Portland Oregon Metro Area Housing Prices - Susan Marthens Real Estate

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June was a mixed bag for Portland-area home sales. Prices again declined and the number of pending sales in the pipeline plummeted more than 25 percent from June 2009, according to monthly Market Report issued by the Regional Multiple Listing Service.

But the 2,012 closed sales in the month marked a 13.3 percent increase from June 2009. And the average time on the market declined to 121 days, a 17.7 percent improvement from the same month last year. The numbers were not as bad as some had expected, given the expiration of the federal tax credit to some homebuyers. But the market clearly remains soft, as Oregon's economy continues to struggle with 10 percent-plus unemployment.

The median sales price in the month was $240,000, down 4 percent from a year ago. At the month's rate of sales, the 14,752 active residential listings would last approximately 7.3 months, a slight improvement from a year ago.

The region's median home price fell 3 percent in 2009 and finished the year at $242,200 in December, the Regional Multiple Listing Service reported. The 2009's price decline was far better than the 9.7 percent drop reported a year earlier.

For the year, closed sales were virtually flat, down 0.9 percent. The big swing for the year was a drop of 10,000 in the number of people planting "For Sale" signs in their front yards. The number of new listings dropped 19 percent in 2009.

Federal incentives shot some life back into housing in the fall. Low rates and the first-time buyer tax credit enticed more demand for homes below $300,000.

The Portland metro area figures above encompasses these five counties in Oregon: Clackamas, Columbia, Multnomah, Washington, and Yamhill. The RMLS report includes separate data for Southwest Washington's Clark and Cowlitz counties.

In West Portland (Includes Southwest and Northwest Portland and parts of eastern Washington County), the average price was $420,500 (it was $478,500 in 2008). The median price was $347,600. The three other areas in the city (North, Northeast, and Southeast) all showed decreases in both average price and median price in 2009.

The home prices in every suburban community decreased in 2008. In Lake Oswego and West Linn, the price of an average home went from $541,300 to $$486,300. All the communities showed double digit percentage decreases except for Milwaukie/Clackamas (-9.5%) and the Mt. Hood area (0.2%). See the chart below for figures.

The RMLS report also included separate data for Southwest Washington's Clark and Cowlitz counties. Comparing 2009 sales activity with that of 2008, closed sales increased 13.8% and pending sales were up 19.5%. New listings fell 23%. Total sales volume for 2009 was $1.2 billion, which matches the total from 2008.

For the year, the average sale price dropped 14.6% compared to 2008 ($237,800 v, $278,300). The median sale price fell 12.6% ($211,500 v. $242,000).

RealtyTrac reports 3.9 million foreclosure filings in 2009, up 21 percent from a year earlier. About 2.2 percent of all U.S. housing units got at least foreclosure notice in 2009. California, Florida, Arizona and Illinois accounted for more than 50 percent of the 2009 foreclosure filings.

For the year, Oregon had one foreclosure filing for every 47 housing units, ranking the state No. 11. Oregon filings were up 89 percent from 2008 and up 303 percent from 2007.

Below is the 10-Year Average & Median Prices chart for the Portland metro area. It covers the period from 2000 to 2009. The average price gained $91,300 ($289,900 v. $198,600) during this 10-year period. This was a gained of 31.5 percent. The Compound Annual Growth Rate (CAGR) is 3.09 percent.

The median price changed by $81,000 during the ten years from 2000 to 2009 ($247,000 v. $166,000). This amounts to a gain of 33 percent − the CAGR is 4.05 percent.

Note: CAGR is an imaginary number that describes the rate at which an investment would have grown if it grew at a steady rate. You can think of CAGR as a way to smooth out the returns.

Item	2002	2003	2004	2005	2006	2007	2008	2009
Average Sales Price	$213,900	$222,500	$246,000	$282,900	$332,600	$342,000	$330,300	$289,900
Median Sales Price	$176,900	$185,000	$204,500	$237,500	$270,500	$290,000	$278,000	$247,000
12-Month Average Sales Price Change³	4.8%	5.6%	10.6%	15.0%	14.1%	6.3%	-3.7%	-12.2%
12-Month Median Sales Price Change⁴	4.1%	4.9%	10.2%	16.1%	13.9%	7.2%	-4.0%	-11.2%
¹The metro area includes the following Oregon counties: Clackamas, Columbia, Multnomah, Washington, and Yamhill. It does not include Clark County in Washington state.²Residential includes detached single-family homes, condos, townhomes, manufactured homes, and multi-family units when one of the units is sold. ³12-Month Average Sales Price Change based on a comparison of the rolling average price for the last 12 months with the 12 months before. For example in 2009: (1/1/09-12/31/09) with the 12 months before (1/1/08-12/31/08). ⁴12-Month Median Sales Price Change based on a comparison of the rolling median price for the last 12 months with the 12 months before. For example in 2008: (1/1/09-12/31/09) with the 12 months before (1/1/08-12/31/08).
Source: Regional Market Listing Service (RMLS™)

Area	2005 Average Price	2005 Sales Price Change³	2006 Average Price	2006 Sales Price Change³	2007 Average Price	2007 Sales Price Change³	2008 Average Price	2008 Sales Price Change³	2009 Average Price	2009 Sales Price Change³
*Metro Area*
Portland Metro¹	$282,900	15.0%	$270,500	14.1%	$342,000	6.3%	$330,300	-3.7%	$289,900	-12.2%
City of Portland
North	$208,800	18.1%	$234,500	17.5%	$266,600	8.4%	$266,100	-0.1%	$236,000	-11.3%
Northeast	$262,300	15.8%	$265,000	15.4%	$321,600	6.4%	$320,000	-0.4%	$287,100	-10.2%
Southeast	$230,900	14.6%	$234,500	15.8%	$285,500	7.1%	$276,100	-3.3%	$240,900	-12.7%
West (Includes SW and NW Portland and NE Washington County)	$410,700	14.5%	$378,100	10.3%	$468,100	3.6%	$478,500	1.9%	$420,500	-12.0%
*Suburban Communities*
Corbett, Gresham, Sandy, Troutdale	$230,000	12.9%	$248,000	15.2%	$281,900	6.3%	$245,000	-8.2%	$222,100	-14.1%
Clackamas, Milwaukie, Gladstone, Sunnyside	$293,200	16.8%	$307,200	15.2%	$334,200	-5.4%	$284,900	-4.6%	$288,000	-9.5%
Canby, Beavercreek, Molalla, Mulino, Oregon City	$282,400	18.9%	$286,000	15.6%	$329,600	1.2%	$280,000	-5.0%	$279,500	-10.7%
Lake Oswego and West Linn	$452,600	13.6%	$443,800	16.7%	$567,900	7.8%	$541,300	-4.5%	$486,300	-9.8%
Northwest Washington County or Sauvie Island	$369,400	14.5%	$359,000	7.6%	$419,400	5.4%	$404,800	-3.4%	$369,300	-8.7%
Beaverton and Aloha	$246,500	13.6%	$251,000	12.7%	$286,500	3.4%	$273,800	-4.4%	$241,100	-11.9%
Tigard, Tualatin, Sherwood, Wilsonville	$328,500	24.8%	$322,000	8.6%	$374,700	5.3%	$352,600	-5.9%	$316,000	-10.3%
Hillsboro and Forest Grove	$243,500	17.0%	$260,000	15.9%	$297,900	5.5%	$277,800	-6.7%	$243,200	-12.3%
Mt.Hood: Brightwood, Government Camp, Rhododendron, Welches, Wemme, ZigZag	$231,400	32.5%	$254,200	20.3%	$283,600	2.0%	$253,700	-10.5%	$254,300	0.2
Outlying Counties193300
Columbia County			$219,800	14.5%	$254,000	11.6%	$230,700	-9.0%	$193,300	-16.1%
Yamhill County			$229,900	18.3%	$281,600	6.1%	$266,800	-5.2%	$227,300	-14.8%
Marion and Polk Counties			$207,000	15.1%	$250,800	6.9%	$252,500	-4.8%	$203,600	-15.0%
North Coastal Counties			$259,000	20.0%	$381,600	14.4%	$358,500	-8.0%	$296,800	-15.2%
*Southwest Washington State (Clark and Cowlitz Counties)*
Includes Vancouver, WA	$260,800	16.4%	$256,000	12.5%	$305,500	1.7%	$278,300	-8.9%	$237,800	-14.6%
¹The Portland metro area includes these Oregon counties: Clackamas, Columbia, Multnomah, Washington, & Yamhill. Note that it does not include Clark County (i.e., Vancouver, WA) in Washington state. ²Residential includes detached single-family homes, condos, townhomes, manufactured homes, and multi-family units when one of the units is sold. ³12-Month Average Sales Price Change based on a comparison of the rolling average price for the last 12 months with the 12 months before. For example in 2009: (1/1/09-12/31/09) with the 12 months before (1/1/08-12/31/08).
Source: Regional Market Listing Service (RMLS™)

Street Trees Increase Home Prices in Portland

In a paper published in Landscape and Urban Planning, Geoffrey Donovan of the U.S. Forest Service's Pacific Northwest Research Station found that, on average, street trees add $8,870 to a home's sales price and reduce its time on the market by 1.7 days.

Donovan and his co-author, David Butry of the National Institute of Standards and Technology in Maryland, reviewed data meticulously collected from 2,608 homes for sale in east Portland in the summer of 2007.

What they found was that if a house had street trees and tree canopy close by, that increased the sales price of a house and it sold faster. And that finding, they note, has some public policy implications. Calculating the increased property tax revenue to the city and comparing it to the expense the city bears maintaining street trees, the authors estimate street trees have a benefit to cost ratio of 2 to 1. "In Portland, the benefits of street trees significantly outweigh their maintenance costs," they write.

Other Sources of Housing Information

The report is the product of a collaborative effort by the PSU Center for Real Estate and the Oregon Association of REALTORS® to provide service to the local community. The intention of the report is to provide useful information about trends in commercial and residential real estate to the real estate community in Oregon and Southwest Washington. It is very comprehensive and covers the local economy as well as housing.

The report is made possible thanks to a donation by the Oregon Association of Rrealtors® along with the participation of RMLS, Cushman & Wakefield, Norris Beggs & Simpson and Grubb & Ellis.

Since 1978, DataQuick has built a reputation as a provider of real estate information. Although much of DataQuick's information is available only to its paid subscribers, some of the information at their Web site is accessible to all visitors. The site covers the California market extensively but it also releases quarterly information on the Portland housing market.

Affordability in Portland

In early 2007, the Portland Development Commission (PDC) finalized its recommendations for spending the new tax increment set-aside from urban renewal districts that the City Council earmarked for affordable housing. The amount: $162.6 million over the next six years. PDC increased its commitment to build as many as 1,450 units specifically for people who pay no more than 30 percent of their income for rent. That means citywide and not just downtown.

Early each year, HUD release new median income figures. This usually triggers rent increases in income-restricted buildings, since landlords are allowed to raise rents whenever the medium income rises.

Northwest Pilot Project tracks the number of downtown affordable housing units and for 2007, it is about 3,400 units.

Urban Boundaries and Home Prices

The cost of housing is one of the most contentious issues related to Portland's metro planning. With an median sales price of $237,500 in 2005, this is beyond the reach of many people.

Does the Urban Growth Boundary (UGB) cause Higher Home Prices? (see Portland Planning for a discussion of UGB). The NAHB desire more land on which to build homes. In their document called The Truth About Regulatory Barriers to Housing Affordability the NAHB identified 42 markets with barriers, Portland being one of these markets. They called the UGB the "Wall of Portland" and attack it accordingly. The Home Builders Association of Metropolitan Portland, has been among those critical of Metro for being too restrictive in its UGB.

2000 Census Bureau figures indicates that the density in downtown Portland has increased by 30 percent, which is what planners had in mind. Only a few cities in the USA have increased their core city population.

Applying Science to the Debate Sightline Institute, an environmental organization located in Seattle, used some science to compare urban sprawl in Clark County in Washington State and Portland. Clark County is just across the Columbia River and part of the Portland metro area. Sightline used satellite imagery of open space, farmland and pavement, along with digital mapping of US Census data to track patterns of growth during the 1990s. They found that if Portland had taken the same approach to land-use planning as Clark County in the 1990s, an additional 14 square miles would have been developed. Click here to read the full report.

Rating Portland's Density

A study released in August 2003, called "Measuring the Health Effects of Sprawl," commissioned by Smart Growth America, a national advocacy group, and financed by the Robert Wood Johnson Foundation, a health promotion group, found that U.S. adults who live in compact cities are more likely to walk or bike to work, school, stores and other everyday destinations than they are to drive. This translates to slightly lower weights and blood pressures.

As part of the study, researchers from Rutgers and Cornell universities used six variables, including housing density and block size, to create a "sprawl index" for 448 urban counties across the United States. The index was set with 100 as the average; more sprawling counties had lower scores.

New York's boroughs had the least sprawl - especially Manhattan, with a score of 352. The most sprawling place was Geauga County, Ohio, near Cleveland, which scored 63.

Multnomah County (where the city of Portland is located), the Northwest's most compact county, ranked 24th densest among the 448 urban counties, just missing the top 5 percent.

Read the opinions of the Cascade Policy Institute, a Portland group that advocates a free-market approach.

1,000 Friends of Oregon feels that the Oregon regulations work well. 1000 Friends of Oregon is a nonprofit charitable organization, founded in 1975 by Governor Tom McCall and Henry Richmond as the citizens' voice for land use planning that protects Oregon's quality of life from the effects of growth.

Oregonians in Action (OIA) is a non-profit lobbying organization that leads the fight for land-use regulatory reform and protection for private property rights. OIA authored two ballot measures in 1998: one to require landowner notification and another to give citizens the right to petition for legislative review of "bad state regulations." In 2004, OIA passed Measure 37, a constitutional amendment that requires compensation to landowners.

Compare Cost of Living Between Metro Areas

There are a number of free sites that allow you to compare living costs between metro areas but the numbers don't always make sense. We recommend using the ACCRA Web site (the acronym means nothing it was created by a group of US Chamber of Commerce researchers years ago). Its a member organization whose mission is strictly research. For under $20 you can compare the cost of living with where you're living to five other USA/Canadian metro areas.

Office of Federal Housing Enterprise Oversight (OFHEO)

The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 mandates that OFHEO publish a House Price Index (HPI), a measure designed to capture changes in the value of single-family homes in the USA. It also includes a HPI in various regions of the country, individual states, and the District of Columbia. You can view the HPI by the state of Oregon and by the MSA (Metropolitan Statistical Area).

National Association of Realtors (NAR)

NAR is the "Voice for Real Estate." It is America's largest trade association, representing one million members, including NAR's institutes, societies and councils, involved in all aspects of the residential and commercial real estate industries. Their "Existing Home Sales Data" measures the health of the residential real estate industry. Each month, statistics on sales of existing single family homes are reported for the national and four regional levels. Statistics on existing condo/co-ops are released quarterly, and figures on existing single-family home sales (detached and condo/co-ops) by state are released quarterly.

Case Shiller Weiss

To learn more about housing cost, visit the Web site of Case Shiller Weiss, Inc. CSW is a home price research company, founded in 1991, that serves a client base principally comprised of leading mortgage lenders, insurers, and Wall Street firms.

Portland Metro Area Home Prices