$50k free to buy a foreclosure?

From today's Oregonian:

"If you meet the income guidelines, the government might have a house deal for you. You may be eligible for a $50,000 interest-free loan to help move into a foreclosed home. The program, adopted by Congress last year, is aimed at preventing foreclosed houses from standing empty, bringing down neighborhood livability and property values."

I honestly don't see much downside to this program.

For the buyers you get free money, which you only have to pay back when you sell.

They are limiting it to Bank Owned properties, which limits the buyer's risk (we bought a bank owned home last year, I'll talk more about it soon) and is what I feel the best way to get a good deal on a foreclosure.

This program isn't keeping people in homes they can't afford, it's just helping keep houses from sitting vacant and gives banks an incentive to sell them at realistic prices.

Unfortunately there are only 160 bank owned houses in Multnomah county at the moment, so the pool of available properties is limited. But they are out there.

Oregon breaks top 10... for foreclosures

Oregon now has the 10th highest rate of foreclosures in the nation according to RealtyTrac and CNN, putting us in good company with other states like California, Florida and Nevada.

In July there were 1 foreclosure in Oregon for every 446 households, and a total of 3605 foreclosure events.

Hitting closer to home, one house on our block was sold at auction this past week and the flippers are hard at work fixing it up for resale.

Portland area foreclosures skyrocket in H1 2009

(I believe the second and third headers are switched on the graphic above. The second column is the % of houses in foreclosure, the third column is the rate or 1/xx houses)

In what should be no surprise to anybody here, Portland foreclosures are up 112% in H1 2009 according to the latest Realty Trac data which was released yesterday:

Portland now ranks 60th out of 203 metro areas with 1.31% or 1 out of 76 of all households in some form of foreclosure, a bit higher than the national average of 1.19%.

Las Vegas NV leads the nation with 1 out of every 13 homes in some form of foreclosure.
Seattle is faring better than Portland, ranking 76th with .94% of households in foreclosure.
Salem OR is doing slightly better than Portland, ranking 64th with 1.18% in foreclosure, while the Eugene area is doing much better with only .80% in foreclosure and a ranking of 94th.

While California still holds a number of top spots in the rankings, the rate of foreclosure has declined in most areas. I predict that Portland will climb in the rankings before we fall since we're late to this party and facing higher unemployment than most areas.

Portland neighborhood maps now available

I realized after talking about neighborhoods yesterday that I never added a link to the local Portland neighborhood maps.

When we were first looking for a place to live a few years ago these maps were very handy to help guide where we wanted to live, as these maps are dictated by school disctricts which is what most people with kids are concerned about.

Also, even though Realtors love terms like "Alberta Arts" that isn't a neighborhood, nor is "Hawthorne".

The link will live in the tools section on the right, and feel free to suggest other tools that you find useful.

How is your neighborhood doing?

Trulia is a wealth of information, and one of my favorite features is their pricing heat map.

You can see recent price activity for individual neighborhoods to see which 'hoods are still hot, and which are fading fast.

I've included the data by zipcode here, as I can't fit it by neighborhood, but if you go here you will see it.

Just be careful, the amount of data in these analysis is small, so the margin of error is high and the trends can change quickly.

Any comments on why certain areas are holding their prices while others aren't?

Price recovery, or dead cat bounce? - May Case Shiller

The May 2009 Case Shiller data was released yesterday and May's median price for an existing home in Portland was down 16.3% from May 2008. (click on any chart to expand it to readable size)

The monthly change was up 0.1% from April. Before everybody gets too giddy about the recovery just remember that this is likely just seasonality as prices also rose slightly in May 2008 before continuing to fall. If we see price increases for 3 months in a row then we can start talking about a recovery.

The median Portland home price is now down 21.2% from the peak in July 2007,

At this point if I would predict prices will continue to decline through 2009 and well into 2010.

A reader asked me recently why I focus so much on the price changes, rather than the actual changes. Because by focusing on the change, and the rate of change in prices you get an early indication into future prices. So while prices in other markets may still be declining, the change in price is also declining signaling a bottom to the declines.

HOW PORTLAND PRICES COMPARE TO OTHER MARKETS

The above chart shows growth rates for Portland, Seattle, the San Francisco bay area (the other areas I consider as closest to Portland) as well as the 20-city composite index. Portland and Seattle are still tracking each other very closely. Lase month Seattle saw a slight uptick in prices while Portland prices continued to decline. This month the trend reversed with Seattle prices continuing to slide and Portland prices rising slightly.

While the price declines for the overall market appears to have hit bottom, Portland and Seattle have slowed but not reversed. The price declines in the SF Bay Area also seem to have bottomed out and are now slowing. Prices have ticked up for the past few months but it remains to be seen if they will continue or slide again this winter.


The above chart is a recent addition. It shows how Portland is faring compared to other cities. Our maximum price decline is still below average, but as we all know Portland was late to this party, a party most homeowners didn't want an invitation to. As the average improves I predict Portland will be worse than average shortly

CURRENT PRICES VS HISTORIC AVERAGE

This chart shows the price index for the past 8 years. I also added a line in pink that represents an average of 5% growth starting in January 2001. You can see that the current price index is now below the 5% average growth line. An over-correction is to be expected, but we are also probably correcting to a more reasonable 3-4% long term growth rate, or about the rate of inflation. But it's likely that we'll over correct before getting there.

FULL PORTLAND PRICE HISTORY


This chart shows the previous bubble in the early 90's, and also shows that Portland prices had never dropped over the past 20 years, until 2008. But as they say, past performance is no guarantee of future performance!

This chart also shows the full available price history for Portland. I'm working to convert it to a log chart which will show the changes better.

ABOUT CASE SHILLER:

The S&P/Case-Shiller Home Price Indices measures the residential housing market, tracking changes in the value of the residential real estate market in 20 metropolitan regions across the United States. These indices use the repeat sales pricing technique to measure housing markets. First developed by Karl Case and Robert Shiller, this methodology collects data on single-family home re-sales, capturing re-sold sale prices to form sale pairs. This index family consists of 20 regional indices and two composite indices as aggregates of the regions.

Data presented in the Case Shiller spreadsheets are calculated monthly using a three-month moving average and published with a two month lag.

Freddie Mac - Youtube sensation?

This headline caught my eye as it appealed to both the marketer in me and my interest in real estate:

"Freddie Mac turns to YouTube to help troubled homeowners"

Mortgage giant Freddie Mac is using YouTube.com to educate homeowners at risk of foreclosure on how they can help reduce the stress and time it takes to get a mortgage modification under President Obama's Making Home Affordable program or Freddie Mac's other workout programs.

Freddie Mac posted a new video on the site that tells borrowers what financial documents they need to have available before calling a mortgage servicer. The documents will enable the mortgage servicer to determine the homeowners' eligibility for a workout and process the application, Freddie Mac representatives note.

The two-minute video, available in English and Spanish, can be seen at www.youtube.com/FreddieMacWeb.

Huh, maybe they've hired some new talent.