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re:PDX is presented by Claire Widmark, broker affiliated with M Realty LLC in Portland, Oregon.
Phone: 971-275-3691
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Friday Night Lites
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.
HUD Clarifies $8,000 Homebuyer Tax Credit Plan, Sort Of
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.)
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.
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?
Free Home Ownership Preservation Counseling Event
Having trouble keeping your home? Get some help.
An re:PDX reader sends me a notice for an upcoming FREE event at the Rose Quarter that could help folks keep their homes:
Home Ownership Preservation Event
Saturday, May 2, 2009; 10am-7pm
Memorial Coliseum (300 Winning Way Portland OR 97227)
Get answers from government agencies, non-profit counselors, and lenders about:
- Refinancing your loan
- Modifying your loan
- New government housing programs
- Avoiding foreclosure scams
You can register and ask for a one-on-one session to talk with a counselor. You’ll need to bring a photo ID and copies of the following:
- 2008 W-2’s and tax returns
- Most recent 30 days paystubs and information of ALL sources of income including but not limited to rental, SSI, Disability, unemployment
- Two most recent bank statements from all checking/savings accounts
- Two months most recent mortgage statements
- Copies of your Deed of Trust and Note
- Current balances on ALL credit cards and other debts, child support, student loans , Equity loans. You can use as a reference the list available at: www.homesafepmi.com/bif/
- A copy of your credit records from the three credit bureaus. They may be obtained from www.annualcreditreport.com
It’s a FREE event. If you’re struggling with keeping your home, please take advantage. More details here.
Sponsored by:Mortgage Lending Education Board/OAMP, Bureau of Housing and Community Development, Oregon Department of Justice, Oregon Housing and Community Services, Portland Development Commission, NeighborWorks America, Oregon Department of Consumer and Business Services, Federal Reserve Bank of San Francisco.
Buyers Disappointed in this “Buyer’s Market”
In today’s Morning Edition on NPR, Portland is named by as one of the national housing markets whose prices are ‘sticky’ (i.e. not in freefall) by Karl Case of the famous Case Shiller/Standard & Poors housing index.
House prices are falling in most places, but for some buyers in Boston and other cities, they’re not falling far enough. Meantime, many who want to sell their houses are pulling back, waiting for a better market. This has buyers asking, “Where’s my bargain?”
I wholeheartedly agree that Portland falls into this category, and so do some of my buyer clients right now.
Listen to NPR’s Falling Prices Leave Home Buyers, Sellers in Limbo. (length 3:56)
Help for Troubled Homeowners
If you’re struggling to keep up with mortgage payments or have had events pushing you toward foreclosure, the federal government has released a website intended to help determine if you are eligible for a loan modification or refinance plan.
The site, MakingHomeAffordable.gov, provides some initial screening tools and advice for borrowers at risk of default. The site also provides links to FreddieMac and FannieMae loan look-up services, since only loans guaranteed by those organizations are eligible for the Making Home Affordable program.
The Fannie Mae form is at www.fanniemae.com/homeaffordable or borrowers can call (800) 732-6643. Freddie Mac’s information can be found at www.freddiemac.com/avoidforeclosure or by phone at (800) 373-3343.
You can also apply for help from your mortgage company by filling out an online application detailing your financial situation at HopeNow.com, a site sponsored by a consortium of mortgage servicers and nonprofit counselors.
What you DON’T want to do, is take an unsolicited telephone offer to help you with your mortage situation, as evidenced by this interesting exchange shared by Rhonda Porter at Seattle’s Rain City Guide.
Investigate options directly with your lender or through the federal government programs first. Scams abound.
NPR: Oregon Foreclosures Tied to Unemployment
NPR Morning Edition today picks up a local Oregon Public Broadcasting story about foreclosure in unexpected markets:
Some new states have moved into the top ten in the latest housing foreclosure figures: Illinois, Idaho and Oregon. They are states that had not suffered significantly in the subprime mortgage crisis until now. Growing unemployment may be forcing more and more people to give up on paying their mortgages.
Listen to the 3+ minute story here.
The story asserts the same view that I’ve held that the recent acceleration in distress sales in Oregon is due more to economic contraction, and not so much on speculative ownership or toxic loans.
Hat tip to Patrick Emerson at The Oregon Economics Blog.
Dohh! Even Homer is Not Immune
Homer Simpson loses his home to foreclosure, due to home equity loans financing his annual Mardi Gras parties.
Courtesy of Marlow at 360Digest.
