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Waugh
February 4, 2009 Managing Director & Subdivision Team Leader
PGP Valuation, Inc.
112 W. 11th Street, Suite 250
Vancouver, WA 98660
Phone 360-823-5274
Median Sale Price Trends Clark County Clackamas County Washington County Multnomah County
Median Existing Detached $24,500 -5% $307,000 -5% $295,000 -6% $275,000 -2%
Median New Detached $276,698 -19% $351,750 -13% $435,000 2% $312,447 1%
Median Attached $188,600 -5% $200,000 -7% $220,000 -4% $247,100 -4%
% of Units Sold New Detached 19% -5% 19% 2% 22% 15% 8.9% 1.1%
Median Existing Home Price down from 2 to 6%, averaging 5%
Mediand New Home Price more static in Washingotn and Multnomah Counties, but down 13% in Clackamas and 19% in Clark Coujnty
Attached housing down average of 5%
Median Sale Prices Are Likely Skewed by Concessions and by the number and location of the sales
New Home Trends
Construction activity and starts are at all time low
Generally selling close to 1/4 of the new units as compared to the peak of the market
New home and lot inventories are declining, but slowing sales are still keeping the overall months of inventory high
Most plat in Clark County with new detached product have absorption from 0 to 2.50 sales per momth, with average at about 1 per month
Attached townhome absorption similar to slightly lower at 0 to 2 closed sales per month
2009 Volume of New Home Sales Could Go Down Further 20% if Economy Does Not Improve
More builders will file bankruptcy in 2009 & we will see builders work together or consolidate to survive
Some production builders trying to get detached housing down to $180,000 for starter home
Affordability is improving with home prices continuing to decline & very low mortgage rates, but recession & tighter lending standards offset
Long term trend for production builders: goal to match of starter home pricing to median incomes, and conform to underwriting standards.
During the peak of the market, starter home prices far exceeded the affordability based on median incomes and traditional underwriting
Median Income are likely to drop given unemployment on the rise, and near term deflation is likely
Lot and land prices have to adjust further
Interest Rate Buydowns More Common as Incentive From Builders
Trend to continued increase in number of attached townhomes entering rental pools by builders.
Some discussion between building community and jurisdications to put a temporary freeze on increased impact fees
Overall Comments
Really in unchartered waters- Deep Recession, new administration, new stimulus plan, new direction for TARP
Demographic Trends also shifting to more conservative for savers in the future
Hard Money Lenders Coming into Play Now
My guess is that we will bottom in early 2010, with a signs of a recovery in later 2011.
Some national experts say housing crisis could last another 3-4 years.
Private parties need to start looking at housing as a long term investment, not a quick flip product
Future success in housing market will be dependent on bringing product to market that is supported by incomes and new underwriting requirements
Qualified buyers will have a great opportunity with declining values and low rates
If you are ready to pull the trigger on a home purchase & have a good deal you should do it as long as you are qualified and not heavily in debt.