Short answer: No.

Long answer: Not now, based on recent months’ sales.

The best measure of market balance is “months’ inventory,” which Realtors measure by dividing the number of active listings on the market into the number of closed sales in any given month, i.e., how long it would take to deplete the inventory at the current month’s rate of sales. A six month supply is now considered neutral (it used to be eight), less being inflationary and more being deflationary, or at least stagnant.

Portland had a 7.7 month supply of listed homes at the end of December 2009, and was below eight months’ supply for the entire second half of 2009. Not bad for a city that started the year at 19.2 months of inventory.

You can almost read a seven year history of the Portland housing market in the table and chart below. West Portland is also included.

The monthly averages in the last column highlight seasonal fluctuations, and the yearly averages in the last row highlight long term trends.

The following chart displays the same information in a different format:

How are different areas of Portland holding up?

The following table sorts the Portland sub-markets from lowest to highest in months of inventory based on December’s closed sales. Note that some of the recently troubled sub-markets, such as the Milwaukie/Clackamas area, have the lowest inventories. After severe price drops, those markets are stabilizing and selling again.

What does this mean for 2010?

• Tune in tomorrow,
• Visit the Portland Home Team’s Market Data Center for other current measures, or
• Call or email us for up-to-date information about your home.

Portland Housing Market: 2009 Review, 2010 Forecast

• Monday – 2009 Portland Home Sale Prices: RMLS releases annualized 2009 data for Portland metro and sub-area markets.
• Tuesday – 2009 Portland Home Sale Totals: What type and size homes have suffered the most?
• Wednesday – Active Listing Inventory: Is it true that Portland is flooded with “For Sale” signs?
• Thursday – 2010 Forecast: What we think it all means for the market value of your current or future home.
• Next Week – Opportunities in 2010: There are unbelievable bargains out there, but they’re not obvious.

The Regional Multiple Listing Service reported that the number of closed sales in 2009 was down 0.9% from 2008 (18,955 vs. 19,132). That sounds okay.

Compared to the previous six years, however, Portland home sales were down a lot more than that. Total closed sales in 2009 were 63% of the average annual number of closed sales in the years 2003 through 2008. To avoid an overwhelming display of numbers, you can sense this phenomenon in the bar chart below (contact me if you want the raw data).

It’s also noteworthy that the mix of sold homes stayed fairly consistent through the years. The two pie charts below are different. The first illustrates the percentage breakdown of total sales in Portland by number of bedrooms from 2003 through 2008; the second 2009 only. No house type varied by more than one percent in 2009 from the average of the previous six years.

This result is counter-intuitive to me, and certainly contrary to the current conventional wisdom. This nearly constant mix of sold homes in 2009 happened despite: 1) the huge drop in total sales, 2) the difficulty in getting jumbo loans since late-2008 (generally thought to have slowed large home sales), and 3) the effect of the first-time home buyer tax credit (generally thought to have stimulated small home sales).

Why?

I don’t know. Here is my knee-jerk hunch, to be refined after much more mulling: People buying a home need (or at least want) a certain range of space and rooms, sometimes less, often more. Two people don’t usually buy four-plus bedroom homes; young families don’t usually buy two bedroom homes. Both will buy the size they need at a price they can pay. So assuming that the need for various size homes is relatively constant, it’s reasonable that the mix of homes purchased could also be constant.

That leaves the main variable on the demand side to be the price buyers can afford. That price is influenced primarily by employment and interest rates, and secondarily by wealth, in the form of down payment funds, and mortgage availability. Yesterday I showed that Portland home prices had fallen fairly evenly across these same home size categories. Perhaps the impact of these factors is more evenly distributed across buyer profiles than we thought.

I have a hunch that a deeper look into the 2009 home sales in each size category will reveal some good clues. More later.

What about the supply side? I’ll post on that tomorrow.

Visit the Portland Home Team’s Market Data Center for other current measures, or call or email us for up-to-date information about your home.

Portland Housing Market: 2009 Review, 2010 Forecast

• Monday – 2009 Portland Home Sale Prices: RMLS releases annualized 2009 data for Portland metro and sub-area markets.
• Tuesday – 2009 Portland Home Sale Totals: What type and size homes have suffered the most?
• Wednesday – Active Listing Inventory: Is it true that Portland is flooded with “For Sale” signs?
• Thursday – 2010 Forecast: What we think it all means for the market value of your current or future home.
• Next Week – Opportunities in 2010: There are unbelievable bargains out there, but they’re not obvious.

Monday I posted about Portland property tax bills increasing due to constitutionally prescribed increases in assessed values and voter-approved levies and bond measures. The question remains “When is it a good idea to appeal my property taxes?”

First, the Board of Property Tax Appeals only considers assessed valuations.

• It can not determine the amount of tax to be assessed, nor can it consider financial hardship as a basis for changing an assessment.
• Appeals will only be heard for current year values, which is why the only way to affect the Maximum Assessed Value (MAV) on improvements is to appeal the Real Market Value (RMV) of those improvements in the year assessed.
  • The Maximum Assessed Value for improvements is derived by formula, which is discussed more completely at our Portland Home Team web site.
  • It makes sense to appeal an over-estimated Real Market Value for last year’s improvements because it affects both the property RMV and the MAV for improvements.
  • You cannot appeal the MAV later.
• Appeals must be filed between the time property tax bills are mailed and December 31st. BOPTA forms and instructions are available from the Oregon Department of Revenue Property Tax Division.
• If you miss the filing deadline or seek to appeal a prior year’s value, you may still be able to file an appeal with the Magistrate Division of the Oregon Tax Court. More information is available at the Oregon Tax Court’s web site.

So who should appeal their Oregon property valuation?

• You think the real market value of your Oregon property on January 1, 2009 was less than the assessed value (which is usually the MAV). A bargain purchase, such as from a relative or a distressed owner, will be valued at its fair market value, not necessarily what you paid for it.
• You disagree with the county’s valuation of new construction, remodeling, or other exceptions. Since these are not usually identified on the property tax statement, you will need to contact the county assessor to determine the value placed on any improvements.
• You think the Assessor’s Office made a calculation error in setting the Assessed Value.

Call us with your questions!

If your home or recent improvements are assessed for more than what you think they were worth on January 1, 2009, consider appealing your valuation. Call or email us any time if you think we can help.

Nationally, the Twenty City Index showed a 1.2% gain in August over July and a 4.9% increase over the low point in April, 2009, with each month showing a slight increase over the previous month. Portland home prices have also seen four months of modest gains, with the August index showing a 0.3% monthly jump and a cumulative 2.5% gain over April.

Several west coast cities are showing strong rebounds. San Francisco, in particular, increased 2.8% from July to August, and has seen a cumulative 12.5% bounce from it’s low in March this year.

S&P/Case-Shiller released their August 2009 Home Price Indices this morning. Visit the Portland Home Team’s Market Data Center for other current measures, or call or email us for up-to-date information about your home.

Property tax statements have arrived, and some people are surprised to see their taxes increase from last year by four to six percent. There has been a fair amount of media coverage of this, but I don’t think the “why” has been made very clear. I’ve written more extensively at our Portland Home Team web site, but here is my attempt at a concise explanation:

Oregon property tax basics:

1. Property taxes are based on the property’s Assessed Value (AV) multiplied by the applicable millage rate.
2. Assessed value is the lesser of:
   1. the Real Market Value (RMV), which is the market value on the January 1st preceding the July to June tax year, or
   2. the Maximum Assessed Value (MAV) determined under Measure 50, passed in 1997. Measure 50 amended the Oregon constitution to set MAV at the 1995-96 assessed value less 10%, increasing by three percent (no more, no less) per year thereafter.
3. Millage rates vary by taxing district, but they are permanently limited by Measure 5, passed in 1990, and Measure 50.
   1. The rate limits may be exceeded for bonds, hospital districts, police and fire pension obligations, and levies passed in 1996 and later that meet special voting requirements.
   2. Voter approved bonds and levies raised many Portland homeowners’ 2009-10 taxes more than the dictated three percent increase in MAV.

What has happened to Portland market and assessed values since 1995?

• Overall, Portland market values are now almost exactly 200% of the market values in the 1995-96 tax year, as measured by the Case-Shiller Index of median home sale prices in January 1995 and in January 2009.
• Under Measure 50, Maximum Assessed Values (MAV) for the 2009-2010 tax year are 136.13% of the 1995-1996 assessed values, which supposedly reflected market values at January 1, 1995.
• The graph shows the spread between Portland market values and maximum assessed values over the years. Most homes are now assessed at about two-thirds of what the assessor thinks is their market value.

Call us with your questions!

If your home is assessed for more than what you think is it was worth on January 1, 2009, consider appealing your valuation. More on that Wednesday. Call or email us any time if you would like to discuss your concerns in detail.