Not surprisingly, our latest market report for October from our Realtors’ Multiple Listing Service (RMLS) shows that our inventory has increased yet again.  The number of homes for sale is creeping up to one of its highest levels in years.  Also, the end-of-the-year time period is when houses typically take longer to sell and this year is no exception.  We also have all that added inventory.  Buyers seem to be fewer in numbers as well; although those buyers that are looking now and through the winter, are more serious buyers.  They either really need to purchase for tax reasons, are being transferred or their homes have sold.  There are also the bargain shoppers out looking to purchase a home at reasonable and lower prices.

During other recessionary times, there have always been a majority of cash sales and I’m seeing that again.  People who have money in savings or in the stock market feel they are losing money rather than making money and are now buying real estate instead with their cash.

Pending sales are off by 39.6% this year compared to October 2007.   The number of closed sales also fell 21.4%.  Days on the market increased  from 121 days to 127 days for this month. From November 1, 2007 to October 31, 2008 the median sale price dropped by -2.2% ($280,000 vs. $236,000) whereas the average sale price dropped -1.1% ($335,800 vs. $339,500).  However, the median price for the month of October actually increased from last month by 3%. 

Affordability:

The good news is that affordability has increased due to the decrease in the median home price and a drop in the average interest rate.  A buyer in Portland can afford 109% of their monthly mortgage payment assuming the buyer has a 20% down payment and obtaining a 30-year fixed rate mortage at 5.97%. According to the chart below, Portland was more affordable in October than it has been for more than three years since December, 2005.

Survey Reports Buyers Still “Sitting on the Fence”:

In a recent survey, approximately 28.5 percent of respondents said that the election of a new president will help to instill confidence in the housing market, followed by a decline in the foreclosure rate (24.1 percent) and a rise in available mortgage credit (19.9 percent).

And 50 percent said the incoming president “should make helping troubled homeowners avoid foreclosure a priority during his first 100 days in office”. Increasing the supply of affordable mortgage credit (22.7 percent) and helping first-time home buyers to buy a home (16 percent) also ranked high among presidential priorities from survey respondents.

Among the 37.4 percent of respondents who identified themselves as home buyers, about 40.7 percent reported that economic conditions have kept them on the fence, and 28.1 percent of homeowners participating in the survey reported that they have sold or know someone who has recently sold a home for a lesser amount than desired.

Also, the survey revealed that about 4.7 percent of respondents plan to buy a home in the next 12 months, with an additional 17.7 percent planning to purchase a home in one to five years.

Foreclosure Activity:

Oregon now ranks towards the top of the states with the largest foreclosure numbers; specifically, at #16.  One out of every 562 homeowners are in foreclosure in Oregon.  RealtyTrac reports that for the month of October, Oregon had 1,306 defaults and a total of 2,841 a 21.20% increase since September 2008 and a 159.45% increase since October 2007.  Washington ranked at #17.

Throughout the United States, there are 279,561 foreclosures up 5% from September 2008 and up 25% since October 2007.

California posts the top foreclosure totals despite continued drop in foreclosure activity.
California foreclosure activity in October decreased 18 percent from the previous month, but the state still posted the highest number of properties with foreclosure filings for the month — 56,954. That total was down from a peak of more than 100,000 in August, but was still up 13 percent from October 2007. Florida, Arizona and Nevada posted the second, third and fourth highest number of properties with foreclosure filings respectively in October. With 12,681 properties receiving a foreclosure filing in October, Illinois registered the nation’s fifth highest state total. The state’s foreclosure activity increased 24 percent from the previous month and was up 31 percent from October 2007. Other states where total properties with foreclosure filings landed among the 10 highest were Ohio, Michigan, Georgia, Texas and New Jersey.

Las Vegas documented the highest metropolitan foreclosure rate among the 230 metro areas tracked in the report, with one in every 62 housing units receiving a foreclosure filing in October — more than seven times the national average. Foreclosure filings were reported on 12,155 Las Vegas area properties during the month, an increase of nearly 6 percent from the previous month and up nearly 104 percent from October of 2007.

Four Florida metro areas posted foreclosure rates that ranked among the top 10 in October, led by Cape Coral-Fort Myers and Miami in the Nos. 2 and 3 spots respectively. Other Florida cities in the top 10 were Fort Lauderdale at No. 8 and Orlando at No. 10.

California metro areas also accounted for four of the top 10 metro foreclosure rates in October, but that was down from previous months, when at least six California metro areas consistently ranked among the top 10. Stockton was the highest ranked California metro area at No. 4, with one in every 100 housing units receiving a foreclosure filing in October. Other California cities in the top 10 were Merced at No. 5, Riverside-San Bernardino at No. 7 and Modesto at No. 9. All four California metro areas experienced monthly decreases in foreclosure activity.

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