June Median Price for Pending Sales Ties All-Time High!
Posted on July 3, 2008
Filed Under Portland, bubbles, Statistics, Selling Real Estate, Buying Real Estate, Real Estate |
And so it goes.
The actual headline will be more like this: “Median price up From May 1.6%, Down Only Slightly - 1.2% - from June 2006. Portland Real Estate Market Much Better Than Most of U.S.!”
But.
Here are the prevailing price trends; blue is pending, green the actual sold price:
Clearly the gap between list price and sold price is widening. Sellers are accepting lower offers. That’s good, especially for discerning buyers. Because this - the number of closed sales…:
…defines a what has been and continues to be a serious problem. Even as month end numbers catch up, we’re still going to be down 35%+ YoY in unit sales, what is a stronger predicate of a healthy market than median price.
In the year ended June 30 - Terradatum numbers pulled from the MLS - there were 8870 fewer closed sales in the Portland Metro area than the year before, or a difference of about $2.5 billion. There’s enormous pressure on prices, and they’re going to have to come down to accommodate. In June we’re at $290k; when we’re at $255k, I think sales will begin to increase. How long that takes depends on sellers.
More June numbers:
Month’s Supply of Inventory: 8.5, same as May. (~10 Months as calculated by MLS).
New Listings: down 21%.
Expired listings: up 37.8%
Pending Sales: down 23.0%
I’d be derelict if I didn’t point out one more thing:
All real estate is local.
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14 Responses to “June Median Price for Pending Sales Ties All-Time High!”
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So a 13% ish slide in prices is what you think it’ll take to get the market moving again?
A lot depends on the economic outlook of the consumer and country IMHO - with mortgage rates rising affordability isn’t really improving all that much with small price declines so far - it’s still way out of wack compared to the historical normal here.
Add to that buyer psychology is firmly in wait and see mode given the carnage in other parts of the country, it could be pretty grim for a few years at least.
Git …
I’ve said - and still think - a 10% to 15% drop from peak is where we’ll eventually end up.
>A lot depends on the economic outlook of the consumer and country
You’re preaching the tautological.
It will be fun to revisit that prediction next spring!
(Hope the blog is still up then.)
I actually think 10-15% down is where we will be next spring - although I don’t agree it’s the bottom.
>I actually think 10-15% down is where we will be next spring - although I don’t agree it’s the bottom.
Based on what?
Overvaluation compared to historical numbers.
I think we’ll revert to the historical inflation adjusted median with a possible over correction to 1 standard deviation below.
>I think we’ll revert to the historical inflation adjusted median…
OK. And that number is what?
Assuming a 7% appreciation rate and using the case-shiller index aggregate price we would need to see a 7% price decrease to get back in line with historical norms. (using April 2004 as a benchmark to “pre-bubble”)
In my estimation we should be roughly 163 in April 2008 and not 175 if the “boom” didn’t happen.
Now of course this doesn’t and can’t take into account how bad the fallout from the poor lending practices might be when the price decline comes. That is hard to quantify.
>In my estimation we should be roughly 163 in April 2008 and not 175 if the “boom” didn’t happen.
Which would put us at a median of $269k, or 10.3% from peak. Yet you said 15% isn’t the bottom.
Again: On what basis?
I am not Uncle_Git. I was providing justification for further price declines, I’ve made no predictions.
>I am not Uncle_Git. I was providing justification for further price declines, I’ve made no predictions
My apologies, that was a quick read.
Predictions are fun and almost always wrong. Would you care to venture a guess?