Some Side Effects of Foreclosures on Portland Real Estate
by William Metzker on February 1, 2010
Two recent reports got my attention, because they will probably really affect both buyers and sellers of Portland Metro homes. The first is from a trade journal I receive, the Foreclosure News Report. A recent article maintains that a shadow inventory clouds the housing market.
In this case, “shadow inventory” refers to lenders holding foreclosed homes off the market to prevent a flood of low-priced homes further depressing prices. Some analysts say that lenders are hoping for another federal bailout (gee, would they really do that?).
Not only is there a pool of lender-owned property being kept off the market, but there’s a huge “overhang” of homes about to be foreclosed, says Amherst Securities. If it’s true nationally, it’s true in Portland, and the recent signs of recovery in the Portland market may be temporary.
One in eight mortgages is at least a month in arrears, by the way.
The other interesting tidbit comes from a joint study by RealtyTrac and Trulia. It shows a remarkable lessening of interest in people buying foreclosed homes.
Why? The process is cumbersome. Folks worry about the repairs, especially the hidden ones. But the really interesting reason is that people fear the homes will lose value, even post-foreclosure. This is despite the fact that foreclosures, on average, sell at a 33% discount.
This news affects people wanting to buy a home because it puts pressure on non-distressed properties, and there are danged few of them. It affects people who may want to sell their home because of the downward pricing dynamic it causes.
Some Side Effects of Foreclosures on Portland Real Estate
by William Metzker on February 1, 2010
Two recent reports got my attention, because they will probably really affect both buyers and sellers of Portland Metro homes. The first is from a trade journal I receive, the Foreclosure News Report. A recent article maintains that a shadow inventory clouds the housing market.
In this case, “shadow inventory” refers to lenders holding foreclosed homes off the market to prevent a flood of low-priced homes further depressing prices. Some analysts say that lenders are hoping for another federal bailout (gee, would they really do that?).
Not only is there a pool of lender-owned property being kept off the market, but there’s a huge “overhang” of homes about to be foreclosed, says Amherst Securities. If it’s true nationally, it’s true in Portland, and the recent signs of recovery in the Portland market may be temporary.
One in eight mortgages is at least a month in arrears, by the way.
The other interesting tidbit comes from a joint study by RealtyTrac and Trulia. It shows a remarkable lessening of interest in people buying foreclosed homes.
Why? The process is cumbersome. Folks worry about the repairs, especially the hidden ones. But the really interesting reason is that people fear the homes will lose value, even post-foreclosure. This is despite the fact that foreclosures, on average, sell at a 33% discount.
This news affects people wanting to buy a home because it puts pressure on non-distressed properties, and there are danged few of them. It affects people who may want to sell their home because of the downward pricing dynamic it causes.