Q: Are property values going up yet? Have we finally reached the bottom or is it close?
A: The direct answer to your question is “it depends on where you live.” Recently-released data from the National Association of REALTORS® shows a decline nationally in the median sale price of both existing condos and single-family homes. Because this is a survey of completed transactions, the numbers are largely affected by the Federal first-time homebuyer’s credit. Entry-level homes, generally speaking, are those with a lower price. Since the subsidy for this demographic was so strong, a lot of the action in the market came from the buying and selling of less expensive properties. Many of these properties are also “distressed” properties—meaning either foreclosures or short sales. These two categories along with the strong demand for the lower priced properties, in turn, have lowered the median sale price.
Locally here in the Portland area we have seen a similar trend with a lower median sale price than a year ago at this time. However, some areas of the city have not had much of a drop in values and in many cases well priced properties are selling over list price with multiple offers. So the picture is not all doom and gloom.
It is hard to determine if this has been enough of a market correction to stabilize prices. Much of the issue is hand-in-hand with the general economic health of the region and the country which has shown recent signs of improvement. The rate of price decline locally has absolutely slowed to a crawl. The RMLS reports that we have lost only about 2.65% in median price value over the past 6 months compared with 9.3% over the previous 12 months. That is very encouraging information. We have weathered a significant recession and signs of stabilization are continuing to emerge.
This will always be a judgment call when predicting the directions of markets. That said, spring and summer are good times for real estate. The conditions are ripe for improvement!