Opening bid prices are 47% below current list prices and in some cases, 70% off the original list prices published during the go-go days of the 2005 bubble market. For example, studio prices start at $110,000. At the high-end, a 3,456 sq. ft. 3-bedroom/3.5 bathroom unit on the 30th floor starts at $600,000. It’s current list price is $1,149,000.

Where pricing will end up is anyone’s guess, but for comparison purposes, the Atwater Place auction averaged $300 per sq. ft. back in September 2009.

Bidders can attend the April 11 auction with a $5,000 cashier’s check and a preapproval by one of the project’s preferred lenders (or proof of funds, if cash). Using a preferred lender may provide you with a $3,000 credit toward your closing costs. The transaction must close by May 26, 2010.

You must register before April 8, and if you want your own agent to advise you on your purchase, you must register them with the John Ross sales office upon your first visit.

To date, the building has sold 223 of 303 total units, and spokesmen are hopeful they can get FHA lending qualification on the building in time for the auction.

More information on the John Ross auction:
Here is the auction site, auction brochure, and Term & Conditions document.

From the New York Times comes:

More than five million households are behind on their mortgages and risk foreclosure. The government’s $75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done.

In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave. This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.

Taking effect on April 5, the program could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.

Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in “relocation assistance.”

The full article at the New York Times.

I put together a graph showing Portland-area median sale prices by month from 2000 through 2009.

The smooth curves show annual growth rates between 3% and 6% (from bottom to top) if you had purchased the median-priced home in January 2000. From 2000 through early 2004, home prices rose consistently in the 3 to 4% range. Then you can see the bubble pricing taking effect, jumping the growth curves and peaking in the summer of 2007.

The mid part of 2009 showed a plateau of $250,000 for a few months in a row, but even with homebuyer tax rebates and low interest rates, prices have continued their descent. Prices are now roughly equivalent with those of early 2005.

Click for a larger image.

Again, this is just a broad look at median pricing for the metro area in general (Portland, its suburbs, plus Yamhill and Columbia counties). I suspect the closer-in neighborhoods would fare better than the outlying areas, but that’s just an educated guess.

The question remains. When federal stimulus and interest rate support programs expire, what will happen to the market?

The New York Times releases another of their nifty interactive graphs to compare markets. Be sure to click on Portland in the list.

Link to NY Times chart.

Except median sale prices, which were down 4% from January 2009 and 3.7% from last month. Prices are now off 20% from the peak values registered the summer of 2007.

Even the good news is a little hollow if you think about it. If you recall, January 2009 was the weakest home sale month in RMLS recorded history: just 732 homes throughout the metropolitan area. Last month, 986 homes closed escrow, but it was only the third-worst sales result recorded.

If there is a bright spot, it’s that 1,535 homes went sale pending in January–transactions that will close in February and March. The homebuyer tax credit may create some additional interest over the next couple months, but it sure didn’t have an effect on January.

North Portland stands out as a market area where inventory is moving the quickest (56 days on market compared to the 145 days average throughout the Portland area). That’s perhaps due to affordability and relative proximity to downtown.

Market Summary

Below is activity by market area. Please note that the median and average sale prices are year-to-date (or in this case, just for January 2010), 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

First, the Federal Reserve will discontinue its purchase of mortgage-backed securities, which has artificially kept mortgage rates down. Then, the homebuyer tax credits will expire at mid-year, leaving the housing market to fend for itself.

How will it do?

The New York Times hit that subject today, and while Portland is no Elkhart, Indiana, I do worry about the second half of the year here.

…it is uncertain whether the government can really pull back without sending housing markets into another tailspin. “A rise in rates would kill us all by itself,” Ms. Swartley (Elkhart Realtor) said.

The Obama administration has offered few ideas about reforming the housing market. Proposals for the future of Fannie Mae and Freddie Mac, the mortgage holding companies taken over by the government at the height of the crisis, were supposed to be introduced with the president’s budget this month. They were not.

The government programs, however crucial, are distorting the market. The tax credit produced sales last fall, but some lenders here say it has troubling implications.

Troubling, indeed. Read the full NYT article here.

Photo by pfala, used under Creative Commons license.

Here’s a 4-minute video showing why (some) banks aren’t really interested in HARP refinances or modification:

Click here to view the embedded video.

Hat tip to Ralph Olson at Pacific West Appraisal.

If you want an assured ticket for Portland’s popular modern home tour (April 17), you might have to pony up early.

The 2010 edition of the Street of Eames will be the last. And tickets will disappear in a matter of minutes.

However, from an announcement this week from the organizers of the Street of Eames home tour:

Tour tickets go on sale Monday, Feb. 22. But, as we did last year, we are selling advance tickets (with a donation) now so you can be sure of getting in.

Effective through Feb. 21, you can purchase tickets at $250 per pair. This includes two $50 tickets and a tax-deductible donation of $150 to the Street of Eames Fund, which supports after-school programs for homeless elementary school students in Portland Public Schools.

We have sold out every tour every year so buy your advance tickets now and make a difference for our city’s neediest children.

The April 17th tour, the fifth and final Street of Eames, will feature eight fabulous houses!

For more information, go to streetofeames.org. And follow us on Twitter @StreetofEames for updates as well as tour-day traffic alerts.

It’s two minutes and forty-seven seconds of epic flameouts. Enjoy.

Ouch.

In a move to minimize its own insolvency and avoid a bailout, the FHA is refining its lending guidelines and raising fees to borrowers.

In changes expected to occur in the first half of 2010, FHA-insured loans will require:

• Up-front mortgage insurance premiums to be 2.25% (up from 1.75% currently).
• Minimum FICO credit score of 580. Lower credit scores will require a 10% downpayment.
• Sellers limiting credits toward buyer’s closing costs and prepaid expenses to 3% (currently 6%).

From USA Today:

The changes, aimed at strengthening the FHA’s reserves in the face of rising foreclosures, shouldn’t hurt too many borrowers, officials say.

“We don’t expect this to have a significant impact on the housing market,” says FHA Commissioner David Stevens, adding that “the moves are designed to get the reserves back up.”

The FHA is playing a greater role in the mortgage market, insuring about 30% of new loans, up from 3% in 2007. Growing defaults have cut its reserves below the level mandated by Congress, leading to fears that it might need a taxpayer bailout.