left column

Connect With Me:

pohl real estate on facebook twitter pohl real estate pohl real estate on linked in E-mail A Friend add this page to your favorites iphone app and qr code pohl real estate
Predefined Homes For Sale PDX Metro
Search By Map  
Listing Id Search  
Detailed Search  
Basic Search  
Luxury Homes  
New Construction  
Portland Condos  
   
Other Sections

Client Tools -- Vast resource center for those getting into or exiting the real estate market.

Relocating to Portland -- Interested in moving to Portland.

Portland Metro Statistics -- Raw Portland Real Estate market data.

PDX News Headlines -- Pohl Real Estate's news recap around Portland.

Home Search -- Every possible type of search available to you.

Housing Tips -- Useful real estate articles.

Customer Service:

We are committed to our valuable customers, if you notice anything needing corrected. Let us know here.

Is the Portland Real Estate Market Stabilized?

6-18-2009

When taking a snapshot of any given real estate market there are a few factors that must be considered:

1. Local Jobs

2. Supply and Demand

3. Interest Rates

Why are these factors important? Well if an area has a lot of jobs and employers and people are not worried about their next paycheck. Not worrying encourages spending. When jobs are hard to come by then it creates more competition for each job which means that employers can get more qualified workers for less money. If people are earning less they are pinching pennies more. If they are pinching pennies the entire local economy takes a hit. Not only are people not going out to expensive restaurants as much, they are not buying fancy cars, and certainly not making large fixed payment purchases like homes. The next factor is the current supply and demand. The supply and demand is very much related to local jobs and interest rates. If their is an excess of supply of homes it pushes demand much lower. When the demand is high it causes people to buy which thus lowers the supply. Real estate is entirely market forces at work. Another big factor is interest rates. If interest are extremely low then it not only makes the home more affordable but it locks that affordability in for a very long period of time. If the interest rates double then the same house could cost twice as much which pushes many people out of the market. Lowering interest rates creates more demand because more people can afford the same house.

Ok now for Portland, Oregon's Real Estate Market

Local Jobs
The Portland job market is not so great. The current unemployment rate is 11.6%. The national average is 8.6%. Workers are fighting tooth and nail for their jobs. When they take a job they are overqualified and underpaid for they end up fighting for better jobs. This causes a lot of turnover which ultimately is not good for employers. See chart below to see what the local unemployment rate has done over the last 10 years.

graph of jobs

Supply and Demand
Ok what is Portland's supply and demand for homes like these days you ask? Well I write a brief monthly market conditions report you can read. The statistical data comes out mid month so you can expect the market conditions to come out the third week of every month. Currently the Portland Market has 10.2 months of inventory on their books. A balanced and average real estate market is 6 months worth of inventory. Even though the Portland market hit an all time high in January at 19.2 month, you can see this is still very high supply of homes available. The consumer ends up with more choices and hesitates to make a decision unless it's an incredible deal. Most of the homes that are selling are unique homes or foreclosure/short sales. 

Interest Rates
Historically, interest rates are still very very low. The 30 year fixed rate loan has been hovering between 4.5% - 5%. This is very good for the real estate market and helps to spur on demand.

Overall, does this mean that the Portland Market is starting to stabilize? In my opinion until the Portland job market starts to stabilize and grow then it would be very difficult for the real estate market to stabilize. When the job market stabilizes and people are able to keep their jobs, then this will cause people to continue to make their mortgage payments. Making mortgage payments will slow down the foreclosure and short sale market. Slowing down the foreclosure and short sale market will slow down supply of available homes and allow the current market forces to filter out the lowest priced homes. When the lower priced homes get filtered out then the market can return to normal conditions with a more balanced supply and demand. How are interest rates tied into this. Right now a drop in interest rates only impacts the people that have the good jobs and good credit, but they are worried about buying in a declining market. When the market stabilizes then a drop in interest rates can do much more. Not only will people not be worried to purchase a home but more people will be impacted. So to make a long story short no the Portland market has not stabilized quite yet.


Back to Portland Real Estate News Archive

Share This Page With A Friend:
Add This Page To Your Reading List: Add This Page to Your Favorites

Previous Articles:
By Month

Dec-2013
Nov-2013
Oct-2013
Sept-2013
Aug-2013
July-2013
June-2013
May-2013
Apr-2013
Mar-2013
Feb-2013
Jan-2013

Dec-2012 Dec-2011
Nov-2012 Nov-2011
Oct-2012 Oct-2011
Sept-2012 Sep-2011
Aug-2012 Aug-2011
July-2012 July-2011
June-2012 June-2011
May-2012 May-2011
Apr-2012 Apr-2011
Mar-2012 Mar-2011
Feb-2012 Feb-2011
Jan-2012 Jan-2011

Dec-2009 Dec-2010
Nov-2009 Nov-2010
Oct-2009 Oct-2010
Sep-2009 Sep-2010
Aug-2009 Aug-2010
July-2009 July-2010
June-2009 May-2010
May-2009 Apr-2010
Apr-2009 Apr-2010
Mar-2009 Mar-2010
Feb-2009 Feb-2010
Jan-2009 Jan-2010

 

 

pohl real estate on facebook twitter pohl real estate pohl real estate on linked in E-mail A Friend add this page to your favorites iphone app and qr code pohl real estate