A random collection of recent real estate news notes, articles, and updates:
Bad MLS Photo of the Day
A jaw-droppingly horrifying, actual MLS photo found on a listing in Southern California. You just have to see it.
Sell your house by owner, by auction, or…by writing contest
A $1.25M Florida plantation to be given to the winner of a writing contest. For a $200 entry fee. Oh, and just 6,250 entries needed. (Found by AgentGenius)
Why Did the Mortgage Crisis Happen?
Local economist and writer Bill Conerly starts a 5-part series at his Businomics blog. Interesting reading and brief, so not too overwhelming. His topics:
- The Great Moderation and the benign housing cycle of the 2001 recession, which made real estate appear to be safe
- Securitization, which changed the funders from lenders to investors, while making the products too complex for most anyone to understand.
- With these two factors in place, the mortgage crisis evolved from the last recession.
- What to expect next time round.
He’s a little more bullish on forecasts than many, as written here and here.
CNN/Money highlights real estate slowing in Portland and other ‘bulletproof’ cities
Seattle, Charlotte are not immune, either
The Party’s Over
So says a sobering report by the Oregon Business Magazine.
Finally,
Phone book deliveries must cease
I say AMEN, brother! One copy per year, ok, but does anyone else think eight phone books a year is a waste?
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May 9th, 2008
It’s May, and I’m a little remiss in mentioning the April 2008 issue of Portland Monthly and their annual real estate issue.
This year, the issue seems a little lighter, but they report on the general market health, identify seven housing trends, rate a few top neighborhoods based on price (low and high), short-term and long-term appreciation, and pace of sales. The article concludes with their Neighborhoods by the Numbers section — measuring real estate factors, school performance, population mix, crime stats, parks, and commute times.
Trends they note:
- Fewer Californian immigrants
- Homes as personal brands
- The attraction of living in the suburbs/exurbs
- Opportunities in a soft condo market
- A growing, aging population in Portland
- Rising rents — 10 to 15%
- Remodeling ‘green’
Last year, they posted the ‘Neighborhoods by the Numbers’ section on their website, but I don’t find it yet this year.
Out of respect for their copyright, I won’t post a copy of the articles here, but since it’s off the newsstand, you can email me and I’ll send it along.
May 8th, 2008
Portland State University released its 2nd quarter Real Estate and Urban Studies Report.
And it weighs in at a beefy 79 pages.
The residential real estate section is consistent with what you’ve read here and in other local outlets — sales down, pricing flat for Q1.
As for the rest, I haven’t absorbed it yet, but you may find interest in the weighty sections by PSU faculty and consultants about Portland’s crossings (bridges), “center” vs. “corridor” growth strategies, Streetcar research, and other land use, urban development and commercial real estate topics.
Full report here.
May 7th, 2008
Anyone hoping for a spring bounce to the Portland area real estate market will likely be disappointed when ‘official’ numbers are released around the 15th.
Except, perhaps, active buyers looking to time the market to their advantage.
As of this afternoon, April 2008 unit sales were running at about 57% of April 2007’s result. By the time all the April lingering data gets entered over the next few days, the result will likely just reach the 60% mark. (Pending sales for April 2008 are down 38% from last years monthly total, so May’s sales result will look familiar.)
And it seems the doldrums are starting to have their effect on sales pricing (finally). The average sale price for the current results is $324,300 (vs. $336,700 last month and $338,200 last April). The median will come in around $275,000 (vs. $286,500 last month and $285,000 last April).
Inventory is growing, with active listings up 1,000 from the beginning of April to start May with 16,400 homes.
The numbers will likely change a little once RMLS scrubs the data, but you get the idea.
Photo by jekkyl, used under Creative Commons license.
May 2nd, 2008
I’m all for using evocative copy to creatively promote listings, but please, if I ever pull something like this…have my license revoked:
[Actual listing somewhere in California, click on the image for the full impact.]
Complete plagiarism on my part. Credit to Jay Thompson, the Phoenix Real Estate Guy and contributor to AgentGenius. I couldn’t help myself.
April 28th, 2008
One test for the health of the Portland metro real estate market is the mix of sub-prime vs. traditional (or prime) mortgages. In a recent National Association of Realtors survey, subprime loans account for only 9% of homeowner mortgages, but they comprise 54% of foreclosures nationally.
The survey, which includes data from the Mortgage Brokers Association, reports that as of early 2008, 32% of homeowners across the U.S. have their homes paid in full, and of those with a home loan, 53% are in a prime mortgage and the balance are in a sub-prime (9%) or FHA/VA loan (6%).
Here’s a look at how Oregon compares to the nation and California by mortgage type:
Mortgage Mix
| Paid in full |
32%
|
24%
|
29%
|
| Prime mortgage |
53%
|
65%
|
60%
|
| Subprime mortgage |
9%
|
10%
|
7%
|
| FHA/VA mortgage |
6%
|
1%
|
4%
|
Foreclosure Mix by Mortgage Type
NAR says the Oregon foreclosure rate is 0.7%, while California foreclosure rate is at 2.2%. Here are the mortgage types that foreclosures are coming from:
| Subprime Mortgages |
54%
|
61%
|
55%
|
| Prime mortgage |
37%
|
38%
|
38%
|
| FHA/VA mortgage |
9%
|
1%
|
7%
|
Does this mean Oregon will continue to outperform national and Californian averages? Maybe, maybe not. But certainly the mix of mortgage products is encouraging.
Source: 2008 State-by-State “Mortgage Market Conditions” Reports, NAR.
Photo by denn, used under Creative Commons license.
April 24th, 2008
The National Association of Realtors has released its 2008 State-by-State “Economic Impact of Real Estate Activity” Reports. These reports evaluate the total economic impact of real estate related industries on the state economy, as well as the direct and subsequent expenditures that result from a single home sale.
Their net result? The average home sale in Oregon drives an additional $81,600 in state income (presumably most of which is taxable). Here’s their numbers for Oregon (based on 2006 results):
Real Estate’s Economic Contribution in Oregon
The Real Estate Industry accounted for $27,675 million or 18.3% of the Gross State Product in 2006.
Economic Contributions are derived from:
- Home construction
- Real estate brokerage
- Mortgage lending
- Title insurance
- Rental and Leasing
- Home appraisal
- Moving truck service
- Other related activities
When a Home is Sold in Oregon…
Income generated from real estate related industries is: $25,776
Additional expenditure on consumer items such as on furniture, appliances, and paint service is: $5,171
When a Home is Sold in Oregon…
It generates an economic multiplier impact. There is a greater spending at restaurants, sports games, and charity events. The size of this “multiplier” effect is estimated to be: $14,854
Additional home sales induce additional home production. Typically one new home is constructed for every 8 existing home sales. Therefore, for each existing home sale, 1/8 of new home value is added to the economy which is estimate in the state to be: $35,800
The Total Economic Impact of a Typical Home Sale in Oregon
Median Priced Home in Oregon: $286,400
Total Income Derived from a Sale of a Home: $81,601
So, while the market may be going through a necessary correction period, a prolonged slump will create a real drag on the state’s economy.
Data: NAR Research Department, April 2008.
April 21st, 2008
For March 2008, the Portland-area real estate market showed its normal seasonal increase in activity, but continues to lag behind 2007’s pace by nearly 33% in sales volume.
A slower rate of sales plus a consistent pace of new listings entering the market means more inventory. April started with 15,412 active properties in the multiple listing service. It’s taking on average 83 days to sell a home in the Portland market (vs. 65 in March 2007). A couple higher-priced markets (Lake Oswego/West Linn and NW Washington County) are now over 100 days on average.
You would expect pricing to be affected by higher inventories and longer sales cycle, and it has…although not on par with other national markets. Comparing year-to-year, March’s average sale price of $336,700 is virtually the same as last year (336,300). Median prices are even, too ($286,500 vs. $286,200).
Below are the year-to-date results through March 2008 for average and median sale prices, appreciation, and time on market (or DOM*), sorted by average sale price. (Remember, the appreciation numbers are a 12-month rollup compared to the previous 12 months and may not reflect recent months’ price declines.)
| Lake Oswego / West Linn |
$557,600 |
$455,000 |
8.7% |
102 |
| West Portland |
$492,400 |
$399,500 |
3.1% |
92 |
| NW Washington County |
$402,600 |
$385,000 |
4.5% |
100 |
| Tigard / Tualatin / Sherwood / Wilsonville |
$363,300 |
$340,000 |
2.2% |
83 |
| Milwaukie / Clackamas |
$356,000 |
$300,000 |
-6.4% |
83 |
| Northeast Portland |
$321,200 |
$273,500 |
6.9% |
64 |
| Oregon City / Canby |
$309,200 |
$286,000 |
0.6% |
91 |
| Hillsboro / Forest Grove |
$289,500 |
$259,900 |
2.7% |
98 |
| Yamhill County |
$285,700 |
$227,000 |
4.1% |
127 |
| Beaverton / Aloha |
$280,300 |
$250,000 |
2.6% |
69 |
| Southeast Portland |
$278,300 |
$249,300 |
5.0% |
70 |
| North Portland |
$274,300 |
$250,100 |
8.2% |
51 |
| Gresham / Troutdale |
$258,700 |
$245,000 |
2.2% |
93 |
| Columbia County |
$230,900 |
$216,000 |
6.2% |
116 |
Source: RMLS, April 2008.
Appreciation percentages are based on a comparison of average price from the last 12 months (04/01/07 - 03/31/08) with 12 months before (04/01/06 - 03/31/07).
* Note: DOM or days on market may exhibit reporting inconsistencies and should be used to analyze trends only.
April 17th, 2008
Auctions aren’t new around here, but on the heels of two high-profile auctions by Buena Vista Homes comes yet another large-scale sell-off of homes.
This time, it’s not by a single builder, but several builders, agents, and owners. On May 4, 2008, over 60 pre-owned homes and new construction will go on the auction block, in an event put on by The Taylor Group, a local real estate broker. They’ve created a website, www.properties2auction.com, designed for this auction, and as a platform ostensibly for more local (and not-so-local) auctions.
In the May 8 round, a mix of townhomes, general single family homes, and luxury properties for bid are located in Portland, Lake Oswego, Beaverton, Tigard, Gresham, Wilsonville, Vancouver WA, Sunriver, Bend, and on the coast. I saw a Street of Dreams home or two on the list. It appears several smaller builders are looking to clear the books of stale inventory, like Buena Vista did earlier.
Similar to the Buena Vista auctions, buyers will need a $5,000 cashier’s check for a bidder’s paddle, enough funds for a 3% earnest money on a winning bid, and a healthy stomach for risk to participate. Inspections and due diligence must happen prior to the auction, and each property offers several times for such inspection.
The live auction takes place at the Hilton Hotel at noon on May 8. Buyer and Seller agents can participate in this and future auctions. More information on the FAQ.
April 15th, 2008
I had an opportunity to talk with Dana Tims for today’s “Dealing With The Downturn” feature in the SW Weekly section of the Oregonian, which covers Tigard, Tualatin, and Sherwood.
Tims interviewed a homebuilder, supplier, remodeler, homeseller, and real estate agent to gauge how each sector is adapting to a slower housing market.
Here is the text, in case the link goes away:
Trying to adapt to the new housing market
A builder, a Realtor, a seller, a remodeler and a supplier discuss their strategies
Thursday, April 10, 2008
DANA TIMS
The Oregonian Staff
Until recently, a vibrant housing market provided many of the jobs and much of the income that stoked the southwest suburbs’ economy for the past half-decade.
Much has happened in the past year to erase the double-digit profits that home sellers were taking for granted.
The number of houses on the market, for instance, has increased almost sixfold since 2006, giving buyers the upper hand.
Houses are lingering on the market far longer than they did two or three years ago. The multiple offers and bidding wars common among prospective buyers as recently as 2005 have been replaced by sellers trimming asking prices 10 percent and more to keep buyers from shopping elsewhere.
Some areas are feeling the pinch more than others. Below are brief profiles of five people and their accompanying market sectors. Each is trying to find new strategies for coping with the downturn.
The Realtor
Ron Ares jumped from his job as marketing director for a high-tech company to a family-run real estate business in West Linn three years ago. That may as well have been a lifetime ago.
“Inventories were half of what they are now, full-price offers were commonplace and if buyers didn’t have all their ducks in a row, they were likely to miss out on houses that were selling the same day they came on the market,” said Ares, a Tigard resident who specializes in the southwest suburbs. “It was one open house, one advertisement and ‘Katie bar the door.’ ”
The market hit its peak, in terms of median sales prices and number of houses sold, last July or August, Ares said.
Ultimately, he expects that this year will see a considerable dip in closed sales when compared with 2007, but the drop will be less than the 35 percent chalked up so far this year.
Successful agents — that is, those not among the nearly 1,100 Portland-area Realtors who decided not to renew their licenses at the beginning of 2008 — need to pay close attention to the market and be willing to expand their skills sets, he said.
Some agents, for instance, are focusing on so-called short sales, where the balance owed on the mortgage is more than a house’s market value. The endeavor involves negotiating with lenders, who may be willing to settle for less to avoid foreclosing.
In Ares’ case, he is working only with longtime lenders who have endured down cycles before and know how to source solid loans.
“What I’m telling clients is, if you need to sell and don’t want to get stuck, look at what the peak pricing was and take 5 percent off the asking price,” Ares said. “Otherwise, they’ll just be chasing the market down.”
Read the full interview for how the other interviewees are coping with a slower real estate market.
April 10th, 2008
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