Prices down around the country (except Portland, Charlotte and...what's going on in Seattle?)

Posted by: Dean Foust on April 25, 2007

Home prices declined in 17 of 20 key housing markets over the past year, according to the S&P/Case-Shiller(R) Home Price Indices (which is produced by Standard & shiller.jpgPoor’s, which—disclosure alert—is like BusinessWeek, owned by The McGraw-Hill Cos.) The chart makes for interesting reading. Detroit (-7.8%) San Diego (-5%), Boston (-4.7%) and Washington D.C. (-4.3%) suffered the biggest year-over-year declines of all cities. And what the heck is going on in Seattle and Portland? Seattle home prices were up 10.6% between February ‘06 and February ‘07, and Portland prices rose 7.7% (readers there, please illuminate).

In general, S&P economists say the data “indicates the deceleration and declines in home prices are showing no signs of turnaround.” So much for the talk that the market was stabilizing. The average consecutive “negative monthly return” of the 20 cities that S&P and Shiller studied is 5 months, and some markets are doing worse: San Francisco and Boston have yielded negative monthly returns since May of last year, notes S&P.

There’s a lot of interesting data in the release, which can be found here. And even more data, including historical price trends for each of those major markets, can be found here. I’d invite readers to help us pore through the data and pick out any interesting nuggets you find in this thread…

Reader Comments

Brandon W

April 26, 2007 9:08 AM

Portland and Seattle are seeing a large population influx from Californians who are cashing out on their $750,000 "median" homes and buying very nice upscale homes for $350-450,000+ in those cities. In general, those cities appear to be attracting a large number of young professionals and 20/30-something couples. If you look at some of the smaller cities in those states - Medford/Ashland and Bend, Oregon in particular - you'll see several dramatic price increases recently. Medford has been rated one of the most overpriced markets in the country. The demand is there, and supply isn't keeping up. The ability of so many "cashed out" Californians to buy upscale homes pushes the median (and average) up.

b. dee

April 26, 2007 1:49 PM

Portland and Seattle are hot markets, despite the influx of californians. people from all over the country are relocating to the NW. 450k will buy you a townhouse in portland, but anything in the 300s is going to put you in the suburbs.

Dan Carpenter

April 26, 2007 2:31 PM

Seattle and Portland prices have been driven by strong gains in employment coupled with rampant speculation and a severly overbuilt condo supply.
Seattle is just simply behind the national trend, and our prices will come into line by summertime.

The average price/sf of homes in Seattle is skewed by an inventory that has increased by 40% since February, 2006. Our Pending and closed sales have decreased some 10-15% as well over this same amount of time...sounds like a deflating bubble to me.

BTW, you CANNOT buy a high end house in Seattle for 350-400,000, that is an entry level price here. You would be lucky to get a 5sf patch of grass for that price in Downtown.

Brandon W

April 26, 2007 10:10 PM

I guess I was implying "up until recently", and I also put the "+" in there because I know it can go much higher than that. I'm looking at moving to Portland, myself, so I'm reasonably familiar with the real estate prices. I've seen quite a few nice townhomes in the $275-300k range in Portland, so it can be done.

John Bailo

April 27, 2007 5:05 PM

Northwest realtors are notoriously cunning.

Coupled with the local news media and just about everyone else, they are pretty much colluding to make you think the prices are high and sales are rolling.

Reality? I drive around South King County and have seen the same brand new housing developments with unsold units...and this has been for more than a year!

Yeah, if you keep a lock on supply, you can artificially prop up the price. But at some point the dam is gonna break.

Jeff Tanasse

March 14, 2008 6:45 PM

I live in Vancouver Wa. across the Columbia River from Portland. Here there is a tug-of-war going on between buyers and sellers with sellers entrenched in firmly..holding selling prices up. With interest rates staying around 6% and with more people moving into the area..buyers will start buying once the Fed is done cutting the interest rate and inventory will start moving again. I bought a $450K house in Sept of 2006 and could sell it now for $470 easy. Tech and commercial construction is still trending upward in this area...homes will follow suit.

William P

May 27, 2008 10:40 PM

In Charlotte the inventory is growing every month with multiple cranes still marking the skyline. Charlotte is a little late to party, but, will soon have a hangover just like everyone else. The Sellers haven't blinked yet, but, I've seen listing prices steadily dropping over the past several months. This economy is largely held together with silly putty and duck tape also known as Wachovia and Bank of America. Both are stuck in the sub-prime mess and are starting to experience the full impact of their errors. A failure, major layoff or acquisition by another player is just around the corner for one or not both of these banks. And the so-called "half backs" aren't going to be enough to fill the void in the chasm.

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BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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