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Archive for the ‘economy’ Category

Home Sales Rise as Economy Stalls

Friday, December 28th, 2012

Lackluster holiday spending and low US consumer confidence did not detour home buyers the last quarter of 2012. Home sales are up for the last couple months as buyers take advantage of low interest rates and depressed property values. Local Realtors had a Merry Christmas cashing commission checks in November and December as Portland RMLS reports a 5% month over month gain in sold home volume. MERS and its legal woes have also contributed to reduced inventory; with the embattled company’s foreclosure practices now being called in to question in landmark court cases across the nation.

MERS Foreclosures Challenged In Landmark Cases

The latest burst of closed real estate transactions in combination with the low number of new listings has caused extremely low levels of available inventory. At best the housing market is peculiar with no real economic synergy behind the increased sales activity.

Meanwhile the FED has recently taken further action to avert a repeat recession and mussed that low economic activity will reach well into the later part of 2015.

The looming fiscal cliff has households on edge as politicians refuse to take on the responsibility we hired them to tackle. Oil prices have dropped due to the instability of the US economy as the world watches lawmakers bicker over US spending and tax policy. Low fuel prices are good for consumer but not enough to turn consumer sentiment in a positive direction. Consumer confidence has been on a steady decline the last few months.

The FED reported US manufacturing levels recently dropped and new unemployment claims rose.

Possibly home buyers fear the uncertainty the fiscal cliff presents on unknown future interest rates.

These RMLS charts speak for them selves.

RMLS Portland Home Sale Data

RMLS Portland

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Economic & Job Growth Forecast

Thursday, December 20th, 2012

2013 Jobs Forecast

The Federal Reserve released job data stating the unemployment rate will remain elevated through late 2015. Unemployment and under-employment continue to weigh heavily on the US economy as 17,000 Americans filed new unemployment benefit applications this week. According to the Federal Reserve the US needs over 200,000 new jobs created each month to break even with newly minted graduates entering the work force. 151,000 new jobs were created in November 2012 with 4.5 million Americans unemployed. As such, it seems more than plausible that short sales will remain a part of the economic landscape at least for the time being. Associated Press released its survey of the nation’s top economists which anticipates 2013 GDP growth to be 2.1% below the 3.5% threshold of real economic growth able to pull the US out of the sluggish housing recovery. Economists noted the tepid growth remains consistent with the past 3 years and expect no significant change in 2013.

New Housing Starts Down

New housing starts are back down again after the short lived influx from Super Storm Sandy. Super Storm Sandy destroyed an estimated 40,000 homes that will be rebuilt next year but that is still not enough building activity to move the national new construction data significantly. Housing starts on the West are down 19% while housing starts on the East Coast are down 26%.

Is Supply Keeping Up With Demand?

The total numbers of sold residential homes was up only slightly year over year 2011 – 2012 as many cost-conscious consumers are feeling budget restraints. Home values made modest gains in 2012 which has not been enough to relieve the financial stress of many underwater mortgage holders. New Foreclosure rate cooled slightly as many states have been working though court challenges to foreclosure procedural process raised by homeowners in default. Recently most of these court challenges have been resolved or expected to be resolved shortly. HUD remains consistent with its outlook of gaining additional foreclosed home resale inventory 2013.

Distressed Properties

Distressed properties including short sales are maintaining similar inventory levels as the year prior and are not expected to decline in volume during 2013. Banks have sough relief from foreclosure losses as repossessions are costly and present problems with title transfer and other issues after the reconveyance of the deed is completed. Overall US home sale volume saw an increase of 5% over last month due to favorable interest rates.

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Fourth Quarter 2012 Foreclosures

Tuesday, December 18th, 2012

An audit of newly filed judicial foreclosures in Multnomah, Clackamas, and Washington Counties during the 4th quarter period of 2012 clearly reflects the fact that distressed property owners remain in need of professional short sale real estate services. Banks are encouraging distressed homeowners in Oregon to seek short sale agents (SFR) to eliminate and settle real estate mortgage debt rather than the expense of a judicial foreclosure or notice of default procedural foreclosure.
Short Sale Transactions have proven far more beneficial than foreclosures for both home owners and banks.

With today’s home values similar to values of 2003 we have a ways to go before we reach a full housing market recovery as distressed property owners owing more on home mortgages than market sale price will deliver still represent a large number of home owners. The spread between what they can sell for and what they owe remains substantial. Homeowners must take action to avoid foreclosure and a short sale is a valid action in avoiding foreclosure.

Foreclosure PDX Home Sales

Newly filed Real Estate Foreclosures in Portland Oregon remain substantial during the 4th Qtr 2012 while conventional home sales increased a bit. Buyers seem to be cooling off to housing price pressure but remain especially active towards distressed real estate pricing. An impromptu survey of my peers confirms a cooling off of buyers due to increased RMLS home listing prices. No one interviewed believes real estate prices will drop further but they expect more of the same with little price change. Additional new home inventory or newly processed foreclosures as cautioned by HUD will further ease current price pressure.

Washington County

In Washington County areas like Beaverton, Hillsboro and Tigard home value recovery remains a step or two behind that of Portland. The over all Real Estate Market appears stabilized and is anticipated to remain so, as long as we don’t experience any global financial hiccups. Low oil prices may have been the primer behind the recent activity.

Happy Valley

Clackamas County’s Happy Valley, West Linn and Oregon City are really no different than the rest of Portland’s suburbs. Happy Valley experienced mass housing development in 2005 and 2006 has yet to recover. Real Estate prices today are below 2007 market highs. Happy Valley foreclosure rates remain higher than PDX foreclosure rates.

Our local housing market is a reflection of the greater economy experienced around us. While the recession has been technically over since 2009 the slow recovery is in deed slow.
The Federal Reserve announced last week that they expect the economy to grow 3% in 2013 with little change in job growth and a 2% inflation rate.

As of today our nation faces the fiscal cliff which indeed is nerve racking but a negotiable settlement seems rather doable. Both parties are posturing to be the good guy savior showing measured flexibility towards a resolve. I believe the final deal will be some of this and that and kicking the fiscal can down the road somewhat to be continued at a later date.

It will be quite some time before home sale are back to normal.
Data distributed by the Federal Reserve confirms home sales are far below healthy levels.

Foreclosure Resource Agent

I am a Foreclosure Resource Agent (SFR) Real Estate Broker licensed in the state of Oregon, federally certified and available to people needing assistance or information regarding short sales, distressed properties, or foreclosure notice.

Please feel free to contact me directly.
Bruce Lockwood 503-473-8001

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Metro Area Housing

Friday, August 26th, 2011

The Metro Area Housing Market appears to be in a state of flux; with outlying areas
still seeing price declines while more centrally located neighborhoods are seeing
less declines, or even flat or increasing price trends. The question on many minds
is whether pricing pressure from the suburbs will exert downward pricing pressure on
centrally located neighborhoods and if so how much will this affect prices and
overall market stability? sadly, we won’t really know for sure until it’s history
but many speculate that certain neighborhoods may still be overpriced. Also adding
convolution is the dynamic nature of housing. While some real estate agents in Portland proclaim that
prices are increasing (Average Sale Price) other Brokers are quick to point out that
the houses that are being sold now are larger homes and that is what is driving up
prices rather than a meaningful recovery. One thing that does appear promising is
the fact that larger, more expensive homes are finding buyers in turn means that sellers
are being freed from their existing properties. Early in the economic recovery
there was a higher percentage of entry-level homes being sold. Now that sellers
have sold what may have been their first house they are free to make new purchases
of larger, more expensive residences in more desirable areas. This may be part of
what is causing outlying areas (suburbs) to continue to suffer price declines while
close-in neighborhoods are seeing strong activity from eager buyers.

Have Questions About Short Sales?
Speak to an Experienced Portland Realtor & Get Answers: 503-473-8001

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Retirement & The Economy

Wednesday, August 24th, 2011

Baby boomers and stock values

Retirees selling stocks at a higher rate than younger investors are buying puts downward price-pressure on market.

Federal Reserve Economists are questioning the effect of retirement age baby-boomers on stock values. Economists trace stock market gains in the 1980’s to baby-boomers preparing for retirement and now believe that the trend will reverse as retirement-age boomers sell stock to cover expenses. Tracking the boomers’ effect on the economy has predicted market action in the past with foretold increases in consumer spending in the 1990’s as the boomer generation entered their most productive wage-earning years. And, as in the 1980’s, the 90’s were a time when boomers also put money into Stocks, Bonds and Mutual Funds. Now that the boomers are retiring it seems a foregone conclusion that boomers will be periodically withdrawing from their retirements by selling off portions of their investment portfolios on a regular basis. Others speculate that at least a portion of the early 2000’s housing bubble may have been brought on by boomers having to progressively nicer homes.

economy retirement

Federal Reserve Bank Of San Fransisco

How Will This Affect The Market?

San Fransisco Federal Reserve Economists Zheng Liu and Mark Spiegel have compared buying and selling ratios based on the theory that people in their 40’s were buying stocks and people in their 60’s were selling stocks. They found that the ratio of population in their 40’s to the ratio of population in their 60’s tracked very closely with patterns in the stock market. In the 1980’s when the smaller number of Depression-era retirees selling stocks in contrast to the greater number of baby-boomers in their 40’s buying stocks predictably led to increased stock values across the board. In the year 2000, the ratio of people in their 40’s buying stocks to retirees in their 60’s selling stocks reversed; not surprisingly stock values declined. Liu and Spiegel use these trends to predict that stock values could be 13% lower than today by the year 2021.

The Rest of The Story

The study did not take offshore investors into account and how newly industrialized economies such as China and India will affect the US Economy as demand for US Stocks from offshore investors rises. Also, factors such as Federal Reserve Interest Rates affect stock prices as investors seek higher yields than may be offered by low interest bonds.

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Fewer New Homes Built

Wednesday, August 17th, 2011

National Housing Update

July marked a slowing of construction of new homes; dropping from already low levels. The Commerce Dept. stated on Tuesday that housing starts were down by 1.5% to an annual volume of only 604,000 units (seasonally adjusted). It should be noted that this was in line with Commerce Dept. estimates. The current rate of 604,000 annual units is roughly fifty percent of what economists claim is necessary to maintain a healthy housing market.

Housing Recovery Not Picking Up

“There is still no sign yet of a pickup in housing,” says Patrick Newport (economist at IHS Global Insight as quoted on MSNBC News). With weak employment cited as a major contributing factor for housing lackluster performance. Distressed properties like short sales and Foreclosures are lowering demand for new houses due to the fact that distressed properties are statistically much lower in price.

Increase In Housing Demand To Come From Younger Generation

Some industry insiders see the next untapped market for homes is Younger Americans who may be currently staying at home longer or delaying entering the work force. As this new generation enters the workforce and becomes independent and requires housing new gains may well be sparked; but employment numbers need to improve for sustained recovery.

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National Politics Affect Consumer Confidence

Tuesday, August 16th, 2011

Recent Surveys Show Consumer Confidence Near Record Low

Early August market the lowest level of Consumer Sentiment in over 30 years; according to a recent article on MSNBC News. Combined with an increase in consumer spending in the first part of July, the current economic situation is certainly far from simple. With Wall Street and the overall state of the economy tied to the housing market; many are uncertain how mortgage rates will be affected by this.

Pundits point to the sharp debate amongst members of Congress over budget deficits and rumors of a Federal Debt Default as likely culprits for late July and early August’s drastic upheaval in stocks and the general US economy. Thomson Reuters/University of Michigan conducted the survey of Consumer Sentiment and also reported that survey respondents reported negative views of the government’s role in the current state of the economy.

Some brights spots exist such as the 0.5% rise in retail sales over the last month showing that consumers were spending more on fuel, cars, furniture and groceries…. although some critics point to rising gas prices and food costs. Despite this senior analysts at Wells Fargo Securities point to increased consumer spending as lowering the risk of a double-dip recession. Concerns still exist about whether the new debt policies will actually stick and whether Americans will see real results on Wall Street and Main Street.

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