3 08 2011

Who Turned The Faucet Off?

 July has seen some better days.  Well, kind of, sales have been down in 2007,2008, 2010 and now 2011 for July.  It was only 2009 we saw a significant up-tick in pending and closed sales together.  Typically most in the real estate business remember July being a good season to buy and sell.  Talk to anyone in the business today and they will respond this way, “Wow.  What happened to the beginning of July?”

 The sales increases came shockingly in places like the $300k-$500k range in North Portland pendings, the $400k-$500k ranges in NE Portland, $300k-$400k in Gresham/Sandy, Milwaukie/Gladstone, Oregon City pendings in up to $500k, Beaverton/Aloha solds $500k-$600k and Hillsboro a little too.  The decreases were even more of a shock though:  down 19% under $200k in SE Portland pending homes, down 45% in pending Milwaukie/Gladstone homes between $300k-$400k, down 72.7% in pending West Portland homes under $200k and 31% in the sold in that category, down 103% in West Portland between $500k-$600k, down 144% in NW Washington County pending homes between $500k-$600k and more.

 Where did those staple buyers under $200k go?

 As far as price, the numbers went up across the board in SE Portland and Gresham/Sandy.  The sold price for Lake Oswego is up 4.63%, up 6.29% for West Portland, up 7.08% for NW Washington County, up 8.39% in Beaverton/Aloha and Tigard/Tualatin/Wilsonville saw a rise of 3.22% in the average sales price of sold homes.  Overall, the Portland Metro Area saw an average rise of pending home sales price of 0.29% and a rise in sold home average sales price of 4.19%.

 The other categories saw another interesting trend of bank-owned homes go down.  NE Portland active homes are down 95%, pending homes in Gresham/Sandy are down 110%, active homes in Oregon City are down 100%, sold homes in Lake Oswego are down 90%, and Hillsboro down 179%.  But West Portland and NW Washington County had massive drops in bank-owned properties: West Portland actives down 276%, pendings down 242%, solds down 159% and Washington County pending homes are down 305%!  Overall the Portland Metro market saw a drop in pending home bank-owned sales of 89% and sold homes sales of 45%.

 Short sales actually saw a little encouragement in the sold homes and less of one in the pending category.

 Where did the buyers go in July?  Well, we don’t know for sure.  The economy also was missing those people too as retail sales were down for July.  The weather is the only decent excuse we can come up with in Portland and even that is a poor excuse at best.

 On the bank-owned question though, I do have a theory: the shadow inventory (property banks are keeping from coming to market) I believe is being held longer possibly because the homeowners are starting to show hope in making payments on their mortages.  With possible improvement in the economy and possible pricing improvements (from previous years) banks may be hanging on to these mortgages to see if their clients will pull through and save them from default.  Or, at least, those properties may be gaining a little more value over time.

 It is hard to say for sure, only time will tell from this point forward.  For now, the hackneyed phrase of “interest rates being extremely low” isn’t tearing people off the couches and into home purchases but perhaps the current activity will breed more activity.  The average price going up is sure to at least do that for those waiting for a bottom.  That, is something we can rest on for now.

 Enjoy the full report here 

 Complete Portland Metro July 2011 Report

Dustin Miller

Broker

Realty Trust Group

DustinM@RealtyTrust.com

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