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.)
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.
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.
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.
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.