How do you put this tactfully? 2009 was a tough year for the global economy and for the Southern Oregon real estate market. Fortunately for the market, the housing sector is today in a stronger position at the end of the year than it was at the beginning. 2009 will no doubt be remembered as a year of transition; as a year that signaled the beginning of the recovery for national real estate markets and for the Southern Oregon real estate market. And none too late.

2009 saw foreclosures and short sales dominating the landscape, and taking with them in their wake Continue reading Farewell 2009 from The Southern Oregon Real Estate Market

The Southern Oregon real estate market here is definitely getting better, and that’s good news, but the truth is it couldn’t have gotten any worse. At the peak of our market in 2005, we were averaging about 135-140 home sales a month compared with the bottom of the market when we were selling around 55 to 65 homes per month. In today’s market, we are now averaging about 80 to 85 sales per month. The median price at the market’s peak in 2005 averaged about $260,000 per month while today the median price is now in the $170K range.

Fortunately, amid all of highs and lows in the Southern Oregon real estate market, prices have finally stabilized, and in a recent conversation with an Appraiser, I was informed that prices have been holding steady since the end of the second quarter of this year with some slight price improvement. Both the Appraiser and myself expect that statistical improvement to disappear as we enter our seasonal slow down. We usually see sales off by as much as 50% in the month of December but we expect an early pick up in the spring as buyers take advantage of the homebuyer’s tax credits that expires in March.

Now the bad news: Continue reading End-of-the year Report for the Grants Pass and Southern Oregon Real Estate

The one thing we can count on is change. It’s all around us; sometimes welcome, sometimes not. As the last few years have shown, the economic changes effecting the real estate industry have been traumatic. With foreclosures up and prices down in the Southern Oregon real estate market, the adaptation to change has required all of us to make some difficult choices. Throughout Grants Pass and Medford, real estate agents and the offices they are aligned with have struggled to survive. In what appears to be a nationwide trend, the Southern Oregon real estate market has witnessed a high attrition rate among agents, many of whom have moved on to other careers or financial endeavors. Some agents have formed their own cottage-industry real estate offices in an attempt to maximize their income by keeping 100% of sales commissions. Other offices have closed their doors, unable to survive in a tighter market with fewer sales and lower numbers across the board. And yet change and choice remain the one constant that insures survival, no matter how difficult decisions seem at the time they are made.

Recently, our office, ERA Prestige Homes, was presented with the opportunity to change by merging locations under one roof with the owners and agents from ReMax Ideal Properties and Coldwell Banker Dorn and Taylor. This is an unprecedented move by Grants Pass standards and the local real estate industry is buzzing with Continue reading Change, Choice, and the Southern Oregon Real Estate Market

Homeowners distressed by the housing sector meltdown in the Southern Oregon real estate market can look forward to help from the U.S. Treasury Department in the upcoming months. Last week the Treasury Department unveiled new rules for homeowners nationwide who need to sell but are “underwater” and unable to get a price for their home that would cover the amount owed to their lender. The Treasury Department plan has been created to help those who either don’t have enough income or whose debt levels are too high to allow them to qualify for a loan modification under the multi-billion dollar program known as Making Home Affordable.

When a home in the Southern Oregon real estate market is listed for a price below what is owed to the lender, it falls into the category of a Short Sale, but make no mistakes about it, there is nothing short about it, except for the funds necessary to pay off the loan. However, there are advantages to a short sale; in addition to saving the seller’s credit, short sales save the banks the expense of foreclosure. Short sales also help to solidify neighborhood property valuations because a short sale price is most likely a higher price than what the house will sell for through foreclosure. It is estimated that in 2009, one out of every ten home sales was a short sale, and in some distressed areas like Las Vegas and Sacrament, the ratio is much higher.

Following are the guidelines for qualification for the new Treasury Department assistance: Continue reading Treasury Department Assistance for Short Sales in the Southern Oregon Real Estate Market

On a previous blog I addressed the impending issues regarding commercial real estate and foreclosure proceedings in both the Southern Oregon real estate market as well as the national commercial real estate market. The global economic meltdown resulted in consumers collectively tightening their belts and spending less. This reduction in spending had a profound effect on the Southern Oregon real estate market and we soon saw “For Rent or Lease” signs hanging in the windows of vacant commercial buildings. With reduced consumer spending, businesses in mini malls, downtown areas, larger malls, and strip malls began to close their doors, unable to pay their rents due to the slowdown in spending. Now another calamity appears perched to effect commercial real estate in Southern Oregon and elsewhere.

It seems that between 2005 and 2008, billions of dollars of commercial real estate was either sold to a new buyer or refinanced to grab equity. The most popular terms used during this refinancing phase in commercial real estate called for payment schedules based on a 20 year amortization and fully due and payable within 5 years, making the first round of loans initiated in 2005 due to be paid off next year in 2010. For the following three years, loans will continue to come due and payable through 2013 as required by the terms of the contract and agreed to by the borrowers. Unfortunately for the banks, this potentially means 3 years of painful commercial foreclosures as borrowers struggle to come up with the funds necessary to comply with their contractual payoffs. Looking ahead to the next three years, commercial lenders must begin to aggressively address this issue or they will join residential real estate lenders in the challenge of unloading foreclosed property. Ultimately, this could mean steep bank losses, tighter money, and continued challenges for a recovering economy.

But are their solutions to this impending problem? Most certainly, but as the personal trainers say to their clients, “No pain, no gain.” A Federal bailout for commercial lenders seems unlikely, so creative options like mortgage modifications seems the likely first step, and we all know how much fun that can be.

More to come on this pressing issue.

Michael Masters

A Socially Conscious Real Estate Consultant