Portland Oregon Metro Area Housing Prices - Susan Marthens Real Estate

Subscribe to the Moving to Portland Month Newsletter You can subscribe to my monthly newsletter at Moving to Portland Newsletter - just give your name and e-mail address. The newsletter tracks the home prices in the Portland metro area.

While sales activity continued a steady month-over-month increase in the Portland metro area, it still fell short of 2008’s same month marks for April.

Comparing April 2009 with the same month in 2008, pending sales were down 10.1% and closed sales decreased 17.7%. New listings also dropped 28.1%. Comparing April 2009 with March 2009, pending sales grew 13.6% (1,860 v. 1,637). Closed sales also rose 10% (1,302 v. 1,184). New listings increased 3.3% (3,808 v. 3,685). Pending sales continue to rise month-over-month at a steeper than usual rate (13.6% in 2009 vs. 6.8% in 2008 and -2.3% in 2007). Inventory also dropped to 11 months, and this is the first time it has dropped from March to April since 2004. Active residential listings in April numbered 14,328 - up from 14,158 in March.

The average sale price for April 2009 was down 10.4% compared to April 2008, while the median sale price dropped 9.1%. Month-to-month, the average sale price and median sale price were mixed when compared with March levels; the average sale price decreased 2% ($291,100 v. $297,000) and the median sale price was up 1.4% ($249,900 v. $246,400).

Affordability Housing in the Portland metro area was at its most affordable point since December 2004. According to a formula from the National Association of Realtors®, buying a house in the Portland metro area is affordable for a family earning the median income. A family earning the median income ($70,000 in 2009, per HUD) can afford 141% of a monthly mortgage payment on a median priced home ($246,400 in March). The formula assumes that the buyer has a 20% down payment and a 30-year-fixed rate of 4.81% (per Freddie Mac).

The highest average and median price for homes in the metro area occurred in the summer of 2007 (July and August) when the average price was $366,900 and the median price was $300,000. Here are the sales price percent change from their peak prices in 2007:

The year ended quietly as sales activity in the Portland metro continued to slow. In December, 2008, the number of closed sales (987) hit its lowest point since February 1992 (905). Pending transactions (810) were at a record low since Regional Market Listing Service (RMLS™) began reporting in 1992, the previous record was 845 in December 1994.

The average sale price decreased 3.7% ($330,300 v. $342,900), and the median sale price decreased 4% ($278,000 v. $290,000.

Comparing the average home price from December 2008 with December 2007 shows a $51,200 drop in the Portland region’s average home price – down to $300,800 from $352,000 a year earlier. The median price decreased $23,600 for the same periods - a drop of 9.0%.

The market peaked in July 2007 and August 2007 when both of these months recorded a median price of $300,000. From this high, the median price in December 2008 dropped $47,100 (16%). The highest average sales during the years 2006-2008 was $366,900 in August 2007. This figure is the highest average sales price recorded for the Portland metro area. Since August 2007, the average price has been slowly declining. In December 2008, the average price declined $66,100 (18.0%) from August 2007.

The Portland metro area figures above encompasses these five counties in Oregon: Clackamas, Columbia, Multnomah, Washington, and Yamhill. The RMLS report includes separate data for Southwest Washington's Clark and Cowlitz counties.

In West Portland (Includes Southwest and Northwest Portland and parts of eastern Washington County), the average price was $478,500, and the average price increased 1.9 percent from 2007. The three other areas in the city (North, Northeast, and Southeast) all showed decreases in both average price and median price in 2008.

The home prices in every suburban community decreased in 2008. Even in Lake Oswego and West Linn, the price of an average home went from $567,900 to $541,300. Northwest Washington County (includes Sauvie Island) showed the least decrease (-3.4). See the chart below for figures.

The RMLS report also included separate data for Southwest Washington's Clark and Cowlitz counties. Comparing results from 2008 with 2007 shows a 9% drop in new listings. Closed sales dropped 26.9%, while pending sales fell 25%. The average sale price dropped 8.9% ($278,300 v. $305,500) and the median sale price decreased 7.7% ($242,000 v. $262,300). Total sales volume for Clark County this year was $1.2 billion, a 37% drop from last year’s $1.9 billion.

In 2008, the average condo price was $290,600 in the metro area. This was a six percent increase over 2007 when the price was $272,900.

Below is the 10-Year Average & Median Prices chart for the Portland metro area. It covers the period from 1999 to 2009. The average price gained $109,600 ($300,800 v. $191,200) during this 10-year period. This was a gained of 57 percent. The annualized gain is 5.7 percent. The Compound Annual Growth Rate (CAGR) is 4.64 percent. The median price changed by $92,900 during the ten years from 1999 to 2008 ($252,900 v. $160,000). This amounted to a gain of 58 percent and an annualized gain of 5.8 percent - the CAGR is 4.68 percent.

Item	2001	2002	2003	2004	2005	2006	2007	2008
Average Sales Price	$201,000	$213,900	$222,500	$246,000	$282,900	$332,600	$342,000	$330,300
Median Sales Price	$169,000	$176,900	$185,000	$204,500	$237,500	$270,500	$290,000	$278,000
12-Month Average Sales Price Change³	1.2%	4.8%	5.6%	10.6%	15.0%	14.1%	6.3%	-3.7%
12-Month Median Sales Price Change⁴	2.3%	4.1%	4.9%	10.2%	16.1%	13.9%	7.2%	-4.0%
¹The metro area includes the following Oregon counties: Clackamas, Columbia, Multnomah, Washington, and Yamhill. It does not include Clark County in Washington state.²Residential includes detached single-family homes, condos, townhomes, manufactured homes, and multi-family units when one of the units is sold. 3³12-Month Average Sales Price Change based on a comparison of the rolling average price for the last 12 months with the 12 months before. For example in 2008: (1/1/08-12/31/08) with the 12 months before (1/1/07-12/31/07). ⁴12-Month Median Sales Price Change based on a comparison of the rolling median price for the last 12 months with the 12 months before. For example in 2008: (1/1/08-12/31/08) with the 12 months before (1/1/07-12/31/07).
Source: Regional Market Listing Service (RMLS™)

Portland Metro Area¹ Residential² Average Home Prices and Appreciation 2004-2008

Area	2004 Average Price	2004 Sale Price Change³	2005 Average Price	2005 Sales Price Change³	2006 Average Price	2006 Sales Price Change³	2007 Average Price	2007 Sales Price Change³	2008 Average Price	2008 Sales Price Change³
*Metro Area*
Portland Metro¹	$246,000	10.6%	$282,900	15.0%	$270,500	14.1%	$342,000	6.3%	$330,300	-3.7%
City of Portland
North	$176,400	11.2%	$208,800	18.1%	$234,500	17.5%	$266,600	8.4%	$266,100	-0.1%
Northeast	$226,600	8.7%	$262,300	15.8%	$265,000	15.4%	3$321,600	6.4%	$320,000	-0.4%
Southeast	$201,500	9.5%	$230,900	14.6%	$234,500	15.8%	$285,500	7.1%	$276,100	-3.3%
West (Includes SW and NW Portland and NE Washington County)	$359,400	9.3%	$410,700	14.5%	$378,100	10.3%	$468,100	3.6%	$478,500	1.9%
*Suburban Communities*
Corbett, Gresham, Sandy, Troutdale	$203,300	8.8%	$230,000	12.9%	$248,000	15.2%	$281,900	6.3%	$245,000	-8.2%
Clackamas, Milwaukie, Gladstone, Sunnyside	$250,600	16.1%	$293,200	16.8%	$307,200	15.2%	$334,200	-5.4%	$284,900	-4.6%
Canby, Beavercreek, Molalla, Mulino, Oregon City	$237,600	8.9%	$282,400	18.9%	$286,000	15.6%	$329,600	1.2%	$280,000	-5.0%
Lake Oswego and West Linn	$397,000	14.8%	$452,600	13.6%	$443,800	16.7%	$567,900	7.8%	$541,300	-4.5%
Northwest Washington County or Sauvie Island	$322,500	9.7%	$369,400	14.5%	$359,000	7.6%	$419,400	5.4%	$404,800	-3.4%
Beaverton and Aloha	$216,500	8.3%	$246,500	13.6%	$251,000	12.7%	$286,500	3.4%	$273,800	-4.4%
Tigard, Tualatin, Sherwood, Wilsonville	$263,700	7.8%	$328,500	24.8%	$322,000	8.6%	$374,700	5.3%	$352,600	-5.9%
Hillsboro and Forest Grove	$208,000	5.5%	$243,500	17.0%	$260,000	15.9%	$297,900	5.5%	$277,800	-6.7%
Mt.Hood: Brightwood, Government Camp, Rhododendron, Welches, Wemme, ZigZag	$174,400	7.4%	$231,400	32.5%	$254,200	20.3%	$283,600	2.0%	$253,700	-10.5%
Outlying Counties
Columbia County					$219,800	14.5%	$254,000	11.6%	$230,700	-9.0%
Yamhill County					$229,900	18.3%	$281,600	6.1%	$266,800	-5.2%
Marion and Polk Counties					$207,000	15.1%	$250,800	6.9%	$252,500	-4.8%
North Coastal Counties					$259,000	20.0%	$381,600	14.4%	$358,500	-8.0%
*Southwest Washington State (Clark and Cowlitz Counties)*
Includes Vancouver, WA	$224,000	13.9%	$260,800	16.4%	$256,000	12.5%	$305,500	1.7%	$278,300	-8.9%
¹The Portland metro area includes these Oregon counties: Clackamas, Columbia, Multnomah, Washington, & Yamhill. Note that it does not include Clark County (i.e., Vancouver, WA) in Washington state. ²Residential includes detached single-family homes, condos, townhomes, manufactured homes, and multi-family units when one of the units is sold. ³12-Month Average Sales Price Change based on a comparison of the rolling average price for the last 12 months with the 12 months before. For example in 2008: (1/1/08-12/31/08) with the 12 months before (1/1/07-12/31/07).
Source: Regional Market Listing Service (RMLS™)

Other Sources of Housing Information

The report is the product of a collaborative effort by the PSU Center for Real Estate and the Oregon Association of REALTORS® to provide service to the local community. The intention of the report is to provide useful information about trends in commercial and residential real estate to the real estate community in Oregon and Southwest Washington. It is very comprehensive and covers the local economy as well as housing.

The report is made possible thanks to a donation by the Oregon Association of Rrealtors® along with the participation of RMLS, Cushman & Wakefield, Norris Beggs & Simpson and Grubb & Ellis.

Since 1978, DataQuick has built a reputation as a provider of real estate information. Although much of DataQuick's information is available only to its paid subscribers, some of the information at their Web site is accessible to all visitors. The site covers the California market extensively but it also releases quarterly information on the Portland housing market.

Affordability in Portland

In March, 2008, Bizjournals compared median home payments and household income levels in the nation's 50 largest metros. The study was based on statistics from the U.S. Census Bureau's 2006 American Community Survey. Bizjournal said this was "the most up-to-date source of federal data on housing costs."

Portland ranked as the 37th most affordable market, with median monthly household income at $4,373. The median monthly mortgage payment is $1,449.

In the Los Angeles area, the median owner-occupied home was valued at $604,500 in 2006. A 6 percent, 30-year mortgage on such a house (after a 10 percent down payment) would cost $3,262 per month. Property taxes would drive the total payment up to $3,491.

That monthly tab would consume 75.5 percent of the median household income in the Los Angeles area, $4,626 per month. (Median is a midpoint, with half of all households earning more, and half earning less.) L.A.'s rate is more than two and a half times the national average of 28.3 percent.

Most of the expensive areas are located along or near America's coastlines. Home costs in 13 U.S. markets run higher than 40 percent of the median household incomes for those areas. Twelve of the 13 -- all but Las Vegas -- are within 100 miles of the Atlantic or Pacific oceans.

Reasonably priced homes, on the other hand, are concentrated in inland regions of the South, Midwest and industrial Northeast.

If home costs exceed 30 percent of income, according to the U.S. Department of Housing and Urban Development's guidelines, a family might find it difficult to afford food, clothing, transportation and other necessities.

In early 2007, the Portland Development Commission (PDC) finalized its recommendations for spending the new tax increment set-aside from urban renewal districts that the City Council earmarked for affordable housing. The amount: $162.6 million over the next six years. PDC increased its commitment to build as many as 1,450 units specifically for people who pay no more than 30 percent of their income for rent. That means citywide and not just downtown.

Early each year, HUD release new median income figures. This usually triggers rent increases in income-restricted buildings, since landlords are allowed to raise rents whenever the medium income rises.

Northwest Pilot Project tracks the number of downtown affordable housing units and for 2007, it is about 3,400 units.

Urban Boundaries and Home Prices

The cost of housing is one of the most contentious issues related to Portland's metro planning. With an median sales price of $237,500 in 2005, this is beyond the reach of many people.

Does the Urban Growth Boundary (UGB) cause Higher Home Prices? (see Portland Planning for a discussion of UGB). The NAHB desire more land on which to build homes. In their document called The Truth About Regulatory Barriers to Housing Affordability the NAHB identified 42 markets with barriers, Portland being one of these markets. They called the UGB the "Wall of Portland" and attack it accordingly. The Home Builders Association of Metropolitan Portland, has been among those critical of Metro for being too restrictive in its UGB.

2000 Census Bureau figures indicates that the density in downtown Portland has increased by 30 percent, which is what planners had in mind. Only a few cities in the USA have increased their core city population.

Applying Science to the Debate Sightline Institute, an environmental organization located in Seattle, used some science to compare urban sprawl in Clark County in Washington State and Portland. Clark County is just across the Columbia River and part of the Portland metro area. Sightline used satellite imagery of open space, farmland and pavement, along with digital mapping of US Census data to track patterns of growth during the 1990s. They found that if Portland had taken the same approach to land-use planning as Clark County in the 1990s, an additional 14 square miles would have been developed. Click here to read the full report.

Rating Portland's Density

A study released in August 2003, called "Measuring the Health Effects of Sprawl," commissioned by Smart Growth America, a national advocacy group, and financed by the Robert Wood Johnson Foundation, a health promotion group, found that U.S. adults who live in compact cities are more likely to walk or bike to work, school, stores and other everyday destinations than they are to drive. This translates to slightly lower weights and blood pressures.

As part of the study, researchers from Rutgers and Cornell universities used six variables, including housing density and block size, to create a "sprawl index" for 448 urban counties across the United States. The index was set with 100 as the average; more sprawling counties had lower scores.

New York's boroughs had the least sprawl - especially Manhattan, with a score of 352. The most sprawling place was Geauga County, Ohio, near Cleveland, which scored 63.

Multnomah County (where the city of Portland is located), the Northwest's most compact county, ranked 24th densest among the 448 urban counties, just missing the top 5 percent.

Read the opinions of the Cascade Policy Institute, a Portland group that advocates a free-market approach.

1,000 Friends of Oregon feels that the Oregon regulations work well. 1000 Friends of Oregon is a nonprofit charitable organization, founded in 1975 by Governor Tom McCall and Henry Richmond as the citizens' voice for land use planning that protects Oregon's quality of life from the effects of growth.

Oregonians in Action (OIA) is a non-profit lobbying organization that leads the fight for land-use regulatory reform and protection for private property rights. OIA authored two ballot measures in 1998: one to require landowner notification and another to give citizens the right to petition for legislative review of "bad state regulations." In 2004, OIA passed Measure 37, a constitutional amendment that requires compensation to landowners.

Resources

Compare Cost of Living Between Metro Areas

There are a number of free sites that allow you to compare living costs between metro areas but the numbers don't always make sense. We recommend using the ACCRA Web site (the acronym means nothing it was created by a group of US Chamber of Commerce researchers years ago). Its a member organization whose mission is strictly research. For under $20 you can compare the cost of living with where you're living to five other USA/Canadian metro areas.

Office of Federal Housing Enterprise Oversight (OFHEO)

The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 mandates that OFHEO publish a House Price Index (HPI), a measure designed to capture changes in the value of single-family homes in the USA. It also includes a HPI in various regions of the country, individual states, and the District of Columbia. You can view the HPI by the state of Oregon and by the MSA (Metropolitan Statistical Area).

National Association of Realtors (NAR)

NAR is the "Voice for Real Estate." It is America's largest trade association, representing one million members, including NAR's institutes, societies and councils, involved in all aspects of the residential and commercial real estate industries. Their "Existing Home Sales Data" measures the health of the residential real estate industry. Each month, statistics on sales of existing single family homes are reported for the national and four regional levels. Statistics on existing condo/co-ops are released quarterly, and figures on existing single-family home sales (detached and condo/co-ops) by state are released quarterly.

Case Shiller Weiss

To learn more about housing cost, visit the Web site of Case Shiller Weiss, Inc. CSW is a home price research company, founded in 1991, that serves a client base principally comprised of leading mortgage lenders, insurers, and Wall Street firms.

Portland Metro Area Home Prices