Portland Condo Sales Report

Posted on 10/21/09 10:37 AM

Median price points for condos sold in Portland’s city center continued to drop in the third quarter of this year. The 12-month rolling average for September came in just above the 300k mark, down from 316k three months earlier and 335k at the beginning of ‘09. Median asking prices are starting to catch up with this trend, dropping below the 350k mark for the first time in more than 2 years.

Accelerated marketing programs, such as the Atwater Autcion and prominent price cuts ( e.g. Block90) contributed towards the overall downward pricing trend. Similarly substantial list/closing spreads such as -189k (Westerly #309) or -92k (Meriwether # 1802) did not exactly help sellers overall. On a dollar per square foot basis the following picture emerged in the third quarter of this year (based on select projects with at least 3 comparable sales in the last quarter): John Ross – $308/SF, Edge Lofts – $300/SF, Westerly – $390/SF, Jefferson – $345/SF and 937 – $440/SF. Note: Averaging technique provides only a ballpark number, since it does not provide any details on finishes/views etc.

Roughly a fifth of all transactions were north of the 500k mark with only a handful of condos closing in the million dollar range such as Elizabeth Lofts #1502, a 3443 SF unit that finally sold for $1,97 million as well as the penthouse suite at the Casey (#1502) that went for $2.9 million. At the opposite end of the spectrum buyers in the sub 250k category had a choice of more than 50 units ranging from McCormick Pier at $142k (734 SF) to the Civic at $220 for a similarly sized unit.

Number Of Transactions Remains Flat

The third quarter typically marks the peak of the year as far as sales are concerned. However, in Q3/2009 the number of transactions remained essentially the same over the previous quarter, climbing by a mere 18 sales overall. Transactions also did not show much of a change over the same period last year with roughly 200 condos selling in the Pearl District, Downtown, South Waterfront and Northwest in Q3/2009. New construction sales accounted for about half of all transactions during this period, up markedly from previous quarters, an indication that developers are increasingly having to respond to the pressure in the capital markets and beyond. With 11 closings for the quarter, the top spot went to South Waterfront’s John Ross followed by 937 (8) and McCormick Pier (7) – both located in the Pearl.

Bank-owned condos in Portland’s city center constituted about 10% of all sales, roughly in line with previous quarters. The number of short sales declined to a mere dozen for the quarter.

Condo Inventory Stuck At 20 Months

Reflecting the busier period of the year, inventory (in months) has climbed steadily since January, settling in at about 20 months (12-month rolling average). By contrast, the Portland metro area as a whole is down to about 9 months. Vacancy rates are also higher than elsewhere in the city. Beyond the new construction units that sold in the last quarter an additional 25-30% was vacant at the time of the sale.

Nonetheless quality developments in good locations remain desirable and if priced appropriately don’t last much more than 30 days on the market, such as these:

Civic #617, 730 SF, sold at 214k
Park Place #304, 1255 SF, 2-bed, sold at 425k
Eliot #710, 916 SF, sold for 312k
Bridgeport #415, 840 SF, sold for 326k
Henry # 1115, the smallest unit (736 SF), sold for 359k

What’s in store for Q4? Inventory is likely to shrink as several sellers pull their listings off for the holiday season. A substantial number of buyers will likely disappear as well. More than any other time of the year, sellers will be delighted to see your offer.