Next Round Of Price Cuts At Portland Condos

July 10, 2009

Westerly, Benson and John Ross Cut Prices Again

Faced with occupancy rates below even the most optimistic break-even proformas and increasing pressure from commercial lenders,  condo developers throughout Portland’s city center are taking another hard look at their pricing. This week it was the The Westerly, Benson and John Ross’ turn to take action.

In an effort to break through the 2/3 occupancy barrier the Westerly, located just a block away from Portland’s NW 23rd extended their “Limited Pricing” edition to another five units. On average prices are now down 25% from ‘08 price points, with some units offered at $300/SF.

Down at the South Waterfront the John Ross faces a similar predicament. Units went on sale back in late ‘05, but the Ross too has struggled to break through the 2/3-sold barrier. The Ross currently also hosts the most Fannie Mae repos among city center condo developments. Here’s a sampling of what “Value Pricing” at the Ross looks like:

  • 638 SF, most recently at 229k, now 199k
  • 1205 SF, most recently at 399k, now 349k
  • 1831 SF, most recently at 759k, now 634k

Price cuts also made an appearance at the Benson, one of downtown Portland’s highest-end developments, situated on the streetcar line with close proximity to the cultural amenities. At 90% occupancy, the investment consortium isn’t quite under the same pressure, thus price cuts were limited to 25k on 2-bedroom, floor-plan “J” units in the mid 400k range.

Having last closed a transaction more than 9 months ago, there’s plenty of room for negotiation, especially as you move up into the +600k range.

Several other developments have taken similar action in recent weeks, notably the Cambridge.

Not familiar with these locations? Check out Agent503’s Condo Map.

Leave a Comment » | 503 - Condos, 503 - Deals | Tagged: , , , , , | Permalink
Posted by agent503

Significant Price Reductions Spur Sales

July 10, 2009

Most Desperate Sellers Slash Prices By 20%

Low interest rates as well as federal and local incentives have helped reduce residential inventory over the last quarter, bringing inventory down to about 11 months – roughly the same level we were at about a year ago. Seller concessions have also contributed towards increasing buyer activity. Three of Portland’s high-profile condo developments announced further price reductions last week, others will likely follow suit in the weeks ahead. Similarly the majority of Desperate Sellers have backed off initial price points by more than 20%.

Price cuts have been particularly steep in Happy Valley, where more than than 45 Desperate Sellers have reduced prices by more than 20%, several by as much as 35 per cent.  A similar trend is unfolding among Desperate Sellers in Portland’s South Waterfront – roughly a dozen condos at the John Ross and Meriwether are now priced at levels last seen in 2004.

High Vacancy Rates Keep Pressure On Sellers

Vacant listings in the Portland metro area continue to dominate the overall supply. Of the roughly 2,000 homes that sold in Multnomah county in the second quarter approx. 1,200 were vacant. As a result, the number of properties included in the Database, which only tracks vacant listings has increased steadily over the last three months. The Database now includes almost 300 properties.

Leave a Comment » | 503 - Desperate Sellers | Tagged: , , , , , , , , , , , , | Permalink
Posted by agent503

Interest-Free Loans For Portland Foreclosure Buyers

July 8, 2009

City of Portland To Offer Up To 50k Interest Free Loans

The City of Portland’s new Portland Housing Bureau is preparing to launch a brand new homebuyer assistance program called the Own Your Own Loan Program. With federal and state Neighborhood Stabilization Program funding, the program is estimated to help first-time homebuyers purchase a home of their own by providing them a silent second mortgage of up to $50,000 to be used for down payment, closing costs and home repairs. The secondary loan, payable to the State of Oregon, does not accrue interest and does not require monthly payments. The program does have a declining five year share of appreciation provision to encourage longer term ownership and also requires the borrowers to occupy the homes for the life of the loan.

Eligible Properties Are Limited To Foreclosed Properties

Eligible properties are limited to foreclosed properties in specific target areas located in Fairview, Gresham, Portland, and Troutdale. Click on the map below to find out which areas are included:

Target Areas For City's Interest Free Loan, Portland, OR

The Fine Print…

  • Neither the purchase price or the after-rehab appraised value of eligible properties may exceed $266,000.
  • The purchase price of the property must be at least one percent below the property’s appraised value.
  • Program is only open to borrowers who have not owned a home in the past three years (first time homebuyers)
  • Borrower may not earn more than 100 percent of the Median Family Income (MFI) adjusted for household size.

More news and updates here.

Leave a Comment » | 503 - Foreclosures, Tax, Legal & Finance | Tagged: , | Permalink
Posted by agent503

Portland’s REO Hotspots

June 26, 2009

REOs Account For One In Five Sales In Portland

As of the end of June there are roughly 450 REOs listed in the Portland-metro area, representing a mere 4% of the total inventory. However, REO sales accounted for almost 20% of the area’s sales last month. REO sales are particularly dominant in Clackamas county where more than a quarter of all transactions involve property that is bank-owned. In Multnomah and Washington county, where land constraints and more rigid planning authorities have curtailed housing growth, one in every six homes sales is a REO.

- Share Of REO Sales vs. Total Sales By County (June 2009) -

REO Sales by county, Portland, OR

REOs Sell Faster Than The Norm

On average 50 properties are repossessed each week across the Tri-County area (see Foreclosure Files). Once they hit the market most REOs tend to move a lot faster than the norm. Thus, in Multnomah county where there are 216 REOs listed for sale towards the of June, more than 116 bank-owned properties closed over the last month. Although REO inventory in Clackamas and Washington county is roughly half that of Multnomah county, both counties racked up more than 75 REO sales (each) in the month of June.

- REO Listings vs. REO Sales For June 2009 -

REO Listings vs REO Sales, Portland, OR

Top Ten REO Hotspots

Although delinquencies and defaults are moving up the food chain, the bulk of the current REO activity (both listings and sales) remains a suburban phenomenon. Not surprisingly several Clackamas county areas are among the top REO locations based on the number of current REO listings and sales.

- REO Listings For June 26 vs. REO Sales Last Month by Area -

REO Sales vs Listings For Portland, ORClick on image to enlarge!

Happy Valley’s Bella Casa Subdivision alone supplies more REO inventory than several inner southeast zip codes combined. However, unlike neighboring Pleasant Valley or Lake Oswego, REOs are moving at a healthy clip in places like Happy Valley and Lents – the latter now provides more than 125 homes priced below 175k.

***Related Posts***

Half Of Portland’s Homes For Sale Are Vacant

Portland’s Weekly Real Estate Repos

Leave a Comment » | 503 - Foreclosures | Tagged: , , , , | Permalink
Posted by agent503

Portland City Center Entry-Level Condo Report

June 18, 2009

Upscale Neighborhoods Increase Share Of Entry-Level Condo Sales

Portland’s Nob Hill and Goose Hollow are still the places to go if you are looking for an entry-level condo in the city center, but they are no longer the only places. Whereas sub-200k sales in in the first two quarters of ‘08 were essentially limited to Nob Hill condo conversions and more dated developments on the fringes of Portland’s city center, The Pearl District and South Waterfront now contribute roughly a third of the sub-200k sales. McCormick Pier, The Lexis and The John Ross in particular have gradually worked their way down into the entry-level category.

More Choice, More Bang For Your Buck

As the spectrum of entry-level neighborhoods has widened, so have the choices for buyers.  Less than 200k is now sufficient for 850 SF at a waterfront development in the Pearl or 650 SF on the 10th floor of an upscale South Waterfront tower. Here’s a sampling of recent sales in the entry-level category:

-McCormick Pier, 2-bedrms, SOLD for 177k at less than $200/SF

-John Ross Loft, 722 SF, SOLD for 170k

-Hilltop 2-bedrm condo, more than 1000 SF, SOLD for 178k

Entry-Level Category Benefits From Intrinsic Price Floor

If you are concerned about value rtention, entry-level condos can be a good choice for you. Prices have come down for entry-level condos, but not as much as their counterparts in other submarkets, nor have entry-level condos been battered like their higher-priced brethren. On average prices are down by about 10%, at least 5 percentage points less than the median for these neighborhoods. This is largely the result of more intense competition in the entry-level arena as well as the presence of an intrinsic price floor i.e. price drops are likely to flatten, the closer you get to zero.

Leave a Comment » | 503 - Condos | Tagged: , , , , , , , | Permalink
Posted by agent503

For Portland Condo Shoppers Cash Is King

June 9, 2009

Paying All Cash Can Make All The Difference

Buying a property all cash, means less contingencies, fewer hassles for the seller and a greater likelihood that the deal will go through. Sellers typically reward this behavior, especially if the seller is a bank or the latter has a major stake in the sale i.e. short sales.  Cash buyers also have a significant advantage on new construction condo deals, where financing is all but impossible for buildings that aren’t at least 50% occupied and/or located in a declining sub-market.

Cash Buyers On The Rise, But Not (Yet) The Norm

Although cash buyers are on the rise, the majority of transactions are still financed one way or another (conventional, FHA etc). Out of the 120 or so condos that sold in Portland’s city center over the last three months, roughly 50 were all cash. As the market tightens these proportions are likely to shift in favor of cash buyers. Given the scarcity of jumbo loans, cash buyers are already the dominant force in the higher price ranges. Thus, the average cash transaction for a city center condo (over the last 3 months) was just under 500k, whereas conventionally financed properties on average went for 360k.

Cash! Here’s What It’s Worth To The Seller

Money talks, but not everybody speaks the same language. While some cash buyers have achieved discounts of as much as 15% over list price, the current average is 7 per cent – only slightly better than the 4% achieved in the conventionally financed department. As always, it pays to know the seller’s circumstances.

Among the developments struggling to boost occupancy rates, The Encore and 937 pretty much take the top spots. Not surprisingly, cash buyers are particularly welcome here.

937 Condos, Portland, ORConsider this scenario at 937:

Three months ago, unit #434 sold pretty much at asking price for just over 300k. Not bad for a 1,000 SF, true 1-bdrm in the Pearl District. The deal was financed with a conventional mortgage and closed in just over a month.

Then, last week unit #334 sold. This is the identical unit – one floor down. The buyer paid all cash and closed the deal in less than a week at 270k – 10% less than the comp. Granted, there needs to be some adjustment for being one floor up, but it ain’t 30 grand.

Similar situations are unfolding elsewhere.

Here’s what’s happening at the John Ross: the asking price on a roughly 800 SF unit on the 16th floor is 236k. The same unit one floor down is open to cash buyers only. The bank is asking for 201k or 15 per cent less than the comp. Why such a gap? Financing can be particularly tricky at the Ross, not least due to the in-house insurance policy.

Interested in other cash deals in the Portland metro area? Drop me a note!

***Related Posts***

Pearl Condos Trading Below Market Value

Leave a Comment » | 503 - Condos | Tagged: , , , , , , | Permalink
Posted by agent503

Portland’s Real Estate Repos This Week: 115

June 4, 2009

Banks Pay $ 28 million To Repossess More Than 100 Properties

Roughly 45 banks were active this week, taking back properties in the Portland metro area for some $ 28 million. Having quietly lifted the moratorium on foreclosures, Fannie Mae and Freddie Mac were among the biggest buyers this week, doling out $ 6.1 million in exchange for 25 properties. Apart from the usual suspects (US Bank, First Franklin etc), regional player MBank also featured prominently, taking back entire subdivisions in Washington County.

Greater Portland Suburbs Dominate Repo Activity

Beaverton, OR
The bulk of the repo activity remains in the suburbs. Roughly a dozen homes in West Beaverton/Aloha fell into the hands of banks this week. On the eastside, Milwaukie and Gresham were among the top contributors. Repossessions have tapered off in Happy Valley – currently home to more than 30 bank-owned properties and dozens of short sales. As has been the case over the last couple of weeks, distress (in terms of repossessions) has been moderate in close-in neighborhoods and for city center condos. Roughly half a dozen properties were repossessed in these areas this week.

Foreclosure Sale Prices Typically 25% Off Last Sale

Banks are typically taking back properties at a 25% discount over the most recent sale. Most of these sales occured during early ‘06 and mid ‘08.  When listing these properties the bank will want to recover the book value as well as any fees incurred over the last couple of months. Nonetheless we are still seeing some pretty decent discounts on some of these listings, such as these condos at the South Waterfront:

-John Ross, 640 SF, listed at 199k, sold in mid ‘07 for 290k, down 31%

-Elizabeth, 900 SF, listed at 331k, sold in mid ‘06 for 439k, down 24%

-Meriwether, 982 SF, listed at 324k, sold in mid ‘06 for 387, down 16%

Check out the latest Foreclosure Files for more details!

Leave a Comment » | 503 - Foreclosures | Tagged: , , | Permalink
Posted by agent503

Happy Valley Real Estate Round-Up

May 26, 2009

Happy Valley Homes, ORAs mentioned in the most recent Desperate Sellers Database update, it’s not all doom and gloom in Happy Valley. Several indicators have been positive over the last couple of months.

Median Prices Are Down, Sales Are Up From A Year Ago

Whereas the number of closed sales is down year-over-year for most sub-markets, Happy Valley has closed more deals in in the last three months than during the same period a year ago.  Approximately 80 homes sold in Happy Valley between March and May ‘09, up from 63 a year ago. Median prices are down 15% from this time last year, now roughly at 360k, with about a dozen homes selling in the +500k range. More than 3/4 of all homes that sold were vacant, often selling at a greater discount than the area average of a mere 4% over asking price.

Sales Pick-Up At D.R. Horton’s Sunnyside Highlands Sunnyside Highlands, Happy Valley, OR

Sales have been picking up at Happy Valley’s Sunnyside Highlands. Roughly a dozen homes sold here over the last three months – more than any other Happy Valley subdivision.

Here are the # of sales by subdivision over the last three months:

  • Sunnyside Highlands: 10
  • Sunrise Heights: 9
  • Burgundy Rose: 6
  • Jackson Hills: 5
  • Hillside Park 3

Fastest Selling Homes in Happy Valley

Here’s a look at some of the fastest movers over the last three months:

  1. 16397 SE Pyrite ST sold in 22 days. Listed at 234k, SOLD for 218k
  2. 11203 SE PHEASANT RIDGE DR sold in 23 days. Listed at 479k, SOLD for 440k
  3. 12498 SE BARI AVE sold in 41 days. Listed at 649k, SOLD for 619k
  4. 14806 SE FRYE ST sold in 48 days. Listed at 436k, SOLD for 403k
  5. 12828 SE REGENCY VIEW ST sold in 51 days. Listed at 236k, SOLD for 225k

Leave a Comment » | 503 - Happy Valley | Tagged: , , | Permalink
Posted by agent503

$8000 Tax Credit Can Be Used for Down Payment

May 14, 2009

Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment. Previously, most buyers wouldn’t receive the funds until after they filed their tax return.

FHA’s approved lenders will now be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

On May 12th the secretary of the U.S. Department of Housing and Urban Development announced:

“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment”

Click here for details!

UPDATE: Not so fast! Looks like we won’t see these changes quite as soon (see John’s comments – in the comments section). It appears that authorization for bridge-loans may be limited to states in which the state housing finance agency already has a tax credit bridge-loan program in place. It also remains unclear if if lenders will accept loans under new guidelines. We have seen several cases where lenders adopt underwriting guidelines that are more conservative than what HUD allows.  For example HUD allows credit scores as low as 580 while most lenders now have a 620 minimum score.   We also know that HUD used to allow sellers to pay the buyers down payment via the Nehemiah or AmeriDream programs and these loans had nearly three times the default rates as compared with loans where the buyer paid their own down payment.

2 Comments | Tax, Legal & Finance | Tagged: | Permalink
Posted by agent503

Happy Valley Homes Added To The Database

May 11, 2009

Happy Valley Contributes More Than 100 Desperate Sellers

Happy Valley, Portland’s poster-child of housing distress has been added to the Desperate Sellers Database. As of May 11, there are about 300 active listings in Happy Valley. More than half of these listings are vacant. Although most sellers in the area are oblivious to the valley of despair, evidence to the contrary is overwhelming; the majority of Happy Valley homes included in the Database has dropped almost 20% since listing start, dozens of homes are selling for 100k less than the original purchase price and almost half of the properties have been on the market for more than a year.

Happy Valley: Great Views, Good Schools, Lost of Desperate Sellers

Happy Valley: Great Views, Good Schools, Lots of Desperate Sellers

Happy Valley Sales Outpace The Pearl District

It’s not all despair in Happy Valley. In the first quarter of 2009 about 75 homes sold in Happy Valley, roughly the same amount as a year ago and in line with previous quarters. Contrast that against the Pearl District, where a mere 30 homes sold in Q1/2009. Both areas had about 300 active listings during that period, but whereas Happy Valley is looking at about 12 months of inventory, the Pearl District currently faces 2-3 times as much inventory in months.

Here’s a look at some of the deals that went down in the Valley in Q1/2009:

- 13910 SE Aldridge, 5-bedrms, 4200 SF: listed at 789k, SOLD for 700k

- 15634 SE Kingbird, 3-bdrms, 3000 SF: listed at 468k, SOLD for 401k

- 12922 SE Meadehill, 4-bedrms, 3600 SF: listed at 349k SOLD for 320k

- 12015 SE Timber Valley, ditto, 1800 SF: listed at 275k, SOLD for 250k

- 10763 SE 95TH CT,3-bdrms, 2150 SF: listed at 299k, SOLD for 248k

Database Now Includes Almost 275 Properties

The addition of Happy Valley brings the total number of homes included in the database to just under 275.  Here’s the current breakdown by area:

  • Pearl District: 29
  • Downtown Portland/South Waterfront: 36
  • Inner Southeast: 24
  • Inner Northeast: 69
  • Happy valley: 108

Single Family Homes account for 3/4 of the Database, with condos currently contributing 65 units. Almost 90 properties are priced at less than 325k, creating numerous opportunities for first-time homebuyers.

***Related Posts***

Half Of Portland’s Homes For Sale Are Vacant

Playing Case-Shiller To Your Benefit

Leave a Comment » | 503 - Desperate Sellers, 503 - Happy Valley | Tagged: , , , | Permalink
Posted by agent503

« Previous Entries