Housing market still hurting

| Print |  Email
Wednesday, October 01, 2008

STATEWIDE When it comes to Oregon’s sluggish Metro housing markets, there is a painful difference between approaching the bottom and reaching it.

Ever since Portland home prices crossed into negative territory in January for the first time since 1987, the big question has been, where does the plunge end and the rebound begin? Falling home prices have led some optimists to declare, as an Oregonian headline did on Aug. 27, that the housing market is “bottoming out.” But step one to a rebound would be an up-tick in home sales, and that isn’t happening. Sales are down more than 30% in Portland, Eugene, Medford and Bend.

Even with a precipitous drop in new home-building, the Portland market remains bloated with more than 10 months worth of inventory and clouded by more than 6,000 uncorrected subprime mortgages and no-document “liar loans” that will eventually be re-set or “re-cast,” bringing higher monthly payments followed by new foreclosures.

The median home price fell $22,000 over the past year. How much further does it need to drop to get the market moving again?

Mark McMullen, a Lake Oswego-based senior economist for Moody’s Economy, predicts that the Portland market will bottom out at a median home price of $260,000 midway through 2009, and will remain flat for the remainder of the year before rebuilding slowly. That would represent a 14% price drop from the market’s peak of $302,000 in August 2007.

“In the coming months we’ll start to see the market firm up, and then we’ll see builders who are forward-looking applying for permits again,” predicts McMullen. “But it will be a while before the market is back in shape.”

Tim Duy, a University of Oregon economics professor who compiles the UO Index of Economic Indicators, thinks prices may have to drop even lower. “Conditions are still very weak, and prices remain, on average, too high,” he says. “Housing prices have swelled beyond what is affordable for people at most income levels in Oregon. Until that situation is corrected, I expect the housing market to remain challenged.”

BEN JACKLET



Have an opinion? E-mail This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

More Articles

5 ways successful people kickstart the day

The Latest
Thursday, April 02, 2015
coffeethumbBY JACOB PALMER | DIGITAL NEWS EDITOR

Are mornings the most productive part of the day?  We ask five successful executives how they get off to a good start.


Read more...

The ancient fish that stops bullets

The Latest
Friday, May 08, 2015
hagfishthumbBY CHRIS NOBLE | PHOTOS BY JASON E. KAPLAN

Hagfish may not have evolved much over the last 300 million years, but their protein-heavy slime promises advances in super-materials.


Read more...

European Vacation

Guest Blog
Thursday, April 23, 2015
norristhumbBY JASON NORRIS | GUEST BLOGGER

There are winners and losers with a strengthening U.S. dollar.


Read more...

The Health Guru

May 2015
Monday, April 27, 2015
BY LINDA BAKER

Mohan Nair channels a visionary.


Read more...

Footloose

April 2015
Friday, March 27, 2015
BY LINDA BAKER

Founded 12 years ago, Keen Inc. likes to push the envelope, starting with the debut of the “Newport” closed toe sandal in 2003. Since then, the company has opened a factory on Swan Island and a sleek new headquarters in the Pearl District. The brand’s newest offering, UNEEK, is a sandal made from two woven cords and not much more.


Read more...

Fighting Fire With Fire

May 2015
Friday, April 24, 2015
BY BEN DEJARNETTE | INVESTIGATEWEST

Timber companies and environmental groups take a stab at collaboration to boost logging and restoration in Oregon fires.


Read more...

Beneath the Surface

May 2015
Thursday, April 23, 2015
0515-goodhacker01 250pxwBY LINDA BAKER

On April 1 I attended a forum at the University of Portland on the sharing economy. The event featured panelists from Lyft and Airbnb, as well as Portland Mayor Charlie Hales. Asked about the impact of tech-driven sharing economy services. Hales said the new business models are reshaping the landscape. “But,” he added, “I don’t pretend to understand how a lot of this [technology] works.” 


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS