Last Friday a British national daily newspaper, The Guardian, named Portland one of the five best places to live in the world, along with the north coast of Maui, Hamburg Germany, Istanbul and Santa Cruz in the Canary islands.

Worst of article: Gawdawful photo.

Best lines:

“There are some, indeed, round these parts who’d like the entire Pacific Northwest to break off from the rest of the US and go it alone” (some days, particularly during election season, I feel that way, too),

“Portland has the highest number of microbreweries in the world” (well, duh…).

Why do you like Portland?

In 2011 19,682 homes sold in the Portland metro area, 4.0% more than in 2010.

The Portland median home price fell 7.9% from 2010 to 2011. Average price fell 6.7%. 22% of the homes sold were bank owned, selling at a 36% average discount from non-distressed homes. 11% were short sales, selling at a 17% average discount. Non-distressed properties held their value much better than distressed properties, and actually appreciated in a few areas. The overall year-over-year decline was smaller than previously years, which usually signals stabilizing prices.

The number of homes listed for sale in 2011 dropped 25.4% from 2010 to 34,084. That led to a steady decline in the inventory of homes available for sale. At December’s sale rate, it would take only 5.3 months to sell all the homes on the market, a level not seen since July 2007, the peak of the market. Six months inventory is generally considered a balanced market.

What does all this mean for 2012? Stayed tuned.

The RMLS Market Action Report for October 2011 reported that sales activity in the Portland metro area showed improvements in closed and pending sales this October compared to October 2010, and the inventory level remained much lower than the same month in 2010. Comparing October 2011 to October 2010, closed sales grew 14.1%, pending sales grew 15.1%, and new listings fell 22%. At October 2011′s rate of sales, the Portland inventory would last 6.8 months. Inventory in October 2010 was at 10.7 months. Conventional wisdom holds that six months inventory is a balanced market.

The Portland median sale price fell 6.7% between October 2010 and October 2011.

Curious about your neighborhood? Call us at 503.222.4300, or visit our Portland Home Team Market Data Center.

The RMLS Market Action Report for September 2011 reported that sales activity in the Portland metro area showed improvements in closed and pending sales this September compared to September 2010, and the inventory level remained much lower than the same month in 2010. Comparing September 2011 to September 2010, closed sales grew 13.4%, pending sales grew 17.5%, and new listings fell 29.5%. At September 2011′s rate of sales, the Portland inventory would last 6.7 months. Inventory in September 2010 was at 10.5 months. Conventional wisdom holds that six months inventory is a balanced market.

The Portland median sale price fell 3.8% between September 2010 and September 2011.

Curious about your neighborhood? Call us at 503.222.4300, or visit our Portland Home Team Market Data Center.

The Wall Street Journal reported today that the U.S. housing market is facing a new problem: a lack of attractive inventory. Nationally, the number of homes listed for sale is down 20% from a year ago and is at the lowest level since Realtor.com began tracking inventory in 2007.

Many sellers are pulling their homes off the market rather than sell them at discounted prices. In addition, banks have slowed the supply of foreclosed properties since processing irregularities came to light last year. While falling inventories are typically a sign of healthy buyer activity, that isn’t the case now. The shrinking supply isn’t driving up prices because buyer demand is soft, despite attractive prices and record low interest rates. While sellers are reluctant to under price their homes, buyers are afraid to over pay. As one person quoted in the WSJ article said, “I wouldn’t describe it as a buyer’s market so much as no market at all.”

Download a PDF of the article by clicking Slim Pickings Are Latest Headache for Home Sales – WSJ

Housing Wire reported Wednesday that a bill introduced in Congress would allow struggling homeowners to withdraw funds from their retirement accounts tax free to pay their mortgage.

Borrowers could pull as much as $50,000 from their retirement account or one-half of the current value of their account, whichever is smaller, and avoid the typical 10% tax penalty. The cap is a lifetime cap, and does not expire on a particular date. Borrowers are eligible to make multiple withdrawals until they reach the cap. The money must be put directly toward the mortgage within 120 days of withdrawal.  Jump to article

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S&P/Case-Shiller Home Price Indices, released Tuesday, showed a fourth consecutive month of home price increases across the United States. Both the 10- and 20-City Composites were up 0.9% in July over June, 2011. Portland was up 1.0%.

 
Other west coast cities were also higher in July than June, though none as much as Portland.

 
All markets except Detroit and Washington D.C. were below their July 2010 levels. Portland was down 8.4% from July 2010 to July 2011.

Curious about your neighborhood? Call us at 503.222.4300, or visit our Portland Home Team Market Data Center.

Want to just look at homes online? Try the Best Home Search Site on the Planet, no obligation.

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Prediction: September and October 2011 months inventory will fall below 6.0 months, a level last seen in July 2007, the peak of the Portland housing market boom.

 
The August RMLS Market Action reported Thursday that Portland’s closed home sales were up 5.6% from July 2011 (1,709 to 1,805), and up 30.7% from August 2010 (1,381 to 1,805).
 

 
Portland’s home sale prices fell slightly from July 2011 to August 2011. The average sale price fell 1.2% ($275,100 to $271,800) and the median sale price fell 1.0% ($227,200 to $225,000).
 

 
Months inventory at the end of August fell to 6.2, meaning at the August rate of sales it would take a little over six months to sell all the homes then on the market. This was a decrease from July’s 7.0 months, and continues to be within the “balanced market” band of 5 to 7 months supply that we have seen since March 2011.
 

 
Looking forward to September and October closings, August 2011 pending sales increased 13.4% from July 2011 (1,928 to 2,187). New listings went down 2.1% (2,942 to 2,879). Absent a surge of new listings, September and October months inventory should reach the lowest point since before the crash, a welcome development indeed. For home sellers, the lower inventory will, hopefully, temper the seasonal drop in sale prices that occurs every winter.
 
Curious about your neighborhood? Call us at 503.222.4300, or visit our Portland Home Team Market Data Center.
 

Your financial decisions and the economic events of the past few years may have left you with a mortgage payment that has become unbearable.

You may have missed a payment.

You may even have a mortgage balance higher than the value of your home.

What can you do?

Your options depend first upon whether or not you wish to keep your home.

Briefly summarized, if you wish to keep your home your options are:

1. Refinance the Loan – You need equity. Any delinquent amounts will be settled in the process. Great solution if you can do it.

2. Rent the Home – If you are willing to be a landlord, you may be able to rent the home for more than you need to pay for alternative housing, thereby freeing cash to continue making the mortgage payments. Note that moving out of the home may affect its status as your “primary residence” for tax and recourse loan purposes, so consult an experienced professional if you seriously consider this route.

3. Modify the Loan – Many suggested options going by various names fall under the umbrella of the following loan modification approaches:

a. Forbearance – You may be able to arrange a temporary payment reduction or suspension of payments with your lender. The lender will look for assurance that you are able to meet the new payment plan requirements.

b. Reinstatement of Defaulted Loan – You may be able to pay any arrearage (the default amount plus interest, attorney fees, late fees, taxes, etc.) through a separate repayment plan.

c. Government Sponsored Loan Modification Programs – Utilize the existing mortgage company to refinance the debt or extend the terms of the loan in order to catch up at a more affordable level. The well-intentioned government loan modification programs are not working as hoped (less than 10% succeeding), and do not address big value losses. Lenders’ experience is that a high percentage of these modified loans default later, so in order to qualify you must show the lender that you have fixed the problem that caused the missed payment in the first place.

d. Warning: Loan modification “consultants” have come under fire for less than scrupulous practices. In Oregon, “Debt Management Service Providers” must register with the Oregon Division of Finance and Corporate Securities (see DFCS site here). We are real estate brokers; we are not debt management consultants. We can, and would like, to help you with your real estate concerns.

Here are a few other helpful web sites:

· HUD at www.MakingHomesAffordable.gov

· NeighborWorks America at www.NW.org

· Better Business Bureau at www.bbb.org

· Fraud Guides at www.fraudguides.com/mortgage-foreclosure-rescue-scam.asp

· All Foreclosure Information at www.all-foreclosure.com/help/scams.htm

· Federal Trade Commission at www.ftc.gov/bcp/menus/consumer/credit/mortgage.shtm

· Federal Reserve’s 5 Tips Series at www.federalreserve.gov/consumerinfo/fivetips_foreclosure.htm

4. File a Chapter 13 Bankruptcy – Discussed below.

Homeowners with little or no equity who have decided to sell or otherwise dispose of their homes don’t have good choices. Most of the options, from “least bad” to “worst,” are briefly summarized as follows:

1. Short Sale – If the market value of your home is less than the amount needed to pay off all liens and convey clear title, you may be a candidate for a short sale. In a successful short sale the lender(s) agree to release their liens without getting full payment of the amount owed. Often the lenders will also agree to forgive the balance owed. Why would they do this? Lenders have discovered that they recover a much higher percentage of their loan value if they work through a short sale than if they go through the foreclosure process, so they have become much more agreeable to approving short sales. The process, though still lengthy and complicated, has improved greatly in the past few months, and is often the best option. Call us at 503.222.4300. We are short sale professionals. We can help.

2. Deed in Lieu of Foreclosure – If your lender is willing, you might simply deed the property to them instead of waiting for them to foreclose. Many lenders require the home to be marketed for sixty to ninety days before considering “taking back” the home, and usually require mortgage payments and taxes to be current and the home to be well-maintained. The existence of junior lien holders often precludes this possibility, as their rights would survive and even improve upon transfer to the senior lender. Furthermore, liability for the lender’s loss on resale, unless negotiated, may stay with you.

3. Foreclosure – No agreements are made with the lender. Your only protection is the legal framework of your state. In Oregon, almost all recent foreclosures have been non-judicial, but the lending industry’s response to the MERS “robo-signing” scandal may lead to more judicial foreclosures, with significantly different implications for homeowners. A lot of bad advice is in circulation as to whether or not lenders can come after you for any deficiencies, so it is absolutely imperative that you get good legal advice regarding your specific situation.

4. Bankruptcy – An option for some homeowners who are facing financial pressures in addition to their real estate issues. Bankruptcy, though usually the last choice, can discharge debt and/or allow more time to work with creditors.

a. Chapter 7 (Liquidation) – Non-exempt assets are sold by the Chapter 7 trustee and the proceeds are distributed to creditors according to the priorities established in the U.S. Bankruptcy Code. With certain exceptions, all personal debt is eliminated. Eligibility standards were added to the code in 2005 to prevent “abusive” filings.

b. Chapter 13 (Wage Earner Plan) – Chapter 13 allows individuals to keep possession of assets, catch up on secured debt, and discharge unsecured debt at the end of the plan. Debt is restructured and a payment plan created to make payments over three to five years, after which the remaining balances on unsecured debts are usually discharged. Chapter 13 permits you to pay debts that can’t be discharged in Chapter 7, such as recent taxes or back child support; to cure defaults on home mortgages; and to eliminate that part of most other liens that are greater than the value of the encumbered assets. Creditors don’t get to choose whether to be bound by the plan, and they must stop collection actions during this time. Think of Chapter 13 as a court enforced debt management plan.

c. Chapter 11 (Business Reorganization) – Most debt is restructured. Though flexible, Chapter 11 is also much more expensive to administer than Chapter 7 or 13, and is usually attempted only by large businesses.

Each of these options has risks and consequential issues, including:

1. Continuing Debt Obligation

2. Credit Rating

3. Income Taxes

4. Time

This is a very brief summary of a very complex reality. Seriously consider your situation, consult qualified professionals, and take quick action in order to allow yourself enough time to complete the best option for you.

Call us at 503.222.4300 for more information and to discuss your particular situation in confidence.