Talk of a recovery in Oregon housing is premature as markets all over the state suffer from falling home values, despite the federal program giving first time buyers a large tax credit. Any up-swing in sales activity has been out weighed by dropping home prices.
The pace of home sales has increased slightly in some markets, but the eroding values seem to be scarring many buyers off as unemployment climbs in Oregon. The pro-longed difficulty to get a mortgage is adding to the slowdown, which Housing Predictor expects to last into 2010.
Those buyers that are making purchases are getting better deals with foreclosures accounting for nearly half of all sales in Portland. Foreclosed properties are selling for as much as 60% below a neighboring home as lenders drop prices in order to get them off the books before a new wave of foreclosures hit. Nationally 2.1-million homes are sitting vacant and that number will rise over the next two years. The foreclosure epidemic is hurting. Portland is forecast by Housing Predictor to sustain average housing value losses of 15.8% in 2009.
A second federal government stimulus package is about all that may give Corvallis housing values a return to equilibrium in the short run.
Fewer home sales and an increase in available inventory are slowing the economy. Corvallis is forecast to sustain average housing deflation of 12.9% for the year. As a college town, Corvallis is an investor’s destination with plenty of properties to choose from and will at least be partially boosted by the town having a strong base of college renters.
 |
| City |
Forecast |
| Portland |
− 15.8% |
| Eugene |
− 13.5% |
| Salem |
− 13.5% |
| Medford |
− 12.9% |
| Corvallis |
− 12.9% |
| Bend |
− 14.6% |
Eugene over-took Salem during the real estate boom to become Oregon’s second largest city. As the building boom grew, more Californians flocked to the community seeking a better quality of life out of the congestion and pollution of the nation’s most populated state.
However, as unemployment climbs in Eugene the city has been impacted by a declining population, resulting in a flood of inventory on the market along with foreclosures. Job layoffs in construction and the lumber mills are producing a sluggish local economy. Eugene may see more home sales in the remainder of the year, but at much lower prices. Average housing deflation is forecast to hit 12.7% in 2009.
The unprecedented boom of home sales in Salem produced record housing inflation as the community eclipsed Eugene for a while as the second most populated city in the state. But once the boom was over home values quickly plummeted, and are forecast to deflate an average of 13.5% in 2009.
The freefall in home prices has made Bend a symbol of the economic perils of the credit crisis, where jobs have been heavily tilted toward construction and services that are for vacationers. With its scenic Cascade Mountain range, Bend grew to more than 80,000 residents during the boom only to witness one of the highest foreclosure markets in the country for a second home market.
The Bend housing market will suffer through 2009 and sustain average housing deflation of 14.6%.
Home prices are plummeting in Medford as the excess inventory of homes on the market grows. The foreclosure epidemic is projected to take an especially heavy toll on Medford, which has never been a booming economic center. Medford will get through the year with average deflation forecast to hit 12.9%.
