Portland RMLS Market Action Report – October 2011

The Regional Multiple Listing Service released the Market Action Report this week and the median sale price for October 2011 was $217,800; this is a 6.7% decrease from the median sale price for October 2010.

The Portland residential real estate market peaked in August 2007 with a median sale price of $302,000. Prices have now fallen 28% from that peak.

Months of supply (total inventory/monthly sales) sits at 6.8 months compared to the 10.7 months of supply for the same month last year. A balanced market has about 7 months of supply.

The first graph compares the median and average sale price with the months of supply. Click on any graph for a sharper image.

The second graph shows the total supply of homes available for sale. This is simply a calculation of the months closed sales multiplied by the months of supply. There are currently 10,023 homes for sale; this is a decrease of 27.5% from the same month the year before.

The third chart shows closed sales by month. There were 1,474 closed sales during the month; an increase of 14.1% from the same month the year before.

The fourth chart shows new listings by month. There were 2,433 new listings during the month; a decrease of 22% from the same month the year before.

The final graph shows how affordable the median priced home is for a family of four. History indicates the ratio is usually between 2.5 and 3.0. Prices would have to fall 3.5% from the current median for the ratio to reach 3.0.

Double Dip?

Don't take the Portland Housing Blog's word for it, just read the news:

"The rate at which mortgage holders were late with their payments by 60 days or more rose in the June-to-September period for the first time since the last three months of 2009, according to TransUnion.

The increase surprised TransUnion researchers, who had expected late payments, or delinquencies, to fall for the quarter. "It's much different than we've been talking about the last few quarters," said Tim Martin, group vice president of U.S. Housing in TransUnion's financial services business unit.

The problems were widespread. Between the second and third quarters, all but 10 states and the District of Columbia saw delinquency rates increase.

Another possibility for the bump in the delinquency rate is that a new crop of adjustable mortgages written toward the end of the housing bubble is resetting. Even if their interest rates remain low after the adjustment, payments might have increased, said Darren Blomquist, a Realtytrac spokesman. "We still have the bad loans mixed in that are resetting." "

Source: USA TODAY

Meanwhile closer to home right here in Stumptown, one of your neighbors on either side of your house is still underwater mathematically - and that's if you're the lucky 2 out of 3 loan owners:

1/3 of PDX Homes Underwater - Source: The Oregonian

Still not convinced that the "bottom" is yet to come? If you would like some technical data as to why a double dip is baked into the cake, please re-read the post below, and pay special attention to the graph at the bottom. It's a hard rain that's gonna fall this winter on the Portland housing market.

STILL convinced that it's 'different' here in the great Pacific Northwest? You were blatantly and clearly warned in mid August by The News Tribune out of Tacoma that we're now solidly in the middle innings of the housing bubble game for the Portland/Seattle part of the world.

Early Innings of the Game = Bad Loans and High Prices

Middle Innings of the Game = Delinquent Payments and Declining Prices

Late Innings of the Game = Default/Auction/Free Market Prices
(the bottom)

The global banking industry/cartel is desperately trying to deny the inevitable math so as to pull off a soft landing and maintain usury/debt based currency control. Look at the European Union! Sorry Charlie. This bubble popping was born to be heard around the world...there's a major shift afoot.

However, the bubble blogger beleaguered should be wary that the late innings of the game may take longer to play out than many anticipate...


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Get Ready for the Double Dip Portland

"Compared with July 2010, home prices in Portland have dropped 8.4 percent. That's the third-deepest decline of the 20 cities surveyed in the index."



Source: The Oregonian

So where do we go from here (as if the trend in the graph above wasn't enough)?

The fact that foreclosures were held at bay for much of 2010/2011, and the timing of payment shocks per the chart below will both have severe effects on Portland's housing market going forward. At Portland's peak in 2006/2007 roughly 1/3 of originated loans were either Alt-A or Option-ARM financed. The common sales pitch for such high commission loans at the time from the average McRealtor / McBroker went something like this "You can always refinance to a low fixed rate when you have more equity".

Whoops.

2012 through 2013 will give stumptown a strong taste of what the bottom feels like. It will take at least that long if not longer to clear the delinquent inventory of homes and find firm price footing. Portland spent most of the last 12 months declining ~10% annually. That trend will continue for the immediate future.

Debts which cannot be paid monthly - will never be repaid in full. It's really that simple. The house will end up foreclosed upon and sold to the free market sooner or later. The banks/politicians will drag their heels and kick the can to avoid reality, but the simple cash flow math does not lie. Home prices in Portland will continue to decline for at least another year, if not several years.





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End Of Summer 2011 - Oregon's Graphic Reality

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