Foreclosure- the option that everyone should try to avoid and only use it if it is your last resort. A foreclosure on your credit history can drastically affect how you can borrow and spend money in the future. It can lower your credit score up to 200-300 points. It is not the choice to take unless someone has lost everything else and has no other options.

Renting- a homeowner might need to change their thinking about their home.   Real Estate is a long term investment. During the fast days of 2003-2007, people were buying and selling so quickly because the market was shooting up so fast. Those days are gone and so real estate appreciation has slowed to a steady level once again. The value of your home WILL go up again but it might not be at the level you purchased for quite some time. If you can consider a rental and stomach covering the additional amount of the mortgage, taxes and insurance- then you might not lose your equity, it would have no affect on your credit and you could move and rent another home that is within your budget. You might have to change your thinking about her mortgage payments- think of it as a payment into an IRA. You might have to tighten your belt a bit but at least you won’t lose your equity.

Short Sale- we are doing a lot of short sales now. Short sales are a good option for home owners that have lost a lot of equity and now owe more in their mortgage than the home is worth. The paperwork and length of time it takes to get a reply from the bank takes a lot of patience so you have to be prepared to make it wait once you submit the paperwork. The bank assigns you a negotiator and then you work with them to lower the loan pay off amounts and release the debt deficiency. Often, there is none or very little affect on one’s credit score. The bank is usually more willing to work with people that are in some type of financial distress- job loss, income reduction, etc. But I have seen sellers will high net worth’s have success with short sales. If you are considering a short sale- you will need a real estate agent with short sale experience that can assess your situation and see if a short sale is a viable option.

Loan Modification- this is also an option but a difficult one to obtain.  Your bank might be willing to work with you to modify your mortgage to decrease your monthly payments if you are in a financially distress situation.  Contact your mortgage holder’s loss mitigation department for more information.

What I have seen a lot of in this ‘recessionary’ market is that buyers have become even more demanding than they ever were before.  They almost have an attitude of entitlement – like it is their turn to be the winners in negotiations.  They take it for granted that they are going to get a good buy and wait and they have no compunction about making low offers and standing firm.

The problem is that with all the choices and the many houses on the market these buyers are often successful with their posture, and if they are not it is not uncommon for them to wait on the sidelines for a better deal on the next one.  Sellers- do you want to wait for a better market or sell now in the market you have?  All homes for sale get “priced” in the marketplace, and the ones we see selling are priced at very compelling values.  Otherwise, there are many houses on the market that are waiting for something to change.  And the problem is that we have learned that change in this market has mostly been moving lower, not higher.

Value seems to be the primary focus of current buyers and can you blame them?  With the present fear in the financial market- everyone is acting more conservative with their investments. Property condition has become secondary to property value.  Perhaps this market has allowed buyers to seek more potential in their home’s condition rather than the appreciating value of the home.

By Becky Jackson

The Atwater Place auction was  fun and crazy.  I have renamed the auctioneer “Accelerated Chaos”!  They have their systems, and they are working with many newly-hired and un-trained people, but there were so many confusing and contradicting rules and statements going into the auction and a million small, redundant steps for everyone to follow.  Seems like they wanted to foster chaos along with the hype.

The auction was active, fast – but not uncomfortable, and sales were generally well above the minimum bids, consistent with recent market results and at substantial discounts from the recent price lists.  Many of the sales were at prices which can be negotiated from developer price lists if a buyer is brave enough to ask and push for it, so in the end we reach the real market price, one way or another.  Sellers can set asking prices, but Buyers determine value by offering and paying what they will.  Tonight 40 people offered and agreed to buy which made a vigorous market happen where there had not been one before.  Some may have paid a bit more than they expected, having gotten caught up in the bidding, I don’t know, but the overall average is a sales price of $291/SF, a substantial discount from most current price lists on A-grade new condos.

There appeared to be numerous willing bidders for all units, except the penthouse which had no offers, and which is fully valued at their ‘minimum’ in my opinion and validated by the buyers tonight. There were also very few bidders for the two townhomes, which is consistent with current market demand for townhomes and reflected in the much lower price/SF for those homes.

This auction was certainly not a cheap process to pursue, but it did lead to sales of 40 homes in a months time – a significant jump in velocity for condos sales for sometime.  Now, the challenge is how they follow that up and sell another 100+ high end homes with the same level of urgency!

Here is the latest march-2009-market-action report from the RMLS. This is the monthly summary of the real estate sales statistics for our region published by the Regional Multiple Listing Service.

In February both the increase in sales and the decrease in listings relative to last month (January) had a positive influence on the amount of inventory for the Metro area. Inventory now is just over 16 ½ months, down from the record breaking high of 19.2 months in January. While this is both good news and a positive change, we are still in a market that is hugely biased in favor of buyers due to high inventory and very low demand. Until this imbalance changes we can only expect that pricing pressure will continue to be on the downside. This means that for selling listings our strategy must continue to hold to these tenets: very competitive pricing, excellent condition and showing preparation, showing convenience for buyers’ brokers and multi- focused marketing strategies for reaching all possible prospects. We also keep clients well informed by offering regular reports on the number of showings for properties and feedback from the brokers or buyers about those showings, plus the competitive picture specific to each listing.

Another report we provide is the “market analyzer” which shows market demand and inventory absorption in a specific property area and type, among other things. This report is key to understanding why pricing much be considered in terms of demand as well as property comparison. For example, we may be able to determine that a property is priced competitive to all other listings, but still have sales challenges because there simply is such light demand.

For buyers we provide all the same detailed information for the areas and specific properties that are of interest in their home search.  Knowledge is power!

Our intent is to provide legitimate statistical information that i useful to you for taking care of your plans for moving.  We know that a big decision like buying or selling a home cannot be done without the analytical information possible to help with those decisions. There are a lot of good things about our business that are emotional and subjective – we need to have personal and emotional connections to our homes. Added to that ‘emotional connection’ I welcome the ‘proof’ of statistics to help us with strategies and decisions. This is true for both buyers and sellers alike.

As always, if you have any questions or want to discuss something specifically, please give us a call at 503-416-4177.

Becky

“Priced right and lookin’ good “ is the mantra to attract one of the savvy buyers looking to take advantage of a buyer’s market!

Check out the full story market-action-2162009 and find the numbers for your area of Portland.  And call us if you have questions interpreting this real estate market.  503-416-4177

Becky