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|Thursday, June 26, 2014|
BY ERIC FRUITS | OB BLOGGER
Is it a blip, or a trend?
That is the toughest question that economists have to answer when trying to forecast where the economy is going.
Last year, the housing market in Oregon—and the U.S. as a whole—was blasting off. The Case-Shiller index of home prices ended the year 13 percent higher than at the beginning of the year. A homebuyer who paid $250,000, would have added almost $33,000 in equity over the course of the year. According to past observation, that additional wealth (on paper, at least) would ultimately translate into increased consumer spending which would, in turn, boost the economy.
More detail on the Portland market shows that last year saw a number of home sales that had not been seen the days of the housing boom of the mid 2000s. Last year, 23,500 home sales were recorded, which is about the same value as the last half of 2006 and the first half of 2007.
Even more striking, 2013 saw the average house selling in less than 30 days after it hit the market. It seems that sellers could plant a “For Sale” in the morning and get a phone call with an offer before they went to bed that night.
But, was last year a blip or a trend?
This year, housing has seems to have slowed. The number of transactions seems to have flattened out and the number of days on the market about doubled since last year. Prices do no seem to have the double-digit growth seen a year ago.
Is the current slow down a blip or a trend? Is the market tapping the brakes, or slamming them?
The tough winter elsewhere stalled out housing starts in the first part of the year. That’s a blip. But other things point to potentially troubling trends.
In the second half of last year, mortgage interest rates began to rise, largely because of expectations that the Fed’s bond-buying program, known as quantitative easing, or QE, was coming to an end. And, it does have to end. But, we don’t know when and we don’t know how. Nevertheless, mortgage interest rate are a little less than one percentage point higher this year than they were the same time last year. For a $200,000 mortgage loan, the payment this year is about $100 more per month than for a loan obtained last year.
In addition to rising interest rates, mortgage lending remains somewhat tight. Last year lenders reported loosening lending standards for much of the year. This year has seen a slight tightening of lending. (Or, more precisely, lending is not getting looser.) The combination of higher interest and tighter credit has tapped the brakes on the housing market.
We know that mortgage interest rates will rise, but we don’t know when or by how much. Credit standards will likely remain tight so long has employment and income opportunities remain stagnant or sluggish. Without a boost to employment opportunities and a renewed interest in returning to work, housing and much of the rest of the economy will remain blipping along a series of small ups and downs.
Wednesday, May 27, 2015
PHOTOS BY JASON E. KAPLAN
Like all good journalists, OB editorial staff typically eschew freebies. But health care costs being what they are, digital news editor Jacob Palmer couldn't resist ZoomCare's offer of a three-in-one (cleaning, exam, whitening) dental office visit, guaranteed to take no more than 57 minutes.
Thursday, May 28, 2015
BY LINDA BAKER | EDITOR
Reinventing capitalism. Office dumpster divers. Handprints versus carbon footprints.
Tuesday, June 23, 2015
Oregon’s new marijuana law is expected to lead to a bevy of new business opportunities for the state. And not just for growers. Law firms, HR consultants, energy efficiency companies and many others are expected to benefit from the decriminalization of pot, according to panelists at an Oregon Business breakfast meeting on Tuesday.
Friday, May 15, 2015
BY KIM MOORE | RESEARCH EDITOR
The Portland Bureau of Transportation is seeking input from businesses on a $5.5 million initiative to create a network of biking, transit and pedestrian trails within Portland’s central city.
Thursday, May 14, 2015
BY JASON E. KAPLAN | STAFF PHOTOGRAPHER
There are more than 160 farmers markets in Oregon, contributing an estimated $50 million in sales, according to the Oregon Farmers Markets Association. We checked in on the Forest Grove market, which for several years has brought local produce and food vendors to Main Street in the center of town.
Friday, May 22, 2015
BY ANNIE ELLISON
Portland tech veteran Ben Berry is leaving his post as Portland’s chief technology officer for a full-time role producing unmanned aerial vehicles (UAVs) aimed at first responders and the military. Berry’s AirShip Technologies Group is poised to be on the ground floor of an industry that will supply drones to as many as 100,000 police, fire and emergency agencies nationwide. He reveals the plan for takeoff.
Friday, May 22, 2015
BY JACOB PALMER
A Power Lunch at Oswego Grill.
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Tonkon Torp helps seed sustainability at Gunderson.
Oregon-based Environments helps companies create inspired workspaces. “Simply put, we help companies future-proof their workspaces,” says Chris Corrado, president. Since 1988,Environments has witnessed firsthand the changing landscape of business. Native Portlander and Environments founder Corrado says, “We help our clients navigate the complex realities of the workplace today and plan for their future in a very mindful, strategic way. We think of ourselves as their partners in the process.”
One hundred years ago, the Willamette River might easily have been mistaken for a sewer. Unchecked industrial activity and decades of pollution made it unrecognizable compared to the clean river that now flows north for 187 miles from Eugene through the center of Portland.
3 Degrees Event Celebrates 5th Year Bringing Nonprofit and Business Professionals Together to Benefit Portland.
Bend energy leader brings passion for efficiency and renewable energy to the nonprofit.
Event in Forest Grove marks recognition of Global Food Safety Initiative Certification.