Posts filed under 'National News'
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
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
To date, excessive foreclosure activity in the Portland metro area has been kept bay, perhaps due to generally stable housing prices and less participation by Oregonians in riskier subprime mortgages than other national housing markets. (Note, I’m not saying we’re immune–just less affected.)
RealtyTrac.com is the default oracle for foreclosure information–showing Oregon at #24 nationally for foreclosure activity with 1,415 in January, up double that of January 2007.
Recently the the Federal Reserve Bank of New York has released an interactive mortgage map for owner-occupied (non-investment) homes, tracking subprime and Alt-A loans.
Users can start with a view of the entire U.S. and drill down to state, county, and zipcode levels to view various risk areas such as percent of low FICO score loans, resetting adjustable rate mortgages, delinquencies, and foreclosures.
These interactive charts show the “regional variation in the condition of securitized, owner-occupied subprime, and alt-A mortgage loans” according to the Mortgage Bankers Association.
You can check out the map here (or click the image). and read more about the Fed’s foreclosure resources for consumers.
To be honest, I did not see a lot of variation within the metro area to note. The data is to be updated monthly, so perhaps we’ll see more activity as ARMs reset and local housing inventory remains high. Perhaps the non-owner occupied properties are the lion’s share of defaults and won’t be reflected on the Fed’s map. A couple disturbing Oregon trends: 35% of subprime loans have had 1 payment late in 12 months, and 41% of subprime ARMS are resetting in 12 months.
(Hat tip to Mike Rohrig and Scott Bridwell.)
April 7th, 2008
The real estate blogosphere is pretty well awash with today’s announcement of Zillow.com’s Mortgage Marketplace, but it may take some time to filter down to the home-shopping consumer. Here’s a quick overview…
You remember Zillow.com, the glossy property valuation site for real estate voyeurs–type in an address, get a Zestimated property value, snoop on neighbor’s houses, and wallow in maps, neighborhood data, etc.
Pretty entertaining, particularly where it came to how Zillow calculated home values (often wildly). They took their early lumps but have gained more market information and improved their methodology to the point now where you can make some broad judgments based on their site’s findings.
But the Mortgage Marketplace potentially offers much more value to the consumer. This service will allow you to anonymously shop for mortgages (for free) from an unlimited number of registered lenders. You can contact the lenders of choice when you’re ready to take your due diligence to the next level.
You can shop for a primary mortgage or home equity line of credit (HELOC). All loan fees will be disclosed upfront. Lenders that don’t perform well get scored as such (ala eBay or Angie’s List). Zillow brings new transparency to what has been a high-pressure, high-stakes part of the home-buying experience.
They’ve done their homework. From the CEO’s blog post:
At Zillow we believe in information transparency. We believe informed consumers are empowered consumers. We believe these informed consumers make better customers for real estate professionals. We believe consumers should be able to shop anonymously, so that they are not approached by a salesperson until they ask for assistance. Finally, we believe in open and free marketplaces.
Borrowers have told us via focus groups and surveys that they spend woefully little time shopping for the mortgage they have – 5 hours. About the same amount of time they spent buying their last computer and nearly half the time they spent shopping for their last car. They also tell us that they want their personal contact information to remain private and that they want to see real rates that are accessible to them, not “teaser” rates that don’t reflect reality. They would also like to shop across their options and be able to do an apples-to-apples comparison of loan quotes from multiple lenders in a standard format. Finally, they’d like to be able to understand the reputation of the broker or lender as seen from the perspective of other borrowers, much like they can judge a seller’s reputation on eBay or a hotel’s reputation on TripAdvisor.
If you’ve tried getting mortgage advice or loan bids through LendingTree and others of their ilk, you probably know what Rich Barton is talking about. And it’s probably why people spend so little time evaluating the financing side of a home purchase. Check it out here.
I’m curious to hear if any of you try the service and what your reactions are. Also, if any loan officers are reading, what is your take? Will you participate?
April 3rd, 2008
January results of the Case-Shiller home price index report reveal the perhaps inevitable news about the Portland real estate market.
In Case-Shiller’s estimation, Portland can no longer claim to be an appreciating market. From January 2007 to January 2008, it’s year-over-year pricing change was -0.5%. It’s just the second smallest decrease nationally (behind just Charlotte, NC), but the the rate of price declines is accelerating.
Tom Cusack over at the Oregon Housing Blog reads into the data a little deeper and finds it to be the first time ever for a year-to-year decrease in Portland’s index. He also notes the January results to be the largest monthly decline in the study’s history and the sixth straight month of declines since the market’s peak in July 2007 (down 4.1% total).
Some believe that our downcycle is timed about 1 year later than other national markets.
Note that the Case-Shiller index lags the current market by 2 months. So, what do more current indexes of asking prices suggest? Altos Research sees a 1.3% decrease in pricing over past 3 months (see chart above).
If there is a nugget of good news in this, perhaps the affordability gap is closing. I will run preliminary sales figures for March around April 5 and we’ll see if the news is any more encouraging.
March 25th, 2008
Regional economic health is certainly a contributing factor to consumer confidence, and by extension, is a weighty concern for those considering a home sale or purchase. By and large, the national media has viewed the Northwest favorably in terms of housing stability, the job climate, and so on.
But recent reports can be a little confusing. Friday’s USA Today ran an article on recession risks, showing Oregon in an ‘expansion’ mode. Yet the University of Oregon Economic Forum suggests the region is still ripe for recession. So, which is it?
According to USA Today/Moody’s Economy.com report, based on its key indicators (including employment, production, retail sales), Oregon charted as growing its economy and held top 10 positions for healthy home value increases, an improving agricultural revenue base, and a high percentage of exports. Only the Medford MSA was shown as ‘at risk’; how Bend evaded that tag, I don’t know.
Meanwhile, the University of Oregon’s report on Economic Indicators suggests otherwise, based on its review of unemployment, building permits, production and other index components:
The University of Oregon Index of Economic Indicators rose 0.2 percent in December, to 102.6 (1997=100), with the majority of index components improving during the month. Despite the December gains, the behavior of the index in recent months remains consistent with a substantial risk of recession in the near future.
Both studies are measuring similar (not identical) factors (I encourage you to visit both sites to view their methodologies), but have come to different conclusions. Despite some recent gains in manufacturing, the U of O study cites weakness in labor, housing, and consumer confidence as their main contributors.
So, how do you view these reports? Some will say they are inconclusive; others will claim we are in denial. How does it affect your decision to buy or sell a home? Or are broad economic measures less important than the state of the real estate market specifically?
March 10th, 2008
A handful of real estate-related (or not) links affecting the Portland market (or not):
Congress Passes Economic Stimulus Package
The President is expected to sign it quickly. Besides tax rebates, the plan also includes higher conforming (i.e. government-insured) loan rates of up to 125% of the area’s median home price. (Current conforming loans are limited to $417,000.)
It’s unknown how much, if any, impact this will have on the local real estate market. Larry Morris of EquiPoint weighs in with his analysis. Perhaps it will have more impact on California buyers, and therefore, free up some California sellers looking to move to Oregon (a traditional source of local real estate activity).
Wall St. Journal covers Portland Teardown
Did you know a Wall Street Journal contributor is writing an ongoing diary of her effort to tear down and build a new home inside the Portland city limits? (I didn’t.) Here’s the latest entry.
Buena Vista Auction - Part Deux
Some of the leftovers from the 1st Buena Vista auction, plus some buildable lots, are going under the gavel again March 8.
Round House
Very cool house in NY, but I would have liked some coverage about the mechanicals that turn the house, and not a shot of the urinal. (Courtesy of the Zillow Blog.)
And, now for something really different…
Frozen in Time
What happens if over 200 people suddenly and instantly freeze in place in the middle of Grand Central Station?
From the same people that brought you the No Pants Subway Ride of 2008.
Technorati Tags: economy, stimulus, real estate, round, house, Portland, Oregon
February 8th, 2008
…for now. The rest of the nation….not so lucky.
According to today’s Case-Shiller Index release, Portland is only one of three markets in its 20-city index that showed 12-month positive growth in home prices.
At 1.3% growth, Portland joins Charlotte, NC (2.9%) and Seattle (1.8%) as the only shining spots nationally.
Miami, San Diego, Las Vegas, Detroit, and Phoenix have fared the worst in the past year, with a range of 13% to 15% decline in home values.
Pricing has flattened in the metro area, and S&P’s experts believe Portland will join the ranks of the declining values in the next few months. (January’s sales results from the multiple listing service should be out in a couple weeks.)
Grisly details at MSNBC.
Portland’s relative good news covered by Ryan Frank’s Front Porch blog coverage.
Technorati Tags: Portland, Oregon, homes, house, real estate, prices, sales, Case Shiller, index
Photo by nature.net, used under Creative Commons license.
January 29th, 2008
In the tempest of the current housing slowdown, the last thing you’d expect to hear is the launch of a new real estate technology startup.
Nevertheless, today marks the unveiling of Roost.com, a venture capital-backed consumer real estate search site, whose model will rely on advanced and thorough multiple listing searches, as well as partnerships with local Realtors, agents and MLS boards.
I was privy to a little advance notice of this service because my brokerage, Advanced Real Estate Services (and a select other few here in Portland) is participating in Roost’s public beta. So, if you choose Portland in the Roost interface and drill down for detailed property information, you will likely be directed to the areshome.com site to view the property details–and hopefully, engage an agent to assist in your homebuying experience.
Unlike Trulia and Zillow, Roost’s listings come from the local multiple listing service, meaning that users are seeing the actual inventory in each local MLS system. Besides Portland, Roost opened searches for Atlanta, Baltimore, Boise, Boston, Chicago, Dallas, Houston, Minneapolis, Orange County, Philadelphia, Sacramento, San Diego, and Washington, D.C.
Roost would appear to appeal to the independent agency market, like us. Many large brokers have their own search tools, but smaller agencies and individual agents cannot afford to build their own. Roost’s revenue stream will come from brokers buying click-throughs from Roost based on geography, akin to Google’s AdWords.
Roost’s launch was well-covered and analyzed this morning by real estate industry bloggers Joel Burslem, Dustin Luther, Greg Swann, plus TechCrunch.
I’ve provided a couple screen captures below, but you should try it out yourself at www.roost.com. The search parameters (image above left) are easy to modify, using the sliders we’ve come to see on sites like Trulia and others.
The search results are displayed rather quickly.
Hovering over a thumbnail of the attached photos pulls up a larger image. Very slick.
Technorati Tags: roost.com, startup, real estate, 2.0, mashup, IDX, Realtor, Trulia, Zillow, listings, areshome.com
January 23rd, 2008
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