The Duke Warner Market Trends and Bratton Reports have hit the Streets and Spring is Just Ahead…

You would never know it from today’s weather with temperatures in the mid sixty degree range. It is suppose to still be winter snowy and cold just like our friends to the east of us. There have been plenty of cyclist, runners, hikers and skiers out taking full advantage of this beautiful weather. It is days like today make you feel blessed to be in Central Oregon.

Both the Duke Warner Market Trends and Bratton Reports are available either through the link provided or you can go to my website shopbendhomes.com. The Bratton Report is showing a drop in the median price of a home in Bend for the month. Looking at this month’s Duke Warner Report we see a drop in the amount of sales in the $225,000 - $325,000 price range, this is the culprit in for the drop in the median price. I believe this to be a temporary drop as the number of pending sales in this grouping has increase by approximately the same amount that sales fell.  Overall the numbers are very similar to the month before and are very strong considering the time of year.

A problem for the next two to three months will be our lack of inventory. To help in relieving this builders have been pulling new home permits at a rate not seen until July of 2007. By early summer a good portion of these homes will hit the market and provide some relief. While consumer confidence is growing there are a good many homeowners that are not comfortable with the price their home will bring. The distressed homeowner’s property, a component that feed the market for so long, still remains on the sideline.  

There are a good number of distressed homes that have either been foreclosed on or are waiting to be processed as a foreclosed home. These homes have been missing from our inventory since last summer.  The main culprit in slowing down these homes from being processed is Oregon Senate Bill 1552. SB1552 requires lien holders to arbitrate with distressed homeowners to work out a solution/option to the foreclosure. The loan servicers have moved to the much slower judicial foreclosure process to evade the requirements of the bill.

The legislation is currently working on a revised version of SB1552 that will encompass the judicial process as well. I believe this new legislation will only continue to slow down the process. Our legislators are well intended but they are too late. Had they left the process that had been in place alone we would have a more stable inventory of homes and would be well on our way to working through the distressed inventory.

It will be interesting to see what spring brings; there are already rumblings of interest rates rising though out the summer. This might be the catalyst for bringing more homes to the market, as homeowners move off of the fence and make the decision to find that new place to call home with super low interest rates.     

 

Bend, Oregon Real Estate Market Summer Stays Strong…

The Duke Warner Market Trends Report for August is out and the upward sales trend has made it through the summer. As one might expect with summer being the busier selling season, the numbers for August rose slightly over the July numbers. The number of properties listed as active dropping slightly. The most active category of homes remains in the under $225,000 range followed closely by the next bracket of $225,000 -$325,000. As reported previously the competition for nice properties that are well priced in these price ranges is stout. Rarely do we submit an offer on a home in the $150,000 range and not have to compete against several other buyers. The upper reaches of the market also continue to see steady sales results which helps balance the market.


As has been the trend for the last several months the distressed property market has been dampened. Once the fuel for our newer listings this segment has now become a trickle. The newly enacted Oregon Senate Bill 1552 has effectively shut down the number of default notices being served which may have slowed down the number of homes falling into this category. The required mediation of the Senate Bill has affected the number of folks moving toward short selling their properties. Most folks in distress are waiting to see what the mediation process will bring before committing to selling their property.

From what I have observed, this segment of the market had already been in decline long before the Senate Bill was enacted. This makes for the likelihood that we are nearing the end for this episode of the housing collapse. I have no doubt that we will continue to see distressed properties on the market but the fantastic opportunities of the last few years have largely been gobbled up and finding new treasures will take more work.

If this is the end of the collapse it may be some time before we see a fully recovered market. Most folks are wary of what the next few months will bring. With the politics of an election year dominating the decision making of business owners, the lawmakers and Wall Street, it could be months before there is any clarity to where the economic markets are heading. This uncertainty continues to dampen the jobs market and saps the strength from folks who want to sell their property and move on with their lives.

Bend is showing its durability and desirability, more than once we have been presumed to be a failing community but every time our spirit shines through. The qualities that have drawn folks to Bend since long before there were saw mills and ski hills remains here today. The beauty of the river, the mountains and the dry climate will always be what endures and draws people to Central Oregon.

Bouncing Along the Bottom in Bend, Oregon... Real Estate Market Trends for October

Before you get into the holiday season you may want to check out the latest market trend reports. This is a great time to pick up property in Central Oregon.


Our local data belays what we often hear in the daily news, from the data in the reports it appears that we have stabilized for the moment. The amount of homes actively listed on the market hit a high in August and September and now is slipping back down as we head toward winter. Distressed homes have retreated as well during this period and now comprise 45% of the market with short sales being about 60% of the distressed category. As we slip back down in inventory for the winter months the overall trend has been fewer homes on the market. We are currently down sixty to one hundred actively listed homes from previous years.

Driving this stabilization trend is the continued strong interest from investors and first time home buyers in the under $250,000 class of properties. This has led to sellers receiving multiple offers on properties that represent good values and has them selling quickly. It has also been surprising to see so many cash buyers. With the tightened underwriting rules for financing properties many capable buyers are by passing today’s amazingly low interest rates and bringing cash to the table.

The investors we see coming into the market are looking at the super low vacancy rates for rental properties in the Bend area and calculating solid returns for the next few years. The other attraction is the remarkably low prices and good values on many properties. This has occurred as sellers have come back to reality of what their property is worth today and will be worth over the next few years.

The biggest hold up in the having the real estate market continue to grow is the lack of confidence that the local job market will improve and the national economy’s lingering stagnation. With the upcoming Presidential election the opportunity that our economic turmoil will turn around is slim. With housing being such a huge component of the national economy it would not be surprising to see continued new programs and new road blocks offered up by both parties to help sway voter confidence thus adding to the lack of confidence.

My take is that the market will stay the same undulating course over the next 18 months. Eventually Bend will see slight gains at first but as confidence returns so will Bends popularity. All of the things people from outside of Bend loved before are still here waiting for them and it is just a matter of time before those who hold the dream to move here act. When those who lust for Bend act on their dreams expect to see return to predictable positive gains in real estate.

Have a great Thanksgiving!!

Cheers,

Bill

Home Tax Credit Extension Dies (for now) on Senate Floor…

Do you have a transaction that qualified for the home tax credit?


Today’s action by the senate killed a large stimulus bill which included business tax breaks, renewal of the flood insurance program and an extension of unemployment benefits. Also attached to the bill was an extension of the deadline for the home tax credit. Real estate transactions that had been in contract before April 30th have a current deadline of June 30th, the extension would give buyers until September 30th to complete the transaction.

Senate Majority Leader Harry Reid who is one of the bills biggest backers feels that the extension may survive through being attached to another bill that has a better chance of approval. Should the bill not survive as many as 180,000 transactions that have yet to close and are in danger of not qualifying for the rebate. Many of those who will not meet the deadline are tied up in a short sale transaction, which are notorious for their lengthy closings.

The failure of the bill may impact many who were counting on the credit to offset their closing costs or down payment. Those buyers could look to the seller to help offset the lose, though it may be a uphill battle if they are dealing with a large loan servicing company for approval of a short sale.

Stay tuned to see if the bill lives on…

More Great Views From Brasada Ranch

Brasada Ranach Spectacular Mountain Views, Uncrowded Spaces

Help is coming for distressed property owners…

Are you one of the legions who for a myriad of reasons need to sell your home and have found that your equity has evaporated? Has your lender sent a notice letting you know that foreclosure may be in your future? Have you explored your options and determined that a short sale is your best avenue of retreat? Have you dreaded the long drawn out and uncertain process of the short sale? Help could be right around the corner, that is if your loans are backed by Fannie Mae or Freddie Mac and your lender is one of those who have volunteered for the program.


The federal government’s Home Affordable Foreclosure Alternative program (or HAFA) is set to start providing relief to qualifying homeowners starting April 5 running through December 31, 2012. HAFA establishes short sale rules and incentivizes borrowers and lenders to work together to avoid foreclosure. The new guidelines will have the borrowers receiving preapproved short sale terms from their lenders before they put the home on the market. The predefined steps will make the process easier to understand for all involved in the sale.

The first step is to determine your loan is backed by either Fannie or Freddie. This can be done by going to http://loanlookup.fanniemae.com/loanlookup/ or https://ww3.freddiemac.com/corporate/. If you have a loan back by either you can then apply for a home loan modification through the Home Affordable Modification Program (HAMP) http://www.makinghomeaffordable.gov/. If you are backed and you do not qualify for a home loan modification or you have started the loan modification process and have missed a payment during the trial modification period you will qualify for the HAFA program.

A few more stumbling blocks include:

• That you are delinquent or you will be defaulting in the near future,

• You can demonstrate that you have a hardship,

• The home is your principal residence,

• Your mortgage was originated before January 1, 2009,

• Your monthly housing payments exceed 31% of your gross income,

With the new HAFA rules, if you do not qualify for a home loan modification your lenders will have to offer you a short sale within thirty days. You the borrower will then have fourteen days to respond to the lenders short sale agreement.

Once an offer to purchase has been made you and your broker will have three days to submit the offer to the lender along with the buyers’ mortgage pre-approval letter. Should there be any other liens on the property you will need to include the status of negotiations with those lien holders. Once all has been submitted the lender will have ten days to approve or deny the offer.

One of the great benefits of the program is the requirement that the lenders release you from any further obligation to repay the difference between the balance of the loan and the sale amount. The ability of the lenders to pursue deficiency judgments has been a black cloud over many a short sale. Lenders (or the collection agencies that they sell the bad debt to) have the ability to pursue a deficiency judgment for up to ten years and in some cases up to twenty years. They can do this because in a short sale the terms of the loan have been modified and the foreclosure process is avoided. No foreclosure means no protect by state foreclosure statues (a discussion for another time).

To get more lenders on board HAFA provides incentives for second mortgages lien holders, up to $3000. While this may not seem like much when tens of thousands may be owed on a note it is far better than the big goose egg they would have received previously. Not forgetting the role that loan servicers play in moving the short sale process along HAFA offers them up to $1000. HAFA also offers the mortgage investors who agree to share the short sale proceeds with the second lien holder up to $1000. And last but not least HAFA provides up to $1500 to assist the homeowner in relocating.

If sounds like a good fix for you and you would like help in navigating this process, call or email me. I would love to provide you with some relief.

Will your lender be seeking a deficiency judgment against you ….

The other day I was interviewing with a prospective client about their distressed property and the options available to them. After researching their options on the internet they were confused about whether a lender has the right to pursue a deficiency judgment against them if they were to short sell their home. Not wanting to go through the ordeal of selling their home only to have the unresolved debt stall their fresh start they asked for my take on the subject.


The first recommendation was that they seek professional counsel from a qualified real estate attorney and CPA. I then shared some of the research that the Oregon Realtors legal hotline had recently provided its members. The hotline offered that currently in Oregon since the short sale of a property is a voluntary modification of terms of the loan agreement, the new agreement can contain any terms the parties agree to. In a voluntary modification like a short sale the deficiency is the unpaid balance of the note. A note holder can sue in court for the unpaid balance of the note unless the maker of the note bargains for and gets “full satisfaction” of the note. Should the borrower get only the note holders verbal agreement to waive their lien and not foreclose that would leave the borrower exposed for the unpaid balance.

To get “full satisfaction” the borrower needs to ask for it!! Otherwise the lender is allowed to waive their lien on the property, forego foreclosure and continue to hold the note as an unsecured debt. Since the note is no longer secured by the property and has become a personal debt, the lender is no longer bound by the foreclosure laws of Oregon. The lender is now free to pursue a judicial judgment for the unsecured debt. In Oregon the statue of limitations for pursuing a judgment is ten years, with the possibility of an extension for another ten years. Just when you thought you would be rebuilding your credit in the next two to four years this dog could be following you around for the next ten years if you do not ask for and receive in writing “full satisfaction” to your lien.

You like the home but wish it had newer kitchen, larger bedrooms or a newer roof….

You have been searching and have found a property you really like but it needs a little love or maybe the rooms are too small and you want to expand them to make it the home you desire. Since 1978 HUD has provide a program design specifically for the buyer who is has found a home they like but needs some immediate attention. The program is designed to help provide a loan package for you to purchase and rehabilitate a home that has been completed for at least one year. The beauty of the program is that it rolls both the purchase price and renovation costs into one loan with a down payment as low as 3.5%.


There are two versions of this program available 203(k) and the 203(k) streamline. Both offer a loan to value rate maximum of 96.5% on the purchase and 110% on the renovation. The streamline program offers fewer restrictions, in this program there is no minimum renovation expense but it does have a capped at $35,000. All properties must be appraised prior to the loan and a value must be determined for the work to be performed. All work done must start within thirty days of closing and be completed within six months of closing. If you can keep your costs down to $15,000 no inspection of the completed work is required.

There are limits to the scope of work that can performed, slab granite counter tops won’t make the grade but a new roof, new appliances, upgrades to heating/cooling systems, flooring, new windows and much more are acceptable.

Ask your mortgage broker to explain the full benefits of how this program can benefit you! If your broker is unfamiliar with the program contact me and I would be glad refer you to a mortgage specialist who is familiar with all aspects of this great program.