Home Archives October 2008 Housing market still hurting

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

Green Endeavor cleans up

News
Wednesday, August 06, 2014
080614 ULnew greenendeavorBY LINDA BAKER | OB EDITOR

Portland startup Green Endeavor strikes gold, inking a partnership with Underwriters Laboratories, an Illinois-based consulting and certification company with offices in 46 countries.


Read more...

Who said we should sell in May?

Contributed Blogs
Friday, July 18, 2014
BullMarketBY JASON NORRIS | OB GUEST CONTRIBUTOR

Back in May, we shared a common Wall Street quote about investing, “Sell in May and go away.” Fast forward to July and the most common question we have been getting from clients is, “When is the market pullback going to occur?”


Read more...

Poll Wrap-Up

News
Friday, August 15, 2014

2014 NewPoll-report-newsletterthumbIn this week's poll, we asked readers: "Who should pay for the troubled Cover Oregon website?" Here are the results.


Read more...

Interview: Dr. Mark Goulston

Contributed Blogs
Thursday, July 10, 2014
JustListenBY TOM COX | OB BLOGGER

Tom Cox interviews Dr. Mark Goulston, author of Just Listen, Discover the Secret to Getting Through to Absolutely Anyone.


Read more...

Private liberal arts education: superior outcomes, competitive price

Contributed Blogs
Tuesday, August 26, 2014
0826 thumb collegemoneyBY DEBRA RINGOLD | OP-ED CONTRIBUTOR

Why has six years become an acceptable investment in public undergraduate education that over-promises and underperforms?


Read more...

Portland rises

News
Monday, August 18, 2014

IMG 2551Portland is in the middle of another construction boom, with residential and office projects springing up downtown, in the Pearl and Old Town. OB Web Editor Jessica Ridgway documents the new wave.


Read more...

Podcast: Interview with Pete Friedes

Contributed Blogs
Wednesday, August 27, 2014

082714-thumb friedesbookTom Cox interviews Pete Friedes, author of "The 2R Manager," about becoming a Best Boss.


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