Saturday, July 18, 2009

June home prices stable

From the Oregonian:

The good news: The Portland-area housing market didn't get worse in June.
The rest of the news: It didn't get much better.
The region's tumbling median home price has leveled off this summer and hovered in June around $250,000, down 17 percent from its peak, according to a Regional Multiple Listing Service report released Wednesday.

The inventory of unsold homes -- the key measure of supply and demand -- improved more than usual in June.
Thanks to an uptick from record-low sales this winter, the inventory dropped from 19 months in January to eight months in June.

"There's likely an enormous amount of hidden inventory in the market," said Tim Duy, a University of Oregon economist. "The market is so relatively weak to what people's expectations are."
For evidence of a "shadow inventory," Duy points to the slower than normal growth in listings this summer.
The real estate market is cyclical, with slow winter months followed by spring thaw
and a hot summer. During that cycle, the number of homes listed typically expands steadily from January to July.
In 2008, listings grew from January to June by 28 percent. In 2007, it was 40 percent, and in 2006, 52 percent.
This year, the rise is just 3 percent.
Economist Bill Conerly of Lake Oswego is more upbeat than Duy. He sees signs the market is bouncing back, pointing to a rise in closed and pending sales thanks in part to more affordable home prices. "People who had been on the sideline saying, 'If I'm going to buy, this is the time,'" he said.
Duy, who tends to be more pessimistic than other Oregon economists, says Portland-area home prices are still too high compared with household incomes. He said he expects Portland-area home prices to fall another 10 to 20 percent.

I'll post my charts on Monday.