1st Half 2008 - West Linn Real Estate Market Statistics
Ron Ares August 13th, 2008
The housing market in West Linn continues to defy logic, as 30% fewer homes sell, inventory soars over 450 units, homes are taking longer and longer to sell, and yet….
median and average prices are down a less-than-expected 4.6% and 1.5%, respectively.
Well, at least I expected steeper price declines based on our weekly roll-ups of real estate sales. When we last looked at quarterly numbers, sales were down 38% and average prices were up some. Now, it appears there is some softening in sale prices, but the market hasn’t fallen off the cliff.
This table compares home sales in West Linn for the first six months of 2008 versus the same period of 2007:
|
Q1 & Q2 2008
|
Q1 & Q2 2007
|
% Change
|
|
| Median Sale Price |
$439,000
|
$459,900
|
-4.6%
|
| Average Sale Price |
$508,800
|
$511,800
|
-1.5%
|
| Closed Sales |
170
|
281
|
-40.0%
|
| Average Market Time |
145 days
|
107 days
|
+36.0%
|
Sales of condos and townhomes are down about 50% from the first half of 2007, so single-family homes are having a greater impact on the average. In fact, sale prices on detached homes are down only 2% from Q1/Q2 of 2007. The table below shows the 2008 value and the percentage change from the same period in 2007.
|
Quantity Sold/Chg
|
Average Price/Chg
|
Avg. Market Time
|
|
| Attached Homes |
8 / -47%
|
$260,000 / -20%
|
90 days
|
| Condominiums |
16 / -53%
|
$198,000 / -4%
|
74 days
|
| Single Family Homes |
146 / -37%
|
$556,500 / -2%
|
155 days
|
So, the questions remain. Are homeowners stubbornly sticking to their 2007-vintage price expectations? Will inventory drop as the peak buying season wanes and owner pull their property off the market? Will short sale and foreclosure properties become a higher percentage of the inventory? Or is West Linn a stable, desirable housing market that will fight the housing downturn trend?
We’ll be watching…
Source: RMLS statistics for January 1 - June 30, 2008 vs. same period in 2007. Every effort has been made to ensure accuracy.
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Thanks Ron for posting your insights into the market. I’ve been keeping an eye on the WL pricing trends, and your website has been extremely valuable in helping me shape my own views. It helps me normalize the different homes and their list prices by looking at the price-per-squarefoot for each property. I’ll be the first to agree that this can’t be applied to 100% of the homes in the WL area (i.e.some homes will have a large plot of land, river access, etc.), but for the most part, the $/sqft ratio should provide a gut-level check on whether the home is priced in relation to others on the market. Naturally, any amenities specific to a particular home could sway the $/sqft ratio a few dollars either way (i.e. upgraded kitchen, fixer-upper, etc.) but for the most part, it should be within the ballpark.
My own opinions to some of the good questions you ask:
“Are homeowners stubbornly sticking to their 2007-vintage price expectations?”
I think initially, the asking price starts off at around $200/sqft, but in recent weeks, it looks like the asking price for homes is around $178/sqft. For those who are serious about selling their homes, they are more open to reducing their prices, and it appears that the average selling price is around $170/sqft. In the past couple of weeks, I’ve seen homes sold for as low as $150/sqft. For those sellers who have put their home on the market to see if they can get what their neighbor got last year, these homes are asking $200/sqft level, which, barring a few exception, I believe is way overpriced for today’s market.
Another theory is that some people may have gotten into their homes at the peak, and are now trying to get out without losing their investment, hence the $200/sqft price.
“Will inventory drop as the peak buying season wanes and owner pull their property off the market?”
Depending on the seller’s motivation, I think those who are not serious about selling their property will pull out. Others may pull out because they can accept certain circumstances in their situation (i.e. longer commute to take on that new job in Hillsboro). But for those who have to sell, they have to sell no matter what the market conditions are. So, I think there might be a slight drop in existing inventory, but I think new inventory will come on the market, hence the supply should either remain steady or should increase.
“Will short sale and foreclosure properties become a higher percentage of the inventory? Or is West Linn a stable, desirable housing market that will fight the housing downturn trend? ”
Although WL is a very desireable community, let’s be honest - it ain’t Manhattan. And even Manhattan is apparently going through a mild price correction. There is a lot of buildable land, lots of homes for sale, prices are falling, buyers who feel priced out of WL have other lower-cost options nearby, such as Oregon City. Granted WL has very good schools and a very safe community, but people will also look at what their monthly mortgage payment is going to look like, and whether or not they can sell their existing home (if they are homeowners). WL pricing may not fall as hard as other communities in the PDX area, but it will follow the national trend of downward pricing pressure. Not sure where the bottom is, but my own prediction is that we would need to get to below $130/sqft in order to attract buyers to the market, and I think we’ll get there by Summer 2009. Today, some homes are selling for $150/sqft, so we’re not that far off.
Ron, I am not sure if you have access to the short sale and foreclosure data (# of homes, selling prices, etc.), but if you do, it would be very informative to post this information on your site.