Which Northwest city was hit hardest in 2007? Difficult to say. Each of these cities were hit equally hard.

However, these cities may have narrowly missed the negative equity tide that washed away markets in a number of California cities, especially Vallejo.

In fact, the charts below suggest that the NW is pulling out of a relatively mild real estate slump.

First, Eugene..

Then Portland..

And Seattle..

Thanks again to Zillow for the amazing “open source” statistics!

Popularity: 47% [?]

Oregon manages to cherry-pick consumers from CA and WA, mostly along the State borders, by holding to a “no sales tax” policy. High hotel/motel room taxes help to make up for this, and the dollars spent in Oregon add to economic competitiveness, although there may be better ways to lure dollars and jobs to Oregon.

The WSJ today includes an op-ed article that provides some insight into why high State income and sales taxes drive people away. CA is used a great example; that while the weather in CA, especially So. Cal, is compelling, this has not been enough to keep its immigration balance out of negative territory.

So where does Oregon sit on the list competitive States? Nowhere in the top ten.

Oregon has managed to avoid large-scale home price re-adjustments in 2007. If the State remains economically less competitive than other Western States, there is no guarantee that this impressive NW bubble of home price protection will protect Oregon homeowners for years to come. It’s human nature to believe that during good times, those good times will last forever..

Popularity: 32% [?]

I can’t figure out how second homes near the Sierras could trump property tax rates in Eugene. $3200 for a $500k home is about 40% less than anyone would pay for the same home in Eugene. Yet Oregon (and Eugene) is not on Forbes’ list of cities/counties with the priciest property taxes. Huh?

Since property taxes in Eugene are relatively high, I thought I should poll you, the great and powerful reader, to see what you think about replacing some or all of Oregon’s property taxes with a progressive consumption tax.

Here’s your take so far:

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Popularity: 25% [?]

Coinciding with their 2006 home values report, Zillow also blogged about it.

Judging from their blog post, one thing Zillow understands well is that the data can’t explain everything - or WHO is impacted. Local resources/knowledge are necessary to paint a picture of why one region might have declining home prices, while another (read: NW) can continue to grow at 10%+.

One explanation, aside from general desirability for those who don’t mind a little winter rain: growth management. The NW, relative to most other regions in the country, especially relative to the Southeastern US, tends to push a controlled pattern of development in which city and county counselors, as well as the citizenry assert significant influence over new and existing development projects.

Does this mean that counselors should be responsible for also providing the public with adequate living wage housing for those who can’t afford to get into a starter home at $200k+? You bet. A single income mother with three children, unless she’s a lawyer, is unlikely to be in a position to buy a starter home in the Northwest.

I don’t accept that housing prices would decline if people who previously couldn’t buy a starter home, could find options in the $120-170k range. Those people would not have contributed to the housing boom in the first place, although by renting they apply pressure to the speculative and rental market in a way that might depress home prices initially. Free markets are great for many, but they are a numbers game, a zero sum game that doesn’t determine a person’s true value to society. Eugene should attempt to do more than just limit development for the privileged 60% (Friends of Eugene) who already own a home or are established here.

Popularity: 13% [?]