Friday, July 29, 2011

Prices up and foreclosures down!?

S&P Case/Shiller and RealtyTrac released some interesting stats this week. 

The S&P Case Shiller Indices showed a second consecutive month of price increases for their 10 and 20 City Composites.  16 of the 20 market areas watched showed some increase, month on month.  Detroit, Las Vegas and Tampa showed decreases and Phoenix was unchanged.  Looking at annual numbers, Washington D.C. was the only area with a positive change and Minneapolis showed the worst decline at 11.7%.  As the spring and summer are usually busy real estate months, seasonal adjustments can decrease the impression of these housing gains.    Portland shows an increase from April to May of 1.2%, but an annual decrease of 9.1%  Though I don't see it in print, I remember hearing the NPR story on this data earlier in the week where the Case Shiller folks said something like, " Hey, seasonal adjustments or not, any increase is good".  I feel the same way.  The Report

RealtyTrac, tracks, among other things, notices for defaults , scheduled home auctions and home repossessions, all signs of impending foreclosure.  Their stats show that in the first two quarters, a majority (84%) of metropolitan areas saw a drop in their foreclosure rates as compared to 2010.  At first blush this is encouraging.  Industry insiders, like me :) attribute this less to the health of the economy and more to issues of unlawful or at least questionable foreclosure practices. 

Remember "robo signing"?  Where bank employees were supposedly approving legal paperwork without actually reviewing it?  That kerfuffle resulted in a slowdown of procedure and paperwork.  So in those instances, foreclosures are down because proper procedures are being followed.  Something to celebrate, I guess. 

Oregon is a non-judicial foreclosure state, which means, as long as proper procedures have been followed, lenders can foreclose without going through a court of law.  As long as proper procedures have been followed, there is the catch.  With the securitizing of mortgages, and the frequent resale of mortgages, lenders created MERS, the Mortgage Electronic Registration System.  This is a mechanism allowed the sale of mortgages, without recording those documents in the county in which the property is located. Thing is, a non-judicial foreclosure in Oregon is predicated on the recording of transfers of titles and liens.  There is at least one court case where a foreclosure was overturned due to this exact issue.  This MERS issue is slowing foreclosures down a bit too.

So it isn't that fewer houses are subject to foreclosure this year compared to last.  The situation is more that questionable practices surrounding foreclosures have mucked up the foreclosure machine.    Though in the spirit of the comment above regarding any market increases being a good thing, I suppose any slowing in foreclosures is a good thing also.

Monday, July 25, 2011

Solar Power and Home Values

We're closing in on a full year with our "photovoltaic energy system". I call it our solar system, but that keeps being misinterpreted.  We've had a few luxurious months where we have used less power than we have generated, resulting in the sale of power back to PGE.  Hooray!  So, we are starting to be able to calculate the day in, day out value of our "solar system".  This then, leads the Realtor in me and the real estate magnate in Don, to wonder about the effect of our solar power on the value of our house.

Conveniently, the smart folks at Lawrence Berkeley National Laboratory, along with some funding for the Office of Energy Efficiency and the U.S. Department of Energy, recently concluded a study on this exact question.  Well, almost this exact question.  They looked at homes in California, 72,000 to be exact, including 2000 that had solar power installed at the time of sale.

The data was spliced and diced a variety of ways; best for you to refer to the report and summary for the particulars.  The study found pretty convincing evidence that houses in California, with solar systems (believe me, the Lawrence Berkeley Labs folks don't refer to them that way) sold for a hefty chunk over homes without such systems: nearly $17,000 for a newish and averaged size system.

Do Don and I think our system added that much?  Not quite.  California has more sun, so a similarly sized system to ours will produce more power throughout the year.  And real estate markets value different amenities differently; swimming pools in Arizona vs. Alaska, for instance.  The Lawrence Berkeley Labs study tells us how the California market values solar power...  A similar study was conducted in 2010, that looked at homes in the San Diego area.  This study arrived at a similar conclusion, still in California.

I would wager the Portland market values solar power a lot, probably as much as the California market, when adjusted for less power generation due to less sun.  We aren't selling anytime soon, so the question is a bit academic anyway.

As an aside, I've been feeling our house is a bit cooler since we  installed the solar panels on the roof last summer.  Don scoffs, but it makes since to me that something else, not our roof, is absorbing or at least intercepting, the suns rays on the most exposed face of the roof, the house just might not get as hot.  Speculation anyone?

Read the research report summary here.

And remember, the work on our project was done through Solarize Portland and the great folks at Imagine Energy.

Friday, July 22, 2011

Decision Paralysis; why I'm having such trouble buying shampoo

I am a decisive person.  I make decisions quickly and well, rarely revisiting or regretting a decision I have made.  In my work, I help other people make decisions; buyer and seller clients, agents in my office I counsel on their business, my daughter etc.  Most of you who know me, know I don't dither and wring my hands over making a decision.

So why, the, am I having so much trouble buying shampoo? 

I try to live in accordance with my values, with a practical approach.  I have few absolutes in my life and manage to find the line that works for me.  For example, while I am an animal welfare advocate, I am not vegan, and I do wear leather here and there.  But I don't need animal products in my shampoo.  And in general I buy organic when possible, but am plenty comfortable getting groceries in small town USA with not an organic vegetable in sight.

So why am I having so much trouble buying shampoo?

Up until a few months ago I had a purple streak in my hair.  It was adviseable to use shampoo gentle on colored hair.  I bought it at the salon.  It was not tested on animals, had no animal products and was expensive as hell.  I got tired of the purple streak and was freed from the designer shampoo.

So why am I having so much trouble buying shampoo?

Here are the priorities and thoughts that come into play in the shampoo buying decision (I'm sure there are more at play, but these are the obvious ones); no animal products, no animal testing, phosphate free, larger bottles as wasteful packaging drives me crazy, I want my hair to look good, I get sucked into the media message that I need special things for my hair to look good, I understand the active ingredients in most hair products are the same but for texture, color and scent, so anything will work, buying local would be good.  And then I walk in the store and see a kajillion different products.

The last stuff I bought came from the "nutrition" section at Fred Meyer.  Smaller bottles, no animal testing or products, cheaper than the fortune I'd been paying at the salon, phosphate free.   I am not fulfilled and look forward to the day those bottles (shampoo and conditioner) are empty.

I was at my Dad's mountain cabin recently and REALLY liked his shampoo; Pert all in one .  Nice big bottle, must be phosphate free as he is quite strict about phosphates up there.  And since it is shampoo and conditioner, it is one less bottle and one less product!  But Pert does contain tallow (an animal ingredient), doesn't claim not to have been tested on animals and certainly isn't located locally.  hmm.

Now you might see why I am having such trouble buying shampoo.  An associate of mine at work, who I think has great hair, tells me she uses a bar of soap for shampoo and "body wash' and uses no conditioner.  Maybe I don't need to buy shampoo at all?  Inaction, not buying shampoo, could be a decision in itself.  That Trader Joe's bar of  oatmeal soap may be just the thing.

Monday, July 18, 2011

Market Update

RMLS, our regional multiple listings service, released their statistics for June on Friday afternoon.  The numbers are interesting. 

A bit of history.  Remember that last year, the homebuyer tax credit was sunsetting and we were in the midst of closing all the transactions that had been put together under that incentive.  So for months now, the closed sales for this year have been diminished by the numbers of last year.  We are almost able to look back and compare normal market to normal market, not incentivized market to normal market.

So, as expected, closed sales were down when compared to the closed sales in June of 2010.  But...pending sales jumped by almost 24% from June 2010 to June 2011.  Wow.  And in a closer look, closed sales increased 12.4% from May 2011 to June 2011. 

Another way we look at the market is by inventory; how many properties are on the market.  At our current rate of sales, how many months would it take to sell all those properties?  It is thought that six months of inventory or less signifies a seller's market, and more than six months is a buyer's market.  June's statistics show six months of inventory, our lowest point since July 2007.  Does this mean we are in a seller's market?  Not quite, though we are seeing some multiple offers and sales prices over list prices in well priced, well cared for and staged properties in the close in neighborhoods.  I am also reminded that a major reason inventory is so low is that we, Realtors, are telling you, homeowners, that this is not the time to sell.  We could be wrong.  And, many homeowners, who bought in the last six or so years, with 100% financing, don't have enough equity to sell and buy up.  Until the housing market tumbled, homeowners sold and bought every seven years. 

Prices do continue to decline.  So the pressure we might see from low inventory is not reflected in the price increases one might expect from normal, supply and demand economics.  The average year to date sales price at the end of June 2011 for the Portland metro area was $260,000, compared to $280,000 in June of 2010.  The median year to date sale price at the end of June was $219,100 compared to $239,900 at the end of June 2010.  These numbers show decreases of 7.8% on the average sale price and 8.7% on the median sale price.

We are nearing the tine of year when we see seasonal slowing in the market as the "before school starts" transactions wane, and folks go on vacation.  There is though always ( but for fall 2001, after 9/11) a bump in the market from the "before the holidays and the end of the tax tear" transactions.  In 2010, the fourth quarter was my busiest.  You never can tell.

See the full Portland area report from RMLS.

Friday, July 15, 2011

Those Darn Party Sewers

I have written about these lovelies before, but want to keep this subject top of mind, or at least not buried below the surface.

Portland's sewer system is old. And much of it was cobbled together over the years.  In the city's close in neighborhoods, not all houses have their own direct connection to the city sewer.  Many houses then, have some sort of joint/cooperative/party line, that heads to the city main.  Many streets have NO sewer main in them, leading sewer connections to join with neighbors to get to a connection on another street.  In the past, the city required, when a line on a party sewer failed, that the "guest" on a party sewer install their own distinct connection.   In the past few years, this requirement became more stringent; requiring that once discovered (even if the party line were in good working order) the guest must install their own line.

It has been suggested that home buyers "scope" sewers as part of home inspections for five to ten years.  As with many new inspections, it can take a few years for such an inspection to become a norm in the marketplace.  "Really", a buyer might ask, "you are suggesting I pay $100 for someone to send a little camera down the sewer?".  Yes, That is what I'm suggesting.  In those early years of sewer scopes, we were only concerned with the functionality of the line, as the party sewer was only an issue when the sewer failed..  And a failed line needed work anyway, so the extra cost of the distinct connection was nominal.

There are many folks out there who bought their homes in the last ten years, diligently paid for a sewer scope, found a good sewer, and yet are in danger of having to pay for a new sewer connection.  There are also lots of folks out there, minding their own business, but who are on a party sewer with a house being sold.  Chances are 50/50 that they'll be the guest and will be required to install a new sewer connection.  Make note, if you are the "host" and yours is the dominant line, you usually are unaffected as it is the guest who is forced to leave the party.

  I had a listing this year where not only was it a party sewer, the required abandonment of the party sewer would effect a total of four dwellings on three different streets!  The City of Portland has proscribed noticing and waiting periods, but inaction is not an option and having no sewer connection is not an option (than goodness).

I had another listing where both the house being sold AND the neighbor were required to install new connections.  My seller clients were quite friendly with their neighbor (this is Portland after all).  The neighbor had been unemployed for two years and was quite financially strapped.  My seller clients were horrified that their move to their dream home would cause such a financial hardship for their friend and neighbor. In this case, my clients worked with a contractor on both sewer connections, thereby getting the lines at a slight discount, and even paid for some of the neighbor's connection...this is Portland, after all.

Also in many of the close-in neighborhoods, the lack of a city main in the street caused some folks to (way back when) pay to have a private line installed in the city right of way.  These connections are also seen to be non-conforming, and the work to make these "proper" can be quite a bit more extensive and expensive.  Many neighborhoods are affected by these issues. 

I have had transactions in Brooklyn, Richmond, Buckman, Sunnyside, Hillside and Arbor Lodge all with party sewer issues.  The Southeast Examiner had a recent article by Reuben Deumling on sewer issues, especially as it affects the Sunnyside neighborhood.  Is your sewer a party sewer?  Are you having hosting a party?  Or merely a guest?


Tuesday, July 12, 2011

Olympia Washington as a vacation destination, really?

Really.  I have a good friend who lives in Bellevue, Washington, and I in Portland.  Most years, our families vacation together on the Olympic Peninsula.  This year, a combination of forces made scheduling such a trip nearly impossible.  We decided, instead, for the two of us to meet somewhere in the middle, Olympia for instance.  This trip was really about spending time together, with a bit of sightseeing thrown in for context.

Boy were we pleasantly surprised! 

We stayed at a somewhat tired business class hotel: the Governor, no worries about confusing it with the Governor Hotel in Portland.  The location was quite central to downtown Olympia with nice views of the lake and Olympic Mountains, along with close proximity to the waterfront.  In addition the reasonable room rate included a pretty decent breakfast.

Our first afternoon we took a bit of a drive to orient ourselves and ended up at Tugboat Annie's for a long leisurely dinner in a comfy corner booth with great views.  Ahhh.  A leisurely dinner with a good friend is one of my most favorite things.

The next morning we took a nice walk along Percival Landing, the waterfront and moorage adjacent to downtown, and ended up at the farmer's market.  Olympia's farmer's market has a semi-permanent home in a covered space, stalls have access to electricity, there are nice restrooms with flush toilets and several more permanent food stalls.  We found some goat cheese with garlic and herbs, a fresh baguette and a bunch or rainier cherries for a picnic lunch later, and of course a few baked goods.  We passed up some gorgeous handmade beeswax candles, living wreaths (wish I'd have bought one) and yes, tie died clothing.

The view from Percival Landing toward the Capitol

Our afternoon took us to Wolf Haven, a wolf sanctuary about 10 miles outside of Olympia.  We had a lovely picnic lunch at the picnic area bordering the prairie, accompanied by a large flock (?) of ravens.  Wolf Haven began in 1982 and now houses 55 animals; 20 in their species survival plan and 35 residents.  The species survival animals are not on tour as they are preparing to be released into the wild and their contact with humans is minimized.  The 35 residents are not candidates to be released into the wild as at some time they were kept as pets or in other sanctuaries where they became too accustomed to humans.  

Diablo, whom we met.

Our tour, led by a knowledgeable volunteer,  took just less than an hour.  Just as we began, the wolves (all of them) set to howling.  Wow, what a sound.  We visited eight enclosures, each housing a bonded pair of wolves.  We learned much about the specif wolves we met along with lots about wolf behavior, endangered species, re-introduction and the like.  I enjoyed, but wasn't surprised to learn that the strong or alpha female is integral in hunts...she organizes them of course!  I was also interested to learn of the symbiotic relationship between ravens (our lunch guests) and wolves.  Ravens often lead the way on hunts and even direct wolves to their prey.  In turn, the wolves actually allow the ravens to do a bit of clean up after a hunt, an honor not afforded any other animal or bird.

Jacob Black, not on tour, but a permament resident.
 After a bit of downtime at the hotel we took a nice stroll through downtown to dinner at the Oyster Bar.  We again enjoyed a leisurely dinner, with a great view and reasonable food (and a great beer menu).  Downtown Olympia is more lively than I'd have thought, with a variety of interesting and primarily independently owned shops and restaurants.

All in all, a very enjoyable weekend with surprisingly a lot to do.  Give it a try!

Wednesday, July 6, 2011

How long does it take for that electric car to pay off?

In a recent article in the Wall Street Journal, Liam Denning writes about a Boston Consulting Group analysis of the ownership costs of combustion, hybrid, all electric and plug-in vehicles.  The BCG study calculated the combustion vehicle costs based on tightened emissions standards, projecting 47 miles per gallon in a compact car.  They looked at the increased costs of attaining this efficiency versus the costs involved in hybrid, electric and plug in vehicles.  Other assumptions included a gasoline price of $4.50 per gallon  and annual maintenance costs of $400 for the internal combustion engine vehicle down to $200 per year for the pure electric vehicle.

In the end, the payback on the hybrid took just under six year, the plug-in payback took seven years and the electric about eight years.  While the article didn't talk about the average length of car ownership in the United States, I was surprised that these paybacks were seen as " a long  time in car years; beyond the expiry of a typical lease".  What is missing here, I think, is an understanding of the mindset of the hybrid/electric car buyer.  Do you really think these niche consumers lease and get a new car every few years?  I'd posit these vehicle purchasers are motivated by conservation values, and realize the waste, both of finances and natural resources, in the purchasing habits based on the disposable society.  I'd love to see a study of how long owners of "high efficiency vehicles" keep their cars, as compared to owners of internal combustion vehicles.

As some of you know, I drive a 2006 Toyota Highland Hybrid.  None of the calculations in the article or study pertain to a SUV that gets, on a good day 29 mpg and gas prices well below $4.50 per gallon.  That being said, I bought the hybrid in the spring of 2005 and expect to have it about another four years.  Some day my pay back will come...

The Wall Street  Journal won't link to the whole story (you'd have to subscribe on line for that), but you may read the intro if you click here.