I'm sorry for everyone (myself included) who bought way high, but just maybe Portland homes in certain neighborhoods were ridiculously priced. I remember shaking my head at 500k bungalows in Peidmont 3-4 years back.

Isaak, I was shaking my head at 250k bungalows 15 years ago. I had no idea that it would get even worse after I'd moved out at the end of 1997.

I lucked out (skill had nothing to do with it) - bought a 2 br. at under $50k, sold at $140 and got into a larger place while the getting was good.

I have, for the last ten years, said that housing should not appreciate faster than inflation until we come up with a three earner family.

While Shiller is essentially saying the same thing, the prospect of a 30 something "child" bailing out most households is really not pleasant to contemplate.

You don't think the Urban Growth Boundary had anything to do with pushing those prices too high in the first place do you?

If it pushed them up, it certainly didn't keep them there.

Portland needs to stop preaching "smart growth" and go back to the Tom McCall principle of "no growth." Of course, that would involve running the apartment construction weasels out of town, but so be it.

Agree. We have had more than enough of this "smart growth" here.
Does anyone have stats on how many empty apts. condos, homes exist in pdx?

Portland needs to stop preaching "smart growth" and go back to the Tom McCall principle of "no growth."

How do we do that, though? It seems to me that if you don't allow anything to be built, you're still influencing the market (and it's probably illegal to prohibit all development).

Portland prices clearly were too high, and the bubble has burst. But we're still and have always been relatively affordable compared to Seattle, SF, and LA. Prices are likely to continue growing, as they have the last few months, but at a much slower rate than in the 90s and 00s. And that's probably a good thing overall.

How do we do that [no growth], though?

1. Strict, no expand policy for the UGB.
2. Strict zoning policy that sticks with existing densities unless it's traded for equivalent density somewhere else within the UGB.

Is it desirable? Probably not in its total form. Is it possible? Yes, I'd say.

The brand new house I bought from the builder in 1994 (not far from L&C in South Burlingame) is currently in escrow at $275,000. We paid $245,000 in 1994 and made substantial improvements to it over the years.

That's zero equity appreciation if you subtract inflation, after 17 years. Nevermind the $55k spent on property taxes, for living on an unpaved/unplowed road.

It is a short sale, but nicer homes in the neighborhood have sold for less.

There is some good news.

September for sale inventory is below 2006 levels. http://www.deptofnumbers.com/asking-prices/oregon/portland/

Affordability is at record levels with 30 yr interest rates at under 4%.

PLUS, those year over year numbers for July don't take into account the skewing of the market from the silly $8000 tax credit. Many "tax credit buyers" closed on their houses in July 2010.

Wendy C. is a pretty weak reporter, the Journal would do well to take her off that position.

Price of homes? - or enormous taxes, only to get higher as insane decisions by are being made by officials - that will drive people out and keep others from wanting to come in?

I find it funny that the old rule of you can only buy a home that is twice your annual income was tossed on the scrap heap as prices rose.

I must have missed the memo that the principles of economics had been changed and that you no longer had to worry about your ability to repay a loan.

But Obama won the Nobel Peace prize, so I guess a lot of principles have been changed.

But Obama won the Nobel Peace prize, so I guess a lot of principles have been changed.

If I'm not mistaken, Ralph, the run-up occurred prior to Obama cominhg into office. And it was already crashing by the time he was in power.

Ours in Medford has lost 50 percent from purchase spring 2007 to appraisal last week and even the County assessment. A realtor friend tells me another flood of foreclosures is on the way very shortly because the banks finally have the paperwork (titles, etc.) together that they overlooked in the mad rush of mass mortgage bundles.

Average price will continue to fall until it bears some rational relationship to average household income. And it's a long way to that bottom.

Individually RE will continue to be the shark tank it's been forever, only more so. "Affordability" indeed.

My wife bought a $25K two-bedroom bungalow and we finished paying it off in 1997, when the 1950's duplex next door went price ballistic. I shook my head then, and every three years thereafter, as the outrageous real estate prices inflated beyond all reason.

That the market would lose that size chunk of value in three years is testament to the level of shenanigans that the finance industry got into and we bailed them out. Forking ingrates.

Those of you who are hurting now, well...you weren't paying attention when you should have been, and you bought a pig in a poke. Now you've nothing but a shipload of pork going bad. Thank the dumbship developers and their dumbship local officials....like the current city council.