Portland Real Estate Blog

A few tidbits:

• Those of you Oregonian readers may have read Ryan Frank's piece yesterday on the front page of the business section with a picture of our sign outside of our NW Ryan listing. Yes, it's still available. It is online here.

• The Oregon Association of Realtors has canceled it's RealtorVision campaign.

• I am going to do some more research on jumbo loans. What I have found is that there are no 30 year fixed loans out there. I have found a 5/1 ARM @ 5.50% and 7/1 ARM @ 5.75%. Both require 20% down.

In August 2007, the Case Shiller Index for Portland was 186.0. The August 2008 Case Shiller Index released today is 171.93, down 7.5% (wish I could say the same for my 401k). Ugly but not as ugly as the national picture:

WASHINGTON (Thomson Financial) – Home prices in major US cities posted record year-over-year declines in August, providing more evidence that prices may not have bottomed out yet.
The S&P/Case-Shiller 20-City Home Price Index released today fell for the 15th consecutive month in August, and the index is now down a record 16.6% from a year earlier. That year-over-year decline is in line with expectations from economists, many of whom were anticipating a record annual decline.

Loose lending rules helped pump up the real estate market. When lending tightened the buyer pool shrunk. I think the squeeze is on the buyer with good but not excellent credit. There are still 3% FHA loans and the USDA rural loans are up to 102%. VA loans have a 2% funding fee that the buyer pays in financing costs. The 80-20 loans are almost extinct from what I am seeing (ask your mortgage broker). That’s when there was an 80% conventional loan and another 20%, often a maxed out equity line, to make up whatever cash to close the buyer needed.

Jumbo loans exist but at significantly higher interest rates than conforming loans (those under $417,500 for most markets). That’s hurt the sales of the $500k-$750k homes (numbers chosen somewhat arbitrarily) since most of the population isn’t sitting on wads of cash for a down payment. There were first time buyers in that range before, and there still are, but not as many. Those thinking about making a change by selling what they own and moving are weary of having to sell their existing homes. There are some houses that I’d love to buy if I was sitting on the cash to do so but since I’m not, I’ll be sitting on the sidelines as well.

Up, down, up, down goes the stock market. The market is an instant pulse of the economy compared to housing reports that take time to flush out.

CNN reports:

Home construction tumbles: Housing starts fell to a 17-year low in September, according to a government report released Friday before the market opened. Starts fell to a seasonally adjusted 817,000 in the month from 872,000 the previous month. Economists were expecting a smaller decline.

Applications for building permits, considered a good indicator of future activity, fell to a seasonally adjusted rate of 786,000 in September, down from a revised 857,000 in August. Economists were expecting a smaller decline.

Does anyone have access to or know how we find out about Portland housing starts and permit applications?

Things are tough. During our sales meeting today an agent said he has 17 listings. Fifteen of them are short sales. He said that some banks he has worked with have agreed to losses of over six figures; another won’t budge on $2000. We’ve seen some amazing things happen in our economy in the last few weeks. We get to see instant reaction in the stock market but real estate reacts at a slower pace; at least the reporting of it does. It appears that the bleeding may have slowed but what things will look like a couple of months from now or years from now is beyond prediction. There are some great deals out there but there in nothing that says they won’t be even better deals in the future. Either that or someone else will have made a move. Only time will tell if it was a good move.

The print version of November’s Smart Money has a story on 25 real estate markets ready to rebound. Portland isn’t one of them. Seattle is #25. The story claims that the complete list of 100 markets can be found online at smartmoney.com/mag but I can only find October articles. I expect the site will be updated and we’ll be able to see where Portland is. We should see RMLS Market Action for September soon.

Youtube video added 10/13 @ 4:45PM

I haven’t sat down and read through the first section of the voter’s guide that came in the mail but the postcard from the Oregonians Against Unsafe Housing got my attention regarding Measure 63. Quoting directly from their website:

Back Door Attack on Homeowner Safety – Vote No on Measure 63

This November’s Ballot includes an initiative that appears on the surface to be a progressive move for homeowners’ independence. But, in reality, it will compromise the very foundation on which homeowners’ dwellings are built. Measure 63 would create exemptions for residential and farm property from state and local building permits and safety inspections if the value of the improvement is less than $35,000 in a calendar year. It would supersede current state and local laws and institute a system in which property owners may alter their structures with few limitations. The measure is only one page in length and so vaguely worded that large-scale improvements would not need permits if a project were broken into $35,000 increments over different calendar years.

For those who own or rent single family residences, you can quickly see the horrible consequences of this measure. Oregonians want to sleep safely at night knowing that work on their foundation, walls, roofs, electrical and plumbing was done to code. If this measure passes, that peace of mind will go out the window.

The Oregonian article cites the pro measure website to be BillSizemore.com but I find nothing of the initiative there. Most of the comments on Dana Tims’ article are critical of the bill. I have to agree. While the permit/inspection process is far from perfect, as both a Realtor and a licensed contractor (though not a contractor for hire), I don’t believe that Measure 63 would be a benefit.

Being able to do or not do work based on a dollar value is beyond stupid. The measure uses $35,000 worth of work in a given year because Sizemore says, “it sounds good.” An individual could easily put in $50,000 of cosmetic remodeling work and cause no safety issue (and can legally do that now). That same person could burn down a house with a $.35 switch. One of the biggest coin tosses when applying for work is the “value of project” question. Applicant aims low, BDS (in Portland) aims a higher and you land somewhere in the middle. In Portland, you permit is partially based on the value of the project being permitted- the portion that requires a permit. My $25,000 project may be your $50,000 project.

Have you registered to vote? You have until 5PM on Tuesday, TOMORROW, to do so.

Photo credit: Mike Zacchino, The Oregonian

Portland has made national news. CNN has clips running of the house in SW Portland that slid down the hill. The Today Show, incorrectly according to local reports, is saying that the slide was caused by recent rain. Geologists on Last night’s KGW report said that the house is built over an old drainage ditch. They are back on the scene this morning. Insurance experts are saying that this may be considered and Act of God and the slide might not be insured! There are six family out of their homes as of right now.

It’s enough to pause and dig out your policy? What is covered? What isn’t? Would you be covered? Do you need to make changes to your policy so that you are covered?

We live in an ever increasingly digital age. A picture was worth a thousand words and was as close to the truth as you were likely to get. With mainstream digital photography and photo editing software, a photo may not be the truth. The impetus of this post comes from another real estate related blog discussion where a Realtor has posted a picture on RMLS where the grass has been painted green using software; almost a toxic dump site green. The comments of that post begin by saying t there should be rules, followed by there are no rules where, in fact, there is a rule and then what is the punishment for breaking the rule? That’s why the subject deserves its own thread here. The photo alteration rule went into effect August 8th. I know RMLS is working on a revision of their rules now and, from what I can see, there is no modification to the status quo regarding photos. There should be some discussion. I hope RMLS, the public and Realtors participate.

RULES AND REGULATIONS OF RMLS™
REGIONAL MULTIPLE LISTING SERVICE, INC.:

3.7 Photographs. Listing Brokers may submit up to sixteen (16) photographs for all listings to be Published in the RMLS™ System. The photographs are to be submitted without any alterations…

I’d consider myself a semi-serious armature photographer. We use a mix my photographs and a professional photographer for our listings. I use a Nikon digital SLR and have a full version of Photoshop and other editing software which I’d rate myself about a B student on.

The question for me is what is an altered photograph? The first picture here is the snapshot that came off the storage device. The second simply has the color auto-corrected in Microsoft Picture Manager and is slightly cropped. Is the second photo altered? Yes, it is. Should it be considered “altered” for RMLS purposes? I think not.

This photo was just for fun. Real estate is marketing. Nothing about the subject property is changed. None of the physical attributes of the neighboring properties have changed, I’ve just drained the color out of them to highlight the house in the middle. Altered?

Cropping or editing? I could have edited the portapoti out of the picture using Photoshop. It is sitting on the property. Is cropping the picture out so it can’t be seen altering? I could have taken the photo from a slightly different angle or zoomed in from the camera to avoid it.

Is removing a pedestrian that happens to walk into that perfect shot an alteration that should constitute a violation? I don’t really think so. Is removing a power line? Yes, it’s not going anywhere. Is painting a pink house blue? Yes. Is auto correcting? No (I wish more real estate photographers would take this step). How about removing yourself from a mirror or other reflective surface? How about this shot? It is four pictures stitched together (notice the bend in the rails (this was my first attempt at this software):

RMLS clearly took a step in the right direction by adding the alteration clause but I don’t feel it can completely address the issue that easily. I’d be more than happy to participate in a group addressing it. Regarding fines? I don’t see it specifically addressed. Fines under $100 are waived if corrective action is taken within seven days of notification. I’d expect that photo-related infractions would all under this category ($2500 fine for a giving out use of our lockbox key or password into RMLS).

CNN reported this story on Friday. I’m conflicted. It’s sweet but rewarding someone for inflicting harm on themselves? Not as though Fannie Mae can afford charity these days.

Addie Polk, 90, of Akron, Ohio, became a symbol of the nation’s home mortgage crisis when she was hospitalized after shooting herself at least twice in the upper body Wednesday afternoon.

On Friday, Fannie Mae spokesman Brian Faith said the mortgage association had decided to halt action against Polk and sign the property “outright” to her.

“We’re going to forgive whatever outstanding balance she had on the loan and give her the house,” Faith said. “Given the circumstances, we think it’s appropriate.”

Residents of Akron have rallied behind Polk, who is being treated at Akron General Medical Center. She was listed in critical condition Friday afternoon, according to Akron City Council President Marco Sommerville.