Thursday, October 2, 2008

Bend Real Estate Defaults Skyrocket in 2008

From the Bend Bulletin:

With three months left in the year, Deschutes County is on pace to nearly triple the number of notices of default filed in 2007.
Through Sept. 30, the Deschutes County Clerk’s Office recorded 1,308 notices of default, a document which initiates foreclosure proceedings. In 2007, 590 notices of default were filed all year.

The city of Bend’s Quarterly Financial Outlook released Monday reported 130 foreclosed homes for sale in the county in August, with a total of 139 foreclosed homes sold in the county since the start of the year.
With so much foreclosure activity, it’s bound to affect property values for homeowners current on their mortgages, said Bend real estate appraiser Scott Buckles.
He said he used to do upwards of 600 appraisals a year. Now, he’s down to eight or 10 a month, he said, and those are coming from the somewhat steady stream of divorces and deaths. Were it not for those, he said he’d have to fold up shop.
“What’s happened, from the top of Awbrey Butte to the double-wides in Plainview, these people who bought overvalued property then took out a (home equity) line of credit then saw their values drop 20 to 25 percent and they are upside down, and no one is going to refinance that because they don’t have enough equity,” Buckles said. “I don’t think the refinancing boom is coming back, even if rates drop to 3 percent,
because no one has equity. It’s really distressing … I’m looking for something else to do.”
Tom Greene, the president of the Central Oregon Association of Realtors, said there is good news for homeowners threatened with foreclosures in that banks and lenders are taking short-sale offers more seriously and are getting easier to work with.

Green said short sales are up in the region — currently running at about 10 percent of listings — and home prices, at least at the lower end, have seemed to stabilize. Sales through the summer declined, though, which be partly blames on stricter lending guidelines.
“Given the state of the economy … it really doesn’t surprise me to see (the surge in notices
of default),” Greene said.
“I hate to think of it being that high, but it doesn’t surprise me.”