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.