Portland-area home sales activity improved in 2011, but a continuing decline in prices brought the total volume of sales to a 10-year low.More homes in the Portland area sold last year than in 2010, but that didn’t stop prices from losing ground.
Falling values have dogged the housing market, keeping buyers and sellers on the sidelines. Foreclosures and short sales have weighed on market values, and observers are still watching for Portland-area prices to hit bottom.
The 19,682 Portland-area homes sold in 2011 represent a 4 percent increase compared with 2010, according to the Regional Multiple Listing Service. But the median price for the year fell 7.9 percent, to $221,000.
The increase in transactions couldn’t outpace the price declines. RMLS reported $5.2 billion in Portland-area home sales in 2011, an 11-year low.
Distressed properties continue to weigh on prices. Of the homes sold in 2011, 22 percent were bank-owned. Those had an average sale price of $170,000, a 36 percent less compared with market-rate properties. Another 11 percent sold as short sales at a 17 percent discount.
On the upside, year-over-year declines got smaller in 2011, which is generally a sign of pricing stabilization. Some analysts have said prices could reverse their trend this year after 4 years of slipping and sliding lower. Clear Capital, a real estate research firm, said it expects Portland-area prices to increase by 1.9 percent in 2012.
“You’ve got to get confidence, income, jobs,” said economist John Mitchell of M H Economic Consultants. “That’ll keep this real estate thing going. When you see prices start to stabilize with continuing low interest rates, consumer confidence, rising rents, I think you’ll see activity up more.”
Many would-be sellers sat on the sidelines in 2011. The number of homes listed for sale during the year dropped by 25 percent, to 34,000.
That’s led to a sustained decline in the overall inventory of homes. At December’s sales rate, it would take only 5.3 months to sell every home on the market, the lowest point in at least three years.
“People realize that if they bought a house in 2005, 2006, they’re not going to make any money putting their home on the market,” said Tim Duy, a University of Oregon economist. “Consequently, they’re just holding. There’s really not any faith in these individuals to put their house on the market.”
Some buyers who might buy a home in other market conditions are reassessing the value of buying a home as an investment, Duy said.
Brian Allen, the president and co-owner of Windermere Cronin Caplan Realty Group, said he sees the low inventory as a sign of balance in the metro area housing market.
While some areas continue to see sluggish sales, other areas often see multiple offers on homes.
“What’s moving is the homes that are priced right for the neighborhood and the condition the homes are in,” Allen said. “And buyers are pretty aggressive in going after them.”
— Elliot Njus
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