Portland Real Estate Market Update – April 2011
The real estate market in Portland finished March with 699 closed sales, which is considerably higher than the 468 and 450 closed sales recorded during February and January respectively. Of the 699 closed sales in March, 175 were distressed properties (foreclosures/short sales) representing 25% of the closed sales for the month. As of the end of March, distressed properties accounted for 28% of the active listings. There were 77 closed sales of homes valued over $500K during March and a total of 147 sales over the three month period of January – March.
The inventory level is lowest in the $251-500K price bracket at 5.4 months and overall it is at 5.7 months worth across all price brackets based solely on the March closed sales rate. Looking back over the last three months average closed sales rate, the inventory picture increases to 7.5 months worth across all price brackets.
The average sold price in March was $288K which is an increase of $20K, compared to $268K in February. The median sold price was $240K in March, up $9K from the prior month. The average price of the active listings ($349K) increased $46K from the last reading in February while the median price for the active listings ($250K) decreased $5K from the prior month.
Tuesday, April 19, 2011
Monday, April 18, 2011
Market Forecast 04/18-04/22
Below is this week’s market forecast. After a rate friendly last week, we are hoping to see more of the same. Unfortunately, often times a good day in rates means a bad day in stocks. Looks like the biggest news this week is the potential for rate volatility on Thursday as bond traders adjust pricing (read: inflate to cover themselves) leading into the long Holiday Weekend.
In other lending news, I am still operating with VERY quick turn times! Of late I am averaging around 22 days to close, so if you have any clients who’s transaction seems to be “going sideways”, feel free to have them call me on my cell below.
Market Comment
Mortgage bond prices rose last week pushing mortgage interest rates lower. The data was mixed. The headline retail sales figure was slightly weaker than expected while the ex-autos figure was higher than expected. Producer prices rose 0.7%, weaker than the expected 1% increase however the core, which excludes volatile food and energy prices, rose a higher than expected 0.3%. Tame core consumer inflation data Friday morning helped end the week on a positive note despite higher than expected consumer sentiment, industrial production, and capacity use data. Mortgage bonds ended the week better by about 1/2 of a discount point.
The bond market will close early Thursday and will be closed all of Friday. Rates could be volatile Thursday as traders position themselves ahead of the extended holiday weekend.
LOOKING AHEAD
Globalization
Economic globalization is the increasing interdependence of national economies through trade, finances, and technology. While economists debate the pros and cons of globalization, the fact remains that globalization is not new and continues to expand.
As a driving force in the global economy, the US often benefits when foreign economies struggle. A prime example is the continued Euro concerns tied to struggling economies in Spain, Portugal, and Greece. Unlike a corporation, a country cannot file for bankruptcy when they can’t make debt payments. One remedy in situations like this has been restructuring the debt, which is mired in uncertainty for investors. A big global concern is the fear that a default by one member of the European Union could ripple throughout all the other eurozone countries. In times like this, investors often move funds to safe havens in what is called a "flight to quality." This is exactly what we saw recently as US debt instruments saw an influx of foreign investment following the tsunami in Japan. Bond prices rose, which caused mortgage interest rates to fall. From a short-term perspective it was great for homebuyers and those refinancing if they take advantage of the short-term drop in rates. Unfortunately those improvements in rates were often very short-lived. The fear of inflation continues to permeate the US and abroad. Oil prices are skyrocketing with political instability throughout the Middle East and Northern Africa. Rising energy costs are only part of the problem as US monetary policy also plays a key role. Inflation, real or perceived, erodes the value of fixed income securities generally causing prices to fall and rates to rise. While there have been a few dips here and there in rates over the course of the last few months we have also seen rates test recent highs. It is wise to take advantage of rate dips when they occur with the continued global economic uncertainty.
In other lending news, I am still operating with VERY quick turn times! Of late I am averaging around 22 days to close, so if you have any clients who’s transaction seems to be “going sideways”, feel free to have them call me on my cell below.
Market Comment
Mortgage bond prices rose last week pushing mortgage interest rates lower. The data was mixed. The headline retail sales figure was slightly weaker than expected while the ex-autos figure was higher than expected. Producer prices rose 0.7%, weaker than the expected 1% increase however the core, which excludes volatile food and energy prices, rose a higher than expected 0.3%. Tame core consumer inflation data Friday morning helped end the week on a positive note despite higher than expected consumer sentiment, industrial production, and capacity use data. Mortgage bonds ended the week better by about 1/2 of a discount point.
The bond market will close early Thursday and will be closed all of Friday. Rates could be volatile Thursday as traders position themselves ahead of the extended holiday weekend.
LOOKING AHEAD
Economic | Release | Consensus |
|
Housing Starts | Tuesday, April 19, | 468k | Important. A measure of housing sector strength. Weakness may lead to lower rates. |
Existing Home Sales | Wednesday, April 20, | 4.8m | Low importance. An indication of mortgage credit demand. A significant decrease may lead to lower rates. |
Weekly Jobless Claims | Thursday, April 21, | 405k | Important. An indication of employment. Higher claims may result in lower rates. |
Philadelphia Fed Survey | Thursday, April 21, | 44.4 | Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates. |
Leading Economic Indicators | Thursday, April 21, | Up 0.6% | Important. An indication of future economic activity. A smaller increase may lead to lower rates. |
Good Friday Holiday | Friday, April 22 | Important. Bond market closes early Thursday and entire day Friday. Shortened week could lead to rate volatility. |
Globalization
Economic globalization is the increasing interdependence of national economies through trade, finances, and technology. While economists debate the pros and cons of globalization, the fact remains that globalization is not new and continues to expand.
As a driving force in the global economy, the US often benefits when foreign economies struggle. A prime example is the continued Euro concerns tied to struggling economies in Spain, Portugal, and Greece. Unlike a corporation, a country cannot file for bankruptcy when they can’t make debt payments. One remedy in situations like this has been restructuring the debt, which is mired in uncertainty for investors. A big global concern is the fear that a default by one member of the European Union could ripple throughout all the other eurozone countries. In times like this, investors often move funds to safe havens in what is called a "flight to quality." This is exactly what we saw recently as US debt instruments saw an influx of foreign investment following the tsunami in Japan. Bond prices rose, which caused mortgage interest rates to fall. From a short-term perspective it was great for homebuyers and those refinancing if they take advantage of the short-term drop in rates. Unfortunately those improvements in rates were often very short-lived. The fear of inflation continues to permeate the US and abroad. Oil prices are skyrocketing with political instability throughout the Middle East and Northern Africa. Rising energy costs are only part of the problem as US monetary policy also plays a key role. Inflation, real or perceived, erodes the value of fixed income securities generally causing prices to fall and rates to rise. While there have been a few dips here and there in rates over the course of the last few months we have also seen rates test recent highs. It is wise to take advantage of rate dips when they occur with the continued global economic uncertainty.
Tuesday, April 12, 2011
HUD (thankfully) Changes Position on Reverse Mortgage Widows/ers
The Department of Housing and Urban Development Office recently changed its position on how it handles widows or widowers in the event their spouse passes and they were not previously listed as mortgagees on the original loan. I did not do a lot of these, but this is still great news for those that recently lost a loved one and were facing losing their property on account of HUD's short-sightedness. Read more here (via NYT)
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