Sponsored by Lane Powell

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

Undersea Power

June 2015
Friday, May 22, 2015
BY JACOB PALMER

Mike Morrow and Mike Delos-Reyes first came up with the idea of an ocean power device 23 years ago, when they were students at Oregon State University. They realized a long-held vision last summer, when their startup, M3 Wave, successfully launched the first ocean power device that works underwater.


Read more...

100 Best Green Workplaces announced

News
Wednesday, May 27, 2015
OBM-100-best-Green-logo-2015-1000pxwBY LINDA BAKER | EDITOR

More than 250 people turned out today for Oregon Business magazine’s seventh annual celebration of the 100 Best Green Companies to Work For in Oregon.


Read more...

Change at the pump?

The Latest
Tuesday, May 26, 2015
001thumbBY JASON E. KAPLAN | STAFF PHOTOGRAPHER

New Jersey and Oregon are the only two states in the U.S. that ban self serve gas stations. But these two holdouts may be ready to give up the game. New Jersey is considering legislation that would lift the state's ban on pumping your own gas. Oregon is considering smaller scale changes.


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...

No Boundaries

June 2015
Friday, May 22, 2015
BY AMY MILSHTEIN

Floor plans embrace the great wide open.


Read more...

Credit Unions Perspective

June 2015
Tuesday, May 26, 2015
BY KIM MOORE

A conversation with Gene Pelham, CEO of Rogue Credit Union.


Read more...

5 things to know about veterans in the workforce

The Latest
Wednesday, July 01, 2015
070215-vetsthumbBY JACOB PALMER | DIGITAL NEWS EDITOR

There are more than 10 million former military members working in the United States.


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