Two reports in the media a few months ago caught my attention. First I opened up the Oregonian newspaper to read that Portland real estate was at a 'new low' in February. Then on my way to the office I heard on /NPR radio that the market had 'turned around' and things were starting to look up!
So . . . what to make of the two stories? First of all, I am not sure what a 'new low' is in real estate because unlike a stock, home prices are well above what they have been historically. True, Portland prices are down about 20% from the 2007 highs but it is not a 'new low.' If you read the full story, you get the idea that the writer thinks there is room for more decline but there are also indications of a stronger market ahead.
The NPR story was part of a larger piece examining the stock market and economy where real estate plays an important role. Homes are still the major asset for most Americans and, despite the reports, most homeowners still do have equity in their residences. The reporter pointed out that on the national level, real estate sales and prices were up from a year ago so the trends looked good. This seems to indicate that the worst is over.
There is an old adage that all real estate is 'local.' I recently heard an economist say that the Portland real estate market was the national market 'on steroids'; so when things are up we go way up and when they head down we again 'over-correct'. So both stories areÂ accurate but you have to make sure you hear them completely and then determine how it affects you!
Even in Portland, if you live in inner SE or inner NE, you are probably feelingÂ less of aÂ decline. But if you had purchased recently in Gresham, Milwaukie or Hillsboro . . .well, you are probably taking a bit of a hit!Â Make sure you understand the 'local' market before making important real estate decisions.