Local Market Trends

Home prices continued to climb in 2006, despite a decline in the number of sales throughout the Cascade foothills region.

2006 started as another banner year with increased sales and prices throughout the Portland metropolitan area. However, numerous inaccurate reports in local and national news media of declining home prices and sales undoubtedly cast a pall over the local market, driving away some buyers.

By the second half of 2006, the number of sales was declining, but prices were remaining steady or climbing in most parts of the Portland metropolitan area.

Buyers may have been nervous in the Cascade foothills region, but sellers apparently were not as worried as they continued to demand higher prices and were willing to settle for slightly longer marketing times rather than giving back much on price.

Preliminary figures from local Realtors® show that the number of Realtor®-assisted sales in the foothills region of southern Clackamas County fell 10 percent in 2006. Meanwhile, the median price for a home in the area rose by 11 percent. The increase in the median price in 2005 was about 25 percent.

Marketing times began to lengthen slightly in the second half of 2006, helping moderate price increases. However, a broad drop in prices that was often forecast by various news outlets never materialized.

The table below shows figures for sales of single-family homes in southern Clackamas County for the fourth quarter of 2006.

Month	Units Listed	Listed Volume	Listed Average	Units Sold	Sold Volume	Sold Average	Rough DOM¹
October	279	92,001,366	329,754	164	57,993,844	353,621	59
November	266	84,131,544	316,284	130	46,138,430	354,911	61
December	134	50,326,782	375,573	125	48,451,625	387,613	72
Totals:	679	226,459,692	333,519	419	152,583,899	364,162	64

Total Listed: 679	Sold Units: 419	Remaining Units: 260	Inventory² Accum: 1.86
Min Sold Price: $97,000	Median Sold Price: $316,787	Average Sold Price: $364,162	Max Sold Price: $1,495,000

The fourth-quarter median sale price was up 9.5 percent from the $289,200 median sale price in the fourth quarter of 2005. A median-priced home is one whose price falls exactly in the middle of all homes sold, with half of the homes sold being priced higher, and half being priced lower. It is usually a more accurate indicator of market activity than the average sale price, which can easily be skewed by a few properties being priced unusually high or low.

The number of fourth quarter sales was down 3 percent compared to the fourth quarter of 2005. Most of the decline in sales for 2006 came during the third quarter.

As sales declined overall in 2006, owners selling without a broker probably didn't fare as well as owners without a broker in 2004 and 2005, when prices and the number of sales were rising at a heady pace.

When sales decline and marketing times lengthen for real estate professionals, these market factors tend to be exaggerated for owners selling on their own. National statistics show that people who sell without a Realtor® generally tend to be less successful, seeing longer marketing times and lower prices than people who hire a Realtor®.

Statistics compiled by The Foothills Report from Realtor® transactions in 2006 show 1,776 sales were completed in southern Clackamas County. This region includes both incorporated and unincorporated areas of the communities of Oregon City, Molalla, Canby, Barlow, Wilsonville, Beavercreek, Mulino and Colton, as well as small portions of unincorporated communities near Aurora, Hubbard, Woodburn and Mt. Angel. Realtors® assisted 1,980 sales in the same area in 2005.

Whatever the results in terms of the numbers of sales for the region's various communities, prices everywhere continued to rise.

The median price for a home in Canby jumped 12 percent last year to $280,000, while the number of Canby sales shot up along with a spate of new construction. Sales rose from 311 in 2005 to 383 last year, a 23.2-percent increase.

New home sales here rocketed up by 88.6 percent compared to 2005, with 132 new homes sold last year. Sales of existing homes rose a more modest, but healthy, 4.1 percent, climbing to 251 from 241 the previous year.

A median-priced Canby home averaged 3 beds and 2 baths in 1,565 square feet on a 0.25-acre lot. The average age of this median-priced home was 37 years.

The time from entry of a Canby property into the multiple listing database until contracting with a buyer, or average market time, was about six weeks last year. This includes homes both in and out of the city limits.

Molalla's median home price rose again after a 22.4-percent spike in 2005. Molalla posted a 16.3-percent gain last year, with the median price going to $235,000, from $202,000 a year earlier.

The number of sales in Molalla also bucked declining sales trends elsewhere, rising 3.5 percent last year, driven by increased sales of new homes. Buyers bought 67 new homes in Molalla last year, compared to 46 in 2005. Molalla has continued to be popular among new home buyers because of prices that tend toward the lower end of the price spectrum for new homes.

A median-priced Molalla home averaged 30 years old on a 0.5-acre lot with 3 bedrooms and 1.5 bathrooms in 1,375 square feet of total floor space.

Molalla's average market time was about eight weeks in 2006.

Oregon City sales plummeted, driven by a sharp decline in new home sales. Buyers purchased only 719 homes here last year, compared to 966 in 2005. This 25.6-percent drop paled only in comparison to the 29.7-percent drop in new home sales in Oregon City, which went from 172 in 2005 to 121 last year. Existing home sales dropped 24.6 percent year over year.

Despite the sharp decline in sales, Oregon City prices continued to rise, with the median jumping to $300,490 from $269,995 in 2005. This represented a hefty 11.3-percent increase.

The median-priced Oregon City home averaged 34 years old with 3 bedrooms and 2 baths in 1,850 square feet of total floor space on a 0.34-acre lot. Average market time for all homes in Oregon City was about eight weeks.

Colton also saw a sharp drop in the number of sales, from 48 in 2005 to 37 last year, a 22.9-percent drop. But prices rose much more sharply than in 2005, with the 2006 median climbing 21.4 percent to $299,900.

The median-priced Colton home averaged 30 years old on 4.14 acres with 3 bedrooms and 2 bathrooms in 1,590 square feet of total floor space. Average market time here was about 14 weeks, four weeks longer than in 2005.

Median price appreciation in Mulino approached 20 percent for the second year in a row, closing out 2006 at $348,750, up 19 percent from the prior year's $293,000. The number of homes sold here was 36, down five from the number sold in 2005.

The median-priced Mulino home last year averaged 1,616 square feet of total floor space on 3.48 acres and was 44 years old. It averaged 3 bedrooms and 2 bathrooms. The average market time for all Mulino homes was about 11 weeks.

Price appreciation in Beavercreek wasn't as robust, but still posted a healthy 6.7-percent gain, with the median price rising from $338,000 to $360,500 last year. The number of sales declined 19 percent, from 58 in 2005 to 47 last year.

The median-priced home here averaged 42 years old with 3 bedrooms and 1.5 baths in 1,642 square feet on 9.39 acres. Average market time for all homes in Beavercreek was about eight weeks.

In Wilsonville, the residential median price soared past the $400,000 mark, rising 17.7 percent to $420,000. Buyers pushed sales 3.3 percent past their 2005 mark, settling at 285 homes sold last year.

The median-priced Wilsonville home averaged just 18 years old with 3 beds and 2 baths in 2,030 square feet of living space on a 0.15-acre lot. Average market time for all Wilsonville homes was about seven weeks.