I have put together this localized home inventory report to give context to the metro statistics that often make headlines. Real estate is a local affair and this report shows which parts of town and which types of property are selling and which ones are sitting. Inventory is figured in months with 6 months being balanced, less than 6 months favoring sellers and more than 6 months favoring buyers. I use current active and 6 months of sold data from the RMLS to create this report.

Trend: Detached homes close in continue to show slight increases due to lower than normal sales volume over the past several months. Condo inventory continues its rise, especially in downtown Portland due to more constrictive lending rules and over supply.

Highlights: Hollywood/Rose City, Overlook & Piedmont are strong with lower inventory. Gresham and Happy Valley are at 14.9 and 11.2 months respectively, slightly lower than last months numbers.

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Popularity: 7% [?]

I’m sure you’ve heard a ton about the Fannie / Freddie refi and loan mod program. The basic idea is that Fannie/Freddie backed or held loans can refi into a 30 year fixed rate at market rate interest rates EVEN IF you owe more on the loan than the home is worth. Info on the program and how to see if you qualify.
You have to be current on payments to qualify for this program!

The loan modification program is voluntary so not all banks will do this. Here is a link to FAQs for both loan refi and mods.

Here is Wells Fargo’s guidelines: making-home-affordable-program-newsflash

Popularity: 12% [?]

With all the news about the economy and residential real estate I’m sure many people are wondering what is happening with commercial real estate.

Commercial is broken up into different sectors: Office, Retail, Industrial, Multifamily.

First the good news:
Multifamily: Peaked in 2008 locally with investors able to get low interest rates and sellers being able to sell at a low CAP rate and therefore a high sales price. This sector is still strong but investors are looking for higher CAP rates and therefore lower prices since rents are flat now.
Industrial: Is experiencing more vacancy due to continued off-shoring of manufacturing jobs and less consumption at home.
Office: locally is hanging in right under 13% vacancy which is keeping things in a range many would describe as balanced. That being said, many land lords are more likely to negotiate the rate and terms of leases and some are having to hold rates even if they have scheduled bumps.
Retail: This is the most visable sector and also one of the harder hit areas. With consumers spending less on everything many non-essential retailers had to shut their doors in 2008 and 2009. This opens an opportunity for new businesses with lower lease rates and better terms.

The bad news: A little something called Maturity Defaults. What is a Maturity Default you ask? The problem is that unlike home loans which are generally fixed for 30 years commercial loans are usually amortized for 30 years but DUE in 5-10 years. This means that you need to refinance every 5-10 years and with lending getting tighter, vacancy going up, business revenue down this is creating a problem. We are going to have many cases of businesses nad investors that paid on time, have equity and are not going to be able to get a new loan. This issue is called a “Maturity Default.” For a fantastic article with graphs and info check out Bill Connerly’s blog Businomics.

Popularity: 9% [?]

Sales volume is a leading indicator for price. To help predict where the market is going I will be publishing sales volume trend reports and pending sales trends. The wisdom is that price follows volume so when you see a market trending higher in sales prices will soon follow up and when sales volume is low prices will stay flat or fall.

The closed sales volume is trending up and pending sales continue to rise but the volume is still down from the same months in 2008. Normally we see sharp increases in closed sales in the months of March and April that lead to a seasonal peak in June and July.

Wild cards: Low interest rates, stock market, continued rise in foreclosure listings & unemployment.

I’m predicting around 500 closed sales in Portland (areas 141, 142, 143 & 148) in May, hovering close to last months numbers. This is still far behind last years numbers so pricing will likely stay flat or slide slightly. First time buyers are still the strongest segment in the market and well maintained homes under 275k account for many of the sales.

Popularity: 7% [?]