Thursday, February 28, 2008

Update on Portland Home Prices

Here is the latest Case-Shiller index for Portland home prices. I have also included Seattle as a basis for comparison. I have to admit, I am pretty amazed, I thought that things would be much worse by now. Seattle is starting to fall fairly quickly, but Portland is not. The January and February numbers might be a bit worse, but I think the market is already showing signs of increased activity as Spring approaches. However, long-term mortgage rates are rising quickly (see yesterday's post) and this might put damper on the market in short order. Despite this, I have to say I am slowly switching from a pessimist to an optimist.


Jeff said...


Nice blog. It's terrific that you're doing this.

I have to take issue with you on house prices. You've noted that Portland home prices haven't fallen much, but what about sales volumes and inventories? The former are dropping and the latter are rising, at least through my own casual observation over the last year. (I don't have ready access to relevant data.)

I'd also point out that Oregon was very late to the national housing rally. We're about 2 years behind the rest of the country.

If you want a particular figure on Corvallis, the folks at suggest that Corvallis is currently about 20% over-valued:

I think that Oregon will get hit at least as hard as the rest of the country.

Jeff Reimer

Patrick Emerson said...

Hi Jeff,

Thanks for checking in. I have been very much a pessimist, but I am not so sure now. I actually think that the late houing boom in Portland has helped it avoid too big a bubble. Still the next few months will be very revealing - so time will tell.

Jeff said...

Let me also note that a possible problem with relying on median prices is the heavy use of incentives and concessions to get the houses sold. In the last several months sellers have often been paying 4% of the buyers' closing costs. New home developers are throwing in incentives like vacations or decorating allowances. These don't get reflected in the final reported price.

So why don't they just drop the price? Realtors can maintain their higher commission while pointing to the strength of the local housing market.