Bank and FHA Foreclosures for Sale Still Weighing Down Portland Prices

by on Foreclosures

Bank and FHA foreclosures for sale are still hurting residential prices in Portland, Oregon as 2011 starts. A report from S&P Case-Shiller showed that Portland was one of the major U.S. markets that recorded a sharp decline in housing prices in January of this year compared with December and January of last year.

With Portland foreclosures and distressed homes still dominating the home selling market, prices continue to tumble in the metro area. In January, selling prices of houses dipped by 7.8% compared with January 2010, while a decline of 1.8% was recorded when January 2011 rates are compared with December of last year. Among the 20 major metro area markets tracked by S&P, 11 posted record price lows in January 2011, including Portland.

Majority of analysts are predicting that foreclosures in Oregon will continue to rise in the coming months, which could only mean further declines in residential prices. Despite the continuous drop in housing prices in the metro region, Portland is actually luckier than Detroit, Las Vegas, Cleveland and Atlanta; with all four major cities experiencing a drop in housing prices to a level that is below the 2000 benchmark. Portland's housing prices for January was higher by 35.8% compared with 2000 levels, but have plummeted by 27.2% compared with the peak period of July 2007.

According to housing market analysts, the data from the S&P report showed that the nationwide housing market will continue to experience massive declines in selling prices, particularly those areas with the highest concentrations of bank foreclosures and FHA foreclosures for sale. They also claimed that it is practically impossible for the country to achieve sustained recovery within the current year.

Moreover, prices are being weighed down by the fact that among the very few buyers willing to brave the residential market, majority are purchasing foreclosed properties for sale; forcing non-foreclosed and newly built home sellers to lower their asking rates to be able to compete and which, of course, drags housing prices down. Among the 20 cities highlighted in the S&P study, only Washington D.C. and San Diego were able to post price increases in January 2011 compared with one year ago. Overall, the 20 markets posted an accumulated price decline of 3.1% during the period covered.

Most housing experts agree that the oversupply of bank foreclosures and FHA foreclosures for sale is causing housing prices to continue to tumble. They also claimed that tight lending standards and high unemployment levels are not helping the residential property market at all.