Archive for January, 2012
January 31st, 2012 | 
Author: by Lee Davies
While everyone wants to know when the housing market is going to rebound, the exciting news for those of us in the industry is that this may be the year of the flat line! Since June of 2006 we have watched market values erode, in excess of 10% per year for a couple of years, but in 2010 the rate slowed to 8.7%, and this past year according to Standard and Poors Case Shiller index, Portland’s values decreased only 4.7%. For many folks this may still seem disappointing, but for home buyers this is excellent news, especially when you combine it with the fact that mortgage interest rates have set new record lows in the 4% range. However, this is only one form of measurement, so here are some items that we, the troops on the ground here in Portland, would like to convey.
Year End Stats: 2010 2011
Inventory is Down 45,691 34,084
Sales Units are Up 18,926 19,682
Market Absorption Improved 7.9 5.3
It is common knowledge that, as inventory tightens, price begins to stabilize, and we are seeing it on the front line when working with buyers. In years past we touted that the reason to buy now was that buyers finally had the ability to shop as there was a broad selection of homes. Today, we have more buyers than sellers who are eager to snatch up a home at a 4% fixed rate mortgage, but the selection is not there. Buyers, like Realtors, are anticipating the typical increase in inventory this spring as home sellers wait for the sunshine to show their homes. But in the past few years, the carryover of inventory of available homes caused a glut of inventory in the spring. This is not the case today.
At the end of 2008, the actual market absorption (time needed to clear out the current inventory of available homes) was over 14 months. Today, those rates are down to 5-8 months. The actual market absorption rate for your home may still be higher or lower than these figures and that is dependent on your location, price range, property type (single family home, condominium, acreage, etc).
Another positive indicator is lot sales. Between 2008 and 2010, very few, if any, builders were buying lots as there was no available financing, and by the time builders would finish building the home, it was apparent based on market trends that the home could be worth 10% less than what they had projected. A leading optimistic trend is that builders are now buying lots; in fact they are scrambling for them. Some are able to get some traditional financing, but most have established creative private sources of funding to conduct business. In 2009, based on the market absorption, it was not uncommon to see that there was a 3 year supply of available lots, and now that figure is closer to a one year supply, but worse yet, much of the supply is made up of the “left overs” – the least desirable lots.
Finally, it was recently reported in the Oregonian, that the actual number of foreclosures in Portland was lower than anticipated, once again suggesting when combined with these other bench marks, that the market appears to be stabilizing.
If you would like to know specifically where your property stands, or would like to begin formulating your real estate/home buying, selling, downsizing, or upsizing plan, please contact one of our brokers. In my opinion, this is a very pivotal time to either make the move or develop your strategy for the years.
by Suzanne Stevens, Web Editor – Portland Business Journal
The foreclosure market in Oregon and nationwide improved in 2011, though foreclosures could tick higher this year.
The number of homeowners in Oregon who dealt with some form of foreclosure filing in 2011 dropped 39.14 percent from the previous year and 34.08 percent from 2009.
According to a year-end market report from Irvine, Calif.-based real estate data firm RealtyTrac there were 22,492 foreclosure filings in Oregon last year, or one for every 73 households. That ranked Oregon No. 14 nationwide in terms of the percent of homes in foreclosure.
The average price of a foreclosed home in Oregon is $171,044. According to the most recent data from the Regional Multiple Listing Service, the median price of Portland home not in foreclosure was $225,000 in November.
Multnomah County had the state’s highest level of foreclosure activity in 2011, with 3,335 foreclosed homes.
Nationally, there were 1.89 million homes in some stage of foreclosure last year, down 34.27 percent from 2010 and 33.17 percent from 2009.
While foreclosure activity in 2011 was at its lowest level since 2007, there could be jump in the numbers this year as lenders continue to work through a backlog of distressed mortgages.
“The lack of clarity regarding many of the documentation and legal issues plaguing the foreclosure industry means that we are continuing to see a highly dysfunctional foreclosure process that is inefficiently dealing with delinquent mortgages,” said RealtyTrac CEO Brandon Moore in a statement. “There were strong signs in the second half of 2011 that lenders are finally beginning to push through some of the delayed foreclosures in select local markets. We expect that trend to continue this year, boosting foreclosure activity for 2012 higher than it was in 2011, though still below the peak of 2010.”
