residential market analysis · 2013-01-22 · realtors. total existing-home sales, which are...

■ Evan Abramowitz is a multifamily investment specialist with Joseph Bernard LLC Investment Real Estate. He is currently working towards the Master of Real Estate Development degree through Portland State University’s School of Business where he is an RMLS Student Fellow. Any errors or omissions are the author’s responsibility. Any opinions expressed are those of the author solely and do not represent the opinions of any other person or entity. Center for Real Estate Quarterly Report, vol. 6, no. 4. Fall 2012 11

RESIDENTIAL MARKET ANALYSIS

EVAN ABRAMOWITZ

RMLS Student Fellow Master of Real Estate Development Graduate Student

September existing-home sales declined modestly, but inventory continued to tighten and the national median home price recorded its seventh back-to-back monthly increase from a year earlier, according to the National Association of Realtors.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 1.7 percent to a seasonally adjusted annual rate of 4.75 million in September from an upwardly revised 4.83 million in August, but are 11.0 percent above the 4.28 million-unit pace in September 2011.

Lawrence Yun, NAR chief economist, said the market trend is up. “Despite occasional month-to-month setbacks, we’re experiencing a genuine recovery,” he said. “More people are attempting to buy homes than are able to qualify for mortgages, and recent price increases are not deterring buyer interest. Rather, inventory shortages are limiting sales, notably in parts of the West.”

Single-family home sales declined 1.9 percent to a seasonally adjusted annual rate of 4.21 million in September from 4.29 million in August, but are 10.8 percent

HOUSING MARKET ANALYSIS ABRAMOWITZ 12

higher than the 3.80 million-unit level in September 2011. The median existing single-family home price was $184,300 in September, up 11.4 percent from a year ago.

Existing condominium and co-op sales were unchanged at a seasonally adjusted annual rate of 540,000 in September, but are 12.5 percent above the 480,000-unit pace a year ago. The median existing condo price was $181,000 in September, which is 10.0 percent higher than September 2011.

Regionally, existing-home sales in the Northeast fell 6.3 percent to an annual level of 590,000 in September but are 7.3 percent above September 2011. The median price in the Northeast was $238,700, up 4.1 percent from a year ago.

Existing-home sales in the Midwest slipped 0.9 percent in September to a pace of 1.10 million but are 19.6 percent higher than a year ago. The median price in the Midwest was $145,200, up 7.0 percent from September 2011.

In the South, existing-home sales increased 0.5 percent to an annual level of 1.93 million in September and are 14.2 percent above September 2011. The median price in the region was $163,600, up 13.1 percent from a year ago.

Existing-home sales in the West fell 3.4 percent to an annual pace of 1.13 million in September but are 0.9 percent above a year ago. With continuing inventory shortages in the region, the median price in the West was $246,300, which is 18.4 percent higher than September 2011.


Figure 1: Portland Sale Price & Inventory Data 1997-2012

Figure 2: Single Family Mortgage Interest Rate

Source: Freddie Mac

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

30-‐Year FRM

15-‐Year FRM


Mortgage interest rates had been steadily decreasing since the first quarter of 2011 and are now at nearly 60-year lows. The national average commitment rate for a 30-year conventional, fixed-rate mortgage was 3.37 percent in October, down from 3.68 percent in June; the rate was 4.55 percent in July 2011.

First time homebuyers constituted 32 percent of homes in September, up from 31 percent in August. They were 32 percent in September 2011. Investors purchased 18 percent of homes in September, which was unchanged from August.

Table 1: Median Home Values of Existing Detached Homes

U.S. West Portland

Metro Area

September 2011 Median Sales Price $165,400 $211,100 $230,400

September 2012 Median Sales Price $184,300 $250,000 $238,000

% Change in Median Sales Price 11.4% 18.4% 3.2%

% Change in Number of Sales Sept 2011- Sept 2012 10.8% 1.0% 17.7% Source: National Association of Realtors

Standard & Poor’s Case-Shiller Index for Portland was 140.80 through August

2012. The represents an increase of 0.49 percent from July 2012, and a year-over-year increase of 3.60 percent. Case-Shiller’s 20 city composite index is up 1.98 percent compared to the same time last year. The index data shows that in 18 of the 20 major U.S. metropolitan cities, home prices increased from the previous month.

Foreclosure filings were reported on 531,576 U.S. properties during the quarter, a decrease of 5 percent from the second quarter and a decrease of 13 percent from the third quarter of 2011 — the ninth consecutive quarter with an annual decrease in foreclosure activity. This was the lowest total since 2007. The report also shows one in every 248 U.S. housing units with a foreclosure filing during the quarter.

“We’ve been waiting for the other foreclosure shoe to drop since late 2010, when questionable foreclosure practices slowed activity to a crawl in many areas, but that other shoe is instead being carefully lowered to the floor and therefore making little noise in the housing market — at least at a national level,” said Daren Blomquist, vice president at RealtyTrac. “Make no mistake, however, the other shoe is dropping quite loudly in certain states, primarily those where foreclosure activity was held back the most last year.

“Meanwhile, several states where the foreclosure flow was not so dammed up last year could see a roller-coaster pattern in foreclosure activity going forward because of recent legislation or court rulings that substantively change the rules to properly foreclose,” Blomquist added. “A backlog of delayed foreclosures will likely


build up in those states as lenders adjust to the new rules, with many of those delayed foreclosures eventually hitting down the road.”

During September 2012 Oregon reported 969 foreclosure fillings. Multnomah

County had the state’s highest level of activity in September 2012 with 275 homes. In the U.S., one in every 730 homes received a foreclosure filling while one in every 1,729 homes in Oregon received a foreclosure filling during September 2012.

Figure 3: Foreclosure Rate Heat Map, September 2012

Source: RealtyTrac


Figure 4: Foreclosure Rate Heat Map-Oregon, September 2012

Source: RealtyTrac

According to RealtyTrac, the ten states that ranked the highest in foreclosure rates in September 2012 were Florida, Arizona, California, Illinois, Georgia, Nevada, Ohio, Michigan, South Carolina, and Colorado. Of these states, Florida posted the nation’s highest state foreclosure rate, with one in every 117 housing units receiving a foreclosure filing in September 2012, more than twice the national average and the first time Florida has lead the rankings since April 2005. In Arizona one in every 125 housing units and in California one in every 125 housing units filed for foreclosure during September 2012.


Table 2: Building Permits Issued, Year to Date, in thousands

Single Family Multi Family Aug-12 Aug-11 % Change Aug-12 Aug-11 % Change United States 345.9 284.6 22% 187.6 123.0 53% Oregon 4.55 3.58 27% 2.59 1.41 84%

Portland-Vancouver-Beaverton OR-WA 3.16 2.15 47% 1.81 1.04 75%

Salem OR 0.19 0.16 24% 0.19 0.07 164% Eugene-Springfield OR 0.26 0.28 -8% 0.31 0.12 172% Bend OR 0.48 0.34 41% 0.05 0.01 671% Corvallis OR 0.04 0.02 90% 0.19 0.17 13% Medford OR 0.24 0.18 38% 0.07 0.07 -7%

Source: National Association of Home Builders

Single family building permits have increased sharply thus far in 2012 in the US and Oregon. The Portland, Bend, Corvallis, Salem, and Medford markets increased more than the US average for single-family with Corvallis increasing 90 percent over this time last year. Eugene was the only major market that decreased by 8 percent. Multifamily new construction has increased sharply in the US and even more in Oregon. Portland increased by 75 percent with over 1,810 units built in the metro area from January-June 2012. Multifamily development returned to Bend after almost zero building in 2011, and posted a 671 percent increase.

PORTLAND

Buyers closed on purchases of 4,427 homes. The number of transactions in third quarter 2012 decreased 17.14 percent from last quarter and 15.43 percent year over year. Median prices for the first quarter were at $267,870, which represents an 2.1 percent decrease over the previous quarter but a 13.18 percent increase annually.

Sales price exceeded list price, which is a key indicator in a hot market, with average sales taking place at 147 percent of the original list price. Sellers in the Portland area have had their homes on the market for an average of only 33 days before closing, which is 62 percent less than third quarter 2011.

There were 231 new properties sold, compared to 392 in second quarter. The new properties sold at a median price of $305,000 which was a virtually unchanged from second quarter. New home prices increased from third quarter 2011 by 7 percent.


Figure 5: Single Family Price per Square Foot, New and Existing Detached Homes, Portland Sub Markets

Source: RMLS

94 111

118 121

137 126

143 124

143 132

140 166

179 162

$80 $100 $120 $140 $160 $180 $200

Columbia County Gresham/Troutdale

Milwaukie/Clackamas Yamhill County North Portland

Hillsboro/Forest Grove Southeast Portland Oregon City/Canby Northeast Portland Beaverton/Aloha Tigard Wilsonville

West Portland Lake Oswego/West Linn NW Washington County

Median Price/Median SqFt


Figure 6: Median Sales Price & Number of Transactions, Existing Detached Homes, Portland Metro (excluding Clark County, WA)

0

1000

2000

3000

4000

5000

6000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

Num

ber o

f Tra

nsac

tions

/Qua

rter

Med

ian

Pric

e

Median Price Number of Transactions


Figure 7: Sale Price/Original List Price& Average Days on Market, Existing Detached Homes, Portland Metro (excluding Clark County, WA)

3rd Quarter Sale/Original ratio: 147.73

Quarterly % Change: 49.2%

Annual % Change: 52.3%

Days on Market: 33

Quarterly % Change: -.02%

Annual % Change: -.62%

0

20

40

60

80

100

120

140

160

0

20

40

60

80

100

120

140

160

Day

s on

Mar

ket

Sale

s Pr

ice

as a

% o

f Lis

t Pric

e

Sales Price/ Original List Price Days On Market


Figure 8: Median Sales Price & Number of Transactions, New Detached Homes, Portland Metro (excluding Clark County, WA)

2nd Quarter Median Price: $305,000

Quarterly % Change: -0.36%

Annual % Change: 7.02%

Number of Transactions: 231

Quarterly % Change: -59.3

Annual % Change: -49.7%

Figure 9: Appreciation Rates of Existing New Detached Homes from Q3 2011 to Q3 2012, Portland Sub-Markets

0

100

200

300

400

500

600

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

Num

ber o

f Tra

nsac

tions

Med

ian

Sal

e P

rice

Median Sale Price Number of Transactions

-5.66%

5.87% -1.44% -0.07%

2.69% 9.12% 8.89% 10.34%

0.27%

5.77% 2.49%

-0.89% -4.29%

4.79%

-30% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Beaverton/Aloha

Columbia County

Gresham/Troutdale

Hillsboro/Forest Grove

Lake Oswego/West Linn

Milwaukie/Clackamas

North Portland

Northeast Portland

NW Washington County

Oregon City/Canby

Southeast Portland

Tigard Wilsonville

West Portland

Yamhill County

% Appreciation


The Gresham / Troutdale submarket increased significantly at over 34 percent from second quarter 2011. West Portland also increased by 26 percent over the same period. The largest annual depreciation was experienced in Oregon City / Canby at 5.88 percent.

VANCOUVER

Vancouver’s median home price during 3rd quarter 2012 was $192,500, a 9.3 percent increase from 2nd quarter 2012 when it was $176,000. The number of homes sold in third quarter decreased by over 39 percent to 564 from the second quarter of 2012, and also decreased by 25 percent year over year. However, the number of days on the market decreased to 40 from 50 in the previous quarter and 89 in third quarter 2011.

Figure 10: Median Price and Annual Appreciation Existing Detached Homes, Vancouver

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

Ann

ual A

ppre

ciat

ion

Med

ian

Pric

e

Median Price and Annual Appreciation Existing Detached Homes Clark County (excluding Vancouver)

Series2 Series1


Figure 11: Average Days on Market and Number of Transactions Existing Detached Homes, Vancouver

In the Vancouver suburbs, the median home price was $243,430, which was a 2 percent increase from the third quarter of 2011, and a 4.5 percent increase from the previous quarter. The number of transactions decreased 20 percent from last quarter to 518. Properties were on the market an average of 56 days which was up slightly from last quarter when it was 55, but a sharp decrease from 86 in third quarter 2011.

0 10 20 30 40 50 60 70 80 90 100 110 120

0

200

400

600

800

1000

1200

Aver

age

Day

s on

Mar

ket

Num

ber o

f Tra

nsac

tions

Average Days on Market and Number of Tranactions Existing Detached Homes Vancouver

Number of Transactions Average DOM


Figure 12: Median Price and Annual Appreciation Existing Detached Homes, Clark County (excluding Vancouver)

Figure 13: Average Days on Market and Number of Transactions Existing Detached Homes Clark County (excluding Vancouver)

-20%

-15%

-10%

-5%

0%

5%

10%

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

Ann

ual A

ppre

ciat

ion

Med

ian

Pric

e

Median Price and Annual Appreciation Existing Detached Homes Vancouver

Series2 Series1

0 10 20 30 40 50 60 70 80 90 100 110 120 130

0 100 200 300 400 500 600 700 800 900

1000

Num

ber f

Tra

nact

ions

Aver

age

Day

s on

Mar

ket

Average Days on Market and Number of Tranactions Existing Detached Homes Clark County (excluding Vancouver)

Number of Transactions Average DOM


CENTRAL OREGON

Bend home sales less than one acre increased 1.5 percent to 537 while Redmond’s decreased 18.6 percent to 153 in the third quarter on homes sold less than one acres. On the other hand, sales volume for homes on 1-5 acres increased by 33 percent in Bend and 20 percent in Redmond. There were 96 transactions in Bend and 35 in Redmond. For homes on less than one acre, the average number of days on market decreased slightly to 127 in Bend and also decreased to 118 days in Redmond. In Central Oregon’s reports, the housing stock is separated by lot size, properties under one acre and those between one and five acres. Price per square foot data is provided to control for lot size between both categories.

Figure 14: Number of Transactions and Days on the Market, Single Family Under 1 Acre, Bend and Redmond

Source: Central Oregon Association of Realtors

0

50

100

150

200

250

0

100

200

300

400

500

600

1Q 2006

1Q 2007

1Q 2008

1Q2009

2Q2009

3Q2009

4Q2009

1Q2010

2Q2010

3Q2010

4Q2010

1Q 2011

2Q 2011

3Q 2011

4Q 2011

1Q 2012

2Q 2012

3Q 2012

Day

s on

Mar

ket

Num

ber o

f Tra

nsac

tions

Number of Transactions and Days on the Market Single Family Under 1 Acre - Bend and Redmond

Trans(Bend) Trans(Rdmnd)


Figure 15: Number of Transactions and Days on the Market, Single Family Over 1 Acre, Bend and Redmond

For sales under an acre, the median home prices for Bend and Redmond both increased during the third quarter of 2012. Over the past year the Bend market under and acre increased by 21.7 percent and the Redmond market increased 26.3 percent for home sales under an acre. For sales over one acre, Bend increased 6.7 percent while Redmond increased by 16.8 percent since third quarter of 2011.

0

50

100

150

200

250

300

350

400

0

10

20

30

40

50

60

70

1Q 2006

1Q 2007

1Q 2008

1Q2009

2Q2009

3Q2009

4Q2009

1Q2010

2Q2010

3Q2010

4Q2010

1Q 2011

2Q 2011

3Q 2011

4Q 2011

1Q 2012

2Q 2012

Day

s on

Mar

ket

Num

ber o

f Tra

nsac

tions

Number of Transactions and Days on the Market Single Family 1-5 Acres -Bend and Redmond

Trans(Bend) Trans(Rdmnd) DOM(Bend) DOM(Rdmnd)


Figure 16: Median Single Family Price and $/SqFt Under 1 Acre, Bend and Redmond

0

20

40

60

80

100

120

140

160

180

200

0

50000

100000

150000

200000

250000

300000

350000

400000

1Q 2006

1Q 2007

1Q 2008

1Q2009

2Q2009

3Q2009

4Q2009

1Q2010

2Q2010

3Q2010

4Q2010

1Q 2011

2Q 2011

3Q 2011

4Q 2011

1Q 2012

2Q 2012

3Q 2012

Median Single Family Price and $/SqFt Under 1 Acre - Bend and Redmond

MED(Bend) MED(Rdmnd) $/SQFT(Bend) $/SQFT(Rdmnd)


Figure 17: Median Single Family Price and $/SqFt, Over 1 Acre, Bend and Redmond

WILLAMETTE VALLEY

Marion County sales prices decreased 9.9 percent since the third quarter of 2011 to a median sold price of $147,000. Salem and Keizer increased year over year by 7.7 percent and 2.2 percent respectively. Benton County increased 2.1 percent over the past year to a median price of $245,000.

0

50

100

150

200

250

300

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

1Q 2006

1Q 2007

1Q 2008

1Q2009

2Q2009

3Q2009

4Q2009

1Q2010

2Q2010

3Q2010

4Q2010

1Q 2011

2Q 2011

3Q 2011

4Q 2011

1Q 2012

2Q 2012

Median Single Family Price and $/SqFt 1-5 Acres - Bend and Redmond

MED(Bend) MED(Rdmnd) $/SQFT(Bend) $/SQFT(Rdmnd)


Figure 18: Annual Appreciation Rates of Existing Detached Homes, Willamette Valley from Q3 2011 to Q3 2012

Source: Willamette Valley MLS

Figure 19: Median Sales Price Existing Detached Homes, Willamette Valley

Source: Willamette Valley MLS

-15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0%

Marion County

Lane County

Eugene/Springfield

Salem

Polk County

Linn County

Keizer

Benton County

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

$220,000

$240,000

$260,000

$280,000

Q1 2008

Q2 2008

Q3 2008

Q4 2008

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Median Sales PriceExisting Detached Homes Willamette Valley

Benton County Linn Marion Polk Lane


SALEM

Salem’s housing market again experienced annual depreciation of 4.8 percent year over year in the third quarter and the number of days on the market decreased. The median sale price increased to $157,200 and the number of transactions increased by over 23 percent from the third quarter of 2011. The average number of days on market decreased from 105 in the second quarter to 99 in the third quarter of 2012.

Figure 20: Median Sales Price and Annual Appreciation, Existing Homes, Salem

-20%

-15%

-10%

-5%

0%

5%

10%

$50,000

$75,000

$100,000

$125,000

$150,000

$175,000

$200,000

$225,000

Ann

ual A

ppre

ciat

ion

Med

ian

Pric

e

Median Sales Price and Annual Appreciation Existing Homes Salem

Median Price Annual Appreciation


Figure 21: Average Days on Market and Number of Transactions, Existing Homes, Salem

EUGENE/SPRINGFIELD

Home prices in the Eugene/Springfield area increased 5 percent from the second quarter of 2012 to $190,000. Values decreased 10.42 percent since the third quarter of 2011.

Lane County prices decreased 6.8 percent from the previous quarter to a median price of $191,000. They increased year over year by 11.11 percent from $171,000 in third quarter of 2011.

0

100

200

300

400

500

600

0 20 40 60 80

100 120 140 160 180 200

Num

ber o

f Tra

nsac

tions

Day

s on

Mar

ket

Averge Days on Market and Number of Transactions Existing Homes - Salem

Average Days on Market


Figure 22: Median Price and Annual Appreciation Existing Detached Homes, Eugene/Springfield

Source: RMLS

-20%

-15%

-10%

-5%

0%

5%

10%

$50,000

$75,000

$100,000

$125,000

$150,000

$175,000

$200,000

$225,000

$250,000

Ann

ual A

ppre

ciat

ion

Med

ian

Pric

e

Median Price and Annual Appreciation Existing Detached Homes Eugene/Springfield

Median Price Annual Apprec.

residential market analysis · 2013-01-22 · realtors. total existing-home sales, which are...

Documents