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Guest Author:
Steve Stenger, President
Condo Approval Professionals LLC
(847) 293-2962
E-mail: steve@condo-approval.com
Website: www.condo-approval.com
Changes to FHA Condominium Guidelines
FHA has made changes to the condominium guidelines as indicated in Mortgagee Letters 2009-46A and B. These changes are effective as of December 7, 2009. I have outlined the positives and negatives of the upcoming changes. First there are a couple of definitions:
There are two (2) types of project review:
- HRAP (HUD review and approval process).
- DELRAP (Direct Endorsement Lender Review and Approval Process). Direct Endorsement (DE) Lenders now have the option to submit projects under this process or HRAP if they choose. They must have the staff that has the capabilities to review and approve projects. Or they can use an experienced consultant to review their projects for compliance.
Positives:
- If the project has started construction prior to submission to FHA an Environmental Report will not be required. This means that if the plat or development plans and any delineated phase have been reviewed and approved by the local jurisdiction and construction of the streets, sewers, and utilities have proceeded to a point that changes cannot be made to the building an Environmental is not required. Not required under DELRAP reviews.
- Site condos (single family detached under condominium ownership) no longer require project approval.
- Project approval not required for FHA to FHA streamline refinance or FHA/HUD REO sales.
- Condominiums that consist of 2 or more units are now eligible for FHA financing. Previously FHA only considered condominiums consisting of 4 or more units.
- Right of First Refusal now acceptable as long as it does not violate discriminatory conduct under the Fair Housing Act Regulation.
- 30% pre-sale and 50% owner-occupancy down from 51%. That means in a 100 unit project only 30 percent will need to be under contract and only 15 units sold to owner-occupant/2nd home purchasers.
- 1 year waiting period for apartment conversions is eliminated. Previously, outside purchasers in an apartment conversion with tenants, had to wait for 1 year after the Declaration had been recorded in order to close on a unit.
- 10-year warranty not required on new construction as long as the local jurisdiction provides a building permit to start construction and also provides a certificate of occupancy prior to closing.
- Attorney’s Certification no longer required.
- Vertical Phasing in single building new construction or condo conversions is now acceptable. The floors must be legally phased in groupings of no less than 5 floors. At least a temporary Certificate of Occupancy has been obtained and all common areas and amenities have been completed.
- Increase in FHA loan concentration from 30% to 50% for new construction and condo conversions. 100% for existing condos that meet the following:
- Project has been completed for over 1 year
- 100% of the units have been sold
- No entity owns more than 10% of the units
- Budget has a 10% reserve contribution
- Control has been transferred to the homeowners
- 50% of the units are owner-occupied.
- Reserve Study not required on existing condo projects. It may be required if the budget doesn’t meet FHA’s 10% reserve requirement.
- FHA will now accept temporary/conditional Certificates of Occupancy for new construction and conversions under the following circumstances:
- All common areas and amenities for the project must be complete
- The temporary/conditional Certificate of Occupancy that was issued clearly indicates that the unit his habitable and eligible for immediate occupancy.
- The jurisdiction that is issuing the temporary/conditional Certificates of Occupancy have a standard protocol for this procedure.
- Vacant or tenant-occupied REO’s including properties that are bank owned maybe excluded from the required owner-occupancy percentage.
- Unrecorded documents are acceptable when a project is submitted for review. However, no loan can be insured until the recorded documents are received.
Negatives:
- No “spot” loan approvals. Existing condominiums must be submitted to FHA for their review and approval as of February 1, 2010. However, I can help with this process.
- No more than 10% of the units may be owned by a single investor. FHA is saying that this will apply to builders/developers that subsequently rent vacant or unsold units. In today’s market, developers are staying afloat by renting units until they can be sold. Now they cannot do that for more than 10% of the units.
- Developers will have to provide a certification that states that:
- The eligible condominium project complies the all applicable FHA requirements addressed in Mortgagee Letter 2009-46B.
- All condominium documents meet all HUD requirements, and state and local requirements.
- Projects consisting of 3 or less units will have no more than 1 unit use FHA financing.
- The 30% pre-sale requirement is indicated to be temporary, to be re-evaluated at the end of 2010. Hopefully, they will decide to keep it.
- FHA concentration level of 50% is temporary as well.
- HO-6 policy now required on FHA condominiums following Fannie Mae’s requirement.
- FEMA Flood Map required for all projects to verify whether or not a project is in a Flood Zone.
- Project approvals expire two (2) years from the date HUD issued their approval of the project. I can assist realtors, homeowner’s associations, and management companies with the recertification process.
- Projects that received approval prior to October 1, 2008 will require recertification on or before December 7, 2010. If they are not recertified by that date, they will be removed from the FHA approved list and have to reapply which requires a full document submission.
ALL ABOUT…..Portland.Oregon.Real Estate, is licensed under a Creative Commons Attribution-Noncommercial-No 
Derivative Works 3.0 Unported License. © Copyright 2008-2009 Betty Jung. All Rights Reserved. Use of this article, photos and images without permission is a violation of federal copyright laws. Based on a Blog at WordPress.
(For more local and national real estate information, go to www.bettyjung.com).
Portland
I posted a new picture Thursday on my Lake Oswego Living.A Photo Blog. Take a look if you haven’t seen it as yet.
CONDOMINIUMS
Condos in 55 metro areas showed that the national median existing-condo price was $178,000 in the third quarter, down 15.4 percent from the third quarter of 2008. Four metros showed annual increases in the median condo price and 51 areas had declines. According to the NAR® report, Portland’s condo market had a -7.0% drop in prices. That’s the 30th biggest decline nationally.
3 Year Condo Median Prices As Of October 2009. Courtesy RMLS
FHA Delays Implementing Rules for Condo Loans..Again
Bob Chiodo in his Oregon Financing Update in September reported on this. The Federal Housing Administration says it will implement a new approval process for condo financing on Dec. 7 – the second time the deadlines have been pushed back. The delay also brings a relaxation of new rules, according to the Mortgage Bankers Association, which has been negotiating with FHA.
Under the latest revision of the rules, 50 percent of units in a condo project will be eligible for FHA funding and up to 100 percent will be eligible in “well-established” projects with a minimum of 10 percent reserves. Half of the units (50% of the total units) will have to be sold to owner-occupants before FHA will back any loans.
In an important move, FHA said it wouldn’t require the recertification of some 40,000 projects that have already been certified for FHA financing. Source: Inman News, Matt Carter (11/05/2009)
Here are the Federal Housing Administration’s new guidelines for owner occupancy and spot approval. Hopefully this will make mortgages for condominiums more accessible. I have a blog post coming soon with more details.
Atwater Update
Meanwhile, the Oregonian reports that the Atwater Place’s auction was a success in that 75% of the auctioned units have closed. The company that’s trying to unload the Atwater Place at fire sale prices wanted to close its auction sales within 30 days of the Sept. 30 event. As of last Friday, they’d recorded 30 sales among the 40 units they accepted winning bids on.
The units that haven’t sold run throughout the building from a $319,000 unit on the third floor to a $681,000 unit on the 19th floor. The auction accomplished another feat: The publicity helped generate six other new sales at comparable if not slightly higher prices per square foot.
ALL ABOUT…..Portland.Oregon.Real Estate, is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 Unported License. © Copyright 2008-2009 Betty Jung. All Rights Reserved. Use of this article, photos and images without permission is a violation of federal copyright laws. Based on a Blog at WordPress.(For more local and national real estate information, go to www.bettyjung.com).
Portland
Guest Author:
Bob Chiodo, CFP
Equity Home Mortgage, LLC
Just a quick note, FHA has once again postponed the condo re-approval changes until December 7, 2009. They mentioned that some of the changes won’t be as dramatic. That’s our good news for the day!
© Copyright 2008-2009 Betty Jung. All Rights Reserved. Use of this article, photos and images without permission is a violation of federal copyright laws.
ALL ABOUT…..Portland.Oregon.Real Estate by Betty Jung is licensed under a Creative Commons Attribution 3.0 United States License.
Based on a Blog at WordPress.
(For more local and national real estate information, go to www.bettyjung.com).
Inasmuch as I haven’t reported on condo stats lately throughout metro Portland, I thought I’d better post this before our official RMLS™ stats are published around October 15. Below are the August 2009 stats. You can see the large inventory of condos that were for sale in August and the relatively few that sold that month. September stats are also shown below and not a lot better. However, condos are selling and due in large part to the First-Time Home Buyer Tax Credit with the rush to close before deadlines in the lower price ranges.
Last Sunday I reported that the FHA rule for condos was put on the back burner until November 30th. I hadn’t received confirmation when I posted that as it was a rumor I heard. However, now comes a report from RISMedia that in fact it is being delayed. Read it here.
However, first here’s a report by another local real estate blogger on the recent Atwater Auction:
“It was a jam packed event with the usual hype and energy that these kinds of events generate. Although many people were evidently just attending out of curiosity, the bidding turned out to be more serious and competitive than most had expected. If you had anticipated picking up one of these units at or near the minimum bid, you should have considered some of the previous comps, as well as the fact that out-of-state bidders are likely to drive prices up beyond the norm. In the end 40 out of 41 units sold, generating just under $20 million in sales.”
August 2009 Stats:
September Stats 2009:
| September 1-29, 2009 Condo Stats | #147Lake Oswego | #147West Linn | #148Portland | #151Tigard |
| # For Sale | 180 | 32 | 591 | 70 |
| # Sale Pending | 22 | 7 | 96 | 17 |
| # Sold | 9 | 2 | 67 | 17 |
| Months of Inventory | 20 mos. | 16 mos. | 8.8 mos. | 4.1 mos. |
| Average Days On Market | 141 | 98 | 110 | 100 |
| Average $/sq. ft. Sold | $224 | $124 | $341 | $131 |
| Average Sold Price | $409,850 | $336,500 | $413,746 | $150,947 |
| Average List Price | $448,556 | $362,000 | $430,218 | $177,764 |
| % of Sale Price vs. List Price | 88.67% | 92.96% | 98.77% | 88.94% |
| Average Sq. Ft. | 1830 | 1477 | 1185 | 1224 |
| Source: RMLS™ |
© Copyright 2008-2009 Betty Jung. All Rights Reserved. Use of this article, photos and images without permission is a violation of federal copyright laws.
ALL ABOUT…..Portland.Oregon.Real Estate by Betty Jung is licensed under a Creative Commons Attribution 3.0 United States License.
Based on a Blog at WordPress.
(For more local and national real estate information, go to www.bettyjung.com).
Guest Author:
Bob Chiodo, CFP
Equity Home Mortgage
*Estimated Rates for the week of September 22, 2009
- 30 year fixed=4.875-5.000
- 30 year jumbo=5.50 to $500k; 5.75 to $600k
- 7/1 ARM=4.50 – 5.25 various programs are available
- FHA/VA=5.00 – 5.25
- OR Vet=4.75 w/1.50 – 4.875 w/1.00
Rates are still holding steady. We have been in this current range for quite a few weeks. We have seen the recent Treasury auctions go very well, the Fed is still very engaged in the mortgage backed securities market and inflation isn’t on anyone’s radar. There is a very good chance that we can maintain these low rates through the rest of the year.
We are still seeing credit standards tighten with recent changes being announced by FHA and Fannie Mae. But even with HVCC, MDIA, and all the other changes, we are still getting deals done. When everyone works together we can still close loans within 30 days. It also appears that most companies are setting themselves up for what will hopefully be a big push in the first time homebuyer market before the expiration of the $8000 tax credit. With the current low rates, we could see some strong activity over the next month.
We had some good news – albeit temporary – that FHA has postponed the cancellation of the condo approvals. Currently, all condominiums that were approved prior to November of 2008 will no longer be eligible for FHA insurance unless they are re-approved. The re-approval process, which hasn’t been fully announced yet, will require approximately 15,000 complexes in FHA’s Santa Ana’s region to gain approval. There are some requirements that will pose as an obstacle for re-approval. These include the requirement that no more than 30% of the units can have FHA financing, all complexes need to have a current reserve report (I just reviewed one that was 135 pages – it couldn’t have been cheap to do) and the Association needs to have 60% of the report’s projected reserves in cash – verified cash. I was advised that in the State of Washington there could be over half of the complexes without the reserve requirement. I have a feeling that a large amount of the Associations won’t have the reserves on hand which means re-approval will be difficult, at best. Additionally, no more than 15% of the units can be delinquent on their association dues. Currently, FHA is out 11 weeks on their regular approval process. We can only imagine how bad the turnaround time will be when we all try to get the 15000 complexes re-approved. I guess 30 day locks are out of the question. My take on this is that we will go through a few months of some real tough times on the condos until FHA figures out a better way of doing things.
Since we are talking about changes, here are some recent notes from Fannie Mae’s announcement yesterday. The maximum allowed debt ratio will be 45% with some exceptions to 50%. Most of the industry is already following these guidelines but there are a few out there that weren’t. There are tougher requirements for reserves on second homes and investment properties. And, if reserves are in stocks, bonds, and mutual funds only 70% of their current value can be used to meet the requirements. Only 60% of retirement account balances will be available to meet those same requirements.
Fannie has also made it more difficult to qualify after a borrower has filed a bankruptcy or when they have experienced a short sale, foreclosure, or deed-in-lieu of. I’ll cover more about these in my next update.
Granted, a lot of these changes can make the overall tone of my update pessimistic but I have always been a firm believer that it is better to have all of the information that’s out there. How else can we plan our business? Besides, before we know it, these times will be over and we will be all rolling in the bucks again! Enjoy the rest of your week. Thanks.
*Rates quoted are for the use of Realtors and others in the real estate/financial service industries. They are not meant to be a quote for an individual situation. Rates change daily and those above are only listed to assist market participants by keeping them informed of current interest rates. Credit scores, down payment, and other risk related issues may change the rate. Quotes are usually shown for a 30 day lock period and a 1% origination or discount fee.
© Copyright 2008-2009 Betty Jung. All Rights Reserved. Use of this article, photos and images without permission is a violation of federal copyright laws.
ALL ABOUT…..Portland.Oregon.Real Estate by Betty Jung is licensed under a Creative Commons Attribution 3.0 United States License.
Based on a Blog at WordPress.
(For more local and national real estate information, go to www.bettyjung.com).
WILL BANKS STOP LOANING ON CONDOS?
Realtor.com had an interesting story about lenders now checking the numbers of delinquent owners in condo projects. I haven’t
heard of anyone locally not being able to obtain a mortgage; this could happen since we are faced with a high number of foreclosures. Certainly, I hope it doesn’t. I’ve written many posts on condos and what to look for in my “condo” category here on my blog. Here’s the info:
“Homebuyers contemplating purchasing a condominium should review a long list of documents and other information to make sure that the property they are considering is a solid buy in this challenging market.
The following information is at the top of the must-consider list:
- Budget. Examine the current budget, a year-to-date statement of income and expenses, and a couple of previous years’ budgets to see how they’ve changed.
- Reserve study. Understand the plan for maintenance and how it will be paid for.
- Special assessments. Ask if there have been any and whether more are planned.
- Delinquencies. How many owners are behind in their payments? Many lenders say no more than 15 percent of owners can be in arrears or they won’t write mortgages in the complex.”
Source: Chicago Tribune, Lew Sichelman (08/23/2009)
Q2 2009 CONDO STATS
Click on Image for Better View. Courtesy Portland State University.
The number of condominium sales in the Portland metro market is up from the previous quarters but is still down significantly. Across our metro area, the number of sales is up 55%. The Portland metro area’s price per sq. ft. is $208, an 8% quarterly increase, but a 5% yearly decrease. The median price for a condo in Portland is $200,000, the same as Q1 2009 according to Portland State University’s Q2 2009 Housing Analysis report.
AUCTIONS
The Atwater Place condos (40 of them) are going up for auction mid-September and can be viewed now if you’re a potential buyer. The prices are reduced as much as 60%. In addition, the Waterfront Pearl has only seen approximately 50 sales out of their 194 units and have gone back to the bank along with the John Ross Tower. There aren’t enough buyers for all the condo projects that were built during the boom years. In another post, I wrote about the ’80s when the same thing happened. You couldn’t give condos away during that recession. Looks like we’re at the same place today and the developers didn’t learn anything from that time period. If you’d like further information, and not working with a real estate agent, let me help, I’d love to be your Realtor®.
© Copyright 2008-2009 Betty Jung. All Rights Reserved. Use of this article, photos and images without permission is a violation of federal copyright laws.
ALL ABOUT…..Portland.Oregon.Real Estate by Betty Jung is licensed under a Creative Commons Attribution 3.0 United States License.
Based on a Blog at WordPress.
(For more local and national real estate information, go to www.bettyjung.com).
Guest Author:
Bob Chiodo, CFP
Equity Home Mortgage
OREGON FINANCING UPDATE
Estimated rates for the week September 7, 2009*
- 30 yr conforming fixed=4.875 – 5.000
- 30 yr jumbo=5.50 to $500k; 5.75 to $600k
- 7/1 ARM=4.50 – 5.375 various programs are available
- FHA/VA=5.00 – 5.25
- OR Vet=4.75 w/1.50 – 4.875 w/1.00
It’s been a while since I have done an update but the one thing that hasn’t changed is the current low rate environment. Rates are great and we are still seeing a lot of activity in the first time homebuyer market. Buyers who are seeking the tax credit should have a home under contract by the end of the month. The credit doesn’t end until 11-30 so, technically, we can accept and process applications before the deadline by 11-1 but everything has to work like clockwork. No inspection delays, no short sales, etc.
We saw a big jump in loan applications last week. A lot of refinancing still going on and the purchase business is moving well. Most of the economic data out lately has been better than expected. It’s given stocks a lift but, with the rates still low, many analysts feel that there is still a strong underlying concern about the strength of the recovery. Before we know it, all these troubled times will be in the past. Time has a way of slipping by.
I came across an interesting web site the other that I want to share with. This site lists FHA mortgage insurance refunds that haven’t been claimed. If you or someone you know had an FHA loan in the past, you should check this out. There are many (over 6000 Smith’s – even two with my last name) who haven’t received their mortgage insurance refund. Here’s the site: http://www.hud.gov/offices/hsg/comp/refunds/index.cfm Good Luck!
It’s been over a month since the new disclosure rules are out and the industry is doing a good job in getting used to the regulations. (Today, I am doing a presentation in my office about the changes and timelines that we need to follow. All interested are welcome.) Of course, we are still discovering new issues (incompatible software is a big one) but we are all working hard to get through them. Although we have been able to close a few transactions in less than 30 days, it’s still wise to write contracts for 45 days. It’s just better to be cautious. And don’t forget, another big change in disclosures comes January 1. More on that as we approach the date.
Lastly, FHA condo approvals expire at the end of this month and we are finding that not a lot of agents are aware of this change. It’s a big one. I noticed that FHA’s website has already been revised to accommodate the change. I have read that 12,000 condo complexes are losing their approval and will need to be re-approved. The new approval process is still an unknown to most of us. I’ll update you as soon as I have a good understanding of what needs to be done. Thanks and enjoy the rest of your week.
*Rates quoted are for the use of Realtors and others in the real estate/financial service industries. They are not meant to be a quote for an individual situation. Rates change daily and those above are only listed to assist market participants by keeping them informed of current interest rates. Credit scores, down payment, and other risk related issues may change the rate. Quotes are usually shown for a 30 day lock period and a 1% origination or discount fee.
© Copyright 2008-2009 Betty Jung. All Rights Reserved. Use of this article, photos and images without permission is a violation of federal copyright laws.
ALL ABOUT…..Portland.Oregon.Real Estate by Betty Jung is licensed under a Creative Commons Attribution 3.0 United States License.
Based on a Blog at WordPress.
(For more local and national real estate information, go to www.bettyjung.com).
Pretty harsh. For now, you could get arrested in Florida The story is posted below. Or, at the very least, you could get foreclosed upon. How many other states will start arresting owners or already are? Portland hasn’t been spared the many foreclosures in the condo segment of our market either. One only needs to look at the Pearl District and South Waterfront. Not only have they not been sold but recently many went on the auction block or as rentals. The developers and builders of those condos are having their problems. But what about those owners who currently own condos and, because of this financial crisis, are unable to pay their HOA condo dues? And, if you’re buying a condo, make sure you check on the reserves of the condo association and any present or future major assessments or you could walk into trouble.
I’ve written many posts on condos and foreclosures in my blog but there’s one in particular, ”On Buying A Condo“, that has suggestions when you go to purchase a condominium. In addition, I’ve written other posts on condos and their issues such as foreclosures, assessments, etc. If you presently already own a condo and haven’t paid your condo dues, you can be foreclosed upon. In addition, those homeowners associations are going to court to force owners to pay up.
A recent report out of Florida, where it has the worst foreclosure crisis, had this to say:
Condo Associations Seek Legal Action
“Angry condo associations are turning to the courts for help forcing owners behind on their fees to pay up. The courts are responding by holding owners who don’t pay in contempt of court, and some could face arrest.
The problem of no payment is particularly acute in Florida where condo values have fallen dramatically. For instance, in the Orlando area, the median price of a condo has fallen about 70 percent in the last two years from $156,500 in August 2007 to $49,800, according to the Orlando Regional REALTOR® Association.
Without court enforcement, the associations are likely to go under, leaving the remaining owners with few options beyond abandoning their own properties.
“The current economic downturn and foreclosure crisis have placed many associations on the brink of disaster,” says Donna Berger, executive director of the Community Advocacy Network, a nonprofit group representing more than 1,500 condo and homeowner associations”.
Source: Orlando Sentinel, Mary Shanklin (08/28/2009)
© Copyright 2008-2009 Betty Jung. All Rights Reserved. Use of this article, photos and images without permission is a violation of federal copyright laws.
ALL ABOUT…..Portland.Oregon.Real Estate by Betty Jung is licensed under a Creative Commons Attribution 3.0 United States License.
Based on a Blog at WordPress.
(For more local and national real estate information, go to www.bettyjung.com).
As recently stated in another one of my blog posts, we will be seeing more and more changes in the mortgage industry. Now, there are changes coming October 1, 2009 for developers of condo projects and existing condo owners who want to get FHA approval for financing. HUD has announced changes to their Condo Approval Process and elimination of “spot” approvals.
These changes will be applicable to condominium developments that are:
- Proposed and Under Construction
- Existing Construction
- Condo Conversions
These projects will no longer be eligible after October 1, 2009:
- Condominium Hotels or “Condotels”
- Timeshares or Segmented Ownership Projects
- Houseboat Projects
- Multi-dwelling Unit Condominiums (More than 1 Dwelling Per Condo Unit)
- All Projects Not Deemed to be Used Primarily as Residential
Zillow® recently posted the following in regards to this new HUD rule as well:
In the past, you only needed to satisfy one of the following two criteria to finance a condo unit using FHA financing.
1.) The Condo Project has a FHA warranty - This requires the Homeowners Association of the condominium project to apply and receive a warranty on the project from the HUD.
2.) The unit must pass a questionnaire called a “Spot Check” done on an individual basis
HUD just released an announcement that they will be changing the guidelines which includes the removal of “Spot Check” approvals which means you will only be able to get a FHA loan on a condo if the project has a warranty. (Mortgage Letter 2009-19).
FHA loans now represent more than 25% of all home purchases. If you are selling a condo in a complex that does not have a FHA warranty, you are eliminating 25% of the buyers today. As our current real estate market has shown that when the ability to obtain financing for a property becomes more difficult, values drop.
WHAT THIS MEANS TO YOU IF YOU’RE A CONDO BUYER
Whether you’re looking to buy using FHA financing or not, this should still affect your buying decision. You don’t want to buy a property that will be more difficult sell down the road. If you find a condo that does not have a FHA warranty and you really want to buy it, know that October 1st is the date the new guidelines go in affect. Also, many lenders will adopt this policy prior to this date, so be sure to check your lender. If you do buy using the “Spot Check” approval now, I would recommend you actively speak to the homeowners association about making the property FHA warrantable immediately after you close on your purchase.
WHAT THIS MEANS TO YOU IF YOU’RE A CONDO OWNER
Check immediately to see if your condo has a FHA warranty. If it has a FHA warranty, you’re good! If it is not a FHA warrantable complex, speak to the Homeowners Association immediately about getting the complex FHA warrantable. The key is to get your complex a FHA warranty PRIOR to the October 1st date. Keep in mind that the turn times to get a warranty will be based highly on the amount of submissions HUD receives. Everybody will likely begin the process after they realize how important this is. The same thing happened in 2008 when non-FHA lenders realized the importance of being a FHA lender and FHA received a wave of applications and submissions. Try to be ahead of the curve.
IS THIS THE ONLY NEW CHANGE?
I’m happy to say that even though this change could potentially be extremely damaging to condo values, there are some positive changes on the 2009-19 HUD letter.
1.) Direct Endorsement Lenders can approve a project
a. This means that a FHA lender can actually do the warranty process for HUD. This is great if your lender is a DE (Direct Endorsement) lender as they can approve the entire project then provide you the financing to close
2.) Site Condominiums will not require a Condominium Project approval
a. Site Condos are single family detached dwellings. These will be looked at almost identically like a standard Single Family Residence to the FHA lender.
3.) Refinancing a condo that’s not warrantable that already has a FHA loan does not require a warranty when refinanced to another FHA lender
4.) No Project Approval is needed for buying a HUD foreclosure condo
Any questions, contact your lender.
© Copyright 2008-2009 Betty Jung. All Rights Reserved. Use of this article, photos and images without permission is a violation of federal copyright laws.
ALL ABOUT…..Portland.Oregon.Real Estate by Betty Jung is licensed under a Creative Commons Attribution 3.0 United States License.
Based on a Blog at WordPress.
(For more local and national real estate information, go to www.bettyjung.com).
Spring can be a busy season for condominium sales. There are many reasons for buying a condo instead of a house. They make great affordable first homes. They also make great last homes, if you are downsizing from a large family house to a smaller residence.
There are special questions condo buyers should ask. Many people perhaps don’t realize that buying a condo can be more complicated than buying a house.
Condo Advantages
- can be less expensive than buying a similarly sized single-family house
- exterior maintenance is the responsibility of the condo homeowners association
- the security of leaving your condo for an extended period without worry (called lock and leave)
- homeowner tax benefits similar to houses
- pride of ownership from being an owner rather than a renter
- potential resale profit as the condo appreciates in market value-supply and demand greatly affects this last advantage and as we’ve seen in Portland of late, this may not necessarily be the case in this real estate market
Condo Disadvantages
- being subject to the rules of the condo homeowners association
- unexpected increases in monthly fees and special assessments for maintenance costs
- policies and rules you don’t like — such as no pets or no rentals
- poor-quality maintenance or management which affect enjoyment and resale values
- poor soundproofing (the number one complaint of condo owners)
- lack of freedom to do as you wish, such as have noisy parties
- neighbors you don’t like or who don’t like you
- surrendering some privacy
Questions to ask
- What is the financial condition of the condo association? If you are considering purchase of a brand-new condo, to attract buyers the developer has probably set the monthly condo fees very low. Watch out for inadequate allocations for replacement reserves which are sure to increase in future years as the building ages and needs repairs. If you are considering buying an older condo, study the replacement reserves. Depending on the building’s age and anticipated replacements, such as a new roof every 15 to 20 years, if reserves are inadequate a large special assessment might be levied on each owner when an unexpected cost arises. Condo buyers should ask if there are any major replacements anticipated in the next 12 months and if there will be a special assessment. Review the board of director meeting minutes for the last six months to determine what issues there might be.
- How do the monthly fees compare with comparable nearby condo complexes? The answer is important not only to your wallet, but if you want to resell the condo at a future date. When the condo fees are very high compared to the competition, that holds down the market value of condos in that complex. Be sure to inquire what services are included.
- Is the condo association professionally managed? Unless it is a small condo building of five units or less, professional management is a good sign. The cost usually pays for itself because an experienced condo manager knows where to get repair discounts that often the equivalent of the professional manager’s fee. A related question to ask is how long the professional manager has been managing the complex. The right answer is: the longer, the better
- How good is the soundproofing? Poor soundproofing is the number one complaint of condo owners (especially for buildings converted from apartments), when you focus on buying a specific unit, it pays to test the soundproofing. This can easily be done by asking the upstairs, downstairs, and adjacent neighbors to turn on their TVs and stereos to normal levels and see if you can hear them in the unit. Also, check for upstairs noisy floors, especially in wood construction buildings if the upstairs neighbors don’t have carpets with heavy padding.
- What is the percentage of renters? Mortgage lenders know the risk of foreclosure default in condo complexes with more than 20 percent to 30 percent renters is very high. Many complexes don’t allow renters. If they do, perhaps the the renters aren’t as considerate as owner-occupants would be. The result can be declining maintenance quality.
- Has the condo unit been professionally inspected and did the seller provide a defect disclosure report? Most states now have laws and court decisions requiring condo and house sellers to disclose known defects. Smart buyers carefully study these written disclosure forms before making purchase offers. In addition, you might prefer to ask, “Would you buy a condo here again?” Most condo owner-occupants are friendly and willing to share their good and bad experiences.
Source: Bob Bruss
© Copyright 2008-2009 Betty Jung. All Rights Reserved. Use of this article, photos and images without permission is a violation of federal copyright laws.
ALL ABOUT…..Portland.Oregon.Real Estate by Betty Jung is licensed under a Creative Commons Attribution 3.0 United States License.
Based on a Blog at WordPress.
(For more local and national real estate information, go to www.bettyjung.com).
Here are the February 2009 stats for the condo, townhouse and attached properties in Portland. You can compare it to my January condo stats here.
SW Portland has a little over 12 months of inventory with 574 condos on the market and is followed by Tigard also with a high number of condos, etc. for sale. Once again, I was surprised to see the low number of foreclosures and short sales that have sold. In preparing these stats, I looked at each individual sold listing to check on which were third-party or bank-owned properties. Lake Oswego’s inventory of condos is at a little more than 8 months, which is a sign that prices may start to stabilize for condos in the 147 area.
| MARKET UPDATE:CONDOS-TOWNHOUSES-ATTACHED2-01-2009/2-29-2009 | Area 147 (Lake Oswego) | Area 148 (SW Portland) | Area 151 (Tigard) |
| # Active | 49 | 574 | 59 |
| # Pending | 1 | 37 | 7 |
| # Sold | 6 | 46 | 5 |
| Average Sq. Ft. Sold | 1393 | 1164 | 1360 |
| Average $ Sq. Ft. Sold | $180 | $317 | $151 |
| High Sold Price | $399,000 | $1,400,000 | $237,000 |
| Low Sold Price | $143,542 | $149,000 | $170,900 |
| Average Sold Price | $250,307 | $368,546 | $205,612 |
| % of Original List Price vs. Sold Price | 90.39% | 88.27% | 112.15% |
| # Foreclosures | 0 | 4 | 1 |
| # Short Sales | 0 | 2 | 0 |
| Days on Market | 124 | 137 | 47 |
| Total Months Inventory | 8.1 | 12.4 | 11.8 |
| Source: RMLS |
From my stats above, it seems as though the lower end with all the starter and first-time home buyer programs, is still the most active. If you are a first-time home buyer, in addition to the first-time home buyer tax credit and FHA, you might want to check out these two sources available here in Portland to assist you or contact a Realtor® (I’m always happy to help you!):
- HOST (Home Ownership a Street at a Time) www.hostdevelopment.com
HOST (Home Ownership a Street at a Time) is a non-profit corporation dedicated to providing homeownership opportunities for working individuals and families.
- Portland Housing Center www.portlandhousingcenter.org
The Portland Housing Center makes home ownership possible through quality education, counseling and financial services.
© Copyright 2008-2009 Betty Jung. All Rights Reserved. Use of this article, photos and images without permission is a violation of federal copyright laws.
ALL ABOUT…..Portland.Oregon.Real Estate by Betty Jung is licensed under a Creative Commons Attribution 3.0 United States License.
Based on a Blog at WordPress.
(For more local and national real estate information, go to www.bettyjung.com).
When people find my blog, my dashboard on WordPress shows what people are searching for. Many times my posts are written based on those searches. One of the searches I’ve noticed is that people want to know the difference between condos, townhouses and attached dwellings.
- Attached. An element of the residence’s construction (such as a common wall, ceiling, or floor, or some
times only the garage walls) are shared with another property. (A 1/2 duplex – sometimes each side is sold separately would be one example of an attached dwelling although the word is also interchanged between condos and townhouses as well). - Condominium. An attached or stand-alone residence for which the owner has title to the space inside the unit only and shares, with specified legal guidelines, common parts of the property. Since condo owners hold title to the condominium unit only, not the land beneath the unit, condos can be stacked on top of each other. All condo owners share title to common areas. Common areas include land, the exterior of buildings, hallways, roofs, swimming pools — any area used by multiple owners.
- Townhouse. The difference between a townhouse and condo is ownership. Townhouse owners hold title to their units and the land beneath them, so townhouse units cannot be stacked on top of each other. As with condos, common areas are owned jointly by all townhouse owners.
According to the National Association of Realtors®, the condo sector, showed the national median existing-condo price was $186,000 in the fourth quarter of 2008, down 15.8% nation-wide from the fourth quarter of 2007. Only eight metro areas showed annual increases in the median condo price while 48 other metro areas had declines.
For the Portland-Vancouver-Beaverton-OR-WA statistics according to the NAR® report, the following are the stats:
Portland was one of those metro areas that showed a decline in median condo prices locally:
2008 1st Quarter median sales price = $214,600
2008 2nd Quarter median sales price = $211,600
2008 3rd Quarter median sales price = $196,000
2008 4th Quarter median sales price = $194,400
2008 = $205,200 Average % change from previous year = -6.2%
I recently reported on condo stats for January 2009 for the Portland metro area from RMLS™, here’s a link to those.
AFFORDABILITY IN PORTLAND, OREGON
According to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) 4th Quarter 2008 just released yesterday, Oregon ranked #44 in the West and #184 nationally as to affordability out of 236 metro areas. Our RMLS™ states that housing in the Portland, Oregon area has not been this affordable since June 2005.
“Falling home prices and very favorable mortgage rates both contributed to the housing affordability gains we saw in the fourth quarter of 2008,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “However, at the same time, worsening economic conditions, historically low consumer confidence and uncertainty about future home prices kept many qualified buyers on the sidelines.
Looking forward, we hope that the newly improved first-time home buyer tax credit, included in recently enacted economic stimulus legislation, will help spur buyer demand, and that government efforts to reduce foreclosures will put a floor under declining home values.”
The most affordable major housing market in the country during the fourth quarter was once again Indianapolis, Ind., which has now topped the affordability list 14 consecutive times. There, just over 93 percent of all homes sold in the fourth quarter of 2008 were affordable to households earning the area’s median family income of $65,100.
BusinessWeek’s Best Affordable Suburbs in 2009
BusinessWeek posted their list yesterday of the most affordable suburbs for 2009. Portland’s Cedar Mill area made it to the list:
Oregon
Best affordable suburb: Cedar Mill
Nearest major city: Portland
Population: 14,462
Median household income: $84,226
Median home price: $465,500
Unemployment rate: 4.3%
Violent crime index: 26
Cedar Mill, an unincorporated area about seven miles west of downtown Portland, has a half-dozen parks and is close to shopping centers at Portland State University. About 42% of residents are married with children. The average commute is 21 minutes.
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(For more national and local real estate information, go to my website at www.bettyjung.com)
Here are some early numbers. Our official RMLS™ stats won’t be published for another week.
NEW CONSTRUCTION STATS:
|
NEW CONSTRUCTION SINGLE-FAMILY DETACHED HOUSES 1/1/2009-1/31/2009 |
RMLS AREA #148 SW PORTLAND |
RMLS AREA #147 LAKE OSWEGO (97034, 97035) |
RMLS AREA #151 TIGARD (97223, 97224) |
|
# Active Listings |
68 |
53 |
55 |
|
# Pending Sales |
3 |
0 |
6 |
|
# Sold |
9 |
2 |
7 |
|
% of List Price to Sold Price |
87.42 |
92.69 |
89.08 |
|
Average Sq. Ft. Sold |
3487 |
3556 |
2767 |
|
Average Sq. Ft. $ Sold |
$205 |
$226 |
$148 |
|
Days on the Market |
159 |
168 |
142 |
|
High List Price |
$1,175,000 |
$895,000 |
$524,900 |
|
Low List Price |
$386,800 |
$715,000 |
$350,000 |
|
Average Sold Price |
$713,824 |
$805,000 |
$410,700 |
|
# Foreclosures |
2 |
0 |
1 |
|
# Short Sales |
0 |
0 |
0 |
|
Source: RMLS™ |
|
|
|
Despite our snow at year-end, high winds and slowing economy, sales were made and closed. In preparing this information, I was surprised there were very few foreclosures or short sales sold. I haven’t been including foreclosure or short sale numbers but will do so in the upcoming months as well. Our RMLS™ listings have parameters indicating whether a property is bank-owned or if third-party approval is required. Several of the listings that were short-sales or foreclosures only had that noted in the comment section and didn’t have any of the boxes checked. Each listing was reviewed to make sure the stats were correct.
The lower range of housing is selling. I’ve noticed the mid-range is not going anywhere. Typically in a recession, and frankly even in a good market, the lower end and extreme higher end sells and the middle just gets stuck. Low end is selling in the condo market and also in detached residential housing. Lake Oswego’s average market time is 316 days to sell attached, condos or townhouses with the low end selling.
SINGLE FAMILY DETACHED & ATTACHED, CONDO, TOWNHOUSE STATS:
| 01-01-2009/01-31-2009SINGLE-FAMILY RESIDENTIAL & ATTACHED, CONDO, & TOWNHOUSES | RMLS AREASW Portland#148 |
RMLS AREALake Oswego#147 (zip code 97034, 97035) | RMLS AREATigard #151(zip code 97223, 97224) |
| # of Active Single-Family Residential Listings | 440 | 234 | 274 |
| # of Pending Single-Family Residential Listings | 47 | 22 | 28 |
| # of Sold Single-Family Residential Listings | 60 | 19 | 27 |
| —Average Sq. Ft. Sold | 2655 | 2531 | 2141 |
| —Average $ Sq. Ft. Sold | $181 | $208 | $150 |
| —% of List Price to Sold Price | 89.53% | 88.18% | 90.5% |
| —High Sold Price | $1,175,000 | $965,000 | $524,900 |
| —Low Sold Price | $206,000 | $190,500 | $165,000 |
| —Average Sold Price | $481,259 | $525,400 | $321,063 |
| —# Foreclosures Sold | 1 | 1 | 4 |
| —# Short Sales Sold | 1 | 3 | 0 |
| —Days on the Market | 91 | 103 | 108 |
| # of Active Attached, Condo & Townhouses | 524 | 159 | 64 |
| # of Pending Attached, Condo & Townhouses | 51 | 9 | 6 |
| # of Sold Attached, Condo & Townhouses | 32 | 2 | 3 |
| —Average Sq. Ft. Sold | 1321 | 1038 | 1096 |
| —Average $ Sq. Ft. Sold | $301 | $146 | $169 |
| —% of List Price to Sold Price | 91.73% | 74.38% | 90.39% |
| —High Sold Price | 1,400,000 | $185,000 | $200,000 |
| —Low Sold Price | $95,000 | $118,000 | $169,000 |
| —Average Sold Price | $397,242 | $151,500 | $184,967 |
| —# Foreclosures Sold | 3 | 0 | 0 |
| —# Short Sales Sold | 3 | 0 | 0 |
| —Days on the Market | 145 | 316 | 100 |
| SOURCE: RMLS™ |
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(For more local or national real estate information, go to my website at www.bettyjug.com).
FHFA just released their report for November 2008 (latest statistics). U.S. home prices fell 1.8 percent on a seasonally-adjusted basis from October to November, more than the 1.1 percent decline in the prior month, according to the Federal Housing Finance Agency’s monthly House Price Index. For the 12 months ending in November, U.S. prices fell 8.7 percent. The decline since the April 2007 peak is 10.5 percent.
Their chart shows home prices nation-wide were at March 2005 levels by the end of November. As indicated in my market update for December 2008 recently, pretty much any appreciation of the last 3-4 years has been wiped out. I read a blog recently about California’s real estate market that said they were back to 2002 levels.
According to Oregon’s Economic and Revenue Forecast which was also just released:
The U.S. lost 2.589 million jobs, with 73 percent occurring from September through December 2008. Oregon lost 35,000 jobs, with 64 percent occurring from September through November 2008. The U.S. unemployment rate is projected to reach over 9 percent. If Oregon follows this trend, unemployment could reach above 10 percent. Oregon unemployment rate peaked at 12.1 percent in November 1982 and reached 8.5 percent during the last recession. Oregon’s 
unemployment rate has now jumped to 9%.
The outlook for the Oregon economy is a deeper recession than in the December forecast. Job losses are expected to be larger and lasting longer into the second half of 2009. Housing markets may take still longer to adjust. Inflation should be lower contributing to slow personal income growth. Figure 1 illustrates the vast changes to Oregon’s employment outlook over the last year.
BREAKING DOWN THE HOUSING STATS FOR DECEMBER 2008
Have you wondered what a 4 bedroom might sell for in RMLS™ #151 (Tigard, Tualatin, Sherwood, Wilsonville)? What price would a condo sell for in SW Portland (RMLS™ #148)? What price point would a 2 bedroom detached house sell for in SW Portland (RMLS™ #148). Want to know what a 3 bedroom house sold for in RMLS™ #147 (Lake Oswego, West Linn). What kind of financing did buyers use in our marketplace? What price points sold in December 2008? Here is that information. These stats represent the month of December 2008 for RMLS™ 148( SW Portland), RMLS™ #147 (West Linn, Lake Oswego), RMLS™# 151 (Tigard, Tualatin, Wilsonville and Sherwood).
This information is available for all areas, however, the focus of my blog is the west-side of Portland including SW Portland, Lake Oswego, West Linn, Tigard, Tualatin, Wilsonville and Sherwood. If you are interested in other areas, let me know or contact your Realtor® as all information is available from RMLS™.
For all the talk of FHA financing, it was conventional loans that buyers sought in December 2008 to finance both detached single-family homes and condos in metro-Portland.
| December 2008 Stats | SW Portland #148 | Lake Oswego #147 | Tigard #151 |
| Total # Detached Housing Sold In December 2008 | |||
| # 4+ bedrooms sold | 22 | 23 | 34 |
| Median Sold Price 4+ BedroomsDecember 2008 | $450,000 | $630,000 | $407,50 |
| Average Sold Price 4+ BedroomsDecember 2008 | $544,860 | $604,359 | $434,176 |
| #3 bedrooms sold | 26 | 10 | 32 |
| Median Sold Price 3 BedroomsDecember 2008 | $320,000 | $415,750 | $263,000 |
| Average Sold Price 3 BedroomsDecember 2008 | $321,731 | $474,640 | $294,817 |
| #2 bedrooms sold | 12 | 4 | 9 |
| Median Sold Price 2 BedroomsDecember 2008 | $262,500 | $329,375 | $229,900 |
| Average Sold Price 2 BedroomsDecember 2008 | $318,438 | $452,938 | $204,433 |
| Average Days on the Market | 172 | 209 | 162 |
| Method of Financing December 2008 (totals for Condos & Single-family Detached Houses) |
|||
| VA | 1 | 1 | 1 |
| FHA | 9 | 1 | 4 |
| Conventional | 70 | 31 | 50 |
| Cash | 17 | 9 | 14 |
| Other | 2 | 1 | 0 |
| Total # Condo Units Sold in December 2008 | 39 | 5 | 10 |
| Median Sold Price December 2008 | $374,400 | $145,000 | $175,550 |
| Average Sold Price December 2008 | $442,476 | $190,700 | $165,489 |
| Available Units Unsold @End of 2008 | |||
| Condos | 814 | 179 | 181 |
| Detached | 868 | 738 | 1,098 |
| Source: RMLS™ |
© Copyright 2008-2009 Betty Jung. All Rights Reserved. Use of this article, photos and images without permission is a violation of federal copyright laws.
ALL ABOUT…..Portland.Oregon.Real Estate by Betty Jung is licensed under a Creative Commons Attribution 3.0 United States License.
Based on a Blog at WordPress.
(For more local and national real estate information, go to www.bettyjung.com).
Market Update Statistics
Q3 2008 Market Update – Condos, Attached & Townhouses
Looking over my blog, I noticed I didn’t report the Q3 2008 stats (July 1-September 30, 2008) on condominiums, townhouses and attached homes for SW Portland, Lake Oswego or Tigard. Inasmuch as we are soon approaching the end of Q4 2008, I thought I’d better get these posted.
SW Portland (RMLS 148):
LISTED:
- Range of list prices for condos, attached, and townhouses in the third quarter of 2008 = $299,000 (Low) to $2,775,000 (High)
- Average list price for condos, attached and townhouses in the third quarter of 2008 = $579,294
- Average sq. ft. cost of listed = $410/sq. ft.
SOLD:
- Number of sold/closed condos, attached, and townhouses in the third quarter of 2008 = 156
- Range of sold prices for condos, attached and townhouses in the third quarter of 2008 = $303,000 (Low) to $2,450,000 (High)
- Average sold price for condos, attached and townhouses in the third quarter of 2008 = $555,702
- Days on the Market = 123 Days
- Average sq. ft. cost of sold = $394/sq. ft.
- Average sq. ft. of properties sold = 1411 sq. ft.
- Sold at 92.99% of original list price
Lake Oswego (RMLS 147):
LISTED:
- Range of list prices for condos, attached, and townhouses listed in the third quarter of 2008 = $105,000 (Low) to $699,000 (High)
- Average list price for condos, attached and townhouses listed in the third quarter of 2008 = $245,331
- Average sq. ft. cost of listed = $201/sq. ft.
SOLD:
- Number of sold/closed condos, attached, and townhouses in the third quarter of 2008 = 33
- Range of sold prices for condos, attached and townhouses in the third quarter of 2008 = $102,500 (Low) to $695,000 (High)
- Average sold price for condos, attached, and townhouses in the third quarter of 2008 =$234,343
- Days on the Market = 87 Days
- Average sq. ft. cost of Sold = $192/sq. ft.
- Average sq. ft. of properties sold = 1220 sq. ft.
- Sold at 78.65% of original list price
Tigard (RMLS 151):
LISTED:
- Range of list prices for condos, attached, and townhouses in the third quarter of 2008 = $99,900 (Low) to $429,000 (High)
- Average list price for condos, attached and townhouses in the third quarter of 2008 = $197,470
- Average sq. ft. cost of listed = $164/sq. ft.
SOLD:
- Number of sold/closed condos, attached, and townhouses in the third quarter of 2008 = 62
- Range of sold prices for condos, attached and townhouses in the third quarter of 2008 = $97,000 (Low) to $419,500 (High)
- Average sold price for condos, attached and townhouses in the third quarter of 2008 = $192,329
- Days on the Market = 79 Days
- Average sq. ft. cost of sold = $160/sq. ft.
- Average sq. ft. of properties sold = 1205 sq. ft.
- Sold at 93.65% of original list price
(For more local and national real estate information, go to my website at www.bettyjung.com)
Condos and Issues Part 4
This is the last part in a series of posts I’ve written in regards to condos and issues. Of course, there are many more topics in regards to condos that I will eventually write about.
There are some condo projects that have no condo fees at all and each owner is responsible for their individual unit. There are condos in Lake Oswego that I have driven by recently that have no HOA dues. The units I am referring to have siding that is damaged, have mildew on the exterior and the roofs are in bad condition. One of the owners, let’s say, doesn’t have the money to redo the siding and roof and all parties have to agree on improvements. How long of a time period do you have to wait until all parties agree? What happens if they don’t agree? Do you go ahead and replace yours? If they don’t repair theirs how will it affect the value of yours and resale? These requirements/timelines/restrictions need to be listed in the CC&Rs and By-Laws of the Homeowner’s Association so all parties understand and live by the same rules.
Another problem I see a lot is a dispute over windows and who is responsible to replace them. In some CC&R’s and By-Laws it clearly states that the HOA will replace defective windows. Others state that the owner is responsible for defective windows. However, most of the time there is absolutely no reference as to who is responsible for defective windows.
When I sell condos, I usually get a call from the buyers asking whether they really need to read all that paperwork – the CC&R’s and By-Laws. I tell them yes, and I will be reading them as well.
© Copyright 2008-2009 Betty Jung. All Rights Reserved. Use of this article, photos and images without permission is a violation of federal copyright laws.
ALL ABOUT…..Portland.Oregon.Real Estate by Betty Jung is licensed under a Creative Commons Attribution 3.0 United States License.
Based on a Blog at WordPress.
(For more local and national real estate information, go to www.bettyjung.com).
I’ve written quite a few posts about condos and my suggestions on what
to check when purchasing a condo. There was one post in particular that I wrote about condos and foreclosures and some of the problems that can be encountered if an entire project or if many of the units go into foreclosure. Unfortunately, it seems as though many condo projects in Portland are now facing the same or similar fate due to our economic times.
Over the years, I’ve seen the building of condos reach a frenzy, then retreat, then go at full speed again when the economy picked up, and now it’s retreating once again. I’ve always believed if you can afford a house, it’s better to purchase a house over a condo. Granted, condos are great for some people and certainly fill a need for many buyers and I’m not against condos. I do list and sell condos! However, one of the reasons I feel a house is a better decision in the long-term is because of what the condo market is going through right now and some other problems associated with condos. It happens over and over.
Buildings that were built as condos in the 1970s recession didn’t sell and were then used as apartments. In the 1980s recession, you couldn’t give condos away as there were too many on the market and the condo market had been overbuilt much like today’s. They were converted back to condos in the 1990s when the real estate market was strong again and there were a lot of condo conversions taking place. There was a 63-unit condo conversion that I had listed in Lake Oswego in the mid-1990s as well. New condo projects built in the mid-2000s are being hit hard as the economy heads south and they will once again have to be apartments. One day when the economy revives, you will be seeing them go back to being condos. It’s a vicious cycle it seems.
Here’s a recent story in The Oregonian about many of the waterfront condominiums reverting to apartments. Some of those condos in those projects were sold. What happens to those owners and their investments? There was a glut of new waterfront condos on the market long before the economy hit a snag. It’s not surprising they didn’t sell. The prices on them were exorbitant and the condo market was over-built much like in other recessionary times.
According to the Front Porch blog of The Oregonian, we have 5 years of condo inventory to sell! I hope the waterfront projects continue and don’t get left by the wayside. It has become the entry into Portland off I-5 and I would hate to see half finished developments along the Willamette River. Yet another sign of the times.
© Copyright 2008-2009 Betty Jung. All Rights Reserved. Use of this article, photos and images without permission is a violation of federal copyright laws.
ALL ABOUT…..Portland.Oregon.Real Estate by Betty Jung is licensed under a Creative Commons Attribution 3.0 United States License.
Based on a Blog at WordPress.
(For more local and national real estate information, go to www.bettyjung.com).
Condos & Issues Part 3
When people buy condos, they expect their monthly HOA dues will cover many of the responsibilities they would otherwise have as owners of single-family homes, like cutting the grass and paying the water bills. The downside is that your fate is tied to 50 or 100 other people who may stop making their condo payments. Now, because of the high foreclosure rates, condo owners have quit paying their HOA dues. Condo associations are now faced with shortfalls and will not be able to pay bills, such as pool care, maintenance and utilities. Recently I read about a condo project that had 38 foreclosures in a 244-unit building and the unpaid HOA dues nearly cost the residents running water because the HOA could not pay for it. In addition, repairs to its ceiling lobby were left undone and wiring and ducts were left exposed when the HOA ran out of money.
In Miami, Chicago and San Diego, I have heard where condo owners were having to adjust to economic woes by sometimes having to mow lawns themselves and working in shifts for building security. What motivated people to go into the condo market and led to overbuilding was the expectation that it would be easier than owning a home as far as maintenance is concerned.
If an HOA faces such a scenario to get through the short-term shortfall, they could institute a special assessment against all the owners to make up the difference. Next, the Board of Directors could create a “zero-tolerance” policy for late condo association fees. Instead of waiting months to take action, proceedings could be started to collect late dues within 30 days. Waiting too long actually makes the situation worse for the condo owner to pay an overdue bill.
The HOA could also begin requiring escrowing three months’ of condo fees to protect the governing body from this type of problem. When it comes to condo fees, the HOA needs to be vigilant that it has policies in place to protect itself financially for the betterment of the whole development. When purchasing a condo, you should find out how many foreclosures are currently in the project, request a copy of the treasurer’s report and find out how much money is in a reserve account to pay for capital improvements and/or repairs. CLICK HERE for Part 1 “Condos and Issues”, where I wrote about liens and pending assesments. Today I spoke to a woman who owns a condo in Ohio. She was assessed $13,000 for snow removal last winter.
In a recent issue of The Oregonian, it was reported that there are approximatley 1,300 unsold high-end condominiums just in Multnomah County. Others say that number is more like 7,500. Make sure you know what you’re getting into when purchasing a condo.
UPDATE **** I’ve received requests for information about the Tanglewood Condominium lawsuit – here’s their website for additional information – FYI.
© Copyright 2008-2009 Betty Jung. All Rights Reserved. Use of this article, photos and images without permission is a violation of federal copyright laws.
ALL ABOUT…..Portland.Oregon.Real Estate by Betty Jung is licensed under a Creative Commons Attribution 3.0 United States License.
Based on a Blog at WordPress.
(For more local and national real estate information, go to www.bettyjung.com).
Photo from Microsoft Office
Here are the stats for three areas on the westside of Portland that include condos, attached homes and townhouses for the Second Quarter of 2008 : Tigard (RMLS 151), Lake Oswego (RMLS 147) and SW Portland (RMLS 148). (HERE’S THE LINK FOR THE Q1 2008 Stats).
Tigard (RMLS 151):
LISTED:
- Number of condos, attached, and townhouses listed in the second quarter of 2008 = 61
- Range of list prices for condos, attached and townhouses listed in the second quarter of 2008 = $85,000 (Low) to $389,500 (High)
- Average list price for condos, attached and townhouses listed in the second quarter of 2008 = $216,011
- Average sq. ft. cost of listed properties = $168/sq. ft.
SOLD:
- Number of sold/closed condos, attached, and townhouses sold in the second quarter of 2008 = 47
- Range of sold prices for condos, attached and townhouses listed in the second quarter of 2008 = $85,000 (Low) to $372,000 (High)
- Average sold price for condos, attached and townhouses listed in the second quarter of 2008 = $211,311
- Days on the Market = 52 Days
- Average sq. ft. cost of sold = $166/sq. ft.
- Average sq. ft. of properties sold = 1283 sq. ft.
- Sold at 96.83% of original list price
Lake Oswego (RMLS 147):
LISTED:
- Number of condos, attached, and townhouses listed in the second quarter of 2008 = 18
- Range of list prices for condos, attached and townhouses listed in the second quarter of 2008 = $67,900 (Low) to $829,000 (High)
- Average list price for condos, attached and townhouses listed in the second quarter of 2008 = $292,888
- Average sq. ft. cost of listed properties = $230/sq. ft.
SOLD:
- Number of sold/closed condos, attached, and townhouses sold in the second quarter of 2008 = 40
- Range of sold prices for condos, attached and townhouses listed in the second quarter of 2008 = $67,000 (Low) to $820,000 (High)
- Average sold price for condos, attached and townhouses listed in the second quarter of 2008 = $269,149
- Days on the Market = 79 Days
- Average sq. ft. cost of sold = $211/sq. ft.
- Average sq. ft. of properties sold = 1275 sq. ft.
- Sold at 89.31% of original list price
SW Portland (RMLS 148):
LISTED:
- Number of condos, attached, and townhouses listed in the second quarter of 2008 = 241
- Range of list prices for condos, attached and townhouses listed in the second quarter of 2008 = $70,000 (Low) to $1,999,000 (High)
- Average list price for condos, attached and townhouses listed in the second quarter of 2008 = $480,602
- Average sq. ft. cost of listed properties = $368/sq. ft.
SOLD:
- Number of sold/closed condos, attached, and townhouses sold in the second quarter of 2008 = 316
- Range of sold prices for condos, attached and townhouses listed in the second quarter of 2008 = $266,500 (Low) to $694,236 (High)
- Average sold price for condos, attached and townhouses listed in the second quarter of 2008 = $465,595
- Days on the Market = 111 Days
- Average sq. ft. cost of sold = $356.50/sq. ft.
- Average sq. ft. of properties sold = 1238 sq. ft.
- Sold at 92.93% of original list price
CONDO APPRECIATION
(COMPARES MARCH TO MARCH FOR EACH YEAR)
Average Sales Price Change from Prior Year
2002 $169,300 N/A
2003 $164,100 -3%
2004 $173,600 8%
2005 $210,600 13%
2006 $242,800 14%
2007 $251,300 4%
2008 $264,300 5%
(All data from the Realtor’s Multiple Listing Service)
© Copyright 2008-2009 Betty Jung. All Rights Reserved. Use of this article, photos and images without permission is a violation of federal copyright laws.
ALL ABOUT…..Portland.Oregon.Real Estate by Betty Jung is licensed under a Creative Commons Attribution 3.0 United States License.
Based on a Blog at WordPress.
(For more local and national real estate information, go to www.bettyjung.com).
Here is Part 2 of the Portland FHA approved Condominium list.
FHA financing is becoming popular once again with buyers, particularly first-time buyers, due to the new increased loan limit of $418,750 here in Portland, Oregon. When considering purchasing Condos or Townhouses the condo projects must have already been approved by the FHA and HUD and be on the FHA-approved condominium list provided below in order to obtain FHA financing.
***UPDATE: 10/2/2008 For an up-to-date list of FHA-approved condominiums by state, CLICK HERE“”".
You can borrow up to 97% financing for a purchase and up to 95% for a refinance. The down payment can be 100% gift and Down Payment Assistance Programs are allowed DPA programs are ending October 1, 2008. Down payments will be increased to 3.5%. A seller can pay up to 6% towards allowable closings costs and/or pre-paids. There are no reserve requirements and no minimum credit scores. Make sure you speak to a lender and get pre-approved before you decide to make an offer. FHA loan amounts vary from state to state, so make sure you check on your particular area and become familiar with the requirements where you live.
Following is Part 2 of the FHA-approved Condominium projects in Portland, Oregon. CLICK HERE for the link to the Part 1 list for Portland. Two other posts were written for FHA Approved Condos in Lake Oswego (CLICK HERE) and Tigard (CLICK HERE) as well.
PORTLAND OREGON APPROVED FHA CONDOMINIUM LIST – PART 2
| Name/Alias | Condo ID | City | State | Zip Code | Status | Field Office |
| GLENNBROOKE RIDGE GLENNBROOKE RIDGE |
048-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| HALSEY GREEN HALSEY GREEN |
052-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| HAYDEN BAY HAYDEN BAY |
054-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| HILLSDALE HOLLOW HILLSDALE HOLLOW |
058-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| HOLMAN GARDENS HOLMAN GARDENS |
060-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| IRVING HOUSE CONDOMINIUMS IRVING HOUSE CONDOMINIUMS |
223-VA | PORTLAND | OR | Approved | Portland, OR | |
| JANTZEN BEACH VILLAGE JANTZEN BEACH VILLAGE |
068-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| LADON LADON |
072-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| LANDING,THE LANDING,THE |
074-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| LINNAE TOWNHOME CONDOMINIUMS LINNAE TOWNHOME CONDOMINIUMS |
265-VA | PORTLAND | OR | Approved | Portland, OR | |
| LLOYD DISTRICT CONDOMINIUM LLOYD DISTRICT CONDOMINIUM |
251-VA | PORTLAND | OR | Approved | Portland, OR | |
| LOMA ACRES LOMA ACRES |
078-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| MARKEE MARKEE |
081-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| MONTEREY TERRACE MONTEREY TERRACE |
084-VA 001 | PORTLAND | OR | 972660000 | Approved | Portland, OR |
| MOUNTAIN FIR MOUNTAIN FIR |
085-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| NORTH PARK LOFTS NORTH PARK LOFTS |
NORTHPARK | PORTLAND | OR | 972090000 | Approved | Portland, OR |
| OLD FORESTRY COMMONS OLD FORESTRY COMMONS |
092-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| OLD FORESTRY CONDOMINIUMS OLD FORESTRY CONDOMINIUMS |
238-VA 2-6 | PORTLAND | OR | Approved | Portland, OR | |
| ORCHARD HILL ORCHARD HILL |
095-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| PEARL LOFTS CONDOS PEARL LOFTS CONDOS |
234-VA | PORTLAND | OR | Approved | Portland, OR | |
| PINE KNOTT PINE KNOTT |
105-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| PORTLAND PLAZA PORTLAND PLAZA |
108-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| QUAYSIDE QUAYSIDE |
110-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| RALEIGHWOOD RALEIGHWOOD |
111-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| RED TAIL CANYON CONDOMINIUMS RED TAIL CANYON CONDOMINIUMS |
REDTAILCY | PORTLAND | OR | 972660000 | Approved | Portland, OR |
| RIVERPLACE RIVERPLACE |
116-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| RIVERVIEW CONDOMINIUM RIVERVIEW CONDOMINIUM |
RIVERVIEW | PORTLAND | OR | 972300000 | Approved | Portland, OR |
| ROCKWOOD VILLAGE ROCKWOOD VILLAGE |
119-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| ROUND HILL CONDOMINIUMS ROUND HILL CONDOMINIUMS |
C180-VA | PORTLAND | OR | 972250000 | Approved | Portland, OR |
| ROYAL MANOR ROYAL MANOR |
120-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| SAN FRANCISCO SQUARE SAN FRANCISCO SQUARE |
123-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| SHADY GROVE CONDOMINIUMS SHADY GROVE CONDOMINIUM ASSOC. |
SHADYGROV | PORTLAND | OR | 972160000 | Approved | Portland, OR |
| SYLVAN HEIGHTS CONDOMINIUMS SYLVAN HEIGHTS CONDOMINIUMS |
219-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| THE QUINTET CONDOMINIUMS THE QUINTET CONDOMINIUMS |
278-VA 001 | PORTLAND | OR | 972100000 | Approved | Portland, OR |
| TIMBERLAND FALLS TIMBERLAND FALLS |
TIMBERFLS007 | PORTLAND | OR | 972290000 | Approved | Portland, OR |
| TIMBERLAND FALLS CONDOMINIUM TIMBERLAND FALLS CONDOMINIUM |
TIMBERFLS006 | PORTLAND | OR | 972290000 | Approved | Portland, OR |
| TIMBERLAND FALLS CONDOMINIUM TIMBERLAND FALLS CONDOS |
TIMBERFLS4-5 | PORTLAND | OR | 972290000 | Approved | Portland, OR |
| TIMBERLAND FALLS CONDOMINIUMS TIMBERLAND FALLS CONDOS |
TIMBERFLS001 | PORTLAND | OR | 972290000 | Approved | Portland, OR |
| TIMBERLAND FALLS CONDOMINIUMS TIMBERLAND FALLS CONDOS |
TIMBERFLS002 | PORTLAND | OR | 972290000 | Approved | Portland, OR |
| TIMBERLAND FALLS CONDOMINIUMS TIMBERLAND FALLS CONDOS |
TIMBERFLS003 | PORTLAND | OR | 972290000 | Approved | Portland, OR |
| TIMBERLAND RESERVE CONDOMINIUM TIMBERLAND RESERVE CONDO ASSOC |
TIMBERLAN003 | PORTLAND | OR | 972290000 | Approved | Portland, OR |
| TIMBERLAND RESERVE CONDOMINIUM TIMBERLAND RESERVE CONDO ASSOC |
TIMBERLAN004 | PORTLAND | OR | 972290000 | Approved | Portland, OR |
| TIMBERLAND RESERVE CONDOMINIUM TIMBERLAND RESERVE CONDO ASSOC |
TIMBERLAN1-2 | PORTLAND | OR | 972290000 | Approved | Portland, OR |
| TIMBERLAND RESERVE CONODMINIUM TIMBERLAND RESERVE CONDO ASSOC |
TIMBERLAN005 | PORTLAND | OR | 972290000 | Approved | Portland, OR |
| TOWERHILL TOWERHILL |
133-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| UNIVERSITY TOWNHOUSE UNIVERSITY TOWNHOUSE |
263-VA 001 | PORTLAND | OR | 972170000 | Approved | Portland, OR |
| VENTURA PARK CONDOMINIUMS VENTURA PARK CONDOMINIUMS |
VENTURAPK | PORTLAND | OR | 972160000 | Approved | Portland, OR |
| WADE PARK ESTATES WADE PARK ESTATES |
141-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| WATER STREET WATER STREET |
143-VA 001 | PORTLAND | OR | Approved | Portland, OR | |
| WATERGATE WEST WATERGATE WEST |
142-VA 001 | PORTLAND | OR | Approved | Portland, OR |
ALL ABOUT…..Portland.Oregon.Real Estate by Betty Jung is licensed under a Creative Commons Attribution 3.0 United States License.
Based on a Blog at WordPress.
(For more local and national real estate information, go to www.bettyjung.com).
Betty Jung
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