Portland Oregon Housing Prices - Portland Real Estate

July sales activity mirrored June’s numbers in 2008. However, activity continues to decrease compared to the same month a year ago. Looking at July 2008 compared with June 2008, pending sales picked up slightly 0.4% (2,003 v. 1,996). Closed sales fell 2.5% (1,831 v. 1,877), however. New listings increased 0.5% (5,237 v. 5,213).

Comparing July 2008 with July 2007 shows a different story. Pending sales decreased 22.3%, while closed sales were down 30.2%. New listings also dropped 9.9%.

At the month’s rate of sales, the 18,219 active residential listings would last approximately 10 months if no new listings were to enter the market.

Comparing the period of January-July 2008 to the same period in 2007 shows that new listings decreased 1.7%. Closed sales and pending sales declined 34.3% and 32%, respectively.

Affordability As a result of rising interest rates and an increase in the median-priced home in the Portland Metro area, the RMLS™ Affordability Index dipped slightly below 100% in June. The index is based on a formula from the National Association of Realtors (NAR). A family earning the median income of $67,500 in 2008 (per HUD) could afford only 98% of a monthly mortgage payment on a median priced home ($289,000 in June). The formula assumes that the buyer has a mortgage with a 20% down payment and a 30-year-fixed rate of 6.32 (per Freddie Mac).

Sales Price The average sale price for July 2008 was down 3.5% ($340,500 v. $352,900) compared to July 2007, while the median sale price dropped 3.9% ($288,200 v. $300,000).

Month-to-month, the average sale price and median sale price are both down compared to June 2008 levels; the average sale price dropped 2.4% ($340,500 v. $348,800) and the median sale price fell 0.3% ($288,200 v. $289,000).

12-Month Sales Price Percent Change What was previously referred to as “Appreciation” is now referred to as “12-Month Sale Price Percent Change.” According to RMLS, “The new description of this calculation is intended to help readers better understand what the calculation compares.” The calculation compares the rolling sales price for the last 12 months with the rolling price for the 12 months prior. Figures for July 2008:

The 12-Month Sale Price Percent Change is based on a comparison of the rolling average/median price for the last 12 months (8/1/07-7/31/08) with the 12 months before (8/1/06-7/31/07).

Comparing July 2008 with July 2007 shows a $12,500 drop in the Portland region’s average home price – down to $340,500 from $352,900 a year earlier. The median price decreased $11,800 for the same periods. The market peaked in July 2007 and August 2007 when both of these months recorded a median price of $300,000. The difference of $11,800 ($300,000 less $288,200, the July 2008 median price) represents a 3.9 percent drop. The highest average sales during the years 2006-2008 was $366,900 in August 2007. This figure is the highest average sales price ever recorded for the Portland metro area. Since August 2007, the average price has been slowly declining. In July 2008, the average price was $340,500. This amounts to a difference of $26,400 between the two dates - a decline of 7%.

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Standard & Poor's Case-Shiller, a highly respected economic consulting firm, monthly report was released on August 26 and read, "Data through June 2008, released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, shows continued broad-based declines in the prices of existing single family homes across the United States, a trend that prevailed throughout 2007 and has continued through the first half of 2008."

The decline in the S&P/Case-Shiller U.S. National Home Price Index – which covers all nine U.S. census divisions – remained in double digits, recording a record 15.4% decline in the second quarter of 2008 versus the second quarter of 2007. This is larger than the decline of 14.2% reported in the first quarter of the year. The 10-City and 20-City Composites also set new records, with annual declines of 17.0% and 15.9%, respectively. However, it should be noted that the acceleration in decline was only moderate in June. The May numbers reported annual declines of 16.9% and 15.8%, respectively.

Phoenix was the worst performer for the June to May period, returning -2.6%. The markets that were the high-flyers during the recent real estate boom continue to be the ones that are leading the current decline. On the plus side, Denver and Boston were the best performing markets for the month, returning +1.5% and +1.2%, respectively. Both these markets have had three consecutive months of positive returns. They are outdone by Charlotte and Dallas, however, which have recorded four consecutive months of positive returns. Portland market for the June to May period showed a decline of -0.3%.

Why the Difference in Numbers? The Standard & Poor's report comes from data gathered at county recorder offices. The home sale prices are then compared with the home's previous sale to show growth or decline in value. Standard & Poor's uses that rate to calculate the monthly and yearly change in values. The firm provides the data for the 20 largest U.S. markets monthly.

The Regional Market Listing Service (RMLS) is an organization governed by local real estate brokers in the Portland metro area, and it provides sale data on the price for home sales closed in a given month. To calculate the median price, the average price, as well as the 12-month sales price percent change, the Regional Multiple Listing Service includes home sales from the five metro area Oregon counties (Clackamas, Columbia, Multnomah, Washington, and Yamhill). RMLS does not include Clark County or Skamania County in Southwest Washington state to arrive at their numbers. The Case-Schiller index includes Clark and Skamania counties because they use the U. S. Census Bureau metropolitan statistical areas (MSA).

Comparing market activity in 2007 with that of 2006, the Portland metro area saw an 8.1% increase in new listings. However, pending sales decreased 15.7%, and closed sales dropped 13.1%. Portland had its third highest total sales volume in residential real estate, at $9.7 billion, a 6.7% decrease from the $10.4 billion in 2006.

The average sale price increased 6.3% ($342,900 v. $322,600), and the median sale price appreciated 7.2% ($290,000 v. $270,500).

The Portland metro area figures above encompasses these five counties in Oregon: Clackamas, Columbia, Multnomah, Washington, and Yamhill. The RMLS report includes separate data for Southwest Washington's Clark and Cowlitz counties.

In West Portland (southwest and northwest), the average price was $468,100, and the average price increase was 3.6 percent. North Portland was the leader in appreciation as the average price increased 8.4% - $266,600 in 2007 v. $245,400 in 2006.

The two appreciation leaders in close-in metro areas suburban communities were Lake Oswego/West Line along with Gresham/Troutdale. Milwaukie/Clackamas was the only communities in the 5-county area to record negative appreciation. See the chart below for figures.

The RMLS report also included separate data for Southwest Washington's Clark and Cowlitz counties. A comparison of 2007 with 2006 shows that there was a 1% decline in new listings. Closed sales fell 18.1%. While pending sales also decreased 17.7%. On the other hand, the average sale price climbed 1.7% ($305,500 v. $300,500) and the median price rose 0.9% ($262,300 v. $260,000). Total sales volume for Clark County was $1.9 billion, down from $2.3 billion in 2006..

2007: Average sales price was $272,900, and condos appreciated 13% over 2006. 2006: Average sales price was $241,800, and condos appreciated 14% over 2005. 2005: Average sales price was $212,000, and condos appreciated 14% over 2004. 2004: Average sales price was $186,600, and condos appreciated 12% over 2003.

Item	2002	2003	2004	2005	2006	2007
Average Sales Price	$213,900	$222,500	$246,000	$282,900	$332,600	$342,000
Median Sales Price	176,900	185,000	204,500	237,500	$270,500	$290,000
Average Price Appreciation³	4.8%	5.6%	10.6%	15.0%	14.1%	6.3%
Median Price Appreciation⁴		4.9%	10.2%	16.1%	13.9%	7.2%
¹The metro area includes the following Oregon counties: Clackamas, Columbia, Multnomah, Washington, and Yamhill. It does not include Clark County in Washington state.²Residential includes detached single-family homes, condos, townhomes, manufactured homes, and multi-family units when one of the units is sold. ³Appreciation percents based on a comparison of average price to the previous year average price. ⁴Appreciation percents based on a comparison of median price to the previous year median price.
Source: Regional Multiple Listing Service (RMLS™)

Area	2004 Average Price	%³ Incr.	2005 Average Price	%³ Incr.	2006 Average Price	%³ Incr.	2007 Average Price	%³ Incr.
*Metro Area*
Portland Metro¹	$246,000	10.6%	$282,900	15.0%	$270,500	14.1%	$342,000	6.3%
City of Portland
North	$176,400	11.2%	$208,800	18.1%	$234,500	17.5%	$266,600	8.4%
Northeast	226,600	8.7%	262,300	15.8%	265,000	15.4%	321,600	6.4%
Southeast	201,500	9.5%	230,900	14.6%	234,500	15.8%	285,500	7.1%
West (Includes SW and NW Portland and NE Washington County)	359,400	9.3%	410,700	14.5%	378,100	10.3%	468,100	3.6%
*Suburban Communities*
Corbett, Gresham, Sandy, Troutdale	$203,300	8.8%	$230,000	12.9%	$248,000	15.2%	$281,900	6.3%
Clackamas, Milwaukie, Gladstone, Sunnyside	250,600	16.1%	293,200	16.8%	307,200	15.2%	334,200	-5.4%
Canby, Beavercreek, Molalla, Mulino, Oregon City	237,600	8.9%	282,400	18.9%	286,000	15.6%	329,600	1.2%
Lake Oswego and West Linn	397,000	14.8%	452,600	13.6%	443,800	16.7%	567,900	7.8%
Northwest Washington County or Sauvie Island	322,500	9.7%	369,400	14.5%	359,000	7.6%	419,400	5.4%
Beaverton and Aloha	216,500	8.3%	246,500	13.6%	251,000	12.7%	286,500	3.4%
Tigard, Tualatin, Sherwood, Wilsonville	263,700	7.8%	328,500	24.8%	322,000	8.6%	374,700	5.3%
Hillsboro and Forest Grove	208,000	5.5%	243,500	17.0%	260,000	15.9%	297,900	5.5%
Mt.Hood: Brightwood, Government Camp, Rhododendron, Welches, Wemme, ZigZag	174,400	7.4%	231,400	32.5%	254,200	20.3%	283,600	2.0%
Columbia County					219,800	14.5%	254,000	11.6%
Yamhill County					229,900	18.3%	281,600	6.1%
Marion and Polk Counties					207,000	15.1%	250,800	6.9%
North Coastal Counties					259,000	20.0%	381,600	14.4%
*Southwest Washington State (Clark and Cowlitz Counties)*
Includes Vancouver, WA	$224,000	13.9%	$260,800	16.4%	$256,000	12.5%	$305,500	1.7%
¹The Portland metro area includes these Oregon counties: Clackamas, Columbia, Multnomah, Washington, & Yamhill. Note that it does not include Clark County (i.e., Vancouver, WA) in Washington state. ²Residential includes detached single-family homes, condos, townhomes, manufactured homes, and multi-family units when one of the units is sold. ³Percent increase over previous year average sale price.
Source: Regional Multiple Listing Service (RMLS™)

Other Sources of Housing Information

The report is the product of a collaborative effort by the PSU Center for Real Estate and the Oregon Association of REALTORS® to provide service to the local community. The intention of the report is to provide useful information about trends in commercial and residential real estate to the real estate community in Oregon and Southwest Washington. It is very comprehensive and covers the local economy as well as housing.

The report is made possible thanks to a donation by the Oregon Association of REALTORS® along with the participation of RMLS, Cushman & Wakefield, Norris Beggs & Simpson and Grubb & Ellis.

Since 1978, DataQuick has built a reputation as a provider of real estate information. Although much of DataQuick's information is available only to its paid subscribers, some of the information at their Web site is accessible to all visitors. The site covers the California market extensively but it also releases quarterly information on the Portland housing market.

Affordability in Portland

In March, 2008, Bizjournals compared median home payments and household income levels in the nation's 50 largest metros. The study was based on statistics from the U.S. Census Bureau's 2006 American Community Survey. Bizjournal said this was "the most up-to-date source of federal data on housing costs."

Portland ranked as the 37th most affordable market, with median monthly household income at $4,373. The median monthly mortgage payment is $1,449.

In the Los Angeles area, the median owner-occupied home was valued at $604,500 in 2006. A 6 percent, 30-year mortgage on such a house (after a 10 percent down payment) would cost $3,262 per month. Property taxes would drive the total payment up to $3,491.

That monthly tab would consume 75.5 percent of the median household income in the Los Angeles area, $4,626 per month. (Median is a midpoint, with half of all households earning more, and half earning less.) L.A.'s rate is more than two and a half times the national average of 28.3 percent.

Most of the expensive areas are located along or near America's coastlines. Home costs in 13 U.S. markets run higher than 40 percent of the median household incomes for those areas. Twelve of the 13 -- all but Las Vegas -- are within 100 miles of the Atlantic or Pacific oceans.

Reasonably priced homes, on the other hand, are concentrated in inland regions of the South, Midwest and industrial Northeast.

If home costs exceed 30 percent of income, according to the U.S. Department of Housing and Urban Development's guidelines, a family might find it difficult to afford food, clothing, transportation and other necessities.

In early 2007, the Portland Development Commission (PDC) finalized its recommendations for spending the new tax increment set-aside from urban renewal districts that the City Council earmarked for affordable housing. The amount: $162.6 million over the next six years. PDC increased its commitment to build as many as 1,450 units specifically for people who pay no more than 30 percent of their income for rent. That means citywide and not just downtown.

Early each year, HUD release new median income figures. This usually triggers rent increases in income-restricted buildings, since landlords are allowed to raise rents whenever the medium income rises.

Northwest Pilot Project tracks the number of downtown affordable housing units and for 2007, it is about 3,400 units.

Urban Boundaries and Home Prices

The cost of housing is one of the most contentious issues related to Portland's metro planning. With an median sales price of $237,500 in 2005, this is beyond the reach of many people.

Does the Urban Growth Boundary (UGB) cause Higher Home Prices? (see Portland Planning for a discussion of UGB). The NAHB desire more land on which to build homes. In their document called The Truth About Regulatory Barriers to Housing Affordability the NAHB identified 42 markets with barriers, Portland being one of these markets. They called the UGB the "Wall of Portland" and attack it accordingly. The Home Builders Association of Metropolitan Portland, has been among those critical of Metro for being too restrictive in its UGB.

2000 Census Bureau figures indicates that the density in downtown Portland has increased by 30 percent, which is what planners had in mind. Only a few cities in the USA have increased their core city population.

Applying Science to the Debate Sightline Institute, an environmental organization located in Seattle, used some science to compare urban sprawl in Clark County in Washington State and Portland. Clark County is just across the Columbia River and part of the Portland metro area. Sightline used satellite imagery of open space, farmland and pavement, along with digital mapping of US Census data to track patterns of growth during the 1990s. They found that if Portland had taken the same approach to land-use planning as Clark County in the 1990s, an additional 14 square miles would have been developed. Click here to read the full report.

Rating Portland's Density

A study released in August 2003, called "Measuring the Health Effects of Sprawl," commissioned by Smart Growth America, a national advocacy group, and financed by the Robert Wood Johnson Foundation, a health promotion group, found that U.S. adults who live in compact cities are more likely to walk or bike to work, school, stores and other everyday destinations than they are to drive. This translates to slightly lower weights and blood pressures.

As part of the study, researchers from Rutgers and Cornell universities used six variables, including housing density and block size, to create a "sprawl index" for 448 urban counties across the United States. The index was set with 100 as the average; more sprawling counties had lower scores.

New York's boroughs had the least sprawl - especially Manhattan, with a score of 352. The most sprawling place was Geauga County, Ohio, near Cleveland, which scored 63.

Multnomah County (where the city of Portland is located), the Northwest's most compact county, ranked 24th densest among the 448 urban counties, just missing the top 5 percent.

Read the opinions of the Cascade Policy Institute, a Portland group that advocates a free-market approach.

1,000 Friends of Oregon feels that the Oregon regulations work well. 1000 Friends of Oregon is a nonprofit charitable organization, founded in 1975 by Governor Tom McCall and Henry Richmond as the citizens' voice for land use planning that protects Oregon's quality of life from the effects of growth.

Oregonians in Action (OIA) is a non-profit lobbying organization that leads the fight for land-use regulatory reform and protection for private property rights. OIA authored two ballot measures in 1998: one to require landowner notification and another to give citizens the right to petition for legislative review of "bad state regulations." In 2004, OIA passed Measure 37, a constitutional amendment that requires compensation to landowners.

Resources

Compare Cost of Living Between Metro Areas

There are a number of free sites that allow you to compare living costs between metro areas but the numbers don't always make sense. We recommend using the ACCRA Web site (the acronym means nothing it was created by a group of US Chamber of Commerce researchers years ago). Its a member organization whose mission is strictly research. For under $20 you can compare the cost of living with where you're living to five other USA/Canadian metro areas.

Office of Federal Housing Enterprise Oversight (OFHEO)

The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 mandates that OFHEO publish a House Price Index (HPI), a measure designed to capture changes in the value of single-family homes in the USA. It also includes a HPI in various regions of the country, individual states, and the District of Columbia. You can view the HPI by the state of Oregon and by the MSA (Metropolitan Statistical Area).

National Association of Realtors (NAR)

NAR is the "Voice for Real Estate." It is America's largest trade association, representing one million members, including NAR's institutes, societies and councils, involved in all aspects of the residential and commercial real estate industries. Their "Existing Home Sales Data" measures the health of the residential real estate industry. Each month, statistics on sales of existing single family homes are reported for the national and four regional levels. Statistics on existing condo/co-ops are released quarterly, and figures on existing single-family home sales (detached and condo/co-ops) by state are released quarterly.

Case Shiller Weiss

To learn more about housing cost, visit the Web site of Case Shiller Weiss, Inc. CSW is a home price research company, founded in 1991, that serves a client base principally comprised of leading mortgage lenders, insurers, and Wall Street firms. The New York Times called CSW ". . . The country's leading residential real estate analysts."

Portland Metro Area Home Prices