Its all three. I evaluate homes for lenders who are considering working with defaulted owners, actually foreclosing, or have taken homes back and are marketing them. I do this all day long seven days a week and could be a blind taxi driver from all of it. The media in most states would have the sheep---I mean people believe that the market is up up up and we are coming up out of our problems. Pure hogwash. Initiallly increasing sales and in some cases equity started when cheaper, small homes and greatly increasing rents crossed on the graph to be profitable rentals. Investors came out of the woodwork and number of sales and then some equity increased.
Most real estate people do not know that now huge money concerns are making offers to the banks holding all the bad loans and already owned foreclosures, (Called REO or Real Estate Owned) to BUY THEM ALL. Huge money wants to own hundredsd of thousands of homes. Why? To keep as rentals!! They can but for cents on the dollar and rents are increasing by the minute. Why are rents increasing? Millions of EX home owners who now have to rent. Its a perfect storm for big, cash players. Heavyu returns from the rent income out perform other methods of investing plus all real estate 'MAY' go up later. Look at some other countries where most people rent instead of own. Values are not up crazily like they did here during the fake mortgage period.
I used to say "As long as they keep making babies but dont expand the earth" meaning values would have to always increase in the long run but its no longer true.
SO. Parts of Portland are up. Parts are neutral./ Parts are not only still depressed but they are going to drop more. Why? Hours of story short here is an example. You want to buy a house listed at $100,000. It has a loan on it of $120,000 and was purchased in 2004 for $180,000. Why is it listed at $100,000 now? Because after things dropped year after year, thatrs what its now worth according to recently sold homes around it. Those finally came down enough for Joe and Jane American to afford now that people actually have to qualify for a loan! Ok, you offer $92,000 and the lender takes it. Why the loss? Because the owner can possibly start a suit to stop normal foreclosure due to MERS or other factors, and give the lender no choice but a judicial (or court trial type) foreclosure. That costs MONEY! It can cost 30,000 or more to the lender who can sue you but wont get squat if you declare bankruptcy. What just happened? The entire neighborhood just dropped $8,000 in value. Now another short sale or reo comes up and its listed lower due to that sale, and the same thing happens. In some areas its reversed as the rents went up and we see over bids. And in some very small spotty areas, expensive properties are on the increase but very FEW. If an area had been one million bucks a house but dropped to 400,000 then sat around 60% depressed, eventually those with money who have to buy no matter what the economy is doing will realize they can get a 1,000,000 place for 400K or so and may get into a bidding war with a few other buyers. Nowthen---the big numbers about which the press spins? If we had been selling 1,000 houses a month in a certain area, than dropped to ONE house a month for a year, but last month sold TWO houses---isnt that a 100% increase?! HA HA So its not the percentage but the actual numbers that one must consider.
Most real estate people I know have many buyers and not enough properties to sell. That has to be analyzed. Yes, they are having some bidding wars. Most of these buyers are uninformed and think that buyiung a short sale means STEALING a property. Nope, nope nope. They are buying a property at is TRUE CURRENT value, just not what its value used to be. And, there are not zillions of short sales in the market. As I said, lenders are holding onto them and would rather get them back with full foreclosure or deed in lieu, etc. No lenders really want to do loan modifications and help owners stay put. NONE OF THEM---loan mods are a pathetic scam and the lenders and government officials in on it should be put away, but thats another story. I gave the short sale decreasing value example above to show what HAD been happening. The lenders are now nasty and make it very hard for buyers and agents. I am seeing values go up in some areas but in TINY amounts, Even as low as fifty bucks over asking. Buyers do that to beat out the many house hunting investors who still try to beat the prices down with lowball offers.
Getting a good deal now is a science. What the future of any property will be is part of that science. It may be a good deal now but terrible later or the opposite. Its sure a totally new game with new rules. Take any media coverage with a grain of salt. When rents reach their maximum and Joe and Jane can no longer afford it, rental profit will stop at certain house values. That will be the top of the market, PERIOD