Oregon is NOT one of the 10 States listed with highest share of negative equity mortgages

(August 27, 2010 • Portland Real Estate, Portland Real Estate Market • 0 comments

According to an Inman News  Article,  an estimated 11 million U.S. homeowners owed more on their mortgages than their homes were worth at the end of June, according to a new report from data aggregator CoreLogic.

CoreLogic said the number of underwater borrowers peaked in the fourth quarter of 2009, and has declined by about 350,000 since then.

The biggest declines in negative equity were concentrated in states with the highest share of underwater borrowers. Nevada experienced an 11.8-percentage-point decline in negative equity share, followed by California, Florida and Arizona (-1.3 percent).

Top 10 states with highest share of negative equity mortgages
1. Nevada (68 percent of 592,000 mortgages)
2. Arizona (50 percent of 1.3 million mortgages)
3. Florida (46 percent of 4.5 million mortgages)
4. Michigan (38 percent of 1.4 million mortgages)
5. California (33 percent of 6.9 million mortgages)
6. Georgia (28 percent of 1.6 million mortgages)
7. Idaho (24 percent of 243,000 mortgages)
8. Virginia (23 percent of 1.2 million mortgages)
9. Maryland (22 percent of 1.4 million mortgages)

10. Utah (20 percent of 470,000 mortgages)

The great news is that in comparison to these other states,  the Portland Metro market- according to the latest statistics from RMLS the average sales price actually increased 2.9%.

See residential highlights table below.

When comparing July 2010 to the month prior, June 2010, the average sale price increased 2.5%($297,000 v. $289,000) and the median sale price also went up 2.5% ($246,000 v. $240,000).

For more information on Real Estate in the Portland Metro area please contact LaDonna Miller- Broker ladonnamiller@earthlink.net or (503) 310-9076.

HUD Announced details for New Refinancing Program

(August 19, 2010 • Portland Real Estate, Portland Real Estate Market • 0 comments

This was an article from the National Association of Realtors published this last week.  This program may offer homeowners a great solution.

On August 6, 2010, the U.S. Department of Housing and Urban Development (HUD) announced details for its new refinancing program to assist homeowners who owe more on their non-FHA mortgages than their home is worth. HUD originally announced the program in March.

Beginning September 7, 2010, the Federal Housing Administration (FHA) will offer qualified non-FHA borrowers the opportunity to refinance with a FHA-insured mortgage on their primary residence. Borrowers must be current on their existing mortgage, qualify under FHA underwriting requirements, and have a credit score of at least 500. The first lien holder must agree to write off at least 10% of the remaining amount owed under the mortgage bringing the combined loan-to-value ratio (LTV) of all mortgages to 115% or less. The LTV for the new FHA mortgage may not exceed 97.75%.

The Treasury Department will provide incentives to second lien holders who agree to forgive all or part of their liens. Additional information and guidelines can be found on the HUD website.

For more information on Real Estate in the Portland Oregon area, please contact LaDonna Miller-Broker Oregon First Real Estate (503) 310-9076 www.RenovationConcepts.net or email: ladonnamiller@earthlink.net

Latest RMLS Market Data for the Portland Metro area for July 2010

(August 13, 2010 • Portland Real Estate, Portland Real Estate Market • 0 comments

Here are the latest RMLS numbers for July for the Portland Metro market. Active listings have increased from last month but the average sales price has still increased.

Despite Increase in Housing prices, Worrisome Signs Remain

(July 29, 2010 • Portland Real Estate, Portland Real Estate Market • 0 comments

This was an article published by NuWire Investor. This article states that even though we have had positive signs in the economy, they state that worrisome signs remain for the US Housing market.  The state of Oregon has been on of the states to realize increases in home prices this year.

“Despite Increase In Housing Prices, Worrisome Signs Remain”

Despite a slight upward trend in prices of late, thanks to the homebuyer credit, worrisome signs remain for the US housing market, raising concern that prices could fall 5 percent by 2012. Revitalized activity has been concentrated in property bargains, stalling price recovery, while foreclosed properties aren’t moving fast enough to stem the looming tide. See the following article from HousingWire for more on this.

Home prices are up in two leading economic indicators today, but instead of reacting positively, the housing industry remains troubled by the not-so-good news.

The 25-MSA Radar Logic residential property index (RPX) Monthly Composite for May finds that home prices increased 2.1% on a year-over-year basis, but adds that gains were not large enough to be described as a recovery. When looking at more than the numbers, Michael Feder, CEO of Radar Logic said the bigger picture points to more evidence of weakness, than strength.

“The patterns in this month’s data are, in fact, troubling,” said Feder. “Activity has rebounded over the last year, but there has been a shift toward lower priced housing.  We have not seen the recovery in prices that we would have expected with the return of volume.”

U.S. house prices rose 0.5% between April and May, according to the Federal Housing Finance Agency’s (FHFA) monthly House Price Index report.  This is 1.2% lower than one year ago.  The Pacific Census Division (Hawaii, Alaska, Washington, Oregon and California) saw the greatest rise in prices at 1.8% while the East North Central (Michigan, Wisconsin, Illinois, Indiana and Ohio) saw a drop of 0.6%.

Although house prices seem to be on a slight yet steady rise after going up by 0.3% in March and 0.9% in April, Capital Economics economist Paul Dales is not convinced the trend will continue.  He believes that housing market activity has yet to translate into double-dip prices and that the market could be as much as 5% below current levels by the end of next year.

“Admittedly, house prices on the seasonally-adjusted FHFA measure increased by 0.5% m/m in May.  That was the third rise in as many months,” Dales said in data response Thursday.  “But prices in May were probably boosted by the lingering effects of the surge in demand generated by the homebuyer tax credit. Now that demand is falling, it won’t be long before prices start to fall too.”

Admittedly, house prices on the seasonally-adjusted FHFA measure increased by 0.5% m/m in May.  That was the third rise in as many months,” Dales said in data response Thursday.  “But prices in May were probably boosted by the lingering effects of the surge in demand generated by the homebuyer tax credit. Now that demand is falling, it won’t be long before prices start to fall too.”

In a statement from RPX, sales of foreclosed homes by lenders and mortgage  servicers, which Radar Logic calls “motivated sales,” decreased as a percent of total sales over the last year. These properties still accounted for 24% of home sales across the 25 MSAs tracked by Radar Logic. Motivated sales do not include short sales , bank-sanctioned sales by home owners for less than their outstanding mortgage balance. If short sales were included, motivated sales would account for a considerably larger share of total sales.

“The implication is that there is little volume in the sectors that are most likely to contain the ‘underwater’ loans, and as a result, the market is not absorbing this overhang,” Feder added. “Unless this inventory overhang is remedied through market or structural forces, it will certainly continue to stifle any early recovery in housing.”

This article has been republished from HousingWire. You can also view this article at HousingWire, a mortgage and real estate news site.

For more information on the Real Estate in Portland, Oregon please contact LaDonna Miller-Broker Oregon First Real Estate

(503) 310-9076 or ladonnamiller@earthlink.net

New Continuing Real Estate Requirements for Current Oregon Real Estate Brokers

(July 19, 2010 • Portland Real Estate, Portland Real Estate Market • 0 comments

The Oregon Real Estate Agency has made some significant changes regarding continuing education.  Here is a list of some of the new Continuing Real Estate Requirements for Current Oregon Real Estate Brokers starting January 1, 2011.

What many people might not know is that Real Estate Brokers are required to complete 30 hours of Continuing Education every two years to maintain their licenses.

Here are some of the new changes from the Real Estate Agency which are effective January 1, 2011.

1. All continuing education must be taken from a Certified Continuing Education provider to meet license renewal requirements

2. All licensees must complete a specific 3 hour board approved Law & Rule required course from a Certified Education provider

3. Brokerage Administration and Sales Supervision courses must be approved by the Agency.

4. Certified Continuing Education providers must meet requirements for keeping records, developing learning objectives and ensuring instructor qualifications.

5. Applicants for a principal broker license must take and pass a principal broker license exam in addition to other licensing requirements.

For more information visit http://www.rea.state.or.us/

For information on Real Estate in the Portland area please contact LaDonna Miller-Broker Oregon First Real Estate  at ladonnamiller@earthlink.net or (503) 310-9076.

Green Homes Selling Faster than Traditional Homes According to NAHB

(June 1, 2010 • Portland Real Estate, Portland Real Estate Market • 0 comments

Green Homes Said to Sell Faster, But Appraisals Remain a Sticking Point

This affordably priced green duplex is in the NAHB National Green Building Award-winning community of Rosewood Hills in Columbia, S.C.,

While official statistics may be lacking, many builders attending the NAHB National Green Building Conference in Raleigh, N.C., on May 16-18 said that they have been able to sell sustainably built homes considerably faster than the traditionally built new homes that have been languishing in today’s tough market.

Green builders, however, have little immunity from the tight financial conditions that have been plaguing the housing market and imposing difficulties for both home buyers and sellers. And the widespread problem of low appraisals — driven largely by a glut of foreclosed properties and a slow market — has been doubly frustrating for green builders because the vast majority of appraisers are unable to recognize the value that green features add to the home.

Energy efficiency, according to speakers at the conference, remains the most salient aspect of the industry’s move to sustainability, and is the one benefit that’s most easily recognized by consumers. Unfortunately, the prospect of sharp reductions in monthly utility bills has not gained much attention from the lending community, and mortgages recognizing those savings remain mostly an idea whose potential has been largely unrealized.

Another ongoing challenge is that the concept of green housing is not well understood by the general public, conference panelists said, and a significant share of prospective buyers are actually turned off by it. Green builders were advised to market the specific benefits of their homes rather than selling green, and to avoid providing too much technical information, which can quickly go over the heads of buyers and discourage sales.

While builders have found that there are buyers who are willing to pay a premium for green features, speakers at this year’s conference emphasized that the price gap between green and standard housing is closing, helped along by tax and other incentives. In general, however, home buyers may be reluctant to pay more for certain items unless they can be shown how these will pay for themselves through lower operating and maintenance costs over a reasonable period of time.

Several builders were on hand in Raleigh to discuss how they have been successful in moving sustainable construction principles into affordable housing. Those attending the conference also heard how green is being incorporated into the multifamily sector and factory-built housing, the latter profiting from a manufacturing process that inherently provides greater precision and holds construction waste to a minimum.

Industry professionals attending the show seemed to feel fairly optimistic about their business prospects and expected green to give them even more of an edge as this segment of the marketplace becomes further established during the full-scale housing recovery that will emerge in the next couple of years.

But the mortgage market isn’t geared up to do an effective job of providing financing for those green homes, they were told, a complaint that hit an especially raw nerve at the conference.

Green Homes Face a Red Light

“Green homes face a red light,” said Rick Porter, CAPS, CGA, CGP, CMP, MIRM, of PorterWorks. “Appraisers don’t understand costs and buyers can’t get the full financing they need.”

In a show of hands from the audience at Porter’s breakout session on the latest in appraising and lending on green building, only a few said that one of their customers had ever been offered an energy efficient mortgage (EEM) or energy improvement mortgage (EIM) or that an appraiser had solicited information on the energy features of one of their homes.

Citing Fannie Mae guidelines advising lenders not to assume that an appraiser is competent, Porter told builders, “You have every right to say I want a competent appraiser. You do not need to roll over on this. If they have not seen or appraised a green home, ask for an appraiser who has appraised one of these homes or has knowledge in energy efficiency.”

Builders have the misperception that they are not even allowed to talk to appraisers these days, said Porter, but as long as they are not unduly trying to influence the valuation, they can voice their concerns through the lender and Appraisal Management Company.

The Appraisal Institute has initiated a one-day seminar on green building and it is presenting webinars, he said, “but I don’t know if this is enough.” Only about 25% of the nation’s roughly 105,000 appraisers are even a member of an organization, “so they are nomads.” In the meantime, underwriters are “tinkering” with appraisals.

As part of the third-party verification process, Porter said that builder should be sure to obtain a residential energy report form from the HERS (Home Energy Rating Systems) rater and provide copies to the lender and appraiser, as documentation that the home is qualified for an EEM or EIM.

Porter also said that Fannie Mae’s Universal Residential Appraisal Form (Form 1004) should have a box at the top for information such as the HERS rating and its certification. In the version of the form that exists today, towards the bottom of the front page there is one line provided for additional green features, such as special energy-efficient items.

To make appraisers and lenders more knowledgeable about the value of green, Porter said that builders should also be handing out or referring them to “Marshall & Swift Green Building Costs.” Selling for $98.95, the publication includes the costs of the most common green items for new construction and retrofits, including labor and other factors. About 1,500 items were recently added to the list.

Comps a Sacred Cow

Porter said that taking the cost approach is “a start” to moving away from appraisals based on comparable sales made nearby and recently. Finding suitable comps has been difficult enough for traditionally constructed homes in a down market, but even more problematic for innovative homes with features that are not commonplace.

“Who made comps the sacred cow?” Porter asked. Moving to a different approach, he suggested, and compiling market information at the national level might be able to substantiate such claims as “green homes sell faster.”

The good news in this regard is that Multiple Listing Services have begun to include information on green features, and a Green MLS Tool Kit is now available to educate Realtors® about gathering data on green homes so that comparables will be possible. The bad news, he said, is that only an estimated 20 to 40 of the 850 MLSs in the U.S. have started tracking green so far. Also, a disproportionate number of new green homes are not listed because they are custom built. “The answer is to build some specs,” he said.

Also, lenders need to factor in utility and maintenance costs to the calculations they use to qualify buyers for mortgages, he suggested. “What happens to the $400 differential” between a house built in the 1960s with an average monthly expenditure of $500 for energy and an Energy Star house that costs $89 a month? Lenders, he said, “are not looking at the full cost of ownership.”

Demanding Energy Efficient Mortgages

In effect, the energy efficient mortgage treats savings on energy as an addition to the borrower’s income. While these loans exist mostly in theory, “you need to start demanding these,” he said.

Although it has been hardly used, Porter said that the Federal Housing Administration’s 203(k) is “the loan right now to get a home green and energy-efficient” and the answer to the energy retrofit that most existing homes need. The loan enables cost-effective energy-saving measures to be financed as part of the mortgage and enables the buyer to qualify for a larger loan amount by considering the monthly savings on energy and allowing higher qualifying ratios. The actual amounts are based on the HERS report.

While no one to date has systematically estimated the actual value green adds to a home, Porter (along with at least one other speaker at the conference) referenced early research calculating that every $1 in annual energy savings brings roughly $20 in additional value. Finding enough data to reach such a conclusion is one problem, and further complicating things is that fact that the bottom line on how much energy is saved ultimately depends on the behavior of the occupants of the home.

Conducted by Rick Nevin and Gregory Watson and published in 1998 by The Appraisal Journal, beyond making calculations, the research concludes that: “The implication for appraisers is that cost-effective energy efficiency investments do appear to be reflected in residential housing market values. Therefore, the appraised value of energy-efficient homes could understate their actual resale value if the comparables used in the appraisal do not reflect the value of a cost-effective energy efficiency investment.”

As an additional resource, Porter mentioned www.dsireusa.org, which is a compendium of available incentives for features that promote renewable energy and energy efficiency. “Lenders and appraisers need to know about them,” he said.

For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132

For more information on purchasing a green home in Portland Oregon please contact LaDonna Miller- Broker- Oregon First Real Estate

ladonnamiller@earthlink.net or http://www.renovationconcepts.net/building-and-remodeling-services/real-estate/  (503) 310-9076

April 2010 RMLS/Portland Real Estate Updates

(May 17, 2010 • Portland Real Estate, Portland Real Estate Market • 0 comments

When comparing April 2010 with the month prior, March 2010, closed sales grew 7.9% (1,941 v. 1,799) and pending sales were up 24.5% (2,991 v. 2,402). New listings, on the other hand, dropped 5.5% (4,713 v. 4,987).

At the month’s rate of sales, the 14,182 active residential listings would last approximately 7.3 months, the lowest of the year so far.

For more information on purchasing Real Estate in Portland, OR please contact LaDonna Miller- Broker- Oregon First Real Estate