The Real Estate Market is Weird

The S &P Case-Shiller Index, recently released for November 2011, showed a distinct and definite decline in home prices.  The S&P Case-Shiller Index looks at a 20-city "weighted average" as a gauge of the market (which also then gives us data on those individual cities).  As Portland is one of those 20 cities, we do get some interesting data and basis for comparison. As this data trails our local RMLS market data by a month, the S&P Case-Shiller Index tends to provide more context and less precision.

In any case, Portland showed a 4.8% decrease in home prices over a year ago, compared to the national decline of 3.7%.  Seattle, showed a 6.3% decrease and interestingly, Phoenix, Arizona, thought of as one of the absolute worst markets in the country, showed a 3.6% decline AND a slight increase from October to November.  hmm

Contrast this to a few local experiences; Ron Milligan, in our office, listed this three bedroom, two bath house in Sellwood on Friday.  Nice house, but not the cream of the crop.  He thought he priced it to sell, but not low by any stretch of the imagination.  This past Sunday's open house drew over 40 parties through, and by Monday he had five or more ( I haven't heard the latest) offers in his hand.

And Alexis Wolf, in our office, is about to list a condominium.  Again nice property, good value, but nothing incredible.  She has been chatting about it before it is listed and has generated quite the buzz.

And Jamie Orr, also in our office, has had this house listed for TWO YEARS.  Yes, the price has come down a lot and was probably going to come down again in the coming weeks.  Until this weekend...two offers!

I'm not denying the S&P Case-Shiller report.  At all.  But some combination of the low inventory of decent houses in Portland, combined with low interest rates and buyers tired of waiting on the sidelines  is equaling activity.

Read the most recent S&P Case-Shiller report

Sellers, we NEED good houses on the market.  If you've been waiting it out, now might be the time to get on with it and sell.  Call me if you need an updated market analysis.

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.