Portland Metro/Tigard Real Estate News

In this forum we will offer discussions on a wide variety of subjects, but focus on Portland Metro and real estate. Hopefully our insights and experiences will inform, educate, challenge and entertain our readers week after week.

Thursday, May 22, 2008

Pending Home Sales on the Rise in April

As most people have heard, one of the hardest hit housing markets is Florida so to hear that things could be turning around is very good news.

It seems that lower prices might finally be luring back buyers, who had previously been waiting for the dust to settle.

In the Naples area of Florida, Realtors had their busiest month of the year. Home sales rose 6 percent to last year while pending home sales increased 25 percent. Some Naples Realtors even think they may have hit bottom. That is just the kind of positivity the housing market could use right now.

In a year the median home price fell from $390,000 to $300,000. All the homes that went into foreclosure on now on the market making it very competitive and driving down prices. Prices that had been inflated to begin with. Buyers have their pick and are pretty much guaranteed a deal which is a far different situation from a few years ago when people were camping out just to overbid on a house.

While homes under $300,000 still are seeing the most activity, listings priced $300,000 to $500,000 are experiencing an increase as well.

Although every neighborhood is different, as well as city, state and region, this is certainly a good sign.



Tuesday, May 20, 2008

Fannie Mae No Longer Requires Larger Downpayment

In response to the housing market taking a nose dive mortgage companies and been making many changes that I would call... reactionary. Because it would be crazy to prevent these sort of situations at expense of loosing the quick buck.

One of these changes was to up the downpayment percentage required of a Fannie Mae guaranteed loans. This was back in December and now that people are concerned about the lack of home sales, not just defaulting loans, the percentage requirement has been brought back down to 3 to 5 percent.



Thursday, May 15, 2008

April Market Report

April Residential Highlights
Comparing April 2008 to April 2007, market activity remains slow. On the other hand, month-to-month activity (March v. April) showed growth in some categories. One area of growth from March to April was pending sales, which grew 6.8% (2,070 v. 1,938). This is the first increase in pending sales from March to April since 2005. New listings also grew 2.7% (5,295 v. 5,155). Closed sales dropped 6.4% (1,582 v. 1,691). This drop is on par with the last three years, though, as closed sales have dropped an average of 6.7% from March to April. On the other hand, when comparing April 2008 with the same month in 2007, transactions were down across the board. New listings fell 2.9%. Closed sales and pending sales decreased 39% and 31%, respectively. At the month’s rate of sales, the 16,370 active residential listings would last 10.3 months, up from 9.1 months in March.

Comparing January-April 2008 with the same period a year ago, new listings were up 5.8%. Closed sales and pending sales were down 35.1% and 34.6%, respectively (see table below).

Sale Prices
Also of note was the first decline in average sale price since August 2002 and in median sale price since May 2001 when comparing April of the current year to the same month the year prior. Average sale price dropped 3.9% and the median fell 3.5% (see table below). One factor in this price decline may be a 51.2% (21 v. 43) decrease in the number of homes sold for $1 million or more, when comparing April 2008 with April 2007. Year-to-date, sales in this price range are down 31.9% compared with the same time last year.


Friday, May 9, 2008

West Bull Mountain Planning

A West Bull Mountain advisory committee met last week and decided on the concept plan for a community to be made from the ground up, and concluded that it needs to include language about job creation and more diverse housing than some had previously expressed.

Also studied was the disparity between what people now living in the areas inside the West Bull Mountain perimeter envision for the community which include parks, walkways and lots of trees and grass, versus the realities of the marketplace.

At the first of a series of community forums held in April had expressed a desire for neighborhoods that were similar to Lake Oswego or Sherwood. This basically solidified the goals already set. All the discussion and planning is helping to create a community that truly reflects it's citizens instead of the citizens adjusting to the community. For as most people know, but usually don't practice, proactive is better than reactive.

Workgroups and committees will forward recommendations to the Washington County commissioners for all policy-level decisions, including a concept plan that will have worked its way through a series of public hearings by next spring, with final plan adoptions occurring by summer 2009.

Of course these community forums and committees will inevitably run into the issue of funding when trying to achieve what they want. These reality checks that will repeatedly pop up might cause jobs and less-expensive housing to be factors in the planning department.

The current market just does not support the full weight of these goals, but a truly great community can still be realized with compromise.



Shrinking Homes

Americans have always considered bigger to be better, but in today's housing market times seem to be changing.

In previous years it had been predicted that there would be a mass downsizing of the American home. Yet the average size of a new home continued to rise from just over 1,600 square feet in the late 1970s to nearly 2,300 now.

But a number of trends suggest that this time Americans really might be ready to downsize. For instance, baby boomers are increasingly becoming empty-nesters and naturally they need less space. Also, between 1970 and 2000, the percentage of nuclear families went from 40% of households to 24%, according to the Census Bureau. Childless families are expected to increase. These types of families tend to spend more time away from home and simply do not have time required to maintain a large home. An example of these childless homes are the Generations X and Yers who want to reside downtown where all the restaurants and entertainment live and offer a minimal commute and smaller, easier-to-care-for living spaces.

In a February survey of potential home buyers by the National Association of Home Builders, 60% said they would rather have a smaller house with more amenities than the other way around. Online house-pricing service Zillow.com found that less expensive houses appreciate more than costlier and presumably larger homes.

New, smaller places will have to pay extra attention to design and features rather than plain space. Dying off are the rooms that, it turns out, are not actually being used. Grand muli-level foyers are impressive but are also a massive waste of space. Rooms that have more than one use will become selling points. Formal living rooms will not be needed as everyone will be in the family room. Formal dining rooms will disappear as well because the slightly larger eating area in the kitchen will already serve that purpose. Built in storage will be a must, just because they are living small does not mean they want to live in clutter.



Tuesday, May 6, 2008

Are Some Housing Markets Bulletproof?

Some of the best housing markets, the ones who kept on appreciating while the rest of the country plummeted have actually started to see some bad times of their own.

Charlotte, NC, Salt Lake City, Seattle and Portland Ore. all posted home price gains during 2007, even as more than half of the 150 markets tracked by the National Association of Realtors registered declines. But now it's looking bad for everyone.

The markets that were first and hardest were the ones who had seen the biggest boom prior, whose prices were unbelievably inflated and therefore had nowhere to go but down. The solid markets who caught the tail end of the boom but much less severe are feeling the downturn effects but for the normal economic reasons.

In Charlotte, prices have fallen about 3.4%, through February, from their August, 2007 peak, according to the S&P Case/Shiller Home Price Index.

Seattle recorded a loss of 6.5% from its July peak ,and Portland prices dropped about 5% during the same period. Salt Lake City saw a decline of about 7% in the fourth quarter of 2007, compared to the third quarter.

These areas actually remained affordable for most residents despite years of price appreciation. For example, the median home price in Seattle was $370,000 in February. And about a quarter of all homes sold there during the last three months of 2007 were affordable to families earning the area's median household income of nearly $76,000, according to the Housing Opportunity Index from Wells Fargo and the National Association of Home Builders.

In Portland 28.8% of homes sold were affordable in the last quarter of last year; in Salt Lake City the figure was 35.4% and in Charlotte it was 62.9%. Compare that with Miami, where only 13% of homes sold were affordable for most people, or San Francisco where only 7.9% of homes fell into that category.

It is not just because our prices never reach crazy, high levels but individual economies play a huge role too. In Seattle, software and aerospace jobs have kept things humming, while high-tech and telecom have done the same for Portland, and banking and tech companies have boosted Charlotte.

Geography is on their side as well. Charlotte, which is home to the headquarters of Bank of America and Wachovia has also seen an influx of retirees from the north who moved to Florida and then left after property taxes and insurance soared in the wake of severe hurricanes.

Similarly, Californians escaping the high cost of living headed up to the Pacific Northwest. Seattle has massive numbers of people moving there daily for it's vibrant downtown. Lots of creative artist, writers and web developer types moving north. Portland is experiencing a similar situation on a smaller scale. We show up on a lot of livable city surveys.

Both towns have also pursued policies of managed growth, limiting the land that can be developed, which has also helped housing prices hold up.

Salt Lake City has fewer such restrictions, but steep growth in its population, which is up about 14% since the 2000 census, has kept housing demand high.

Now the credit crunch that has made getting a mortgage harder for everyone is hitting even the strongest markets.

It is very discouraging news to hear that we will have to suffer like the rest, but the upside is that we are likely to recover more quickly than others so comparatively, it won't last too long.