NPR reports on the rising trend of all-cash housing transactions, including a resurgence of house flippers.

Listen at the audio link or read the article at NPR.org.

As foreshadowed by May and June’s low pending sales, the July closed sale total tells the real story of the non-tax-credit-stimulated housing market in Portland.

From a high of 2,050 closed transactions in May, the market has cooled to around 1,400 closings during what would normally be the peak home buying and selling season (the 10-year July average is 2,400 closed sales). To give it more perspective, 1,400 sales is more in line with what you would expect for a January or February of an average year. July’s pending sale figure of 1,627 signals a low closed sales month in August. The slower sales pace has raised the available inventory level to 15,271 homes on the market — or 10.8 months’ supply. The Portland area has not had 15,000+ listings on the market since November 2008.

Despite the soft volume, prices have remained steady, even rising. Compared to June, the average and median sale prices were up 2.5%. In the Portland metro area, the median sale price was $246,000 and the average equaled $297,000. These levels were -1.6% and +2.9% respectively over July 2009 results, and may be residual echoes of the tax-credit frenzy of April and June 2010.

Below are summaries of the Portland housing market, including year-to-date figures for the metro areas.

Market Summary

Below is activity by market area. Please note that the median and average sale prices are year-to-date), and the appreciation numbers are a 12-month average compared to the previous 12-month average. Total market time is the number of days between the date it went on the market and when it received an acceptable offer.

Market Report by Area

Market data courtesy of RMLS, July 2010.

Reader Darin points us to a Yahoo/Bloomberg article touting Washington and Oregon as the top two housing markets to rebound by early 2014 (funny how that number went from late 2009 now to 2014).

The article specifically calls out Bend:

The area around Bend area, in central Oregon’s high desert by the Cascade Mountains, has the second-highest four-year growth forecast, 33.6 percent, after Bremerton-Silverdale, Wash. Bend draws home buyers and visitors with its wealth of outdoor recreational opportunities, but its prices have dropped about 40 percent since hitting a peak in late 2006. Fiserv and Moody’s Economy.com now expect a rapid recovery starting next year. Greg Broderick, a real estate broker in Bend, says prices have overcorrected and buyers are seeing good value in the market. Homes priced the low hundred-thousand-dollar range “are being snapped up at a furious pace,” he says. Still, the area must deal with a higher-than-average unemployment rate, which the BLS says was 13.4 percent in June.

Yep, that jobs thing is kind of a big deal. You can’t eat lifestyle.

Full article over at Yahoo real estate.

For a second month in a row, the Portland housing market shows that it is clearly returning to its pre-tax incentive pace. This means low sales volumes when compared to historical averages in what would normally be the peak home-buying and selling season. It’s as if everyone moved their calendar up by a couple months.

March and April saw pending sales levels rise to 2,400 and 3,000 homes respectively. This translated into approximately 2,000 homes per month closing from April through June–just in time for the (recently extended) federal tax incentive deadline. By contrast, May and June experienced just ~1,500 and ~1,600 pending sales each, signaling a substandard summer for Portland home sales. For comparison’s sake, Portland’s 10-year average for this time of year is around 2,600 closings per month.

Pricing has remained stable, with the average bouncing around and the median stuck at -4% compared to 12 months ago for the 3rd month in a row. The average sale price in June was $289,000, the highest since September 2009. The median came in at $240,000, also equivalent to the fall of 2009.

The average time on market is 4 months and inventory levels are stable with 14,750 homes actively being marketed. At the current pace of sales, the existing inventory would take 7.3 months to absorb.

Market Summary

Below is activity by market area. Please note that the median and average sale prices are year-to-date), and the appreciation numbers are a 12-month average compared to the previous 12-month average. Total market time is the number of days between the date it went on the market and when it received an acceptable offer.

Market Report by Area

Market data courtesy of RMLS, June 2010.

The new buzz phrase in distressed real estate is “strategic default”, or purposely walking away from an upside down mortgage. Apparently, wealthy homeowners are handing the keys back the bank at a higher rate than their middle-class counterparts.

The NY Times reports that homeowners with mortgages in excess of $1 million are defaulting at a 1 out of 7 pace.

From the NY Times article:

More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.

Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment.

“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.

“They may be less susceptible to the shame and fear-mongering used by the government and the mortgage banking industry to keep underwater homeowners from acting in their financial best interest,” Mr. White said.

Read more at the NY Times.

Photo courtesy of Corvair Owner, used under Creative Commons license.

The homebuyer tax credit binge is over and all that’s left is the hangover.

As expected, closed sales in May were very strong, at over 2,000 transactions closed, but pending sales in the first post-tax credit month were just 1/2 of April’s performance.

Relatively low listing activity is keeping inventory down in the 7 months of availability. It’s taking 123 days on average to put a home under contract–a month quicker in North and Northeast Portland, however.

Will Portland’s housing market endure another season of lower volume, and therefore, lower prices? Is a double-dip inevitable? Or are things stabilizing?

A month or two of summertime activity (without federal incentives) will tell us much.

Market Summary

Below is activity by market area. Please note that the median and average sale prices are year-to-date), and the appreciation numbers are a 12-month average compared to the previous 12-month average. Total market time is the number of days between the date it went on the market and when it received an acceptable offer.

Market Report by Area

Market data courtesy of RMLS, May 2010.

Apparently there is a backlog of 180,000 homes that went under contract prior to April 30 but have not closed escrow in time to qualify for the Federal government’s tax credits. The Senate on Wednesday approved an extension for homes in escrow through September 30. The extension does not affect contracts accepted after April 30 and will have no impact on future home sales. The House passed a similar resolution in December.

I had not heard locally of a backlog, but I suppose homes that are short sales that are still awaiting lender approval could be affected.

More info at CNBC.

Last summer, the HGTV show “My First Place” came to Portland and selected a couple of my clients to follow and film as they purchased their first home together.

As their agent, I was sorta obligated to go along with the deal. I mean, who would turn down free publicity, right?

Well, the episode finally airs this Thursday, May 27 on HGTV. Check your local cable provider for the time, but you’re looking for the episode titled, “Living the Rock ‘n Roll Lifestyle“. (My client, Zaven, is an accomplished multi-instrumentalist and frontman for the band, Abort! Abort! The music thing is kinda key to the episode.

Without giving anything away, the house hunt did not go as planned. Hilarity ensured and it was all caught on film. Nine months later, I’m petrified at what might end up on screen, but it’s too late for that now.

I have not seen any of the footage, and have no idea how it all turned out. It must not be too bad because it is just the 2nd or 3rd episode of the new season. The production is formulaic, but less contrived than you think. We were encouraged, even implored, to share our true thoughts out loud.

We met with the crew at least a half-dozen times: the house hunt, a follow-up showing, the contract writing, the contract response, the home inspection, a meeting or two, etc. Despite working with the relaxed video, audio, and production staff, it was still a grind. Each filming stretched our visits to 3 or 4 times longer than normal, and there were moments when I felt I had to oversimplify things for the camera. Nevertheless, I’ve been on the local news a few times, and this was a much more natural and relaxed process for me.

The transaction got a little complicated at the end due to the recent restrictive lending environment, but it all worked out. Working with Zaven and his wife Amber was the best part of the whole thing, and I was delighted that we found a really cool place for them along the Williams corridor in the Boise neighborhood.

Here’s to hoping that post-production takes off a few pounds, puts a little hair back on the dome, and mostly that I didn’t say anything horrifically unprofessional.

Portland’s strong, springtime home-buying activity continued through April, with nearly 2,000 homes selling and another ~3,000 entering into contract. The sale pending number is the highest since May 2007 and is comparable to figure we saw during the bubble-buying period between 2004 and 2007.

Sale prices bounced up a tick from last month, but are still 3 to 4% down from a year ago. The average home in the Portland metro area sold for $282,100 and the median value is now at $240,000.

On average, it’s taking at least 4 months for a new listing to eventually sell. April’s absorption rate of sales vs. available listings is now down to 7.3 months of supply, however, it’s unlikely that that buyers will continue their torrid purchasing pace with the tax credit now expired.

The closed sale numbers should be strong through May and June, but we’ll keep an eye on the pending sale numbers as the canary in the coal mine that will determine if the buying binge continues.

Market Summary

Below is activity by market area. Please note that the median and average sale prices are year-to-date), and the appreciation numbers are a 12-month average compared to the previous 12-month average. Total market time is the number of days between the date it went on the market and when it received an acceptable offer.

Market Report by Area

Market data courtesy of RMLS, April 2010.

Reporting this a little late this month, but March results for Portland’s real estate market were a little eye-opening.

First off, 1,800 homes closed escrow in March. That’s ok, but not historically all that strong for March.

However, 2,400+ homes went sale pending in the month. That’s the highest number of homes under contract going back 31 months…back to the peak days of the real estate frenzy in summer of 2007. Astounding. (And it means April and May closings will be strong.)

Is this the beginning of a rebound or just a paroxysmal response to the expiring tax credit? I suspect it is the latter and as we settle into the peak real estate season, the subsidized home-buying process will wane and the true market will emerge. April’s numbers should be out around the 15th.

Market Summary

Below is activity by market area. Please note that the median and average sale prices are year-to-date), and the appreciation numbers are a 12-month average compared to the previous 12-month average. Total market time is the number of days between the date it went on the market and when it received an acceptable offer.

Market Report by Area

Market data courtesy of RMLS, March 2010.

Jason Lucas and I spent a couple hours at the John Ross condos on Monday to see every unit and to document the features, views, and finishes for all the properties going on the auction block on April 11, 2010.

Click here to view the embedded video.

[ NOTE: March 31 - We are having some issues getting the photos online. Please check back. ]

We’ve summarized the opportunities in the table below, including view direction, estimated property taxes and monthly HOA fees.  We took a couple pictures of each unit to give a rough idea of the view and kitchen set-up. Floor plans are available, too. Just ask us.

Additionally, we’ve prepared some spreadsheet analyses for the auction that might give you a sense of how you might bid. Note, if you wish to have agency advice during the auction process, you will need to register an agent (like Jason or I) with the John Ross sales office prior to April 8. Also, the auctioneer is hosting a free informational seminar on April 3 at 1:00 pm at the John Ross information office.

If you would like to talk through your strategy for the auction, give us a call: Jason Lucas at (503) 481-7332 or Ron Ares at (503) 460-7992. Jason in particular has seen dozens of units in the South Waterfront properties (including the Meriwether and Atwater) and he wrote the expanded John Ross section at the bottom of this post.

John Ross Auction

Every effort has been made to ensure accuracy, but please note these are estimates provided by the developer.

More about the John Ross Condominiums

The John Ross Condominiums were developed by Gerding Edlen along with Williams & Dame Development. The building is Portland’s tallest residential building standing 31 stories. There are 303 condo units in the John Ross ranging in size from 600 square foot studios to a 5000+ square foot penthouse. The building is unique aesthetically because of the elliptical shape of the building’s tower which also provides great views from almost all of the condos.

The interiors of the John Ross tower units are clean and modern with hardwood floors, high-end appliances, wool carpets in bedrooms, and silestone quartz or granite counter tops. Although the materials are high quality in general, the overall fit and finish of the building is a tier below the Atwater or Meriwether properties. Given the price point of the John Ross condos, however, the building offers a very competitive value for South Waterfront home ownership.

Features of the building include secure parking in the underground garage, a 5th floor garden terrace and community area, and impressive lobby with full-time concierge.

Situated in the center of the South Waterfront neighborhood, the John Ross is a block from the Portland Streetcar which connects to Downtown, the Pearl District, and Nob Hill. The Aerial Tram is also just steps away next to OHSU.

Links

John Ross Auction site
John Ross Condos site
Oregonian coverage of the auction

If you believed the Portland-area housing market was in recovery mode, February 2010’s results won’t bolster your confidence.

Yes, sales are up 18% over February 2009. And, yes, pending sales are up 45% over last year.

But if you’re a home seller, it still may not be a good time to market your property. Average and median sale prices dropped 3.3% and 2.1% respectively between January to February, and are a good 8.5% and 9.3% down from a year ago. From the peak values in 2007, prices in the Portland real estate market have declined by 23%.

At the current rate of sales, it would take 13 months to absorb the current housing inventory; better than the nearly 17 months rate this time last year. On average, homes that do sell take 5 months to find a willing buyer.

With less than 60 days left to get a property under contract and qualify for federal tax credits, activity seems to be up (looking at pending sales). This activity may be emphasizing smaller, affordable properties, thereby pulling the average prices lower, but that’s just a theory.

Market Summary

Below is activity by market area. Please note that the median and average sale prices are year-to-date), and the appreciation numbers are a 12-month average compared to the previous 12-month average. Total market time is the number of days between the date it went on the market and when it received an acceptable offer.

Market Report by Area

Market data courtesy of RMLS, February 2010.

If you’re struggling to keep your home, you may want to take advantage of an upcoming workshop and free counseling put on by the federal government.

From the Making Home Affordable Program:

A homeownership preservation workshop, sponsored by the Obama Administration’s Making Home Affordable Program, HOPE NOW Alliance and NeighborWorks® America, will be held in Portland for all homeowners who may be at risk of foreclosure. The workshop is free, open to the public, and provides a chance for homeowners to meet face-to-face with their mortgage company and a HUD-approved counseling agency to work on a solution to help them stay in their home.

WHO: Portland homeowners who are in default on their mortgage or may be at risk of foreclosure
WHAT: Free Homeownership Preservation Workshop
WHEN: Tuesday, March 23, 2010, 1:00 pm -7:30 pm
WHERE: Doubletree Hotel Portland, 1000 NE Multnomah Street, Portland, OR 97232

The Obama Administration’s Making Home Affordable Program was created to help millions of homeowners refinance or modify their mortgage payments to a level that is more affordable.

More information at www.MakingHomeAffordable.gov and a link to the flyer (in Spanish, too).

Like the neighboring Atwater Place, owners of the John Ross Condominiums have decided to auction 50 unsold units in an effort to clear the books of remaining inventory in 2010.

Opening bid prices are 47% below current list prices and in some cases, 70% off the original list prices published during the go-go days of the 2005 bubble market. For example, studio prices start at $110,000. At the high-end, a 3,456 sq. ft. 3-bedroom/3.5 bathroom unit on the 30th floor starts at $600,000. It’s current list price is $1,149,000.

Where pricing will end up is anyone’s guess, but for comparison purposes, the Atwater Place auction averaged $300 per sq. ft. back in September 2009.

Bidders can attend the April 11 auction with a $5,000 cashier’s check and a preapproval by one of the project’s preferred lenders (or proof of funds, if cash). Using a preferred lender may provide you with a $3,000 credit toward your closing costs. The transaction must close by May 26, 2010.

You must register before April 8, and if you want your own agent to advise you on your purchase, you must register them with the John Ross sales office upon your first visit.

To date, the building has sold 223 of 303 total units, and spokesmen are hopeful they can get FHA lending qualification on the building in time for the auction.

More information on the John Ross auction:
Here is the auction site, auction brochure, and Term & Conditions document.

New solutions from the Obama administration for the housing crisis continue to emerge.

From the New York Times comes:

More than five million households are behind on their mortgages and risk foreclosure. The government’s $75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done.

In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave. This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.

Taking effect on April 5, the program could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.

Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in “relocation assistance.”

The full article at the New York Times.

I put together a graph showing Portland-area median sale prices by month from 2000 through 2009.

The smooth curves show annual growth rates between 3% and 6% (from bottom to top) if you had purchased the median-priced home in January 2000. From 2000 through early 2004, home prices rose consistently in the 3 to 4% range. Then you can see the bubble pricing taking effect, jumping the growth curves and peaking in the summer of 2007.

The mid part of 2009 showed a plateau of $250,000 for a few months in a row, but even with homebuyer tax rebates and low interest rates, prices have continued their descent. Prices are now roughly equivalent with those of early 2005.

Click for a larger image.

Again, this is just a broad look at median pricing for the metro area in general (Portland, its suburbs, plus Yamhill and Columbia counties). I suspect the closer-in neighborhoods would fare better than the outlying areas, but that’s just an educated guess.

The question remains. When federal stimulus and interest rate support programs expire, what will happen to the market?

According to the Case-Shiller report, home price declines are easing throughout most of the country, including Portland–down 5.4% from the previous year.

The New York Times releases another of their nifty interactive graphs to compare markets. Be sure to click on Portland in the list.

Link to NY Times chart.

Just about every metric comparing January 2010 to January 2009 would appear to be positive news — higher sales volume & pending sales, fewer new listings, shorter marketing timelines…

Except median sale prices, which were down 4% from January 2009 and 3.7% from last month. Prices are now off 20% from the peak values registered the summer of 2007.

Even the good news is a little hollow if you think about it. If you recall, January 2009 was the weakest home sale month in RMLS recorded history: just 732 homes throughout the metropolitan area. Last month, 986 homes closed escrow, but it was only the third-worst sales result recorded.

If there is a bright spot, it’s that 1,535 homes went sale pending in January–transactions that will close in February and March. The homebuyer tax credit may create some additional interest over the next couple months, but it sure didn’t have an effect on January.

North Portland stands out as a market area where inventory is moving the quickest (56 days on market compared to the 145 days average throughout the Portland area). That’s perhaps due to affordability and relative proximity to downtown.

Market Summary

Below is activity by market area. Please note that the median and average sale prices are year-to-date (or in this case, just for January 2010), and the appreciation numbers are a 12-month average compared to the previous 12-month average. Total market time is the number of days between the date it went on the market and when it received an acceptable offer.

Market Report by Area

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1. Portland Oregon Real Estate Market Activity – May 2009 The Portland real estate market held steady through the month...
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