009

Is it just me or does the Case Shiller report track stale data.  It's usually 60 days old, which is far too long in this real estate market to go without information.  The truth, however, is that many markets & analysts follow this index, so let's see what we can learn from it for December 2009 and the Portland Oregon marketplace.

1. The change from October to November was 0.3% appreciation while the November to December change was -0.3% depreciation (a 0.6% swing)
2. The calendar year 2009 saw -5.4% decline in prices which is somewhat different from the RMLS figure (a rolling average) of -12.1%.
3. Nationwide, home values are back to 2003 levels and show a record low decline of 19.1% from 1Q2009

This begs the question:  Have we hit bottom?  It remains to be seen what will happen with mortgage backed securities, lending practices, changes in regulation, and many other factors. Truth be told, we are a supply and demand business and each neighborhood & property type will have different numbers. It pays to... 

KNOW THE VALUE OF YOUR HOME

Well, Here's day ONE of my FIRST real estate blog

Um, okay ANOTHER real estate blog.  Great that's all we need.  So what makes you any different or unique. That's what our team hopes to change is to provide information that is timely AND relevant.  So, to kick off my first post, let's chat about BLOGs. Yes blogs.  This technology has been around for awhile and we know that everyone is doing it.  When you have a chance to identify with and appreciate a good blog (which I have thankfully learned for Joel Burslem and his dynamic blogging and fresh content).  What is it that I like about those blogs:  Well they are intelligently written, appeal to a very specific audience (ME), and add value.  Our goal with this particular blog is to do just that, be intelligent, have fresh content, and add value.  Visit Joel's new blog and I"m sure you would agree that he has some really relevant content & design.  His last business blog was so successful that Inman acquired it.  Good example indeed.  Well, have a wonderful day and look forward to a number of interesting and unique posts.