Portland Condo Quarterly Q4/2009
During the final quarter of 2009, Portland’s city center condo prices continued to slide, prompting the highest number of transactions per quarter in 2009. In the wake of more aggressive sales events such as the Atwater Auction, several new construction condo developments – notably the Strand, the John Ross Condos and the Westerly – introduced some of the steepest price cuts we’ve seen so far.
Sales Volume Continues Upward Trend
The year that started out with a dismal 94 transactions in Q1/2009 ended with more than 220 closed deals in the last quarter. Sales for condos in the Pearl District, South Waterfront, Downtown and Northwest sub-markets ticked up markedly in the summer months, a trend that continued throughout the year. In the end, the seasonally weaker fourth quarter was up 15% over the third and had climbed almost 40% from the same quarter a year ago.
As noted previously, a substantial amount of activity is in the entry-level segment, reflecting the impact of home-buyer stimuli on first-time buyers. Thus, roughly a quarter of all city center condos sold for less than 200k, typically in the 750 SQFT range. In spite of the initial skepticism, South Waterfront developments are emerging as viable players, the John Ross Condos alone wrapping up more transactions (25) than any other city center condo development, another 7 deals closed at the Meriwether Condos in the last three months of the year. The Avenue Lofts as well as McCormick Pier were among the heavy hitters in Portland’s Pearl District, both closing on roughly a dozen units respectively.
Inventory Returns To Normal Levels
For the first time since summer 2008, inventory (in months) dropped below 10 months and essentially remained at that level for the entire fourth quarter. As recent as Q2/09 inventory had been at 17 months, before dropping a couple of notches to 13 months in the third quarter of 2009.
A note of caution: a substantial amount of shadow inventory is likely to be unleashed in the months ahead, as sellers return to the market. As a result, it appears unlikely that inventory will remain where it is at this point in time. Having said that, there are plenty of examples of units selling in less than 30 days, such as these:
-North Park Lofts, 9th floor, 700 SQFT, SLD at $464/SQFT
-Civic, 10th floor, city views, 888 SQFT, SLD at $304/SQFT
-Elizabeth, 8th floor, 1564 SQFT, SLD at $364/SQFT
Prices Continue To Slide
Median price points for condos sold in Portland’s city center continued to drop in the fourth quarter of this year, and were in the high 200k range in each of the last three months of the year. The 12-month rolling average (shown below) for December also came in well below the 300k mark at 290k, down from 305k three months earlier and 335k at the beginning of ‘09.
With more than 50% of all transactions closing in the sub 300k category, sales at the opposite end of the spectrum were few and far between. A mere dozen or so homes changed hands in the +750k segment of Portland’s city center condo market. About 10% of all condos sold were bank-owned, significantly below the average for the Portland-metro area as a whole.
Roughly a third of all city center condo transactions closed at or above asking price! Nonetheless significant spreads (in the opposite direction) are still very much the norm, and will remain so for the foreseeable future. Just don’t expect to have your offer accepted at 150k below asking price, as was the case for unit # 1703 at the Eliot Lofts, John Carrol’s signature development in downtown Portland.
For the city center as a whole, median condo closing prices per square foot hovered around the 300k mark in the third quarter of 2009. Bear in mind $300/SQFT is the median. Price points range from $620/SQFT at the Casey to the mid $200s at the Edge Lofts and all the way past the $200 mark at the Shoreline.
Looks like an interesting year ahead!
