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April 25, 2007
Prices down around the country (except Portland, Charlotte and...what's going on in Seattle?)
Home prices declined in 17 of 20 key housing markets over the past year, according to the S&P/Case-Shiller(R) Home Price Indices (which is produced by Standard & Poor's, which--disclosure alert--is like BusinessWeek, owned by The McGraw-Hill Cos.) The chart makes for interesting reading. Detroit (-7.8%) San Diego (-5%), Boston (-4.7%) and Washington D.C. (-4.3%) suffered the biggest year-over-year declines of all cities. And what the heck is going on in Seattle and Portland? Seattle home prices were up 10.6% between February '06 and February '07, and Portland prices rose 7.7% (readers there, please illuminate).
In general, S&P economists say the data "indicates the deceleration and declines in home prices are showing no signs of turnaround." So much for the talk that the market was stabilizing. The average consecutive "negative monthly return" of the 20 cities that S&P and Shiller studied is 5 months, and some markets are doing worse: San Francisco and Boston have yielded negative monthly returns since May of last year, notes S&P.
There's a lot of interesting data in the release, which can be found here. And even more data, including historical price trends for each of those major markets, can be found here. I'd invite readers to help us pore through the data and pick out any interesting nuggets you find in this thread...
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Portland and Seattle are seeing a large population influx from Californians who are cashing out on their $750,000 "median" homes and buying very nice upscale homes for $350-450,000+ in those cities. In general, those cities appear to be attracting a large number of young professionals and 20/30-something couples. If you look at some of the smaller cities in those states - Medford/Ashland and Bend, Oregon in particular - you'll see several dramatic price increases recently. Medford has been rated one of the most overpriced markets in the country. The demand is there, and supply isn't keeping up. The ability of so many "cashed out" Californians to buy upscale homes pushes the median (and average) up.
Posted by: Brandon W at April 26, 2007 09:08 AM
Portland and Seattle are hot markets, despite the influx of californians. people from all over the country are relocating to the NW. 450k will buy you a townhouse in portland, but anything in the 300s is going to put you in the suburbs.
Posted by: b. dee at April 26, 2007 01:49 PM
Seattle and Portland prices have been driven by strong gains in employment coupled with rampant speculation and a severly overbuilt condo supply.
Seattle is just simply behind the national trend, and our prices will come into line by summertime.
The average price/sf of homes in Seattle is skewed by an inventory that has increased by 40% since February, 2006. Our Pending and closed sales have decreased some 10-15% as well over this same amount of time...sounds like a deflating bubble to me.
BTW, you CANNOT buy a high end house in Seattle for 350-400,000, that is an entry level price here. You would be lucky to get a 5sf patch of grass for that price in Downtown.
Posted by: Dan Carpenter at April 26, 2007 02:31 PM
I guess I was implying "up until recently", and I also put the "+" in there because I know it can go much higher than that. I'm looking at moving to Portland, myself, so I'm reasonably familiar with the real estate prices. I've seen quite a few nice townhomes in the $275-300k range in Portland, so it can be done.
Posted by: Brandon W at April 26, 2007 10:10 PM
Northwest realtors are notoriously cunning.
Coupled with the local news media and just about everyone else, they are pretty much colluding to make you think the prices are high and sales are rolling.
Reality? I drive around South King County and have seen the same brand new housing developments with unsold units...and this has been for more than a year!
Yeah, if you keep a lock on supply, you can artificially prop up the price. But at some point the dam is gonna break.
Posted by: John Bailo at April 27, 2007 05:05 PM