Portland Housing Market: 41% Overvalued

[Viva_La_Revolution]

National City Bank released their quarterly housing analysis on Friday, and Oregon gets top billing. Unfortunately it's not for good reasons.

"Bend, Oregon tops the overvaluation list, at 59%. Miami, at 44% is the largest city at significant risk, while Honolulu, Portland, OR, and Riverside-San Bernardino also exceed the 32% threshold. Los Angeles, Seattle, and Phoenix are notably close to that mark. Another way of measuring the degree of overvaluation is by the share of the total housing market meeting the criterion of overvalued. For example, at its peak in the second quarter of 2006, 20 percent of all housing units in America were in metro areas classified as overvalued. By the fourth quarter of 2007, however, that figure dropped to a modest 4 percent. When looked at in market value terms, overvaluation peaked at 39 percent during the fourth quarter of 2005 and the second quarter of 2006. However, that measure has also fallen dramatically, to just 7 percent during the fourth quarter of 2007. Essentially we have, in a scant six quarters, reversed the overvaluation generated since the last half of 2004."

While Bend gets top honors, Portland isn't far behind, taking the #11 spot (out of 330 metro areas) at 41% overvalued.

Most other markets have corrected fairly quickly, so I would expect Portland to also correct over the next 6-8 quarters.

http://portlandrealestateoutsider.blogspot.com/2008/04/portland-41-overvalued.html

This is what I've been telling everyone. Put off buying a house until at least next year. Our bubble just started bursting in January, a year later than PHX, SF, etc.