National, Portland home prices settle into slower growth

By Elliot Njus | The Oregonian/OregonLive | Posted October 30, 2018 at 08:25 AM

Portland-area home prices grew at their slowest rate since 2012 during the 12 months ending in August.

New numbers from the S&P CoreLogic Case-Shiller home price index show prices are losing momentum across the country, though they continue to climb year-over-year in each of the 20 cities included in the index.

National home prices rose just 5.8 percent over the past year, falling below a 6-percent gain for the first time in a year. 

Las Vegas, San Francisco and Seattle saw the nation's fastest-rising prices, while the smallest increases were in New York and Washington, D.C.

The housing market appears to be settling into a pattern that's been historically familiar but largely absent since the rise and fall of the housing bubble. Other indicators are also showing signs of a softer housing market: sales of new and existing homes have slowed, while construction of new homes has been uneven.

Home prices in areas like Portland have hit a point where they're out-of-reach for many who might otherwise be looking to buy their first home. Rising mortgage rates have further limited their ability to buy in the expensive region.

Housing-market watchers say that doesn't mean prices are likely to crash. David M. Blitzer, chairman of the index committee, said mortgage default rates haven't ticked up as they did starting in 2006.

"Without a collapse in housing finance like the one seen 12 years ago, a crash in home prices is unlikely," Blitzer said. 

Skylar Olsen, an economist for the real estate website Zillow, said the slower growth in housing prices was welcome relief for homebuyers. It could push some prospective buyers who are on the fence to buy a home before even higher mortgage rates appear. 

But others might feel the pressure's off, particularly as rents in many areas -- including Portland -- have plateaued, and in some cases fallen. 

"Some potential buyers may wait, enjoying a rare national decline in rents and watching for the right home to come on the market," Olsen said. "They also might not like what they see this winter, if it's homes left from earlier in the year that were overpriced or are otherwise undesirable."

The Case-Shiller index uses repeated sales of the same homes to measure changes in home values across the market. It uses a three-month average to smooth volatility.

The Portland area's median sale price in August was $407,500. It fell to $392,500 in September.

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