The upside of the Portland market compared to the West
Nationwide, we have finally seen a raise in median sales price in June which is very encouraging. And locally, we have reasonably good news as well. Our inventory of homes in the Portland Metro area has dropped to 8.2 months, which is the lowest level since August 2007. A comfortable inventory is around 4-5 months, which is the amount of time it would take for the current active listings to be sold. As well, according to DataQuick, foreclosed properties have only accounted for 17.2% of our total home sales in the last 12 months, whereas in the Western states, foreclosures have been HALF OR MORE of all resale activity!
Combined with the data that our median price drop in May has only been 12.7%, compared to vastly higher numbers in AZ, NV, and CA, we are in relatively good shape.
Friday, July 31, 2009
Tuesday, July 28, 2009
The Big Bad Wolf of Short Sales
The Big Bad Wolf of Short Sales
Would you let a wolf guard your sheep or count on a trained and loyal sheep dog?
This is what a lot of homeowners are doing when they allow an investor to sell and negotiate their short sales. They are called investors because they want to make money on the deal. In my opinion, this is perfectly ok! We live in America! But I, as the home owner, would not want them to make their money on me!
Here's an example: One of my clients received a call from an investor the other day explaining to them that they would buy the home and resell it and not charge any Realtor fees. This sounds great, but here is the truth: The investor will try to get the home at a discount so he can resell at a profit. Depending on the homeowner's situation, this could harm the client. Secondly, 90% of all short sales are not good investor’s purchases, unless the property is in major disrepair. The investor tries to get such a low price for the home that the banks will never take the deal and the home usually goes to foreclosure.
This is my advice - Find a real estate agent that is an expert in short sales. Remember the buzz word in the real estate community right now is "expert short sale agent", so everyone is claiming to be an expert. Here are two very important questions to ask an agent before you list your home with them: How many short sales have you successfully closed on the listing side? If the answer is below 50, I would keep looking. Secondly - Who does the negotiating? If the agent says that they do, be very careful, because they better have a team behind them doing everything else because short sales are very labor intensive. I don’t believe you can be an expert and not have a staff behind you. My team has successfully completed hundreds of short sale negotiations and we learn something every day.
There are times that investor purchases make good sense. If the property is in bad shape, if the seller's main goal is to stay in the house as long as possible, or the sellers of the home are going to or have filed bankruptcy. In some cases it does not matter what the home sells for, so investor low price purchases are fine. But in most cases, find a real estate agent that is a true expert.
Written by Nick Shivers
Would you let a wolf guard your sheep or count on a trained and loyal sheep dog?
This is what a lot of homeowners are doing when they allow an investor to sell and negotiate their short sales. They are called investors because they want to make money on the deal. In my opinion, this is perfectly ok! We live in America! But I, as the home owner, would not want them to make their money on me!
Here's an example: One of my clients received a call from an investor the other day explaining to them that they would buy the home and resell it and not charge any Realtor fees. This sounds great, but here is the truth: The investor will try to get the home at a discount so he can resell at a profit. Depending on the homeowner's situation, this could harm the client. Secondly, 90% of all short sales are not good investor’s purchases, unless the property is in major disrepair. The investor tries to get such a low price for the home that the banks will never take the deal and the home usually goes to foreclosure.
This is my advice - Find a real estate agent that is an expert in short sales. Remember the buzz word in the real estate community right now is "expert short sale agent", so everyone is claiming to be an expert. Here are two very important questions to ask an agent before you list your home with them: How many short sales have you successfully closed on the listing side? If the answer is below 50, I would keep looking. Secondly - Who does the negotiating? If the agent says that they do, be very careful, because they better have a team behind them doing everything else because short sales are very labor intensive. I don’t believe you can be an expert and not have a staff behind you. My team has successfully completed hundreds of short sale negotiations and we learn something every day.
There are times that investor purchases make good sense. If the property is in bad shape, if the seller's main goal is to stay in the house as long as possible, or the sellers of the home are going to or have filed bankruptcy. In some cases it does not matter what the home sells for, so investor low price purchases are fine. But in most cases, find a real estate agent that is a true expert.
Written by Nick Shivers
Tuesday, July 21, 2009
The Strategic Foreclosure
The Strategic Foreclosure
If you have money in the bank but can barely make your payments, maybe you are considering negotiating a loan modification with your lender. Unfortunately, these are taking forever to get approved and the likelihood of them lowering the principal balance is very low. So what can people do that are $50,000, $100,000 or more underwater on their homes, but that could continue to scrape by and make their payments?
We're not attorneys, but we speak from experience, having handled hundreds of short sale transactions in the past three years. We can't advise you to use this approach, but many of our clients have used a certain strategy with their upside down properties, especially when they are wanting to stay in their homes. We are located in Portland, Oregon and have helped people all over the country with their short sales. It is critical that you and your Realtor know the state laws relating to foreclosure. In Oregon (and in many other states), this is a non-deficiency state, so the 1st mortgage lender has no recourse after the foreclosure or short sale. Consequently, we can use this to negotiate a full release of debt with your lender, so you can sell your home for less than is owed and avoid a foreclosure on your record. The reality is that this process takes time, and auctions are normally postponed when there is an offer on the home. Some homeowners we have worked with haven't made a payment in 2 years while we have continued to negotiate with the lender.
The bottom line is if you are in trouble financially and anticipate not being able to make your payments comfortably, immediately make contact with Realtors like us who know the in's and out's of the foreclosure and short sale process. We can come up with creative solutions that will ultimately give you favorable results and make the best out of a tough situation.
Written by Nick Shivers
If you have money in the bank but can barely make your payments, maybe you are considering negotiating a loan modification with your lender. Unfortunately, these are taking forever to get approved and the likelihood of them lowering the principal balance is very low. So what can people do that are $50,000, $100,000 or more underwater on their homes, but that could continue to scrape by and make their payments?
We're not attorneys, but we speak from experience, having handled hundreds of short sale transactions in the past three years. We can't advise you to use this approach, but many of our clients have used a certain strategy with their upside down properties, especially when they are wanting to stay in their homes. We are located in Portland, Oregon and have helped people all over the country with their short sales. It is critical that you and your Realtor know the state laws relating to foreclosure. In Oregon (and in many other states), this is a non-deficiency state, so the 1st mortgage lender has no recourse after the foreclosure or short sale. Consequently, we can use this to negotiate a full release of debt with your lender, so you can sell your home for less than is owed and avoid a foreclosure on your record. The reality is that this process takes time, and auctions are normally postponed when there is an offer on the home. Some homeowners we have worked with haven't made a payment in 2 years while we have continued to negotiate with the lender.
The bottom line is if you are in trouble financially and anticipate not being able to make your payments comfortably, immediately make contact with Realtors like us who know the in's and out's of the foreclosure and short sale process. We can come up with creative solutions that will ultimately give you favorable results and make the best out of a tough situation.
Written by Nick Shivers
Wednesday, July 15, 2009
Confusing and Contradictory Reports
More Confusing and Contradictory Reports about Oregon
In contrast to the last national news article that we wrote about, at least one writer thinks Oregon is positioned for a rebound. A new report from Moody's Economy.com and msnbc.com states that Oregon is one of 5 states that is well positioned for a job recovery in the last quarter of 2009. This is well ahead of the projections for the other 45 states, and this is mainly due to the high-tech industry centered in the Portland Metro area. There has been less spending throughout 2008 and 2009 in high-tech, and the expectation is that businesses on the sidelines of needing to upgrade their technology will be coming back into the arena with their dollars. The Silicon Forest is ready and waiting for those funds, and will respond in kind with new jobs and new opportunities. With our unemployment currently at 12.2%, this is welcome news! However, with all this confusing speculation in the media, what's the best way to make sense of the market? This is another reason to be certain that you are working with Realtors like us who are thriving in the local market and know the great opportunities right here in our community.
Written by: Nick Shivers
http://www.msnbc.msn.com/id/30991972/
In contrast to the last national news article that we wrote about, at least one writer thinks Oregon is positioned for a rebound. A new report from Moody's Economy.com and msnbc.com states that Oregon is one of 5 states that is well positioned for a job recovery in the last quarter of 2009. This is well ahead of the projections for the other 45 states, and this is mainly due to the high-tech industry centered in the Portland Metro area. There has been less spending throughout 2008 and 2009 in high-tech, and the expectation is that businesses on the sidelines of needing to upgrade their technology will be coming back into the arena with their dollars. The Silicon Forest is ready and waiting for those funds, and will respond in kind with new jobs and new opportunities. With our unemployment currently at 12.2%, this is welcome news! However, with all this confusing speculation in the media, what's the best way to make sense of the market? This is another reason to be certain that you are working with Realtors like us who are thriving in the local market and know the great opportunities right here in our community.
Written by: Nick Shivers
http://www.msnbc.msn.com/id/30991972/
Thursday, July 9, 2009
Is Portland real estate really a bad investment?
Is Portland real estate really a bad investment? No way!
Let's be honest, Oregon's unemployment numbers are terrible. With 11.6% of the population without a job in April, this has a powerful impact on our housing market. This is the leading factor in some people's condemnation of our investment potential, but let's take a step back and look at the big picture of what makes the Portland Metro area unique: Relocation of California residents to our area accounts for a fair share of what fueled the local housing boom in past years. This will continue indefinitely, with an estimated increase in Portland's population by 1 million people by 2020. Our quality of life is excellent and is a magnet for those looking to upgrade to lovely communities without the huge coastal price tag. The Urban Growth Boundary restricts sprawl (see Phoenix, AZ for contrast) and preserves rural areas. Quality mass transit is ever expanding, and we continue to be a model for cities worldwide in our 'Green' developments.
We have properties listed at every price point, in every city in the Metro area, and we get offers on all of them. People want to live here! The Northwest did not experience much of the extreme highs of the housing bubble, and was over a year behind the nation in experiencing a downturn. Nationally, people are coming to grips with real estate being a long term investment rather than a get rich quick scheme. And when it comes to great places to live, Portland continues to get lots of positive media attention and deservedly so.
The long term outlook for this area is very strong, and most likely this will be the time period everyone looks back on and says: "If only I had bought then". Consequently, the best choice you can make is putting a qualified real estate professional on your side that understands the art of negotiation. We're here to help you get that great deal!
Written by: Nick Shivers
Article for the post
5 Housing Markets That Have Further to Fall
By Sarah Morgan, SmartMoney.com
Jun 30th, 2009
Think twice before buying a house in these cities any time soon.
Home buyers looking for a bottom in the real estate market may have been encouraged by housing data released earlier this week. Sales of existing homes rose 2.4% in May, according to the National Association of Realtors. The increase was a little less than most analysts had expected, but it represented the second straight month of improvement. Meanwhile, sales of new homes dipped 0.6% in May, continuing a trend of fairly flat months so far this year, according to data released by the Commerce Department.
Don’t get too excited – it’s still too early to say the housing market bottomed out, analysts and economists say. Distressed properties still account for about a third of all sales, and 29% of sales were to first-time home buyers, who are currently benefiting from an $8,000 tax credit.
The sales trends are telling. “You’re not really seeing a lot of move-up buying,” says Richard F. Moody, chief economist and director of research at Forward Capital, LLC. “There are so many vacant homes and so many foreclosures that [there’s] not the normal trade-up pattern that you would have traditionally seen,” Moody says.
Housing prices fell nationwide during the first quarter, according to Standard & Poor’s Case-Shiller Index. The decline appears to be slowing: in February and March, the annual rate of decline did not set a new record, but home owners should take little solace in those numbers. “Based on the March data… we see no evidence that that a recovery in home prices has begun,” David M. Blitzer, chairman of the Index Committee at Standard & Poor’s, said in a statement.
All of this less-than-terrible news has left analysts cautiously optimistic that much of the country will start to see housing prices rise sometime in the next year or two. Looking at the nation as a whole, today through the spring of 2011 may be the window for those looking to buy a house at the bottom of the market, says Gary Hager, president and founder of Integrated Wealth Management, a New Jersey-based financial planning company.
A few markets where the housing crisis started earliest have already shown signs of bottoming out. Early-suffering cities like Denver and Boston are now seeing slower declines in home prices, which could indicate they’re already poised for a comeback.
And in some areas, buyers have seized on rapidly falling prices. Existing-home sales rose 9% in the Midwest in May, according to the National Association of Realtors.
“There will be regional differences in the turnaround,” says Maureen Maitland, vice president of index services at Standard & Poor’s. “Most economists I talk to are expecting the beginning of the turnaround to be sometime next year,” she says. However, she added, “the last market may not turn around for two or three years.”
For those hoping to buy at the best possible price, we’ve got a list of five cities where home prices may still have farther to fall. But keep in mind, getting a house at a discount is still not necessarily a house you can afford.
“In light of the housing market boom and bust, consumers should feel very comfortable financially” before deciding to buy, says Lawrence Yun, chief economist for the National Association of Realtors. “They should not try to overstretch their budget to get their dream home.”
1) Detroit
Housing prices fell 4.9% in Detroit in March, according to the latest reading of the Case-Shiller Index. That marked the city’s largest monthly decline since January 1991, when S&P’s backlogged data begin. Houses in Detroit are currently selling at 1995 prices – and with prices still falling so fast, it’s hard to say when the city will rejoin the 21st century.
“Detroit is Detroit because of the auto industry,” says Maitland. The whole Midwest is hurting from car companies’ woes, but Detroit is hurting the most.
2) New York City
Anyone who was hoping to see Wall Street suffer from the financial crisis can relax. New York may have avoided the nationwide implosion in home prices early on, but the city saw its largest-ever monthly decline in March, at 2.5%.
“New York may not be out of the woods,” Maitland says. “Because of what’s going on with the financial markets and the layoffs on Wall Street, New York may be one of the last places to turn around.”
3) Phoenix
Home prices in Phoenix have fallen 53% from their peak in June 2006, and the 2009 data suggest they’ve got farther to go. In March, prices in Phoenix fell 4.5%.
The Southwest has been one of the hardest-hit regions in the mortgage crisis. The region still faces a glut of recently-built homes.
“In Phoenix, you had some of the worst excesses,” in terms of overbuilding, Moody says. “The surplus of houses is so great that it could take two or three years” for prices to turn around. However, a steady influx of new residents into the region suggests the long-term prospects for the market are sound, he says.
4) Portland, Ore.
In the Northwest, median home prices are down but they remain above the national average. Portland’s prices fell 2.1% in March. Home prices in Seattle were down 2.0% for the month.
“Portland’s still going down,” says Dave McCarthy, president and chief executive of Integrated Asset Services, a real estate valuation and asset disposition and management company that collects data on the housing market.
The city “has remained pretty strong but they’re starting to feel some of the effects,” he adds.
The local labor market may be playing a role, Moody says. Portland’s unemployment rate was 11.6% in April, according to the Department of Labor. That’s well above the national average for the month (8.9%).
The Pacific Northwest bubble was among the last to burst, which could mean the market will be among the last to recover.
5) Minneapolis
Housing prices in Minneapolis fell 6.1% in March, the largest monthly decline of any metro area since data tracking began in 1987.
More than half of all March home sales in Minneapolis were due to foreclosure or short-sale activity, according to the Federal Reserve Board’s Beige Book, which gathers information on regional economic conditions. Foreclosed homes tend to drive prices down because “the bank’s best interest is to get the asset off their books” as quickly as possible, Maitland says.
Let's be honest, Oregon's unemployment numbers are terrible. With 11.6% of the population without a job in April, this has a powerful impact on our housing market. This is the leading factor in some people's condemnation of our investment potential, but let's take a step back and look at the big picture of what makes the Portland Metro area unique: Relocation of California residents to our area accounts for a fair share of what fueled the local housing boom in past years. This will continue indefinitely, with an estimated increase in Portland's population by 1 million people by 2020. Our quality of life is excellent and is a magnet for those looking to upgrade to lovely communities without the huge coastal price tag. The Urban Growth Boundary restricts sprawl (see Phoenix, AZ for contrast) and preserves rural areas. Quality mass transit is ever expanding, and we continue to be a model for cities worldwide in our 'Green' developments.
We have properties listed at every price point, in every city in the Metro area, and we get offers on all of them. People want to live here! The Northwest did not experience much of the extreme highs of the housing bubble, and was over a year behind the nation in experiencing a downturn. Nationally, people are coming to grips with real estate being a long term investment rather than a get rich quick scheme. And when it comes to great places to live, Portland continues to get lots of positive media attention and deservedly so.
The long term outlook for this area is very strong, and most likely this will be the time period everyone looks back on and says: "If only I had bought then". Consequently, the best choice you can make is putting a qualified real estate professional on your side that understands the art of negotiation. We're here to help you get that great deal!
Written by: Nick Shivers
Article for the post
5 Housing Markets That Have Further to Fall
By Sarah Morgan, SmartMoney.com
Jun 30th, 2009
Think twice before buying a house in these cities any time soon.
Home buyers looking for a bottom in the real estate market may have been encouraged by housing data released earlier this week. Sales of existing homes rose 2.4% in May, according to the National Association of Realtors. The increase was a little less than most analysts had expected, but it represented the second straight month of improvement. Meanwhile, sales of new homes dipped 0.6% in May, continuing a trend of fairly flat months so far this year, according to data released by the Commerce Department.
Don’t get too excited – it’s still too early to say the housing market bottomed out, analysts and economists say. Distressed properties still account for about a third of all sales, and 29% of sales were to first-time home buyers, who are currently benefiting from an $8,000 tax credit.
The sales trends are telling. “You’re not really seeing a lot of move-up buying,” says Richard F. Moody, chief economist and director of research at Forward Capital, LLC. “There are so many vacant homes and so many foreclosures that [there’s] not the normal trade-up pattern that you would have traditionally seen,” Moody says.
Housing prices fell nationwide during the first quarter, according to Standard & Poor’s Case-Shiller Index. The decline appears to be slowing: in February and March, the annual rate of decline did not set a new record, but home owners should take little solace in those numbers. “Based on the March data… we see no evidence that that a recovery in home prices has begun,” David M. Blitzer, chairman of the Index Committee at Standard & Poor’s, said in a statement.
All of this less-than-terrible news has left analysts cautiously optimistic that much of the country will start to see housing prices rise sometime in the next year or two. Looking at the nation as a whole, today through the spring of 2011 may be the window for those looking to buy a house at the bottom of the market, says Gary Hager, president and founder of Integrated Wealth Management, a New Jersey-based financial planning company.
A few markets where the housing crisis started earliest have already shown signs of bottoming out. Early-suffering cities like Denver and Boston are now seeing slower declines in home prices, which could indicate they’re already poised for a comeback.
And in some areas, buyers have seized on rapidly falling prices. Existing-home sales rose 9% in the Midwest in May, according to the National Association of Realtors.
“There will be regional differences in the turnaround,” says Maureen Maitland, vice president of index services at Standard & Poor’s. “Most economists I talk to are expecting the beginning of the turnaround to be sometime next year,” she says. However, she added, “the last market may not turn around for two or three years.”
For those hoping to buy at the best possible price, we’ve got a list of five cities where home prices may still have farther to fall. But keep in mind, getting a house at a discount is still not necessarily a house you can afford.
“In light of the housing market boom and bust, consumers should feel very comfortable financially” before deciding to buy, says Lawrence Yun, chief economist for the National Association of Realtors. “They should not try to overstretch their budget to get their dream home.”
1) Detroit
Housing prices fell 4.9% in Detroit in March, according to the latest reading of the Case-Shiller Index. That marked the city’s largest monthly decline since January 1991, when S&P’s backlogged data begin. Houses in Detroit are currently selling at 1995 prices – and with prices still falling so fast, it’s hard to say when the city will rejoin the 21st century.
“Detroit is Detroit because of the auto industry,” says Maitland. The whole Midwest is hurting from car companies’ woes, but Detroit is hurting the most.
2) New York City
Anyone who was hoping to see Wall Street suffer from the financial crisis can relax. New York may have avoided the nationwide implosion in home prices early on, but the city saw its largest-ever monthly decline in March, at 2.5%.
“New York may not be out of the woods,” Maitland says. “Because of what’s going on with the financial markets and the layoffs on Wall Street, New York may be one of the last places to turn around.”
3) Phoenix
Home prices in Phoenix have fallen 53% from their peak in June 2006, and the 2009 data suggest they’ve got farther to go. In March, prices in Phoenix fell 4.5%.
The Southwest has been one of the hardest-hit regions in the mortgage crisis. The region still faces a glut of recently-built homes.
“In Phoenix, you had some of the worst excesses,” in terms of overbuilding, Moody says. “The surplus of houses is so great that it could take two or three years” for prices to turn around. However, a steady influx of new residents into the region suggests the long-term prospects for the market are sound, he says.
4) Portland, Ore.
In the Northwest, median home prices are down but they remain above the national average. Portland’s prices fell 2.1% in March. Home prices in Seattle were down 2.0% for the month.
“Portland’s still going down,” says Dave McCarthy, president and chief executive of Integrated Asset Services, a real estate valuation and asset disposition and management company that collects data on the housing market.
The city “has remained pretty strong but they’re starting to feel some of the effects,” he adds.
The local labor market may be playing a role, Moody says. Portland’s unemployment rate was 11.6% in April, according to the Department of Labor. That’s well above the national average for the month (8.9%).
The Pacific Northwest bubble was among the last to burst, which could mean the market will be among the last to recover.
5) Minneapolis
Housing prices in Minneapolis fell 6.1% in March, the largest monthly decline of any metro area since data tracking began in 1987.
More than half of all March home sales in Minneapolis were due to foreclosure or short-sale activity, according to the Federal Reserve Board’s Beige Book, which gathers information on regional economic conditions. Foreclosed homes tend to drive prices down because “the bank’s best interest is to get the asset off their books” as quickly as possible, Maitland says.
Wednesday, July 1, 2009
Making Your Home More Affordable ( In Theory)
The Making Home Affordable program has just released a statement today saying that they will now refinance any Fannie Mae and Freddie Mac loans with a Loan To Value Ratio of 125%. This is only open to eligible homeowners with loans backed by them and begins on September 1st. The LTV limit was formerly 105%, and this opens up doors for millions of homeowners to take advantage of low interest rates even though they have no equity. Those homeowners with private investors holding the loans are still out of luck for the time being.
AND REMEMBER - ONLY 12% of all eligible loans that are currently be reviewed by the lenders are being approved!
Written by:
Nick Shivers
AND REMEMBER - ONLY 12% of all eligible loans that are currently be reviewed by the lenders are being approved!
Written by:
Nick Shivers
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