Posted by Ryan Frank, The Oregonian December 30, 2008
Portland-area home values continued to reach new depths in October when prices dropped 10.1 percent compared to the same month in 2007, according to an index published today.
The Standard & Poor’s Case-Shiller index, one of the most closely watched housing measures, reported the first such double-digit decline in Portland since prices began to fall in the summer of 2007. Prices have now fallen back to their January 2006 levels.
Portland, along with Seattle and Charlotte, ranked among the top three markets in the index early in 2008. But their position has fallen as the housing crisis that began in the Sun Belt and Rust Belt states rolls through the Northwest. Portland and Seattle now rank No. 7 and No. 8, respectively, for the smallest year-over-year declines. Seattle and Atlanta also dipped to double-digit declines for the first time in October. (Check out Portland’s index since 1987 and an October 2008 ranking by city.)
“While not yet experiencing as severe a contraction as in the Sun Belt, it seems the Pacific Northwest and Mid-Atlantic South is not immune to the overall demise in the housing market,” David M. Blitzer, chairman of the Standard & Poor’s index committee said in a statement.
Beyond the northwest, the worst of the pain continued to be concentrated in California, Arizona, Nevada and Florida where speculators, growth and loose lending combined to drive prices far beyond sustainable limits. Phoenix, Las Vegas and San Francisco all fell more than 30 percent in October compared to a year earlier. The 10-city and 20-city composites also hit new lows at 19.1 percent and 18 percent, respectively.
The New York Times’ home page, for now, has a very cool chart for that shows each of the 20 markets rise and fall in the housing boom and bust.
Over the past 25 years we have seen a decrease in the utilization of seller finance to a point in which lender valuations are driving home prices lower and lower without the proper balance provided by seller finance closings. Seller finance typically involves a higher sales price than traditionally financed purchases because a true market value is represented by a sales price a willing buyer and seller agree upon. When an appraisal is ordered, approx. 5% of the sales comparables come from seller financed closings, whereas in the late 1980’s closer to 20% of the comps would have been seller finance related. We are not in a buyer’s market or a seller’s market, we are in a lender’s market.
Tom Funicello, Jr.
Seller-Finance Sales & Marketing
LoanCare Servicing Center, Inc.
(602) 578-3242 Direct
“I come not to be served, but to serve others”