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)
Sunday, March 27, 2011
Market Forecast 03/27-04/1
This week has the potential to be a very volatile week for mortgage rates. There is new market data everyday that has the potential to swing mortgage bond trading, so if playing the market doesn't sound like your cup of tea it might be a good idea to lock in a rate and watch from the sidelines. "If you like it, lock it!"
Feel free to call me if you have any questions about the below!
Market Comment
Mortgage bond prices fell last week pushing mortgage interest rates higher. Stocks generally showed strength throughout the week, which didn’t help mortgage bonds. Reports of Japan stabilizing their nuclear facilities resulted in a reversal of the earlier flight to quality buying of US debt. New home sales data came in weaker than expected which helped rates bounce back a bit mid-week. Unfortunately Fed Official Plosser’s comments Friday afternoon sent bonds falling and rates higher. Plosser indicated monetary policy will soon need to reverse course and that the preferred exit strategy would raise rates and reduce the Fed’s balance sheet concurrently. Mortgage bonds ended the week worse by about 3/4 of a discount point.
The Treasury will auction 2-year notes on Monday, 5-year notes on Tuesday, and 7-year notes on Wednesday.
LOOKING AHEAD
Personal Income and Outlays
The personal income and outlays release is a monthly report issued by the Bureau of Economic Analysis (BEA). The data is important because it is thought to provide a solid indication of future consumer demand. The personal income component is primarily a measure of wages and salaries. The outlays component is primarily a measure of spending on goods and services. Together the figures provide analysts valuable insight into consumer economic standing and consumption.
The prior release showed an increase in wages and salaries. Some of that was attributed to a cut in the payroll tax. If that trend reverses future weakness could adversely affect consumer spending and the entire US economy. Decreased or stagnant wages coupled with tighter borrowing restrictions make it difficult for consumers to spend money. It is important to note that no single economic indicator can consistently predict the future of the economy. However, the personal income and outlays report is a closely watched release. The consumer remains a vital component of the US economy.
The release this week has the potential to move the financial markets. Now is a good time to take advantage of mortgage interest rates at their current levels to avoid market volatility.
Feel free to call me if you have any questions about the below!
Market Comment
Mortgage bond prices fell last week pushing mortgage interest rates higher. Stocks generally showed strength throughout the week, which didn’t help mortgage bonds. Reports of Japan stabilizing their nuclear facilities resulted in a reversal of the earlier flight to quality buying of US debt. New home sales data came in weaker than expected which helped rates bounce back a bit mid-week. Unfortunately Fed Official Plosser’s comments Friday afternoon sent bonds falling and rates higher. Plosser indicated monetary policy will soon need to reverse course and that the preferred exit strategy would raise rates and reduce the Fed’s balance sheet concurrently. Mortgage bonds ended the week worse by about 3/4 of a discount point.
The Treasury will auction 2-year notes on Monday, 5-year notes on Tuesday, and 7-year notes on Wednesday.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| Personal Income and Outlays | Monday, March 28, 8:30 am, et | Up 0.4%, Up 0.6% | Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| PCE Core Inflation | Monday, March 28, 8:30 am, et | Up 0.2% | Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve. |
| Consumer Confidence | Tuesday, March 29, 10:00 am, et | 70 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| ADP Employment | Wednesday, March 30, 8:30 am, et | 180k | Important. An indication of employment. Weakness may bring lower rates. |
| Weekly Jobless Claims | Thursday, March 31, 8:30 am, et | 365k | Important. An indication of employment. Higher claims may result in lower rates. |
| Factory Orders | Thursday, March 31, 10:00 am, et | Up 2.4% | Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. |
| Employment | Friday, April 1, 8:30 am, et | 8.9%, 160k | Very important. An increase in unemployment or a large decrease in payrolls may bring lower rates. |
| ISM Index | Friday, April 1, 10:00 am, et | 61 | Important. A measure of manufacturer sentiment. A large decline may lead to lower mortgage rates. |
Personal Income and Outlays
The personal income and outlays release is a monthly report issued by the Bureau of Economic Analysis (BEA). The data is important because it is thought to provide a solid indication of future consumer demand. The personal income component is primarily a measure of wages and salaries. The outlays component is primarily a measure of spending on goods and services. Together the figures provide analysts valuable insight into consumer economic standing and consumption.
The prior release showed an increase in wages and salaries. Some of that was attributed to a cut in the payroll tax. If that trend reverses future weakness could adversely affect consumer spending and the entire US economy. Decreased or stagnant wages coupled with tighter borrowing restrictions make it difficult for consumers to spend money. It is important to note that no single economic indicator can consistently predict the future of the economy. However, the personal income and outlays report is a closely watched release. The consumer remains a vital component of the US economy.
The release this week has the potential to move the financial markets. Now is a good time to take advantage of mortgage interest rates at their current levels to avoid market volatility.
Thursday, March 3, 2011
...but despite lower rates, oil prices could hurt housing recovery
Uncertainty seems to be keeping potential buyers from "pulling the trigger" on buying a home in a depressed market/
CNBC Real Check Blog — Olick: U.S. Housing Recovery Hurt by Unrest in the Middle East — CNBC.com Realty Estate News - CNBC.
CNBC Real Check Blog — Olick: U.S. Housing Recovery Hurt by Unrest in the Middle East — CNBC.com Realty Estate News - CNBC.
Middle East Unrest Lowers Mortgage Rates
Investors, fearing that the increased cost of oil could potentially derail the US Recovery, have started pulling their money from stocks and putting them in Bonds, lowering mortgage rates for the 3rd straight week!
http://www.totalmortgage.com/blog/mortgage-interest-rates/oil-prices-and-mideast-turmoil-may-impact-mortgage-rates/10611
http://www.totalmortgage.com/blog/mortgage-interest-rates/oil-prices-and-mideast-turmoil-may-impact-mortgage-rates/10611
Thursday, January 27, 2011
Rent Vs Buy?
According to recent data, it makes more sense to buy than rent in 72% of Major US Cities. Here is a great website that breaks down this info in a useful infographic: http://trulia.movity.com/rentvsbuy/
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