Eugene RMLS Market Action Report – October 2009

The Regional Multiple Listing Service released October’s Market Action Report and the median sale price for October 2009 was $195,000 this is a 7% decrease from the median sale price for October 2008.

The Eugene residential real estate market peaked in June 2007 with a median sale price of $243,300. Prices have now fallen 20.0% from that peak.

Months of supply (total inventory/monthly sales) is at 6.2 months compared to the 9.2 months of supply for the same month last year. A balanced market has about 7 months of supply.

The first graph compares the median and average sale price with the months of supply. Click on any graph for a sharper image.

The second graph shows the total supply of homes available for sale. This is simply a calculation of the months closed sales multiplied by the months of supply. There are currently 1,946 homes for sale; this is a decrease of 16% from the same month the year before.

The third chart shows closed sales by month. There were 314 closed sales during the month; an increase of 25% from the same month the year before.

The fourth chart shows new listings by month. There were 503 new listings during the month; an increase of 11% from the same month the year before.

The final graph shows how affordable the median priced home is for a family of four. History indicates the ratio is usually between 2.5 and 3.0. Prices would have to fall 15% from the current median for the ratio to reach 3.0.

The rational behind my affordability ratios

With home prices falling and affordability increasing it probably is a good time to remind people how I calculate the affordability ratio.

I use median family income numbers from The U.S. Department of Housing & Urban Development (HUD). HUD doesn't list income levels for every metro area. According to HUD the income level for Portland is $70,000. When you compare the current median home price to the current median income you get a ratio of 3.5.

HUD doesn't publish data specifically for Vancouver so I use the Portland income level. Some will say wages are lower in Vancouver and I have no doubt there is some data to back up that argument but wages vary significantly on this side of the Columbia too.

Eugene's median income is listed as $57,200 and their ratio is 3.4.

HUD doesn't release new data at the beginning of the year so I've been using the 2008 HUD data for most of this year. I'll start using the 2009 data in November.

Some readers might say this ratio is overly simplistic and doesn't take interest rates or taxes into consideration. They might even have the courage to mention the NAR affordability index which reported affordability every month of the housing boom. I agree, this is a simple ratio and that is why it is more accurate than the NAR numbers.

Vancouver median priced home is now affordable

The Regional Multiple Listing Service released the Market Action Report this week and the median sale price for October 2009 was $200,000 this is a 14% decrease from the median sale price for October 2008.

The Vancouver residential real estate market peaked in July 2007 with a median sale price of $269,900. Prices have now fallen 26% from that peak.

Months of supply (total inventory/monthly sales) sits at 6.4 months compared to the 13.7 months of supply for the same month last year. A balanced market has about 7 months of supply.

The first graph compares the median and average sale price with the months of supply. Click on any graph for a sharper image.

The second graph shows the total supply of homes available for sale. This is simply a calculation of the months closed sales multiplied by the months of supply. There are currently 3,424 homes for sale; this is a decrease of 30% from the same month the year before.

The third chart shows closed sales by month. There were 535 closed sales during the month; an increase of 52% from the same month the year before.

The fourth chart shows new listings by month. There were 765 new listings during the month; a decrease of 13% from the same month the year before.

The final graph shows how affordable the median priced home is for a family of four. History indicates the ratio is usually between 2.5 and 3.0. The current ratio is 2.96 therefore homes are affordable again in Vancouver!

Portland RMLS Market Action Report – October 2009

The Regional Multiple Listing Service released the Market Action Report this week and the median sale price for October 2009 was $245,000; this is an 11% decrease from the median sale price for October 2008.

The Portland residential real estate market peaked in August 2007 with a median sale price of $302,000. Prices have now fallen 19% from that peak.

Months of supply (total inventory/monthly sales) sits at 6.5 months compared to the 11.1 months of supply for the same month last year. A balanced market has about 7 months of supply.

The first graph compares the median and average sale price with the months of supply. Click on any graph for a sharper image.

The second graph shows the total supply of homes available for sale. This is simply a calculation of the months closed sales multiplied by the months of supply. There are currently 13,058 homes for sale; this is a decrease of 20% from the same month the year before.

The third chart shows closed sales by month. There were 2,009 closed sales during the month; an increase of 37% from the same month the year before.

The fourth chart shows new listings by month. There were 3,443 new listings during the month; a decrease of 5% from the same month the year before.

The final graph shows how affordable the median priced home is for a family of four. History indicates the ratio is usually between 2.5 and 3.0. Prices would have to fall 17.0% from the current median for the ratio to reach 3.0.

Thank God we don't live in Detroit

From ABC News:

Nearly 3 in 10 residents of Detroit need a job.

The unemployment rate in the city of Detroit rose to 28.9 percent in July, the highest rate of unemployment since Michigan started keeping modern numbers, according to the Michigan Department of Labor, Energy, and Economic Growth.

113,008 people in Detroit are without jobs, 277,815 people are currently employed.

Despite news of an improving economy, many residents of Michigan haven't felt the impact of the nation's stimulus programs. The state of Michigan has the highest unemployment rate in the nation at 15 %. Other large cities in Michigan are extremely challenges as well. The city of Highland Park had a 36% unemployment rate in July, Pontiac 35 % and Flint 28 %.

Portland is down to 10.9% last month.