Tuesday, October 27, 2009

Portland Home Values: Case-Shiller August Numbers

The August Case-Shiller numbers are out and the news is good...for now. The housing market appears to be stabilizing in Portland and across metro areas in the US. This first picture is the raw C-S numbers for Portland, Seattle and the 20 city composite.

The next picture is the year over year change in home values for the same three indices.

The combination of low interest rates for mortgages and the new home buyer tax credit seems to be having a substantial impact, however with the tax credit potentially expiring (if it is not extended), high unemployment and a shadow inventory of foreclosed properties that will take a while to work through the market, I would not get too optimistic about the next year or so. I would expect these to take a dip in the winter and perhaps, finally, by the middle of 2010 we'll see sustained improvement.


Jeff Alworth said...

What are your thoughts on extending the tax credit for first-time homebuyers? I am instinctively worried about putting more people in homes to get us out of the hole. Wasn't that how we got into the hole in the first place?

Patrick Emerson said...

I think that the credit as is currently exists, meaning solely for new home buyers (and assuming no fraud which is, apparently, not safe to assume), along with the now incredibly strict underwriting standards banks are using means that we are not pushing people into homes they cannot afford.

I support an extension until spring, but not an expansion as realtor and builders groups are asking for. The winter season could re-ignite the depression of home values and with unemployment still high, I think it makes sense to keep it going through April.