Foreclosures and short sales that ripped through the regional real estate
market with the deepening recession have declined dramatically as a percentage
of total home sales.
` In 2010, the peak for distressed sales, foreclosures and
short sales accounted for 56.73% of the 1,553 single family homes sold in the greater
Bend area, which is by far the largest sub-market in Central Oregon.
As the housing crash began in 2008, only 7.35% of Bend
area sales were in the distressed category. But in 2009 the number accelerated
to 54.94% of total sales and continued above 50% until beginning to decline in
2012 when 726, or 18.17%, out of 1,902 single family homes sold were in the
distressed category.
In 2012 through late October the total of single family
homes sold has already reached 2,122, with only 247, or 11.59% of those either
short sales or foreclosures.
Although seen as a positive trend, the decline in
distressed sales could also be partially the result of a new state law that
caused some lenders to pull back from issuing notices of default for a time.
The
law was intended to encourage lenders to sit down, and ideally negotiate, with
delinquent homeowners. But the voluntary nature of the statute resulted in many
lenders turning from the nonjudicial path to the courts through the judicial
foreclosure process, both of which are allowed in Oregon.
With
a recent “fix” by the legislature, lenders are now required to negotiate with
homeowners in either foreclosure method.
When
most lenders were opting for nonjudicial foreclosures the process would
typically take about six months from the filing of a notice of default with the
intent to proceed to trustee’s sale after that period.
In 2007, before the housing storm hit, there were only
591 notices of default recorded in all of Deschutes County. That tripled to
1,930 in 2008 and rose to 3,507 in 2009 and a high of 3,762 in 2010 before
tapering off to 2,363 in 2011.
For 2012 default notices dropped to only 797 before
rising again this year when 858 were
filed through late October.
Even with single family sales in the Bend sub-market through
10 months of 2013 more than double all of 2008 there’s still the possibility
that more distressed sales are in the “shadows.”
However, there is considerable new housing construction
at the lower to lower middle market and financing is available to qualified
buyers. Inventory as measured by annualized previous month-to-month sales is
also low at less than 4 months.
As
such, new distressed sales coming onto the market would possibly be absorbed by
continued steady, barring continued dysfunction in Congress or the Federal
Reserve making an abrupt about face by driving up interest rates.
