Saturday, May 23, 2009

Oregonian: 'It doesn't look as if things will get better soon'

From the Oregonian:

The spring buying season has started, and the numbers - surprise - don't reveal many sunny story lines.

Yes, the falling prices can mean bargains for investors fat with cash. And first-time homebuyers have begun poking around, enticed by low interest rates and an $8,000 federal tax credit.

The Portland-area median home price in April was $249,900, down 17 percent from the bubble-era peak. The number of closed sales through April was down 30 percent from a year ago. Anyone who bought after January 2006 has seen his home lose value.

The trouble is most acute among downtown condo towers and luxury homes. Sales of homes above $1 million are off nearly two-thirds from last year.

It doesn't look as if things will get better soon.

The housing collapse sparked by bad mortgages has run through Sun Belt and Rust Belt states for years now. But Oregon homeowners are seeing the worst of the housing trouble hit just as the recession strikes.

Oregon's unemployment rate -- No. 2 in the nation for March -- means more trouble for people struggling to cover their mortgages.

Foreclosures continue to rise, and more sellers are losing money on what are known as short sales. Those sales happen when an owner owes more then the house is worth.

Buyers always want to know whether home prices have hit bottom. But the answer is never clear until the bottom has passed.

Here's what a couple of experts say:

Economics firm IHS Global Insight ranked Portland as the ninth-most overvalued housing market in late 2008. Bend was fifth, Eugene 10th, Salem 12th and Medford 20th.

Jerry Johnson, a Portland housing consultant to homebuilders and cities, predicts median prices will hover around $250,000 through 2009.

The article includes a story about a first time home buyer looking at short sales in the Pearl District. Good information for those of us looking in a few years.