I collected a few real estate related articles this week. The first couple of paragraphs of each are quoted here and the complete stories are linked. All three are somewhat interrelated.  The first, from the National Association of Realtors says that the market is picking up on its own.  The third article suggests that the Feds might act lower interest rates even further in order to stimulate the housing market.  The middle article underscores how important it is to make money available to those that qualify or even those who do not qualify under new (and needed) lending requirements .  Loan modifications have never worked the way they should have.

2012 Home Sales: Positives on Many Fronts

 NAR released its latest pending home sales index figure last week and for the second month in a row the index is up. But more than that, the index has broken 100. This is significant because the only time since the housing boom collapsed that the index has broken 100 is when the home owner tax credit was in effect. The fact that the index has returned to that level a year since the credit has been in effect means the housing market is strengthening completely on its own, without any stimulus.

CoreLogic: More Portland homes in trouble in October

More Portland area homeowners lost their property or fell behind on their mortgages in October but the region is still performing better than average.  CoreLogic Inc. , a Santa Ana, Calif.-based real estate firm, said Thursday the foreclosure rate for Portland rose to 2.45 percent in October, an increase of 0.24 percentage points compared to one year ago.

Portland’s highest rate was 2.72 percent, recorded in July 2011.  The national foreclosure rate in October was 3.51 percent, a 1.06 percentage point increase from the prior year.

Dudley Calls for Government Steps on Housing as Fed Considers More Easing

Federal Reserve Bank of New York President William Dudley called on the U.S. government to try new programs to revive the housing market while saying the central bank may still consider ways to cut interest rates.

“Implementing such policies would improve the economic outlook and make monetary accommodation more effective,” Dudley said today in a speech to bankers in Iselin, New Jersey. At the same time, it’s “appropriate” for the Fed to consider steps to ease monetary policy, he said.

Predictions for Portland’s real estate market is that it will either go up or down.  Or be flat.  Depends on who you ask.  Housing Predictor gives their 2012 prediction:

Portland should witness an increase in sales in 2012 but a weak job market and lay-offs among high-tech firms in the region will keep home sales, including condos sluggish. Portland is forecast to sustain another year of falling home prices, netting 5.1% less.

Back in October we linked to a Wall Street Journal interactive graphic with data from Fiserv Case Shiller that predicts Portland property values will increase 5.9%.  The two sources have a 10% spread and there are so many variables that crystal ball predictions are risky at best.  What we’re telling our potential clients now is that the market may remain mostly flat or even lose a little on the short-term but that with a long-term view (more than a few years) there are lots of reasons for optimism.  As a buyer how you personally weigh each of the factors will determine if this is a “Buy Now” market for you or whether the sidelines are still the place to be.

• Interest rates
• (Un)employment rates
• Size of shadow inventory- homes that will be foreclosed on or that are already owned by banks but not yet on the market
• Local and national politics- election year
• Strength of rental market
• Your personal feeling about the market- your gut
• How you qualify for a loan now versus working on your credit, building a larger down payment, etc

As a seller you have to weigh the factors above but you may not have a choice based on hardship or other events.  I started to write a list of things to consider as a seller but quickly realized that there a too many situational factors which in list format are either to vague, don’t apply or are too complex depending on the individual situation.  The best advice is going to come from having a conversation so that an educated decision can be made.  That’s true for a buyer too.  Decide on a goal and pick a strategy to get there.

If there is a legitimate endeavor you can pretty much guarantee there is a scam to go with it.  While most “for rent” postings are probably legit we’ve seen numerous scam attempts over the years using a property that is listed “for sale” as bait.  I wrote this post about Craigslist in 2009.  One of our listings became a target of a rental scam this week.

The scammer used hotpads.com account to post the home for rent which then syndicated to other real estate related websites, including Zillow, which allowed the “for rent” listing to overwrite our legitimate “for sale” listing.  The scammer went as far as to create an email address using a derivation of the owner’s name.  What tends to happen is that people do drive-bys to check out the property and once they see it they call us from the real estate sign outside.  It doesn’t take long to figure out there is a scam in progress.  In this case the lady who called had also talked to the scammer: “we’re retired and the house is vacant.  Wire money and we will send you the keys.” Presumably the callback came from a disposable cell or blocked number.

We reported the posting to both Zillow and Hotpads and they were removed within 24 hours.  Zillow has a dedicated page of “Five Tips to Help You Avoid Becoming a Rental Scam Victim.”  Zillow’s tips are listed here but go to their page for the details.  Criagslist has a similar scam awareness page.

1. Remember the mantra, “If it seems too good to be true, it probably is.”
2. Carefully analyze email correspondence for red flags.
3. Make sure that the property you are interested in is legitimately for rent.
4. Use a reputable source in your search for rental listings.
5. Finally, if someone asks you pay rent without seeing the property and signing a lease, don’t do it

October 2011′s Portland Case Shiller Index was released yesterday.  Portland slipped slightly over the previous month from 136.10 to 135.44.  October’s pricing nearly mirrors January’s 135.80 but the 12 month average still makes the Portland Business Journal’s headline, “Home prices down 4.7% in past year.” True but this time last year it was down  7.8% over the previous 12 months and the 12 month rolling average was at its worst between May 2009 and May 2008 where it dropped 16.3%.  The market’s health is improving but years of abuse isn’t going to allow it to recover overnight. The reality for 2011 is that, “flat is good.”

I has a long conversation yesterday with a reporter from Reuters.  Among the things we talked about was the ability to buy at at historic low interest rates with down payments at 3.5% for and FHA loan.  There’s the mortgage insurance hit but not much, if any, interest rate hit for these types of these loans.  Lending requirements are more stringent but for those that qualify (and want t0) money is available.  In Portland, we’re looking at January 2005 pricing according to Case Shiller.  A CS report recently pegged Portland’s 2012 potential price rise at 5.9%.

We also talked about the return of the single family property investor.  We’ve got clients looking to take advantage of a really strong rental market in Portland.  Buyer’s are using conventional financing but also self directed IRAs to purchase.  I’ll write an updated post on using an IRA to purchase real estate soon.

There are certainly positive signs for a strong 2012 but we’ve still got to be wary of Portland’s unemployment rate, local and national politics/elections and global economic problems.  Any one of these or in combination could hamper recovery.

I just downloaded the 100+ page National Association of Realtor’s 2011 Profile of Buyers and Sellers.  Obviously there’s a lot to read there but these are the highlighted stats listed for buyers:

Writing for me is like going to the gym.  Love doing it but get out of the habit and it’s hard to get back to.  Today’s release of RMLS Market Action should get me back in the groove.  Inventory is four months lower than it was this time last year.  That partially because there are currently only 9,451 active residential listings and partially because closed sales are up 18.9% from November of 2010.

Average price is down 4.6% from this time last year but edged up .3% from October.  Can we be cautiously optimistic about the Portland housing market going into 2012?  I previously wrote about the Case Shiller article predicting gains.  Yahoo/CNBC wrote “Residential Housing Ready to Waken?” on Friday of last week.  We should note that Portland has typically been about a year late to the party.

“It has become increasingly apparent to us that the pieces for a housing rebound next year are beginning to fall into place,” declared Barclays Capital analyst Stephen Kim in a recent note to investors.

Affordability and interest rates are as good as they have ever been in recent years.  There’s plenty of reason to be a pessimist too: jobs, politics, Europe being just a few of them.

We are excited to announce that we are now the Turner Team, Inc at Atlantic & Pacific Real Estate (US), LLC.  The decision to leave Prudential Northwest Properties was the hardest business decision we have ever made. We leave our old home with nothing but fond memories and the nicest things to say about their tools and people.

Atlantic & Pacific Real Estate is full-service brokerage with locations across the country and this is their introduction to the Pacific Northwest.   Founded in 2008, we are a part of the Carrington family of companies. The entire Turner Team has moved with Jenny and I.

We’re making the transition as quickly as possible but if you see something out of place we apologize.  If you need any assistance with anything let us know and we’ll be happy to help.

Happy Thanksgiving!

RMLS Market Action for October 2011 was released yesterday.  The average price of residential property in Portland is $258,700.  The median price is $221,000.  So what does the NBA lockout have to do with that?  CNBC reports that the average NBA player has lost $220,000 in wages thus far due to the lockout (Kobe has lost over a million dollars).  That means the NBA’s 450 players could have purchased 5% of Portland’s housing inventory and reduced the current 6.8 months of inventory to 6.5 months just by playing some basket ball.

In reality most of that salary income would not have been spent in Portland and it is not the players losing out.  The economic impact to Portland is of far greater concern than the impact to millionaires fighting with billionaires.   The NY Times which has a documented love affair with Portland reported on how cities that are a one-team-town suffer the most (they failed to acknowledge the Timbers).  Joe Freeman at the Oregonian also wrote of the impact to the local economy which was repudiated by economist Patrick Emerson.  The Rose Garden employs 900 people a night and the City gets $77,000 for its coffers on games days.  Six games of revenue would have paid for the police overtime last weekend at Occupy Portland protests.  All the money referenced above will be spent one way or another but a large portion probably won’t be spent in Portland.

Moving off the soapbox, let’s go back to RMLS Market Action.  The average and median prices referenced above are both declines on both an annual and monthly basis.  Inventory has pretty much remained static, up just one tenth of a month.  6.8 months of inventory is lower that it was at any point in 2010.  A positive note is both pending and closed sales are up compared to October 2010 and year-to-date compared to 2010.  More houses are selling but for less money.

We’ve updated the flowcharts that we created to explain the short sale process.  There are three perspectives: Short Sales for Buyers, Short Sales for Sellers and an Overview of the Short Sale Process.  Those are the links to the original posts.  These are the revised charts:

Every short sale is different and may or may not mirror the charts presented here.  As of 11/11/11 there are 667 properties listed as short sales of the 3459 homes for sale in Portland (19.2%).

Imitation is the sincerest form of flattery.  It’s also a copyright violation.  This post should duplicate, just like all of my other posts, on http://www.portland-property-management-companies.info/blog/.  It’s a site that I have no affiliation with and have certainly not given them permission to repost my content.

Looks an awful lot like the post I wrote that day:

I’ve always taken pride in writing my own copy and citing what isn’t mine. Apparently not the case here. Who is affiliated with the site is a little murky but my call to the domain registrant has yet to be returned.