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Nearly 20% of Portland Homes in Distress Sale Status
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.
Late Mortgage Payments Rise in Oregon
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.
California, Arizona, Nevada, and Florida are still among top foreclosure states. These four states account for nearly half of the national foreclosure events alone.
No. That’s not Mickey Mouse in your sewer line.
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:
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).
Portland Real Estate Market Activity – April 2009
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.
Nice City, No Jobs.
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.
The Gray Lady Continues Her Love Affair with Portland
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
Are national banks shaking down loan applicants for mortgage estimates?
Steve Duin pens an interesting column today in The Oregonian, titled “There goes the neighborhood bank“. Essentially, he suggests that some (formerly) local neighborhood banks are shaking down loan applicants for non-refundable, mortgage “commitment” fees. In other words, they’re now charging a $500 – $750 upfront fee to provide a Good Faith Estimate.
Duin cites JP Morgan Chase (new owner of Washington Mutual) as dinging a banking customer $750 for quoting a refinance rate–one that ultimately wasn’t competitive with another lender’s offer. Refund? Tough luck, said Chase/WaMu.
Recently, I’ve been pointing clients to local mortgage brokers and small, regional banks because I’d been hearing that some of the larger banks (Wells, BofA, etc.) were taking no less than 6 weeks to fund loans. But this loan commitment fee is a new one to me. Anyone else experiencing this?
Portland Real Estate Market – Early Review of April Results
With much anecdotal evidence and hearsay to the contrary, the reality for the Portland real estate market is that activity continues to move at a sluggish pace.
My early peek shows around 1,250 homes closing escrow in April, and over 1,700 homes going sale pending for the month. Although the number of sales and pending properties are up about 6% from March, these numbers are well below seasonal averages. (Closed sales for April 2006-2008 were 2,558, 2,594, and 1,582 respectively.)
Median and average prices will be down 17-18% from their peaks. The average price will come in around $291,000, down about 2% from last month. The median will likely come in around $250,000, up 1.5% from last month–the fifth month that the median has bounced between $246,000 and $259,000. Active inventory is basically flat or up just a smidge.
Does it signal the bottom? Leave your guess in the comments.
The RMLS staff will clean up the numbers and have them out by the 15th, and I’ll do a full post by market area at that time.
One Less Foreclosure Victim
Not all foreclosure casualties get so lucky. Meet Nyree, a recent addition to the Ares family.
A few weeks ago, an associate lobbed an innocent email grenade into my inbox. She had been previewing homes and on this particular day, walked through a short-sale property.
The family was being displaced and couldn’t bring along their Australian cattledog. The email was signed with the kiss-of-death “I thought of you” ending.
This, of course, started a whirlwind of emails, visits, family arguments and predictably, an adoption. Call it the indomitable persuasiveness of a daughter and wife tag-team.
Despite my grousing, I must say it has worked out way better than I expected. I’m also happy to see that the family’s house is now sale-pending, hopefully allowing them out from under the pressure of foreclosure.
For her part, Nyree seems to like it here (at least that’s what she says). She and Foster herd each other all day long–that’s a zero sum game. Plus, she’s got squirrels to chase and a little girl to cuddle with. Win, win.
I’m not sure what they’re looking so smug about.
Back to real estate tomorrow–an early look at April sales results.
