Tuesday, May 26, 2009

Portland home values off 21%

The S&P Case-Shiller Index is based on observed changes in home prices. It is designed to measure the increases or decreases in the market value of residential real estate.

For each home sale transaction, a search is conducted to find information regarding any previous sale for the same house. If an earlier transaction is found, the two transactions are paired and are considered a “repeat sale.” Sales pairs are designed to yield the price change for the same house, while holding the quality and size of each house constant.Sales pairs from the following counties are included in the Portland index: Clackamas, Columbia, Multnomah, Washington, Yamhill, Clark (WA), and Skamania (WA).

The first graph shows all historical data for Portland, Seattle, and the 10 city index. The Portland residential real estate market has fallen 15.3% in the last year.

The second graph highlights the changes since the Federal Reserve stopped lowering interest rates in June of 2003. The Portland index is currently at 147.68; a decline of 20.8% since the market peak. The last time the index was this low was May of 2005.

The final graph shows the year over year percent change since June of 2003.

It looks like the national housing market reached the point of inflection, where things go from declining at an increasing rate to declining at a declining rate. Only a few more years...then we can all buy homes.
Portland on the other hand is still getting worse at a worse rate. We should reach the midway point before the year is over.