Portland, Oregon Real Estate Outlook 2012

Portland, Oregon Real Estate Outlook 2012

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Current Portland Housing Trends January 2012

 

Recently released pending home sales figures suggest a bright future for not only the Portland housing market, but also the national housing market. The seasonally adjusted national pending home sales index released by the National Association of Realtors has risen for a second month in a row. The pending home sales index has also risen past 100. This is important because the only other time the index has broken 100 since the housing boom collapsed is when the home owner tax credit was in effect. According to Portland realtors the fact that the index has risen past 100 and to it’s current level, a year since the home owner tax credit has been in effect, implies that the housing market is recovering seemingly on its own without the addition of any form of stimulus.

Portland realtors and Portland real estate trends analysts are hopeful for the future of the Portland housing market and the national housing market.

The Portland real estate market is displaying signs of growth in multiple areas besides just in pending sales figures. Both local and national rates of housing starts are increasing while housing prices are stabilizing. Nationwide around 100,000 jobs are created a month and shows signs of being able to rise to 150,000 jobs created a month. Portland realtors note however that this rate of job production is not nearly high enough to be able to return things to the level they were before the downturn, but instead signifies that the market is heading in the right direction. Many Portland realtors believe that with the increases in Portland Homes for Sale it is almost certain that there will be similar increases in the Gresham Real Estate market and Happy Valley Real Estate market.

Some Portland Real Estate agents are worried that the seasonally adjusted national pending home sales index is being used as the only indicator of local and national real estate market health.

These Portland Real Estate Agents warn that while the national pending home sales index can be a good indicator of overall market health, it can actually be a very misleading indicator when you don't take into account other indicators of overall market health. For example, the amount of pending home sales is rising but the amount of homes that are actually being sold is relatively stable and even dropping in some regions. This indicates that more homes are being put up for sale in a market where the same amount, or even a lower amount, of people are buying homes.

Another indicator of overall market health is the rate of new housing starts. The rise in the rate of housing starts indicates that there is more interest in new housing projects, along with more money in the economy to fund the creation of the projects. On top of that each new housing project creates jobs and thus nourishes the local economy. By itself the increasing rate of housing starts seems like it would lead to an extremely healthy housing market and overall economy, but when you take into consideration the fact that the rate that homes are being bought is staying the same instead of also increasing, and in some cases is even decreasing, you can see that there is going to be money going in to creating homes that are not going to be bought. The building of these homes can be detrimental to the housing market and economy. This is because it leaves homes for sale for long periods of time, which forces the sellers to decrease the asking pric es of the homes. That will lead to profit margins that are barely above zero or even in the red.

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