Comparing all of 2011 with 2010, there are mixed signals in the mls numbers. The good news is that closed home sales are up 4% over 2010 and pending sales are up 6%. However the 2011 median sales price for a Portland home is down 7.9% from the previous year. And the number of new listings is down 25.4%.

Theses conditions could push Portland real estate prices higher in the coming months.

Here’s why. The small amount of new listings coupled with a small increase in sales means less homes  for sale to choose from. (We call it inventory.)  December 2011 had 5.3 months of inventory (See the chart below from Portland’s mls.)  Four to six months inventory is generally accepted as a “neutral” market favoring neither buyers nor sellers. Less than 4 months is a seller’s market. All through 2011 the number of months of inventory has been trending down. (Again, see the mls chart below.) We started 2011 with 11.3 months of inventory.

We are expecting more foreclosed Portland homes to enter the real estate market in the coming months. Read more about Portland foreclosure trends here.  If so, buyers will have more homes to choose from. But sellers will continue to have low priced competition.

Are you looking for Portland homes for sale? You can search the entire Portland MLS from this web site. Customize your search according to your house criteria, schools and lifestyle needs. Give it a try.

Thinking of selling your home in Portland? For December the average market time was 142 days.

(This report is a snapshot in time. To compare December with previous months, see my other reports on Portland Real Estate Market Conditions.)

Portland Real Estate Market: Home Sales

December 2011 closed home sales are up 10.3% over the previous December 2010.  Pending sales are also up 19.3%. In comparing December 2011 with the previous month (November 2011) closed home sales are up 6.0% and pending sales are down 14.4%

Portland Real Estate Market: Home Prices

The median sold price for Portland real estate is up 0.5%  over the previous month. We closed out the year with a December median sold price of $216,600. That’s just a bit higher than January 2011’s median price of $215,000.

Is it a Buyers or Sellers Market for Portland Homes for Sale?

Is it a buyers market or a seller’s market? See the chart to the right.

For Portland homes for sale, it’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market;  4-6 months is a neutral market; and more than 6 months inventory is a buyers market.

All information is courtesy of RMLS.

For the short term Portland home buyers and investors should see the Portland real estate market improving. Long term, home sellers may see the beginning of the end of the foreclosure homes bloating the market. (Although it may take most of 2012 to begin to see  strong results. There are still a number of foreclosures in Portland to be sold.)

For home buyers and investors 2012 is the year of opportunity.

The number of foreclosure homes will keep Portland home prices low. The number of foreclosures in Portland and short sale properties should increase a bit over 2011 numbers. The increase in inventory means more choice for buyers and less multiple offer bidding war situations. Lenders are likely to approve more short sales. This will also increase the number of homes in the Portland real estate market. (See below: Effect of Delayed Foreclosures in Portland for 2012)

Portland home sellers need to realize that foreclosure homes and short sales will still be an inconvenient reality of the Portland real estate market for at least another year.  (See below: Delayed Foreclosures in Portland for 2012) Learn more about buying bank owned properties here.

Foreclosure homes – Foreclosure filings

For 2011, foreclosure filings were down over 30% from 2010 filings. They were also down over 30% from 2009 filings. In fact, the number of foreclosure homes filed in  December 2011 were the lowest since 2007.  Nationally, less than 2% of U.S. houses had a foreclosure filing in 2011. That’s lower than in 2010, 2009 or 2008.

So for 2011 the number of foreclosure homes decreased. That’s good, right? Well possibly, but lower foreclosure filing numbers may have more to do with legal issues and challenges for financial institutions than with the amount of home owners not making their house payments.  That leads us to the issue of delayed foreclosures and what that means for foreclosures in Portland.

What are delayed foreclosures, how do they affect bank owned properties for sale?

During 2011 institutions with bank owned properties faced a number of document and legal issues. Remember “robo signing”? Many foreclosure homes were removed from the real estate market while financial institutions dealt with these challenges.

Industry watchers agree that the number of foreclosure filings for 2011 was artificially low while these legal issues were being dealt with. Expect the number of 2012 foreclosures in Portland to rise as financial institutions foreclose on homes that were delayed in 2011.

Effect of delayed foreclosures on the 2012 Portland real estate market

1. The amount of delayed foreclosures is expected to be smaller than the number of foreclosure homes in previous years. So the resulting decline in home prices should be smaller than in previous years.  This may be the light at the end of a very long tunnel for home sellers.

2.  More foreclosure homes to sell means more housing inventory for buyers. That means more choice and less multiple offer situations on foreclosures in Portland. This Realtor will be happy to have her clients not forced into bidding wars on bank owned properties.

3.  Many industry watchers feel lenders are likely to approve more short sale offers rather than deal with the legal issues of foreclosure homes and the hassles of owning, maintaining, and selling foreclosure properties. If this is correct, it should also move the glut of potential foreclosure homes through the real estate market.

There has been so much news about stricter lending requirements over the past few years. Many folks who could be first time home buyers think they are unable to buy right now. Some folks think you need 10% or 20% of the sales price to buy a home now. Some think there are no loans for first time home buyers.  Well I’m here to tell you that is just wrong information.

You too can take advantage of historic low interest rates and low prices for Portland real estate. 3.75%   is the current FHA loan interest rate for buying a home.  (Click here to get more complete information including APR.) Call me and I’ll show you the way to buy a home!

How much down payment do I need for buying a home in Portland? That depends on the type of loan you will use.

3.5% of the sales price for FHA loans

0%    of the sales price for Veterans loans or

0%     of the sales price for USDA (rural property) loans

Let’s talk about the FHA loans for buying a home in Portland.

I am not generally an advocate of zero down payment for my home buying clients. (Although  in some situations zero down payment makes sense.) Using an FHA loan to buy a home in Portland and the metro area can be the best route for first time home buyers  (and also for move up buyers who have little equity in their current house but are interested in buying a home).

If you want to use FHA to buy a home in Portland or the metro area,  your price range is <$418,750 for a single family home or <$536,050 for a duplex.  Those loan limits should make home buying easy. The current median home price in the Portland area is $225,000.  (Educate yourself before buying a home. Learn about the current Portland real estate market.)

Use the buttons to the right to search the Portland MLS and find homes for sale in your price and area.

FHA loans are made by banks and mortgage bankers and other financial institutions. The loans are guaranteed by the federal government against default. This means less risk to lenders. Less risk means lower down payment for the home buying public.

You may qualify for an FHA loan if you are:

• a lawful residents of the United States
• of legal age to sign
• able to show enough income to qualify
• going to use the home as a residence

Want to know the current FHA loan limits in Multnomah, Washington, Clackamas, Marion or Yamhill County?
Use the arrows on this widget to change county.

Home buying takes a bit of thought and preparation.

Call me if you’d like a copy of my home buying information packet.  It contains information I’ve compiled in my 25 years of guiding clients through the home buying process. There is information for first time home buyers and more experienced people buying a home in Portland.

Buying a home that needs repairs using an FHA loan

It can be done. Here’s what FHA has to say at http://www.fha.com/fha_article.cfm?id=191:

One question many newcomers to the FHA loan process ask: Is it possible to purchase a fixer-upper with an FHA home loan? This basic question makes all the difference for some applicants–those willing to put in time and effort to remodel or repair a property could find major savings on their initial home purchase. The FHA does allow borrowers to locate a fixer-upper; under what is known as HUD’s 203(k) program, a qualified borrower can not only purchase such a home but also include the cost of repairs or improvements into the loan.

There were more closed home sales in Portland in November than there were in October or in the previous November. Sold home prices are also up. A home purchased in January, 2011 would cost about $10,000 more in November.

Do you want to buy a home in Portland? Can you believe these interest rates? Fixed rate FHA loans and conventional loans are still under 4%. Now if buyers just had a few more homes to choose from…

(Looking for Portland homes for sale? You can search the entire Portland MLS from this web site. Customize your search according to your house criteria, schools and lifestyle needs. Give it a try.)

Thinking of selling your home in Portland? For November the average market time was 135 days.

(This report is a snapshot in time. To compare October with previous months, see my other reports on Portland Real Estate Market Conditions.)

Portland Real Estate Market: Home Sales

For November 2011 closed home sales are up 18.9% over the previous November 2010.  Pending sales are also up 18.2% over November 2010.

In comparing November 2011 with the previous month (October 2011) closed home sales are up 3.2% and pending sales are down 10.3%

Portland Real Estate Market: Home Prices

The median sold price for Portland homes for sale is up 3.3%  over the previous month. For November 2011 the median sales price is $10.000 higher than the median sold price for January 2011.

Is it a Buyers or Sellers Market for Portland Homes for Sale?

Is it a buyers market or a seller’s market? See the chart to the right.

For Portland homes for sale, it’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market;  4-6 months is a neutral market; and more than 6 months inventory is a buyers market.

All information is courtesy of RMLS.

Portland home sales this year are shaping up to be an improvement over 2010. According to the latest stats from RMLS, closed sales are up again compared with last year. For October 2011 closed sales are up 14.1% compared with October 2010. Pending sales are also up 15.1% compared with last year.

Thinking of buying a home in Portland? Last week the 30 year fixed rate for an FHA loan was  still 3.75%. Amazing!  Who knows how long these low rates will last.

Thinking of selling your home in Portland? For October the average market time was 136 days.

(This report is a snapshot in time. To compare October with previous months, see my other Market Conditions Reports.)

Portland Real Estate Market: Home Sales

Closed sales for October 2011 up 14.1% over the previous October 2010.  Pending sales also up 15.1% over October 2010.

Comparing October 2011 with the previous month (September 2011) closed sales are down 7.1% and pending sales are down slightly 0.9%

Portland Real Estate Market: Home Prices

The median sold price for Portland real estate is down  5.6%  over the previous month. For October 2011 the median sales price is $2,800 higher than the median sold price for January 2011.

BUYERS MARKET? OR SELLERS MARKET?

Is it a buyers market or a seller’s market? See the chart to the right.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market;  4-6 months is a neutral market; and more than 6 months inventory is a buyers market.

All information is courtesy of RMLS.

Yet refinancing to today’s low, low rates has been all but impossible for many home owners trying to avoid foreclosure.

If you are trying to avoid foreclosure by making your payments more affordable, changes to the Obama administration’s Home Affordable Refinance Program (HARP) could help you stay in your home. The changes coming out by the end of the year are expected to help you refinance even if you owe more than then current market value of your home.

Here’s how the Wall Street Journal describes the original HARP program in their blog.

What is HARP? The Obama administration in 2009 rolled out HARP to refinance borrowers whose loans were backed by Fannie Mae and Freddie Mac and who were current on their payments. The idea was simple: If you were making your payments on time but didn’t have enough equity to refinance, you would be able to lower your rate without having to pay down your mortgage balance or take out mortgage insurance.

Initially, the program was limited to borrowers who owed between 80% and 105% the value of their homes. In mid 2009, the program was opened to borrowers who owed up to 125% the value of their homes.

But some of the  HARP program requirements for lenders and borrowers made it very difficult for home owners to use the program to refinance and try to avoid foreclosure. That’s why the President and his administration are making changes to the program. The details are to be announced mid November.

The changes coming at the end of the year will allow home owners to refinance even if their loan is higher than 125% of the market value of their home. There is one important catch, your home loan must be owned by Fannie Mae or Freddie Mac. If you’re not sure, you can click on these links.

If reducing your monthly mortgage payment by a couple of hundred dollars will help you avoid foreclosure and keep you in your home. This program could be a life saver. In the new rules to be announced soon, lenders will face less risk in refinancing the loans. Home owners will have a streamlined set of requirements:

• Show you’ve made your last six house payments,
• Verify you haven’t missed more than one payment in the last year and
• Prove you have a source of regular income

These changes to the HARP guidelines should be made clear around the middle of November 2011. Expect the banks to have their revised programs in place by the beginning of December. Although the HARP program was set to expire in June 2012, one part of the change is to extend the program through 2013. But don’t wait till then… the program is designed for home owners trying to avoid foreclosure to take advantage of our extremely low interest rates. Who knows when rates will go up, so act as soon as you can!

Closed sales and pending sales are up over last year this time. Comparing closed sales for the third quarter of 2010 with the third quarter of 2011 closed sales were up a whopping 21.5%. (Pending sales increased 21.6% and new listings were down 27.6% over third quarter last year.)

Thinking of buying a home in Portland? Last week the 30 year fixed rate for an FHA loan was 3.75%. Amazing!  Who knows how long these low rates will last. (This report is a snapshot in time. To compare September with previous months, see my other Market Conditions Reports.)

Portland Real Estate: Sales

Closed sales for Sept 2011 up 13.4% over the previous Sept 2010.  Pending sales also up 17.5% over Sept 2010.

Comparing September 2011 with the previous month (August 2011) closed sales are down 12.1% and pending sales are down 14.9% (The pending sales figure is slightly skewed for August 2011 by a change in the way RMLS reports pending short sales.)

Portland Real Estate: Prices

 The median sold price for Portland real estate is up just a small amount (2.6%)  over the previous month. For September 2011 the median sales price is $15,800 higher than the median sold price for January 2011.

BUYERS MARKET? OR SELLERS MARKET?

Is it a buyers market or a seller’s market? See the chart to the right.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market;  4-6 months is a neutral market; and more than 6 months inventory is a buyers market.

All information is courtesy of RMLS.

judging by the August 2011 numbers from our local MLS. Closed sales are up dramatically (30.7%  over the previous August) and pending sales are also up. Portland home buyers must really be taking advantage of the extremely low interest rates. Last week the 30 year fixed rate for an FHA loan was 3.8%. Amazing!

(This report is a snapshot in time. To compare August with previous months, see my other Market Conditions Reports.)

Portland Real Estate Market: Sales

Closed and pending sales are up for August 2011. Compared with the previous August (2010), closed home sales in the Portland metro area are up 30.7% and pending sales have increased 29.6%

Compared with the previous month (July 2011) closed sales are up 5.6% and pending sales are up 13.4%/ (The pending sales figure  is slightly skewed for August 2011 because of a change in the way RMLS reports pending short sales.)

Portland Real Estate Market: Prices

Sold prices for Portland real estate are down just a small amount over the previous month. That’s the first time in 2011 that the month to month sold price change has decreased.  Even so, the median sold price for August 2011 is $10,000 higher than the median sold price for January 2011.

BUYERS MARKET? OR SELLERS MARKET?

Is it a buyers market or a seller’s market? See the chart to the right.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market;  4-6 months is a neutral market; and more than 6 months inventory is a buyers market.

All information is courtesy of RMLS.

Lesley B

Rick V

So take a walk across the street and take a good look at your house. Look at nearby houses, too, and see how yours compares.

1.  Landscaping  Is your landscaping at least average for the neighborhood? If it is not, buy a few bushes and plant them. Do not put in trees. Mature trees are expensive, and you will not get back your investment. Also, immature trees do not really add much to the appearance value of the home.

If you have an area for flowers, buy mature colorful flowers and plant them. They add a splash of vibrancy and color, creating a favorable first impression. Do not buy bulbs or seeds and plant them. They will not mature fast enough to create the desired effect and you certainly don’t want a patch of brown earth for home buyers to view.

2.  Lawn  Your lawn should be evenly cut, freshly edged, well watered, and free of brown spots. If there are problems with your lawn, you should probably take care of them before working on the inside of your home. This is because certain areas may need new sod, and you want to give it a chance to grow so that re-sod areas are not immediately apparent. Plus, you might want to give fertilizer enough time to be effective.

Always rake up loose leaves and grass cuttings.

3.  The Front Door & Entryway  The front door should be especially sharp, since it is the entryway into the house. Polish the door fixture so it gleams. If the door needs refinishing or repainting, make sure to get that done.

If you have a cute little plaque or shingle with your family name on it, remove it. Even if it is just on the mailbox. You can always put it up again once you move. Get a new plush door mat, too. This is something else you can take with you once you move.

Make sure the lock works easily and the key fits properly. When a home buyer comes to visit your home, the agent uses the key from the lock box to unlock the door. If there is trouble working the lock while everyone else stands around twiddling their thumbs, this sends a negative first impression to prospective home  buyers.

4.  House Exterior  The big decision is whether to paint or not to paint. When you look at your house from across the street, does it look tired and faded? If so, a paint job may be in order. It is often a very good investment and really spruces up the appearance of a house, adding dollars to offers from potential home buyers.

When choosing a color, it should not be something garish and unusual, but a color that fits well in your neighborhood (and with your neighborhood association). Of course, the color also depends on the style of your house, too. For some reason, different shades of yellow seem to illicit the best response in home buyers, whether it is in the trim or the basic color of the house.

As for the roof, if you know your house has an old leaky roof, replace it. If you do not replace a leaky roof, you are going to have to disclose it and the buyer will want a new roof, anyway. Otherwise, wait and see what the home inspector says. Why spend money unnecessarily?

5.  The Back Yard  The back yard should be tidy. If you have a pool or spa, keep it freshly maintained and constantly cleaned. For those that have dogs, be sure to constantly keep the area clear of “debris.” If you have swing sets or anything elaborate for your kids, it probably makes more sense to remove them than to leave them in place. They take up room, and you want your back yard to appear as spacious as possible, especially in newer homes where the yards are not as large.

1.  Kitchen and Baths  If your home is dated, remodeling the kitchen and baths will give you the most dollar for dollar return on your investment. There are many levels of updating from repainting or re-facing cabinets to a complete kitchen re-do with cabinets, counter top and appliances. Consider your home’s competition (other homes for sale near by) and your budget.

When deciding how much to update, give me a call. We can assess your home’s condition, evaluate your home’s competition and determine the best ways to use your updating budget.

At the very least, be sure the kitchen and baths are clean, clean, clean plus uncluttered and sweet smelling. This may be all you need.

2.  Plumbing and Fixtures  All your sink fixtures should look shiny and new. If this cannot be accomplished by cleaning, buy new ones where needed. If you don’t buy something fancy, this can be accomplished inexpensively and they are fairly easy to install. Make sure all the hot and cold water knobs are easy to turn and that the faucets do not leak. If they do, replace the washers. It is not difficult at all.

Check to make sure you have good water pressure and that there are no stains on any of the porcelain. If you have a difficult stain to remove, one trick is to hire a cleaning crew to go through and clean your home on a one-time basis. They seem to be wonderful at making stains go away.

3.  Ceilings, Walls and Painting  Check all the ceilings for water stains. Sometimes old leaks leave stains, even after you have repaired the leak. Of course, if you do have a leak, you will have to get it repaired, whether it is a plumbing problem or the roof leaks.

You should do the same for walls, looking for not only stains, but also areas where dirt has accumulated and you just may not have noticed. Plus, you may have an outdated color scheme.

Painting can be your best investment when selling your home. It is not a very expensive operation and often you can do it yourself. Do not choose colors based on your own preferences, but based on what would appeal to the widest possible number of buyers. You should almost always choose an off-white color because white helps your rooms appear bright and spacious.

4.  Carpet and Flooring  Unless your carpet appears old and worn, or it is definitely an outdated style or color, you probably should do nothing more than hire a good carpet cleaner. If you do choose to replace it, do so with something inexpensive in a fairly neutral color.

Repair or replace broken floor tiles, but do not spend a lot of money on anything. Remember, you are not fixing up the place for yourself. You want to move. Your goal is simply to have as few negative impressions upon those who may want to purchase your property.

5.  Windows and Doors

Check all of your windows to make sure they open and close easily. If not, a spray of WD40 often helps. Make sure there are no cracked or broken windowpanes. If there are, replace them before you begin showing your home.

Do the same things with the doors – make sure they open and close properly, without creaking. If they do, a shot of WD40 on the hinges usually makes the creak go away. Be sure the doorknobs turn easily, and that they are cleaned and polished to look sharp. As buyers go from room to room, someone opens each door and you want to do everything necessary to create a positive impression.

6.  Odor Control  For those who smoke, you might want to minimize smoking indoors while trying to sell your home. You could also purchase an ozone spray that helps to remove odors without creating a masking odor.

Pets of all kinds create odors that you may have become used to, but are immediately noticeable to those with more finely tuned olfactory senses. For those with cats, be sure to empty kitty litter boxes daily. There are also products that you can sprinkle in a layer below the kitty litter that helps to control odor. For those with dogs, keep the dog outdoors as much as possible. You might also try sprinkling carpet freshener on the carpet on a periodic basis.

7.  Take A Room By Room Tour  Your buyers will. Make note of items that need to be fixed or replaced. Then tackle the list. Does the garbage disposal sound as if a plane is landing in the back yard? Does the window blind in the den come off the wall when you raise and lower it? We all live with things like this in our homes. My kitchen cold water faucet works in reverse. It’s one of the things I’ll fix before I sell my  home.

8.  Costs of Repairs  Do not do anything expensive, such as remodeling. If possible, use savings to pay for any repairs and improvements – do not go charging up credit cards or obtaining new loans. Remember that part of selling a house is also preparing to buy your next home. You do not want to do anything that will affect your credit scores or hurt your ability to qualify for your next mortgage.

Make cosmetic improvements, particularly on the front of the house.  Potential buyers are trying to eliminate houses from consideration, make yours one they can’t.

The interior of your home is important as well.  Thin out your possessions with the same ruthless determination you’d bring to weeding your garden.  The fewer things you have in a room or closet, the larger it will appear.

1.  First Impressions are lasting.  Your first step should be to walk across the street and look objectively at your property.  Consider what you can do to make the place more appealing from the outside. The front door greets the prospect.  Make sure it is fresh, clean, and scrubbed looking.  Keep lawn trimmed and edged, and the yard free of refuse. Plant flowers and have a pot of posies on the front porch. Fix leaking gutters and do some touch-up painting – especially around the front door.

2.  Decorate for a quick sale.  Faded walls and worn woodwork reduce appeal.  Repaint rooms that need it and if the cost is not too great, replace badly worn carpeting. Why try to tell the prospect how your home could look, when you can show him by redecorating?  A quicker sale at a higher price will result.  An investment in new kitchen wall treatment will pay dividends.

3.  Let the sun shine in.  Open draperies and curtains and let the prospect see how cheerful your home can be (dark rooms do not appeal).  If it’s a normal Portland day with no sun at all—turn on your lights!

4.  Fix that faucet!  Dripping water discolors sinks and suggests faulty plumbing.

5.  Repairs can make a big difference.  Loose knobs, sticking doors and windows, warped cabinet drawers and other minor flaws detract from home value.  Have them fixed. Make sure all appliances are scrupulously clean and operating properly.

6.  From top to bottom.  Display the full value of your attic and other utility space by removing all unnecessary articles.

7.  Safety first.  Keep stairways clear.  Avoid cluttered appearances and possible injuries.

8.  Make closets look bigger.  Neat, well-ordered closets show that space is ample.

9.  Bathrooms help sell homes. Check and repair caulking in bathtubs and showers.  Make this room sparkle.

10. Arrange bedrooms neatly.  Remove excess furniture.  Use attractive bedspreads and freshly laundered curtains.

Pricing your home correctly:

• Can save you thousands of dollars on your family’s largest investment

• Reduces risk because an overpriced home may eliminate some buyers if it is out of their price range

• Ensures that other agents will show the home

• Is good when it comes time to appraise.  Your home must appraise at the selling price for the buyer to get financing

With this in mind, here is what you need to know:

1. Market value is determined by the price a buyer will pay and a seller will accept in an “arms length” transaction. It is not determined by the amount you need to net from your home plus selling expenses or by the price you paid plus your upgrades and repairs. I know sellers like to think this way, but buyers could not care less. They just compare the price and amenities to other homes for sale.

2. Your prime marketing time, i.e. greatest number of showings, comes when your home first hits the market. At this point your home attracts the most attention from serious buyers. “Testing the Market” with an above market price can waste this precious marketing time.

3. When your home is priced above fair market value, you limit the amount of buyers who can and will view your home. (See number 2 above.)

4. You’re likely to receive a higher price for your home if you list it at fair market value than if you list it above fair market. Why is this? With above fair market pricing, buyers perceive your home is over priced and they “over compensate” on their offer amount. Remember, buyers see many more homes in your price and area than sellers do. They quickly become pricing experts. You should too.

5. If your home is on the market a long time, buyers perceive it as over priced or has “issues.” They make their offering price based on this belief.

To compare July 2011 figures with June 2011 check my previous blog.

A snapshot of the Portland real estate market for Buyers and Sellers:  Remember July? That’s the month the entire country (the entire world?) held its breath waiting for the US Congress to raise the nation’s debt limit.  Uncertainty abounded.  Hardly a time to make the biggest purchase of one’s life. And yet July 2011 saw more closed home sales and more accepted offers (pending sales) than the previous July. Inventory levels of homes to choose from are also down. Home prices in Portland continue to rise. Read on for more details.

Comparing July 2011 Portland real estate numbers with July 2010:  Close home sales were up 21% over the previous July. Pending sales were also up 18.4%. There are 27% less homes available to buy in Portland than there were in July 2010.

The average market time for a home for sale in Portland is 132 days. It was 121 days this time last year.

July 2011 compared with June 2011 Portland home sales:  June had more closed sales and pending sales. In July the closed sales went down 12.7% and pending sales also went down 3.7%. New listings decreased by 6.4% compared with June. Maybe we can blame it on Congress?

At the current rate of sales the Portland real estate market has 7.0  months of inventory. (In June there were 6.0 months of inventory. See the chart and explanation below for more details.)

Sales Prices  are still lower than the previous July. The average sales price for July 2011 was 7.4% lower than July 2010 and the median price is down 7.6%. But here’s the interesting thing, prices continue their gentle rise since the beginning of the year. The average sales price for July 2011 is 3% higher than June 2011. The median sales price is 1.9% higher than June. This is the seventh straight month of price increase. (See the Portland Metro Residential Highlights chart below for more details.)

In January 2011, the median sold price for Portland homes was$215,000. In July it is $227,200.  That’s a $12,200 increase in median home prices for the year so far.

Is it a buyers market or a seller’s market? See the chart below.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market;  4-6 months is a neutral market; and more than 6 months inventory is a buyers market. All information is courtesy of RMLS.

To compare June 2011 figures with May 2011 check my previous market conditions blog.

A snapshot of the Portland real estate market for Buyers and Sellers: Portland home prices continue their  gradual rise. Since January 2011 the median sold price for Portland homes has increased $7,900. (See the chart below.) As prices start to rise and interest rates remain at near historic lows, the number of homes available to buy has shrunk. There are getting to be fewer homes to choose from, and they are costing a little more each month. If you are waiting to see the bottom of the market, you may have to look in the rear view mirror. There are still lots of great homes to buy. Call me. I’ll help you set up an on-line search for homes for sale.

Comparing June 2011 Portland real estate numbers with June 2010: Closed home sales were down a little bit (2.7%) this June over last June. However pending sales were up a huge 23.7% over the previous June. Pending sales are homes where an offer has been accepted but the sale has not yet closed. June’s pending sales are July’s closed sales in many cases. New listings of homes for sale in Portland dropped 22.4% compared with June 2010.

The average market time for a home for sale in Portland is 134 days. It was 121 days this time last year.

June 2011 compared with May 2011 Portland home sales: Closed home sales are up 12.4% over last month while pending sales are down -7.7%. New listings are also down 5.8% from last month.

At the current rate of sales the Portland real estate market has 6.0 months of inventory. (In May there were 6.8 months of inventory. See the chart and explanation below for more details.)

Sales Prices: Compared with the previous June, the average sales price is down 7.8% and the median price is down 7.1%. However, we continue our 2011 trend of gently increasing the median sales price each month. The median sales price for Portland real estate is up for June 2011 by 1.3% over May 2011. (See the Portland Metro Residential Highlights chart below for more details.)

I’ve graphed the median sales price for Portland real estate for the past 13 months. You can see our slow but steady rise in prices. Does 6 months price increase make a trend?

For June the average price for buying a home in Portland is $267,100 and the median price is $222,900.

Is it a buyers market or a seller’s market? See the chart below.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market;  4-6 months is a neutral market; and more than 6 months inventory is a buyers market. All information is courtesy of RMLS.

We’re talking buying a home in distressed condition (fixer-uppers) or distressed terms (short sale ). Frequently it’s both (cash only terms due to condition). Here’s more about buying Foreclosures. Here’s more about buying Short Sale Properties.

Maybe the home needs a new roof and electrical panel. The owner took the furnace with him when he was forced to leave. And the septic system is “iffy.” (I don’t have to make this stuff up. Reality is crazy enough.) Possibly the seller needs his lender to go “short” on what is owed, or the bank owns the home and just doesn’t get it that a major rehab is required.

If you can just figure out how to finance this piece of Portland real estate, you know you can increase its value and turn into a beautiful home.  You just need a lender who thinks like you do.

Traditional lenders must follow regulations that make it near impossible for owner occupied buyers and investors to get financing at all or on terms that makes sense for these kinds of properties.

That’s why I’m so glad I attended the class “Financing Tools for Difficult Times” presented by John DesCamp Sr. of The Legacy Group. His company operates two divisions: one is a traditional mortgage bank, and the other is a private institutional lender that has solutions to many of the challenges traditional lenders throw in the path of buying distressed property.

Some of those traditional lender challenges include:

• large down payment requirements;
• loan to value ratios (loan amounts) computed on the lower of purchase cost or market value;
• tight limits on the amount sellers can contribute on behalf of buyers;
• restrictions on gift funds and other forms of collateral buyers may use.

The end result is that traditional loans on distressed properties require so much cash down payment from buyers that most distressed properties just don’t make financial sense to purchase and most buyers don’t have enough resources to make the purchase.

Non-traditional loan structures (typically, loans from a capital company like Legacy Group Capital) don’t use one-size-fits-all federal rules. They look at each project individually to provide funding that makes sense. It may involve a short term construction loan while the property is being put back into shape and then a permanent loan on the rehabbed property. Or it may mean one loan based on the value of the property after it is improved, taking into account the completed value of the home rather than just the costs to make those improvements.

There is even an alternative to the rehab loan FHA 203(k) that can save the borrower thousands of dollars over the course of the loan.

If you think you want to reap the equity benefits of buying a home in Portland that needs fixing, call me. Or call John DesCamp. Mention my name and he’ll work extra hard for you.

Here’s how to contact Anne Kadin, Meadows Group, Inc., Realtors: 503 320-3163

Here’s how to contact John DesCamp Sr., The Legacy Group

Phone: 503.224.4033; Cell: 503.780-7743 Email johndsr@legacyg.com (MLO-114798)

It’s a slow but steady upward trend in the Portland real estate market. The median sold home price has shown a small but consistent upward trend every month of 2011. January 2011’s median  price was $215,000. In May the median  price  is $220,000.  Portland home buyers: It’s time. Let’s go look at homes!

To compare May 2011 figures with April 2011 check my previous market conditions blog.

A snapshot of the Portland real estate market for Buyers: In general, May figures (as reported by the RMLS) are improved over April’s numbers. There are more closed sales than in April, more pending sales, and the number of new listings increased 7.7% That means more homes for you to choose from. Interest rates are still well below 5% for most borrowers.  It’s a great time to buy a home in Portland.

Comparing May 2011 Portland real estate numbers with May 2010: The number of closed homes are down for May 2011 by 15%. But pending sales are up a huge 45.1% over the previous May. New listings are 4.1% less than the previous May.

May 2011 compared with April 2011 Portland home sales: Closed homes are up 8.1%, pending sales are up also 8.1% and there are 7.7% more new listings.

At the current rate of sales the Portland real estate market has 6.8 months of inventory. (In April there were 7.2 months of inventory. This is the lowest number of months of inventory since October 2009 when there were 6.5 months of available homes for sale. See the chart and explanation below for more details.)

Home Prices Comparing May 2011 with May 2010, the average sold home price is down 4.8% and the median home price is down 7.9%. In a month to month comparison of April and May 2011, the average sales price is down just a tiny bit (-1.8%) while the median sales price increased just a tiny bit (0.1%)  (See the Portland Metro Residential Highlights chart below for more details.

For May 2011 the average home price is $262,400 and the median home price is $220,000.

Is it a buyers market or a seller’s market? See the chart below.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market; 4-6 months is a neutral market; and more than 6 months inventory is a buyers market. All information is courtesy of RMLS.

To compare April 2011 figures with March 2011, check my previous blog.

A snapshot of the Portland real estate market for Buyers: If you are thinking of buying a home in Portland, now is a good time to act.  The number of homes to choose from is shrinking and prices are starting to rise. They are currently at 2004 home price levels. With interest rates still under 5% for many borrowers, there are many good opportunities to buy a home in Portland.

Comparing April 2011 Portland real estate numbers with April 2010: closed sales decreased 17%, pending sales were 33% less and new listings also are less by 34.2%.

April 2011 compared with March 2011 Portland home sales: again closed sales are down, but only by 0.3%. Pending home sales are also slightly down –by 0.5%. But new listings are slightly up over last month by 1.4%.  On the whole, April looks pretty much like March.

At the current rate of sales the homes for sale in the Portland real estate market would last about 7.2 months. (In March  there were 7.1 months of inventory. See the chart and explanation below for more details.)

Portland Home Sale Prices: Home prices are now at 2004 to 2005 price  levels.

The average sales price for a home in Portland dropped 5.2% compared to April 2010 and the median price went down 8.4% to $219,900. (See the Portland Metro Residential Highlights chart below for more details.)

However, the average sales price for April 2011 increased 2.4% over March 2011 average; and the median sales price increased 2.3%.  In fact the median sold price has slowly but steadily increased every month this year. I’ve graphed the median sold prices for the past 12 months. Here it is:

Median sold price for Portland homes May 2010 through April 2011

Here’s more information from RMLS.

Is it a buyers market or a seller’s market? See the chart below.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market; 4-6 months is a neutral market; and more than 6 months inventory is a buyers market. All information is courtesy of RMLS.

To compare March 2011 with February 2011, check my previous market conditions blog.

A snapshot of the Portland real estate market for buyers: The median price for a home in Portland is $215,000. Prices in the Portland real estate market may be starting to bottom out. Here’s what’s happening. First there is a significant drop in number of homes for sale in Portland. More buyers are closing on their new homes and less sellers are putting there homes on the market in these uncertain times. That means less “inventory” or homes for sale in Portland. When there is less for sale, demand pushes prices up. And we’re starting to see a very small increase in prices. The figures for March 2011 are just a small piece of information. Is it a trend or a fluke? Stay tuned.

Comparing March 2011 with March 2010: We had 10.2% less closed sales than last March. Pending sales are also 16.2% less, and new listings are way below March 2010. They are down 38.7%

March 2011 compared with February 2011: Closed sales are up 50.4%. Pending sales are up 26.5%. And new listings are even on the increase—up 6% over last month.

At the current rate of sales the homes for sale in Portland and the metro area would last for 7.1 months if no new homes came on the market. See the chart below for more information about what this means.

Sales Price: are up. I haven’t written that in a while! Compared with February 2011, the average sales price for Portland real estate is up 6.8% and the median price is also up slightly (0.6%). Compared with March a year ago the average sales price is down 6.8% and the median is down 10%.

With the first quarter of 2011 competed, the average sold price of a home for sale in Portland dropped 9.2 % compared with the first quarter of 2010.

Is it a buyers market or a seller’s market? See the chart below.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market; 4-6 months is a neutral market; and more than 6 months inventory is a buyers market. All information is courtesy of RMLS.

To compare February 2011’s numbers with January 2011, check my previous market conditions blog.

A snapshot of the Portland real estate market for buyers: While the number of Portland homes for sale to choose from is going down (through homes being sold and less homes coming on the market to replace the inventory), prices appear to be stabilizing. The median sale price is now $213,700. The last time the median price was nearly this low was in 2004. Current interest rates hover around 5% and below depending on your credit score.

Comparing February 2011 with February 2010: Closed sales were up 5.8%, but pending sales and new listings are both down (13.9% and 26.1% respectively).

February 2011 compared with January 2011: The Portland real estate market increased in closed sales by 3.8%. Also, pending sales were up 6.9%. Again, new listings of homes for sale in Portland dropped 7.8% compared with January.

At the current rate of sales, if no new homes for sale in Portland came on the market it would take 10.9 months to use all the inventory for sale. (See the chart below.) These 10.9 months of inventory for February 2011 is considerably lower than the 12.9 months for February 2010 and the 16.6 months of inventory for February 2009. The Portland real estate market is definitely moving in the right direction!

Sales Prices: are lower than February 2010. The average sales price is 10.5% less and the median sales price is down 9.1%. Compared with the previous month of January 2011, the average sales price is down just slightly, 1.8% and the median price is down 0.6%.

See the Portland Metro Residential Highlights chart below for more details.

Is it a buyers market or a seller’s market? See the chart below.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market;  4-6 months is a neutral market; and more than 6 months inventory is a buyers market. All information is courtesy of RMLS.

That’s what most people say when I ask the question. (I frequently write about the Portland real estate market. Check out my other blogs here.)

There has been so much bad news in the media about falling values. Everyone thinks we’ve lost the entire decade’s worth of home appreciation. Buyers think they should be able to purchase a Portland home for the same price as in 2000.  Sellers who bought their home in 2001 or 2002 think they would have to sell at a loss today. It’s just a case of too much negative news about the housing market. And the misconceptions make it hard for buyers and sellers to come to agreement on price.

If you think we’re down to median sold home prices for the year 2000, you’re wrong.

2002? Wrong. 2003? 2004? Wrong again.

The 2010 median sales price for Portland real estate was $239,900.That’s just a bit above the median sold price for 2005 of $237,500.  There were such huge gains in Portland real estate value in 2006 and 2007 —in 2006 the median price jumped to $270,500.  Even the bleak years of 2008-2010 did not wipe out all the value gains of the decade.

See the chart below from the RMLS to get the full picture.

Confused about what “median” means? Check the definition below the Summary Table chart.

What does median sold price mean? It means of all the homes sold in Portland during 2010, half sold for less than $239,900 and half for more. It’s a better gauge of price than the average home price, which gets skewed when a multi-million dollar home is sold. (Yes a few of them have sold.)

But the median or the average home price are both meaningless numbers without a perspective to the past. So be sure to take a look at this chart from RMLS.

To compare January 2011 figures with December 2010 check my previous blog.

Comparing January 2011 Portland real estate numbers with January 2010: closed sales increased 5%, pending sales decreased 3% and new listings are really down—20.5%. The average sales price for Portland real estate dropped 11.9%

January 2011 compared with December 2010 Portland home sales: closed sales dropped 29.2%, but pending home sales increased 23.1%. This bodes well for February closed sales. New listings also increased a huge 62.5%.

At the current rate of sales the Portland real estate market has 11.3 months of inventory. (In December there were 7.9 months of inventory. See the chart and explanation below for more details.)

The inventory in months chart doesn’t go back far enough to see the real trend of decreasing inventory of Portland homes for sale. January 2011’s 11.3 months of inventory is the lowest January inventory figure since January 2007 (the beginning of the real estate demise) when there was 6.2 months of inventory.

Sales Prices are still declining. This is the bad news for sellers. For buyers, let’s get together and take advantage of the low prices and low interest rates.

The average sales price for January 2011 compared with January 2010 declined 11.9% and the median price of Portland real estate declined 10.4%. Compared with December 2010, Portland home prices also declined by 10.5% for the average and 6.5% for the median sales price. (See the Portland Metro Residential Highlights chart below for more details.)

Is it a buyers market or a seller’s market? See the chart below.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market; 4-6 months is a neutral market; and more than 6 months inventory is a buyers market. All information is courtesy of RMLS.

Attention Portland home buyers. Here’s a great opportunity to make buying a home in Portland affordable. You’ll need to be a first time home buyer and you’ll need to act now to take advantage of the Oregon Bond Loan program. If you qualify and want to search for homes in Portland, use this link to see all the Portland homes for sale in the MLS.

Rodd Miller of Pacific Residential Mortgage, LLC sent me the information about this state program. It’s only available for a little while, so call me or call Rod quickly to see if you qualify. Here’s what Rod has to say:

The Oregon Bond Loan helps consumers in Oregon buy their first home by providing two borrowing options. This Residential Loan Program, available for a limited time, helps eligible families increase their home purchasing power and lower their monthly house payments for greater affordability.

The Oregon Bond Loan offers eligible borrowers a choice between the following options:

Cash Advantage Home Loan option*

• Low, fixed interest rate

• Cash grant up to 3% of the borrowed amount

• Minimal cash-to-close

Rate Advantage Home Loan option*

• The state’s best fixed interest rate

• With Low down payment and closing cost option

*Qualifications are similar for either program option.

Qualifications

• Must be a first-time homebuyer (or not have owned a primary residence during the three-year period prior to the date the note and mortgage is signed).

• The first-time homebuyer requirement (above) may be waived if they are purchasing in a targeted geographical area.

• A qualified Homebuyer must be (or intend to be) an Oregon resident and must agree to occupy the home being purchased as their primary residence.

• Eligible income levels and other qualifying criteria for this program are available through your PRM Mortgage Banker.

For January 2011 Bank Owned or foreclosure properties were 11% of homes for sale in Portland yet they were 28% of  all transactions in escrow. Why? Buyers may perceive foreclosure properties as the best value without the hassles and uncertainty of buying short sales. Non-distressed sellers need to fight for attention in today’s housing market. They are 70% of the market and  58% of the sales. (See below for definitions of types of sellers.)

Why is this important to know? Sellers should know who their competition sellers are. Buyers should know which market segments have the most buyer competition. Let’s work together to devise your own personal home buying or home selling strategy. Go with the flow or be a Contrarian. It’s your choice. I can help.

This January 2011 data is courtesy of RMLS

These days there are 3 categories of home sellers:

1. Short Sale Sellers. These are folks whose home loans are higher than the market value of their homes. They need their lender(s) to agree to take less then owed on the property. Short sales can take a lot of time to close. Some never get lender approval, so they never close (Learn more about Short Sales here)

2.  Banked Owned. Homes lost to foreclosure are sold by banks. They are listed by Realtors and sold through the MLS.  These sales close in the normal 30 to 45 day escrow period.(Learn more about Foreclosures here.)

3.  Non-distressed Sellers. These are the regular sellers who have put their homes on the market. They need to be competitive with the prices of short sales and foreclosure properties. They also need to stress the advantages of buying a non-distressed property: ability to help buyers with closing costs and do minor repairs that may come up on inspection reports. Short sale and many bank owned properties can not or will not do this.   (Search the MLS here)

To compare December with the previous month, check my previous market conditions blog.

Comparing December 2010 with December 2009: there were 2.9% less closed sales. However pending sales increased 6% and new listings were down by 8.5%. (Remember, December’s pending sales are generally January’s closed sales. So expect brighter news next month.)

December 2010 compared with November 2010: There were big increases in closed sales over November—14.3%. But pending sales dropped 15.2% and new listings were down a whopping 22.2%. But then, December always has that effect on the real estate market. Sellers don’t generally put their house up for sale just before Christmas. They prefer to wait until after the holidays.

At the current rate of sales the Portland real estate market has 7.9 months of inventory. (In November there were 10.2 months of inventory. See the chart and explanation below for more details.)

Sales Prices: For December 2010 the average sales price for a home in Portland went down 5.2% compared with December 2009. The median home price was down 5%. But looking at December 2010 compared with November 2010, the average sales price went up 2.2%. (See the Portland Metro Residential Highlights chart below for more details.)

Is it a buyers market or a seller’s market? See the chart below.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market;  4-6 months is a neutral market; and more than 6 months inventory is a buyers market. All information is courtesy of RMLS.

The November figures continue a downward trend but only by 1% compared to the previous month. Does this mean the downward slide is slowing??

To compare November with the previous month check my previous market conditions blog.

Comparing November 2010 with November 2009, let’s remember that first time home buyers didn’t know the tax credit deadline of November 30, 2009 would be extended into 2010. Because of this many buyers who normally would have bought in a later month timed their purchases to close in November. This inflated Nov. 2009 figures.

Now back to the November 2010/November 20o9 comparison. Closed sales were down 28.7%. (See the paragraph above.) Pending sales were up 7.4% and new listings fell about 1%.

November 2010 compared with October 2010: all the numbers were down. Closed sales fell 1%, pending sales were down 12.6% and new listings were down a whopping 20.7%. These are raw figures, not seasonally adjusted ones. New listings always decrease around the holidays as new sellers prefer to wait for the beginning of the new year to market their homes.

At the current rate of sales, the Portland real estate market has 10.2 months of inventory. See the chart and explanation below.

Interest rates for buying a home in Portland have gone up a little but are still below 5% for the majority of buyers. Economists expect mortgage rates to slowly increase during 2011. Better lock in your 30 year rate before your buying power erodes.

Is it a buyers market or a seller’s market? See the chart below.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market;  4-6 months is a neutral market; and more than 6 months inventory is a buyers market. All information is courtesy of RMLS.

To compare with last month, check my previous market conditions blog.

Comparing October 2010 with October 2009, closed sales are down 35.7%, pending sales are down 21.5% and new listings are also down by 9.4%. These numbers seem terrible. But think about what was happening last October. The First Time Home Buyer Tax Credit was set to expire after November 30, 2009.  Many, many buyers already had their new homes in escrow to take advantage of the credit. The tax credit artificially inflated October 2009 real estate sales figures. So of course the Oct. 2010 statistics look terrible compared with last year.

Looking at October 2010 compared with September 2010, shows a much smaller decline (and a decline we would expect in any real estate market as we approach the holidays). Closed sales are down 7.7%. Pending sales are up 3% over September. And new listings are down12.1%.  Even in normal real estate markets many would be sellers prefer to list their homes after the holidays rather than start a listing in October or November. Let’s see if the stats for the beginning of 2011 bears this out.

At the current rate of sales the Portland real estate market has 10.7 months of inventory. See the chart and explanation below.

If you’re ready to buy and plan to be in your new home for a couple of years, there are great opportunities for buying a home in Portland. Interest rates remain around 4.25% for 30 year fixed loans. Don’t miss out on these great rates. As interest goes up, your buying power erodes. This would make a great blog topic. I’ll work on it.

Is it a buyers market or a seller’s market? See the chart below.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market;  4-6 months is a neutral market; and more than 6 months inventory is a buyers market. All information is courtesy of RMLS.

To compare with last month check my previous market conditions blog.

Looking at September 2010 compared with September 2009, closed sales are down by 22.3%, pending sales decreased 30.7%. New listings are down 1.4%. The average sales price is down 3.5% and median sold price is down just a hair—0.6%

Comparing September 2010 with August 2010, closed sales are higher by 1.3%, but pending sales are down 6.2% and new listings decreased 7.3%. The average sales price compared with August is down 6.4% and the median sales price is down 4%

At the current rate of sale activity, the existing inventory would last 10.5 months. See the chart below.

I’m late getting these figures into my blog and October numbers should be out in the next few days. I’m hoping to see improving numbers. But I won’t be surprised if the market stays in the doldrums until the beginning of next year. It’s dark. It’s rainy. And the Portland real estate market frequently slackens off for the holidays.

I do think we have pent up demand that will bring the market (slowly) back once it is unleashed.

People still dream of owning their first home. Others want to move up to a bigger home or downsize to something more manageable. Prices are low, interest rates haven’t been this low since the 1950’s. Once buyers feel the prices are somewhat stabilized, demand will grow again. I do believe it.

Is it a buyers market or a seller’s market? See the chart below.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market; 4-6 months is a neutral market; and more than 6 months inventory is a buyers market. All information is courtesy of RMLS.

Answer: from Tim Vanderburg, Northwest Mortgage Group tvanderburg@nwmortgagegroup.com

Yes, there are new rules. They’ll make your monthly payment very slightly higher. But once you understand the numbers you’ll see that the changes are manageable and allow you to start out with more equity in your home as soon as you purchase.

Don’t let the changes in FHA keep you from making the best investment possible in your future!

To understand the recent changes let’s talk about what the Federal Housing Administration (FHA) does. It’s a federally sponsored agency that insures a lender against the possibility of a loan going into default. That’s a pretty big deal in the current mortgage environment where record numbers of home loans are delinquent and properties are being foreclosed upon in droves.

To finance the default insurance, FHA collects insurance premiums from the borrower –the home buyer– in two phases:

1. The up front mortgage insurance premium. This can be financed into the loan amount to keep your closing costs down.

Old Up Front Premium: 2.25% As of Oct 4, 2010:  1%

2.  The annual premium. It’s collected as part of the monthly payment. As the balance on the loan is reduced, the monthly premium can, with a good payment history be eliminated over time.

Old Annual Premium:  .55% As of Oct 4, 2010:  .90%

At first look, this change seem s to make it harder to buy a home in Portland but let’s look at this a little closer. Here’s an example of the old and new FHA loan costs of a loan amount of $200,000 using an interest rate of 4.5%.

Yes, your total monthly payment for that new home is $45.10 more per month. But  instantly, on the day of closing you owe $2,500 less than you would under the old rules. Or you could say your equity has increased by $2,500 because of this rule change. (It would take about 4.6 years at the lower payment to earn that equity position in your Portland real estate. In today’s market where property appreciation is no longer a given, that equity position can be really valuable.)

If you would like more information on FHA or any other mortgage program, call Tim Vanderburg at Northwest Mortgage Group (503) 452-0001. With more than 20 years experience helping Portland home buyers, Tim is well qualified to help you navigate the changing mortgage environment.

To compare these figures with last month, check my previous market conditions blog.

August home sales for the Portland metro area look glum when compared with August 2009 sales figures. Closed sales are down 25% and pending home sales are down 21.7%. New listings went up only 1.3% compared with August 2009. So buyers don’t have much in the way of new inventory to choose from.

Looking at August 2010 statistics compared with the previous month closed sales fell 2.2%, and pending sales actually increased 3.6%. But new listings are down 5% compared with the previous month.

Comparing January-August 2010 with the same period in 2009 the market looks to be improving. Closed sales are up 14.%, pending sales increased 4% and there are 6% more new listings.

There is about an 11 month supply of homes for sale if no new homes come on the market.

Now let’s look at average sale prices. The Average price actually increased 1% for August 2010 compared with August 2009. It increased 0.8% when compared with the previous month of July 2010.

Is it a buyers market or a seller’s market? See the chart below.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market;  4-6 months is a neutral market; and more than 6 months inventory is a buyers market. All information is courtesy of RMLS.

My client has her home for sale in Portland at 2518 SE Belmont, Portland 97214. (Scroll down to see the flier.)

To download a flier of this great piece of Portland real estate Click Here.

This is a beautiful property at an awesome price ($285,000).

Here are the highlights:

The charm of a 100 year old building. It has leaded glass window, wood burning fireplace, and claw foot bathtub. The  formal dining room has pocket doors, a bay window and built-in cabinet.

The ease and efficiency of living in a remodeled building. In 2005 the kitchen and 2 full bathrooms were completely redone. A 90% efficient gas furnace was installed along with new electric service and new plumbing. A new roof was also put on in 2005.

It’s hard to find more space for the price. The main floor of the condo is about 1300 square feet with two bedrooms and two full baths.

There’s also a semi-finished basement. It’s about 490 square feet and includes the washer & dryer and furnace. The basement is accessed from the kitchen of the condo and has its own outside entrance too.

With a walk score of 85, the condo is close to everything, including Zupan’s, the Avalon Theater, Cricket Cafe, Theater Theater, Hawthorne shops, and much more.

Want to be part of a neighborhood? There are just four condos in the building. Going to a HOA meeting is like hanging out with your neighbors.

If you’re searching the MLS it is #10058750.

To see all the homes for sale in Portland (and the whole metro area) check out my Home Finder Service or use the Portland Quick Home Search box to the right.

To see inside, just give me a call 503 320-3163.

The first time home buyer tax credit deadline has definitely skewed the numbers. Many people buying a home in Portland Oregon bought in April (instead of July) to take advantage of the tax credit. It will take a few more months for us to see if the market is worsening or just reacting to the artificial influence of the tax credit.

To compare with last month check my previous market conditions blog.

On to the July numbers for Portland real estate. Compared to the same month last year, closed home sales are down 29%. Also pending sales are down 24.9%. New listings (homes for sale in Portland) are up slightly–by 3.1%.

Compared to June 2010, July closed sales also fell by 29.8%. (Remember, the tax credit original rules were to close your first time home purchase by June 30, 2010.  Until the deadline was extended, July closed sales would not receive the tax credit. Lots of people purchased their home in June rather than July.)

Now let’s look at the sale prices of homes for sale in Portland real estate. The Average sales price for July 2010 increased 2.9% over the previous July. It increased 2.5% over June 2010.

The months of inventory for Portland real estate is currently at 10.3 months. (See the chart below.) This is firmly in the buyer’s market for homes for sale in Portland. So if you are looking at homes for sale in Portland Oregon, there are lots of homes to choose from.

What does all this mean? The numbers are confusing. Closed sales and pending sales for homes for sale in Portland are down. It’s a buyer’s market, yet prices are up slightly over last month and last year. It’s hard to explain except that we are still feeling the effects of the tax credit’s artificial influence on the Portland real estate market.

Is it a buyers market or a seller’s market? See the chart below.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market; 4-6 months is a neutral market; and more than 6 months inventory is a buyers market. All information is courtesy of RMLS.

These are great questions. Determining answers is tricky. We’ll only know the bottom of the market when we see it in the rear view mirror. But there are definite signs of stabilization.

To compare with last month check my previous market conditions blog.

Homes are starting to sell faster and for slightly more money than they had been. This is good news. We see this in two sets of real estate statistics. Let’s look first at real estate home prices for sold homes with our latest market figures. June 2010’s average sales price was 3.3% lower than June 2009’s. But it’s up 2.4% over January 2010’s average sold price. In addition the total market time (a loose basis for how long homes take to sell) was 121 days in June, 145 days in January 2010 and 147 days in June of 2009.

The months of inventory (see chart below) is a measure of whether the real estate market favors buyers or sellers. While we’re still in a slight buyer’s market with 7.3 months of inventory last month, this is way better than January 2009’s 19.2 months of inventory.

Is it a buyers market or a seller’s market? See the chart below.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market; 4-6 months is a neutral market; and more than 6 months inventory is a buyers market. All information is courtesy of RMLS.

FIRST THE GOOD NEWS FOR HOME BUYERS

Interest rates are the lowest they have been since the 1950′s!  Home buyers take note: I know of several people who have locked in a spectacular rate of 4.375% for the next thirty years.

Locking in a rate this low makes better financial sense than waiting a few months for a lower purchase price but having higher interest rates. Even if home prices continue to slide a bit lower, as a home buyer you’ll still do better taking advantage of these great rates. But that’s another blog topic.

THE NOT GOOD NEWS–WILL YOU QUALIFY FOR A HOME LOAN?

1.  GOVERNMENT GUIDELINES ARE NOW VERY TIGHT

Background: Today 95% of all home buyers use government insured loans through FHA, Fannie Mae and Freddie Mac’s rigid guidelines. Lenders must follow these guidelines to sell newly made loans on the secondary market. This frees up money for lenders to make new loans. These guidelines continue to get tighter and tighter.

Here’s one example: Lenders are now running a second credit report on buyers 3 days before closing.

TIP: Wait until AFTER closing on your new home to buy a new refrigerator or furniture for that new family room. Buying large items on credit before your home closes could mean the loan (and the house) will not close. Increased borrowing may push your debt ratio out of the government guidelines.

2. CHANGES TO FHA REQUIREMENTS

At this time 25%-35% of home buyers use FHA. And stimulating home ownership stimulates the economy. So would you think that FHA would make it easier for buyers to use FHA loans? Nope.

REDUCTIONS TO SELLER PAID CLOSING COSTS FOR BUYERS: Home buyers will get less help from sellers on closing costs. Sellers have been allowed to help their home buyers by paying up to 6% of buyer closing costs. Early this summer FHA will cut that contribution to 3% of the loan amount. On a $200,000 loan, the additional $6000 a buyer will have to come up with may mean the difference between being a home owner and remaining a renter.

INCREASES TO MORTGAGE INSURANCE PREMIUM (MIP): This is not the “If I die the mortgage is paid off” kind of insurance. It insures the lender for losses if the buyer is unable to make loan payments. (Do you think mortgage insurance companies have seen their claims go up the last few years?) Each month the borrower pays MIP as part of their monthly mortgage payment. MIP for FHA loans has traditionally been .55% of the loan amount paid each month for about 5 years into the loan. There is a bill in Congress now to raise that rate to .9%. This will raise the monthly payment enough to keep many borrowers from qualifying for a loan.

3.  QUALIFYING CONDO FINANCING:

The percent of condo buyers using FHA loans is probably much higher than for detached homes. FHA has scrapped its previous list of approved condo associations (condo buildings it will loan on). Now each condo association must start a new approval process before any more FHA loans can be used.

Learn more about buying a condo here.

If you remember, buyers needed to have their first home under contract by April 30, 2010. That’s a Pending Sale. The transaction needs to close by June 30, 2010. That’s a Sold statistic.

As expected, April saw a surge in pending sales and May has an increase in homes sold (43% more sold homes than May 2009). Look for June 2010 sold statistics to be higher also. But the market seems to not be sustaining this growth. Pending sales for May 2010 are down 24% compared with May 2009. And they’re down 50% from April 2010. People who would have bought in May had their offers accepted in April to qualify for the tax credit.

For May 2010 we have a seven month supply of homes for sale. (See the chart below.) That’s the lowest it’s been since October 2009. That is a good sign and brings us more in line with a neutral market–neither Buyer’s Market nor Seller’s Market.

The most optimistic news I pull out of the May 2010 numbers is that month to month price declines are slowing. If this continues, the housing market price tumble may be bottoming out.

May 2010 average sold price is down 5.5% from May 2009 but only down 2.3% from April 2010 average sold price. And the median sales price for May 2010 is down 4.4% from May 2009 but only down 0.4% from April 2010′s median sold price.

The next few months will help us see if the real estate prices are bottoming out.

Is it a buyers market or a seller’s market? See the chart below.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market;  4-6 months is a neutral market; and more than 6 months inventory is a buyers market. All information is courtesy of RMLS.

After lots of testing and lots of soul searching, we decided Home Quest offers the best search capabilities for our visitors. We hope you agree once you get to know it.

Yes, we know how hard change can be for you. And we’re sorry for any inconvenience. But we know you’ll grow to love Home Quest and its many features.

Please feel free to phone Anne Kadin (503 320-3163) if you need help adjusting to the new MLS search.

In the meantime, if you have saved searches you want to reference, this link to the old MLS search program will be available until approximately May 3rd for you to reach the old MLS program.

Thanks again for your understanding. And let us know when we may help you find the home of your dreams.

April 2010 compared with April 2009

April 2010 had closed sales up 49.1% over April 2009. In addition, pending sales were up a huge 60.8%; new listings were up 23.8%. The average sales price went down 3.1% and the median sales price decreased 4%.

( We’ll have to see May 2010’s numbers to see how much of that increase was generated by the rush to qualify for the first time home buyer tax credit before 4/30/10.)

April 2010 compared with March 2010

In looking at April 2010 compared with the previous month, closed sales were up 7.9% and pending sales increased 24/5%. New listings were down 5.5%. the average sales price went up 0.6% over March figures; and the median sales price increased 0.5%.

Prices are still low. Interest rates haven’t crept up too much yet, although they are expected to rise over the coming months. If you qualify for a loan, this is an excellent time to buy.

Is it a buyers market or a seller’s market? See the chart below.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market;  4-6 months is a neutral market; and more than 6 months inventory is a buyers market. All information is courtesy of RMLS.

I would have to say that the information they used to do the ranking makes it one of the best cities for home sellers too.

Forbes looked at which cities in the country had the lowest mortgage rates. Then they added the 1/2008 to 1/2009 change in percent of homes in foreclosure and change in percent of homes that were delinquent for 90 days or more on the mortgage. Portland is number ten on the list ( The data for Portland is shown below.)

This news is good for sellers too because our foreclosure rate is low. Short sales and foreclosures lower the market value of homes. Sellers who are not in foreclosure must lower their prices to compete with bank owned and short sale properties.

The less foreclosures in Portland, the better for us all.

Here are the details for Portland:

Portland-Vancouver-Beaverton, OR.-WA.

Average Effective Home Mortgage Rate: 5.03%

Mortgages 90+ Days Delinquent, January 2009: 1.82%

Mortgages 90+ Days Delinquent, January 2010: 3.63%

Foreclosures, January 2009: 1%

Foreclosures, January 2010: 1.86%

(To see the other top ten cities check out this link )

Is it a buyers market or a seller’s market? See the chart below.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market;  4-6 months is a neutral market; and more than 6 months inventory is a buyers market. All information is courtesy of RMLS.

The February stats aren’t great. But the number of new listings, pending sales and closed sales are all better than in February 2009. So the market is moving in the right direction.

Is it a buyers market or a seller’s market? See the chart below.

It’s all based on the number of months of inventory. How many months would it take to sell all the homes currently on the market if no new property came up for sale? Less than 4 months inventory is a sellers market;  4-6 months is a neutral market; and more than 6 months inventory is a buyers market. All information is courtesy of RMLS.

But there’s a one year extension of the program for some members of the military and certain other federal employees. Service people qualify if they are:

• members of the uniformed services, Foreign Service and members of the intelligence community. They are eligible for this one year extension if they serve on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.
• spouses qualify if the service member is married

For this special extension, military members must have their signed, binding contract to purchase their new home by April 30, 2011 and close on the property by June 30, 2011. The rest of first time home buyers must have a signed, binding contract for their new home by April 30th and close on the sale by June 30th, 2010.

Learn more details at the IRS website.

Here’s one for people wanting to buy a home in Portland or any other part of Oregon.

Oregonians looking to buy their first home may qualify for an assistance grant from the Home Sweet Home Program (HSHP). The Oregon Association of Realtors and the Oregon Bankers Association have partnered to create grants for buyers who earn less than or equal to the median income in their area. (The Oregon median income in 2008 was  $50,165. Link to Census Bureau info.)

HSHP funds will be disbursed to eligible first-time home buyers in the form of $2,000 grants.  To access funds, the home buyer must obtain their first mortgage loan through an Oregon Bankers Association member bank.  The bank will work directly with the Bankers Association which is administering the program.  The eligible home buyer must also be working with a REALTOR® on the home purchase.

Download the flier with more info on the program.

Please call me if you have questions: Anne Kadin 503 320-3163.

A: Anne, I’d tell your client to beware of so-called debt services as advertised on TV!

Here’s why:

Any promise of “Instant” debt relief is likely to be a scam, especially if the service charges an upfront fee of several hundred dollars. No one can make your debt disappear. But there are ways you can lower your monthly payments.

For relief, turn to a nonprofit credit counseling agency certified by the National Foundation for credit Counseling (nfcc.org/firststep/locator.cfn). It will act on your behalf to negotiate with credit card companies to lower or freeze interest rates and set up a manageable payment plan. (Some also offer budget counseling and debt management classes.) And unlike debt services, credit counseling services charge only administrative fees; expect to pay about $50 in set up costs and $25 for monthly maintenance.

Tim Vanderburg Mortgage Banker NW Mortgage Group, Inc. Ofc: 503.682.2880 Toll Free: 800.452.0038 tvanderburg@nwmortgagegroup.com www.Timvanderburg.com

Do you hear your real estate opportunity knocking?

Right now, as the Portland real estate market continues to stabilize, there are unique opportunities for home buyers and home sellers. It you’re trying to time your purchase for the bottom of the market, now is the time. And see below why you might want to time your sale for the bottom of the market too.

FOR BUYERS

• Low mortgage rates–Current low interest rates (around 5%) won’t last. This spring the Fed will wind down its subsidy of home loan rates. Interest rates are expected to rise. Many analysts expect to see 6% and above rates quite soon.
• Lower prices—Median home prices in the Portland Metro area are 14.8% lower than they were 2 years ago.
• $8,000 tax credit–First time home buyers must have a written, accepted sales agreement by 4/30/10 to qualify. Learn more about the tax credit.
• Rehab loans are still available—Check http://hownw.com/ for info on distressed property loans.

FOR SELLERS

• $6,500 tax credit—see if you qualify.
• Capitalize on current demand—currently there are more motivated buyers competing for fewer available properties.
• If your non-short sale home would be good for a first time home buyer, you’re in luck.  First time home buyers who want their $8,000 tax credit (and who wouldn’t?) cannot be assured a short sale purchase will close in time to qualify for the tax credit. They must choose from the available traditional owner sales and foreclosures.  Does that include yours?
• Expect a return to our traditional 3-4% appreciation.
• Most sellers are buyers too—It’s a terrific time to buy up at these “discounted” prices and lock in a low interest rate before the mortgage rates rise. Yes, your current home is worth less, but so is that dream home.

Please call if I can help you or anyone you know profit from our current real estate market.

Opportunity is Knocking

The federal government is giving away money to home buyers.

Do your part. Stimulate the economy. Receive what may be a once in a lifetime income tax credit when you buy your first home or as an existing home owner, buy another home.

If you need more info, please give me a call. I can help.

Here are the details for the Home Buyer Tax Credit of 2009/2010:

Who is eligible?

What are the eligible properties to purchase?

The tax credit is for a primary residence. It may be single family, a condo , townhouse or co-op.

What are the purchase deadlines?

The new residence must be purchased between 11/7/09 and 4/30/10. This means buyers must have a written, binding contract by 4/30/10 and close on that transaction before 7/1/10.

How much is the tax credit?

The credit is based on two factors: home price and buyer income

The price of the new home must be less than $800,000

The buyers’ income must be less than $125,000 for single purchasers and less than $225,000 for married buyers.

Purchasers with income over this level may still be eligible for a partial tax credit.

(NOTE: this is a change in income limits from the 2009 First Time home Buyer Tax Credit  for home purchases from 1/1/09  to 11/6/09.)

Does the credit need to be repaid?

Not if the buyer occupies the home for 3 years or more. If you sell the property before the 3 year period is up, you must repay the full tax credit at the time of sale.

Still have more questions? Check out http://www.federalhousingtaxcredit.com/

The good points:

Portland OR homes for sale inventory

• Prices in October still moved downward. This month’s figures show a lower average sold price (2.3% lower) than September’s figures. Yet the median price was up a bit over September. This may be signs of the market bottoming out.
• Most qualified buyers can obtain an interest rate under 5% today.
• First time home buyer tax credits have been extended to sales accepted before April 30,2010
• Owners of existing homes for 5 + years can also get a tax credit for buying a new home before April30, 2010

The reason to act soon:

• Interest rates may start going up again in the new year as the Fed cuts back its program to buy mortgages on the secondary market. This program has kept mortgage rates artificially low to stimulate the housing market.  Some analysts believe a reduction or cessation of this program could boost mortgage rates to the 5.5% to 6.5% range (compared to the 4.5% avg rate today).
• We can only tell where the bottom of the market is by looking over our shoulder. There is reason to believe home prices are leveling off.

Call me to learn the process to get you into that new home. 503.320.3163.

Back to the market information…

In the entire Portland Metro area:

The 12 month average appreciation rate is: -12.5%
This month’s Average Sales Price is: $283,000
This month’s Median Sales Price is: $245,000

The average days of market time is 135

Questions or comments about the market?

Email me Mailto:Anne@PortlandHomeSource.com

If you’re looking to buy in our “reduced price” home market, these next couple of months are perfect for three reasons.

1.  Those first time home buyers going for the $8000 tax credit are mostly in escrow by now so they can close by the Dec 1 deadline for the credit.

2.  We’re headed into the holidays when many buyers sit out the market until the beginning of the year.

3.  The average home price in Portland is down 10.6% from August 2008 and the median price is down 10.8% (And August 2008 average price was down 3.9% from August 2007)

All of this translates into the perfect buyer’s market. Are you ready to take the plunge?

Here are the housing numbers for August 2009. We have a cautiously improving housing market for the Portland metro area. The market continues to improve over 2008, but the August 2009 numbers are very slightly down from July 2009 statistics. Since we need to look at trends, rather than individual months, this doesn’t bother me.

For example, the average months of inventory (our indicator of a buyer’s or seller’s market) is 7.8 for August 2009. That is significantly down from last August (2008) but up only slightly from July 2009. See the chart at right to follow the trends. Closed sales and pending sales are both up from the previous August, but down slightly from July 2009.

In the entire Portland Metro area:

The 12 month average appreciation rate is: -10.6%
This month’s Average Sales Price is: $296,300
This month’s Median Sales Price is: $249,900

The average days of market time is 135

Questions or comments about the market?

Email me Mailto:Anne@PortlandHomeSource.com

We continue to see good news in the real estate market with the July ’09 stats that are just out. There were 8.6% more closed sales in July ’09 over July ’08 and pending sales were also up 8.3% over last July’s numbers. That means August’s numbers should also be showing improvement.

The number of months of inventory (see the box to the right) is how we measure a buyer’s market vs a seller’s market.  The very high amount of inventory we had been seeing is steadily moving downward each month. This is the 6th consecutive month where we see a reduced amount of months needed to sell all the homes on the market. Just for comparison,  in July ’08 there was 10 months of inventory for sale.

According to a formula from the National Association of Realtors, housing prices in the Portland area are in the affordable range for families earning the median income.

All of these numbers are moving in the correct direction for a recovery in our housing market.

In the entire Portland Metro area:

The 12 month average appreciation rate is: -11.9%
This month’s Average Sales Price is: $288,600
This month’s Median Sales Price is: $250,000

Questions or comments about the market?

Email me Mailto:Anne@PortlandHomeSource.com

¹ Inventory in Months is calculated by dividing the Active Listings at the end of the month in question by the number of closed sales for that month.

² % Change is based on a comparison of the rolling average sale price for the last 12 months with 12 months before.

All statistical information comes from RMLS^TM

There are signs of good news in the Portland area housing market. June 2009 pending sales were up 8.4% over June 2008. It’s the first time since December ’06 that pending sales were higher than the same month of the year before. Maybe the worst is behind us.

Comparing June 2009 with May 2009, closed sales were up 24.5%, pending sales were up 10% and new listings were also up 9.7%.

Inventory in Months–see box to the right–dropped for the 5th consecutive month.

All of these numbers are moving in the correct direction for a recovery in our housing market.

In the entire Portland Metro area:

The 12 month average appreciation rate is:   -9.7%
This month’s Average Sales Price is:   $299,800
This month’s  Median Sales Price is:    $249,900

Questions or comments about the market?

Email me Mailto:Anne@PortlandHomeSource.com

¹ Inventory in Months is calculated by dividing the Active Listings at the end of the month in question by the number of closed sales for that month.

² % Change is based on a comparison of the rolling average sale price for the last 12 months with 12 months before.

All statistical information comes from RMLS^TM