It’s no longer just a slowdown: Portland-area home prices have begun to slide after a long post-recession boom, according to one industry measure.

An index from the real estate website Zillow says the area’s median home value reached a peak $399,300 in February. It’s since fallen ever so slightly to $397,400 in April.

The decline is small, but the index uses a rolling average and seasonal adjustment to iron out volatility. Prices remain 3% higher than they were a year earlier, but the company’s seasonally adjusted index has shown declines for two months in a row.

Before March, the last time Zillow reported a decline in metro home prices was February 2012.

Home prices have slowed across the country but overheated West Coast markets have seen a more dramatic turnaround. According to Zillow, home values in Southern California, the Bay Area and Seattle all turned negative before Portland.

The decline is a sign of lingering volatility from the housing bubble, the subsequent bust and the rapid rebound, said Zillow economist Skylar Olsen.

The rebound pushed prices out of reach for the typical homebuyer, she said.

“We’re talking about an affordability issue and demand being unable to keep pace,” Olsen said.

After prices bottomed out in the crash, they started rising again, fast. Portland saw prices grow by 10 percent or more in a year. They reached their previous peak in 2007 — and then they kept going.

Buyers grew increasingly competitive over a shrinking inventory of homes for sale, setting off bidding wars.

Eventually, prices grew higher than the average homebuyer can comfortably afford. Portland metro home prices are now 35% higher than they were at the peak of the bubble.

Today in Portland, home sales have slowed. The inventory of homes is growing and houses are sitting on the market longer.

Tim Duy, a University of Oregon economist, said the decline reported by Zillow tracks with other indicators.

“This is broadly consistent with other price measures which show that housing price growth in the Portland area slowed to a crawl beginning in the second half of last year,” Duy said. “Price growth became unsustainable given income growth and, unlike the 2000s, lenders were not able to bring exotic mortgages into play to sustain rapid price appreciation.”

The price slump might be good news for would-be homeowners who have struggled to save enough for a down payment — a moving target when prices are climbing rapidly.

The turnaround in prices, however, isn’t being felt evenly across the Portland area.

Prices continue to rise at the low end of the market — in more affordable neighborhoods and for smaller homes that are affordable to first-time buyers — while the high end of the market has seen the biggest slowdowns.

Another measure, looking only at homes that recently sold, paints a similar picture to Zillow’s numbers.

The Regional Multiple Listing Service reported this week the median price for homes sold in April hovered at $405,000, unchanged from a year earlier.

Closed sales declined 4.5% year-over-year, RMLS reported, and homes that did sell in April spent 11 more days on the market on average than those that sold during the same month a year earlier.

-- Elliot Njus

enjus@oregonian.com; 503-294-5034; @enjus

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