Home prices rose in Portland and most other major U.S. cities in August, another positive sign for the recovering housing market. Portland-area home prices rose half a percent in August and 3.6 percent compared with the same month a year ago, according to the Standard & Poor's/Case-Shiller home price index, released Tuesday.
"The sustained good news in home prices over the past five months makes us optimistic for continued recovery in the housing market," said David M. Blitzer, chairman of S&P's index committee.
Across the 20 metros surveyed, prices rose 0.9 percent for the month and 2.0 percent compared with a year earlier. Seventeen of the cities saw year-over-year gains in price. Only Seattle lost ground in August. Prices there fell one-tenth of a percent but remain 3.4 percent higher than a year ago.
The report joins other news suggesting the housing market has reversed its dramatic decline and begun a sustained recovery.
Home sales are up across the country, boosted by low home prices and low mortgage interest rates. The effect of foreclosures, meanwhile, has diminished as investors buy up the supply and lenders reduce their portfolio of repossessed homes.
Those looking to buy are still finding a slim inventory of homes available, and the competition between buyers is helping raise prices. Industry economists, however, say the low inventory has also constrained sales.
However, rising prices have slowly started to draw more sellers to the market.
"The sellers that we're working with in Portland are people who don't have to sell, which is a big change from what we were seeing into the summer," said Rachel Musiker, a spokeswoman for the Redfin real estate company.
New residential construction is also increasing, a sign homebuilders have increased their sales and are growing more confident.
In Portland, prices are up 9.14 percent from their low point in the housing crash, recorded in March. However, prices are nearly 25 percent lower than at their July 2007 peak.
The greatest price increases are seen in the middle pricing tier -- the middle one-third of all homes, priced between $208,000 and $312,000 -- which has seen 6.5 percent growth since a year ago. Homes priced in the lower one-third are gaining faster than those priced in the top third.
The Regional Multiple Listing Service reported the median home price for the Portland was $241,000 in August, then fell to $238,000 in September. However, sale prices remained 3.2 percent higher in September than a year earlier.
Month-over-month growth has slowed, and Case-Shiller may reflect the usual seasonal decline in home prices in coming months.
"Fits and starts would fit with the general pattern you might expect," said Josh Lehner, an economist with the Oregon Office of Economic Analysis. "When you're at this low level of growth, you're very susceptible to shocks. If you're at stronger growth levels, you're a little more isolated from these kinds of variations."
The Case-Shiller index is widely watched and imitated because it uses repeat sales of individual properties to reliably measure relative changes in home values over time. It's released on a two-month delay, and it uses a rolling average of three months of pricing data.
Elliot Njus, The Oregonian, October 30, 2012