CINCINNATI (TDB) -- Advocates of building a streetcar line in Cincinnati could be right. The $182 million project might trigger a housing and commercial revival. But real estate prices have collapsed in Portland, the Oregon city whose 9-year-old streetcar system has been held up as a model. The Portland Real Estate Blog reported earlier this month the city's real estate market is miserable:
"Issued building permits through October declined across the country with Portland and other Oregon markets fairing worse than the national and regional averages." (The data in the graph above is from the National Association of Home Builders.)
And The Cincy Blog noted this week that Portland's home prices have deflated at rates few U.S. metropolitan areas have seen: "Good news for property owners around greater Cincinnati- we’re not listed in the recent Forbes Magazine article naming U.S. cities with the fastest-falling housing prices."
Where have home prices fallen the most? Here's the list:
1. San Diego-Carlsbad-San Marcos, Cal.
2. Salt Lake City, Ut.
3. Charlotte-Gastonia-Concord, N.C.-S.C.
4. Denver-Aurora, Co.
5. Portland-Vancouver-Beaverton, Or.-Wa.
6. Atlanta-Sandy Springs-Marietta, Ga.
7. San Jose-Sunnyvale-Santa Clara, Cal.
8. San Francisco-Oakland-Fremont, Cal.
9. Austin-Round Rock, Tex.
10. Seattle-Tacoma-Bellevue, Wash.
None of this suggests that a Cincinnati streetcar won't be economically viable. Nor does it mean that it won't be fun to ride. But the real estate data from Portland shows property values fluctuate based upon macroeconomic conditions. Reckless lending, Wall Street excess, financial shenanigans and high leverage presaged an overheated real estate market and the biggest economic blowup since the Great Depression. Streetcars didn't create the boom in Portland, and they didn't let the air out. Blame and credit seems to belong to a speculative bubble.