The December Case-Shiller numbers are in and the news is more of the same for Portland. Here is the raw data in graph form for Portland and the 20 city composite:
And here is a sobering picture, it is the average annual appreciation of a Portland home over the last seven or so years. As many near-in neighborhoods are holding on pretty well, it means there is some pretty severe bloodletting elsewhere.
I always wonder, however, what to think of the bloodletting in the new developments. Sure there are people who invested in their own home who see the value go down, but if they are there for the long-haul, this is not necessarily a problem as long as they could afford the original mortgage. Then there are the speculators who bought for investment purposes and it went south, but with limited liability they are not too badly off (one of the reasons for the real tanking of the housing market is the ease at which such investors can walk away). There were also the liars who used the no doc loan opportunity as a chance to fraudulently obtain a home. Finally, there are the people who couldn't really afford what they bought but were counting on quick appreciation to allow them to extract equity from the home. These are the folks who are really adversely affected by the downturn and represent people who made a reasonable calculation but extraordinary times dealt them a bad hand. These are the folks I feel for.
There is a bright spot: the Fed is actively working to push long-term rates down and it is working - mortgage rates are insanely low. I think the worm is about to turn. It is crazy to sit on the sidelines too much longer and good deals are plentiful. So, though I have been wrong before, I think we may see some leveling off this spring (remember, these data stop in October).
By the way, as a side note, one of the reasons the Fed is doing this is because banks are still not loaning money like they should be because they can borrow from the Fed at these incredibly low rates (.25%) and buy treasuries that pay about 2%. Not a great return, but incredibly safe and since all other lending seems too risky, that's what they are deciding to do. So the Fed reckons they can buy treasuries and drive the rates down so much that banks will start to switch to the riskier loans. This is quantitative easing. See a great Marketplace whiteboard video for a nice explanation of this.