Portland Oregon Real Estate Agent Blog

Case-Shiller Numbers Begin to Settle - Portland Ranks Mid-Pack

Ron Ares — Tue, 30 Jun 2009 15:55:49 +0000

Those looking for a glimpse of blue sky amid the cloud layer covering the housing market may catch a peek today, based on April 2009 results of the Standard & Poors Case-Shiller Home Price Index.

The index shows that price declines were slowing in the 10 and 20-City composites. On average, major metro areas have seen 18% annual decreases in home values, but the month-over-month declines are slowing.

By comparison, Portland registered a record 16%, one-year decline in home values. The result is a little better than the overall average, and ranks 8th in the 20-city survey. April’s -0.6% decline over March was better than March/February’s -2.1% dip. Home prices in Portland are now comparable to those of May 2005. Nationally, prices are closer to mid-2003 vintage.

From David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s:

“While one month’s data cannot determine if a turnaround has begun; it seems that some stabilization may be appearing in some of the regions. We are entering the seasonally strong period in the housing market, so it will take some time to determine if a recovery is really here. The stock market bottomed in March and measures of consumer confidence have turned upward. This report shows that these better spirits are also appearing in the housing market”

Case-Shiller Home Price Index - April 2009

(Sorted by 1-year % change)

Metropolitan Area	April 2009 Level	April/March Change (%)	March/February Change (%)	1-Year Change (%)
Denver	122.17	1.50%	0.10%	-4.90%
Dallas	114.39	1.70%	0.10%	-5.00%
Boston	146.45	0.40%	-2.00%	-7.70%
Charlotte	118.69	-0.50%	0.30%	-10.00%
Cleveland	98.07	1.20%	-0.90%	-10.50%
New York	170.33	-1.70%	-2.60%	-12.50%
Atlanta	105.36	0.30%	-1.50%	-14.80%
Portland	146.85	-0.60%	-2.10%	-16.00%
Seattle	149.38	0.20%	-2.00%	-16.80%
Washington	167.30	0.80%	-1.30%	-16.90%
Chicago	122.30	0.00%	3.10%	-18.70%
San Diego	144.43	-0.10%	-1.50%	-20.00%
Los Angeles	159.37	-0.90%	-1.40%	-21.30%
Tampa	140.41	-0.70%	-2.70%	-21.30%
Minneapolis	108.63	-0.70%	-5.90%	-22.10%
Detroit	69.92	-1.50%	-4.90%	-25.40%
Miami	145.77	-2.00%	-3.60%	-27.30%
San Francisco	118.46	0.60%	-2.20%	-28.00%
Las Vegas	112.39	-3.50%	-3.80%	-32.20%
Phoenix	104.45	-2.20%	-4.50%	-35.30%
Composite-10	150.34	-0.70%	-2.10%	-18.00%
Composite-20	139.18	-0.60%	-2.20%	-18.10%

Full details can be found at www.homeprice.standardandpoors.com.

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Portland Oregon Real Estate Market Activity - May 2009

Ron Ares — Wed, 17 Jun 2009 16:12:59 +0000

The Portland real estate market held steady through the month of May, posting modest month-over-month increases in closed and pending homes sales, while average and median sale prices remained flat compared to April. Year-to-date, the Portland metro area has sold 28% fewer homes than in the January - May 2008 period. Median and sale prices for May are down 13% from one year ago.

Interestingly, available home inventory remained virtually flat for the month. With the slight uptick in closed sales and fewer new listings than the seasonal norm, the housing inventory of 14,493 active listings would take 10.2 months to sell at current sales pace–the lowest mark since August of 2008.

So, is this nominal performance GOOD news? I suppose it should be viewed as positive. My buyer list is busy, and many agents I talk to say the same. Low rates, first-time buyer incentives, and a perception that prices are getting near the bottom are certainly having an effect.

On the other hand, I am worried about Oregon’s 12%+ unemployment and the downstream effects. Also, the activity induced by the first-time buyer tax credit activity will begin to recede in the next few months unless the timeframe is extended by the government. I mentioned earlier, that some market areas have up to 25% of their inventory in some form of short sale or repossessed foreclosure, so there are many homes that need to be absorbed, but are hard to buy right now.

I think this plateau of activity will continue through the summer and then we’ll see the seasonal activity dip again toward the end of the year which will put some downward pressure on prices.

Here is May 2009’s market activity summary:

Market Summary

	May 2009	Prev. Month April 2009	Last Year May 2008
Median Sale Price	$250,000	$249,900	$287,500
Average Sale Price	$291,400	$291,100	$335,000
Closed Sales	1,427	1,302	1,863
Pending Sales	1,967	1,860	2,124
New Listings	3,879	3,808	5,182
Active Listings	14,493	14,328	17,066
Total Market Time *	147 days	148 days	n/a
Inventory (in months)	10.2	11.0	9.2

Here is activity by market area. Please note that the median and average sale prices are year-to-date, and the appreciation numbers are a 12-month average compared to the previous 12-month average. Total market time is the number of days between the date it went on the market and when it received an acceptable offer.

Market Report by Area

Area	YTD Avg. Sale Price	YTD Median Sale Price	12-Mo. Appreciation	Total Mkt Time*
Lake Oswego / West Linn	$464,400	$390,000	-10.2%	150
West Portland & Downtown	$438,900	$357,000	-2.2%	165
NW Washington County	$375,200	$350,000	-5.9%	190
Tigard / Tualatin / Sherwood / Wilsonville	$318,200	$298,300	-7.8%	161
Northeast Portland	$294,600	$258,000	-4.3%	96
Milwaukie / Clackamas	$293,300	$265,000	-7.5%	175
Oregon City / Canby	$286,400	$246,000	-11.7%	155
Hillsboro / Forest Grove	$250,300	$229,500	-9.2%	168
Beaverton / Aloha	$249,200	$230,000	-7.6%	133
Southeast Portland	$241,800	$215,000	-7.7%	110
Yamhill County	$235,800	$215,000	-10.4%	196
North Portland	$232,700	$230,000	-6.4%	120
Gresham / Troutdale	$228,700	$215,000	-11.3%	154
Columbia County	$185,600	$178,900	-12.5%	175

Data courtesy of RMLS, June 2009.

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Friday Night Lites

Ron Ares — Fri, 12 Jun 2009 19:30:26 +0000

Just a few news items to wrap up this week in Portland real estate:

Portland real estate prices stay level, sales on modest climb for May

RMLS official tabulations for May 2009 will come out next week, but my early review shows that closed sales continue a small month-over-month increase (a seasonal effect), and median and average sale prices were essentially flat from the previous month. Closed sales will show to be up 10% over April, but down by ~30% from one year ago. Both median and average sale prices are around 13% off levels from a year ago. Come back early next week for a full report.

Oregon foreclosures nearly double in a year

A recent tabulation of foreclosure activity in Oregon shows a nearly 90% increase compared to May 2008. One out of every 525 Oregon homes received a foreclosure filing in May–the nation’s 12th highest rate.

Oregon to get a head start on recovery?

Really? Why? From research by Moody’s:

High-tech industry is one element. A slowdown in technology spending in 2008 and 2009 has created a pent-up demand for technology — businesses that know they need to upgrade and are waiting for the ability to spend.

“States that have a high concentration in tech-related industries are well positioned to take advantage of this trend, which is particularly true of Colorado, Idaho, Oregon and Washington and to a lesser extent Texas,” said economist Andrew Gledhill of Moody’s Economy.com.

I certainly hope the prediction is true, but I suspect digging out of a 12% unemployment hole will take longer than expected. (And wasn’t Moody’s one of those rating companies that suggested those mortgage-backed securities were AAA rated?)

Bike community letting it all hang out

Last, but not least, the Portland bike community celebrates it’s version of the World Naked Bike Ride on June 13 with a series of events. If you’re in the vicinity of NE 39th and Glisan around 2PM, you’re bound to get an eyeful during the Sunny Nekkid Ride (fair warning!). The big event is at midnight, and last year, 2,000 riders participated.

Photo by jd.inaz. Used under Creative Commons license.

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HUD Clarifies $8,000 Homebuyer Tax Credit Plan, Sort Of

Ron Ares — Thu, 04 Jun 2009 16:20:13 +0000

After a bit of a false start a couple weeks ago, the Department of Housing and Urban Development has figured out how to monetize the $8,000 first-time homebuyer tax credit for FHA-insured loans and allow its use in advance of filing a tax return.

Unfortunately, there’s still some minutiae to navigate.

From the HUD press release:

The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today’s announcement details FHA’s rules allowing state Housing Finance Agencies and certain non-profits to “monetize” up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate.

Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today’s announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower’s own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. Today’s action permits the first-time homebuyer’s anticipated tax credit under the Recovery Act to be applied toward the family’s home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit. [Emphases mine.]

The National Association of Home Builders (NAHB) estimates the Administration’s homebuyer tax credit will stimulate 160,000 home sales across the nation - over 60% of which will be first-time buyers who will receive the credit. The NAHB figures another nearly 60,000 existing homeowners will be able to buy another home because a first-time buyer purchased their home using this strategy.

Washington State loan originator Rhonda Porter hits the highlights on her mortgage blog. Jeff Belonger, at The FHA Expert, touches on the fine points of how the credit can can be applied.

Photo by Aaron Hockley, used under Creative Commons license. (No correlation to the article. I just like it.)

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Nearly 20% of Portland Homes in Distress Sale Status

Ron Ares — Fri, 29 May 2009 15:53:00 +0000

I have viewed hundreds of homes this year and it’s become very common to show one or two short-sale and bank-owned properties to a client during a given tour. That’s because nearly 18% of active listings fall into one of those categories — around 2,600 total across the Portland metro area.

Approximately 14% of active listings are short sales and 4% are homes already foreclosed upon and returned to the bank (REOs). The worst hit areas are Gresham, Beaverton, and Happy Valley, where a quarter of the inventory is either a foreclosure or on its way.

One caveat: Many of the properties in short sale status have offers pending, but lender response times for these transactions can take several weeks, even months. Therefore, the short sale inventory lingers in active status much longer than typical transactions.

Here’s a breakdown by market area, as of May 27, 2009.

Area	Bank-Owned Properties (Foreclosed)	3rd-Party Approval Needed* (Short Sales)
Beaverton / Aloha	5%	21%
Gresham / Troutdale	7%	19%
Milwaukie / Clackamas	6%	19%
Southeast Portland	5%	17%
Hillsboro / Forest Grove	3%	18%
Tigard / Tualatin / Sherwood / Wilsonville	3%	17%
Oregon City / Canby	3%	15%
Northeast Portland	4%	13%
Columbia County	4%	12%
Lake Oswego / West Linn	3%	9%
Yamhill County	3%	9%
North Portland	2%	9%
NW Washington County	2%	9%
West Portland & Downtown	2%	8%

*Third-party approval usually means a bank must approve a sale. Sometimes it means the property is in an estate and requires approval by an executor, but I scrubbed most of those properties out of the data.

If dabbling in distress properties is your cup of tea, drop me a line and I’ll send you the list of properties in the areas you’re interested.

Data courtesy of RMLS.

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Late Mortgage Payments Rise in Oregon

Ron Ares — Fri, 29 May 2009 01:37:17 +0000

The Mortgage Bankers Association reports that 7.5% of mortgages are at least one month late in Oregon. And the worse may be yet to come.

As reported on the Oregonian’s Front Porch blog by Ryan Frank, delinquent mortgages are among the highest in the last 30 years.

Since record keeping began in 1979, the only two quarters with higher rates came in 1985 when a nasty recession rocked Oregon’s timber-heavy economy.

Compared to a year ago, the number of troubled mortgages has doubled to 47,700.

The MBA suggests that unemployment rates are fueling delinquencies and won’t subside until mid-2010.

Jay Brinkmann, the chief economist for the mortgage bankers group, said that the number of prime mortgages going into foreclosure would only increase with more job losses expected. “What is the outlook going forward? Well, delinquencies are very much tied to employment,” he said.

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No. That’s not Mickey Mouse in your sewer line.

Ron Ares — Fri, 22 May 2009 02:41:04 +0000

You just never know what you’ll run into during a home inspection. Here’s my latest sewer inspection (scope) result. The audio starts at 10 seconds and ends at around 50 seconds:

Click here to view the embedded video.

As you can hear, the inspector is delighted (”Sweet!”), not because he found rats in the sewer, but because he got some video footage of rats to share in his training sessions. I’m the one chuckling, nervously, in the background.

The buyers, um, did not find much humor in the discovery. In this case, however, the hole was near the city main, past the curb out in the street and will be the city’s repair.

But, here’s the point. I’ve had three sewer scopes done in past few weeks. And all three failed due to bellies (low points that hold water and waste) or separated joints in the pipe that will eventually cause problems. Even on new construction, it’s worth the $100 test fee, even if you don’t find rats.

UPDATE 07/01/2009:
If you thought that was gross, check out this sewer footage from North Carolina (hat tip Mike Rohrig).

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Portland Real Estate Market Activity - April 2009

Ron Ares — Tue, 19 May 2009 14:57:59 +0000

Traditional seasonal activity has Portland’s real estate market on the upswing, however the gains are modest.

Closed sales in April 2009 increased over March by 10% and pending sales (homes under contract) rose 13.6%. The month’s closed sales of 1,302 are 40% lower than the average number of April sales going back to 2000.

Inventory remained relatively flat, ending April with the market netting an additional 170 active listings. The number of active listings divided by the closed sales yields 11.0 months available inventory. Sold homes took an average of 4.8 months to receive an offer.

The median sale price is up 1.4% over March, but the average sale price is down 2.0%. On a year-to-year basis, prices are down 9.1% and 10.4% respectively for median and average. Prices are off 17-18% from the peak market values of August 2007. In other words, a house selling for the median price in August 2007 at $302,000 would conceivably sell now for around $250,000.

Home prices are bouncing around some, a sign some believe is indicative of the beginning of ‘the bottom’. I’m not so sure. The effects of rapid unemployment signals additional housing stress that we haven’t fully experienced yet. I don’t have any hard evidence, but it seems to me that short sale listings are on the increase.

Market Summary

	April 2009	Prev. Month March 2009	Last Year April 2008
Median Sale Price	$249,900	$246,400	$275,000
Average Sale Price	$291,100	$297,400	$325,000
Closed Sales	1,302	1,184	1,582
Pending Sales	1,860	1,637	2,070
New Listings	3,808	3,685	5,295
Active Listings	14,328	14,158	16,370
Total Market Time *	148 days	156 days	n/a
Inventory (in months)	11.0	12.0	10.3

Market Report by Area

Area	YTD Avg. Sale Price	YTD Median Sale Price	12-Mo. Appreciation	Total Mkt Time*
Lake Oswego / West Linn	$484,400	$395,000	-9.1%	178
West Portland & Downtown	$446,000	$352,500	-2.6%	154
NW Washington County	$363,000	$333,800	-5.8%	135
Tigard / Tualatin / Sherwood / Wilsonville	$320,700	$304,400	-8.0%	158
Oregon City / Canby	$299,800	$248,900	-9.0%	147
Northeast Portland	$297,100	$259,900	-3.0%	107
Milwaukie / Clackamas	$296,300	$265,000	-8.2%	185
Beaverton / Aloha	$249,000	$231,500	-6.6%	126
Hillsboro / Forest Grove	$245,500	$225,700	-9.6%	165
Southeast Portland	$240,800	$215,000	-6.2%	127
Yamhill County	$238,600	$214,000	-9.0%	164
North Portland	$234,500	$236,300	-5.1%	113
Gresham / Troutdale	$228,200	$213,500	-9.1%	167
Columbia County	$179,900	$170,000	-11.1%	185

Data courtesy of RMLS, May 2009.

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Nice City, No Jobs.

Ron Ares — Mon, 18 May 2009 14:52:46 +0000

Balancing last week’s gushing by the NY Times, here’s a Wall Street Journal expose, “Youth Magnet Cities Hit Midlife Crisis‘, highlighting the lack of employment in Portland for its new, young residents.

Portland has attracted college-educated, single people between the ages of 25 and 39 at a higher rate than most other cities in the country. Between 1995 and 2000, the city added 268 people in that demographic group for every 1,000 of the same group living there in 1995, according to the Census Bureau. Only four other metropolitan areas had a higher ratio.

Small problem. No jobs.

Some new arrivals are burning through their savings as they hunt for jobs that no longer exist. Some are returning home. Others are settling for low-paying jobs they are overqualified for.

Full article here.

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The Gray Lady Continues Her Love Affair with Portland

Ron Ares — Mon, 11 May 2009 18:20:25 +0000

Here’s yet another travel article about Portland from the New York Times by Matt Gross, the Frugal Traveler–this time heralding Portland’s cheap(er) eats, sights, travel, and lodging.

Here’s the article and a corresponding slideshow.

Photo credit: Leah Nash for The New York Times

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