Thursday, October 28, 2010

Will Late to the Party Portland Be Different?

The Portland housing market has taken it's lumps, but how does it fare with respect to the rest of the nation since the bubble burst? Rather than looking at how much prices have corrected in dollars or indexes, John Burns as part of the UCLA Anderson Forecast looks at how far prices have corrected backward in time. It's a rather interesting analysis that deserves a study.

"Detroit is back to 1995 prices, and some cities like Dallas, Portland and Seattle are only back to 2005 or 2006 prices (the bubble arrived later in the Northwest)."

If you look only at the CS data, it's obvious that Portland is the last major metro hanging on to yesterday. Will it last? Is it different here? Why? Why Not? How do real incomes in Portland support your answer?

Look on the bright side! If nothing else, it seems the title insurers have gained an implicit taxpayer back stop from on a too big to fail ticket and have suddenly resumed issuing title insurance on distressed properties again. The big boys have all backed down, or have they? Fidelity has decided that the risk is still just a wee too high when it comes to BofA.

"Three major title insurance companies - First American Financial, Old Republic InternationalStewart Information Services - told Wall Street analysts in conference calls Thursday that they had decided not to demand written indemnifications from lenders re-selling foreclosed homes. Combined, the three companies account for 52 percent of the title insurance market.

Such indemnification agreements were drafted earlier this month with input from Fannie Mae and Freddie Mac and their regulator, the Federal Housing Finance Agency, along with the title industry's trade group, the American Land Title Association. They were seen as a way to keep the market for foreclosed properties working despite legal uncertainty.

Earlier this week, the nation's largest title insurance company, Fidelity National Financial, announced it would cancel its indemnification requirement, which had been scheduled to go into effect for all lenders Nov. 1. Fidelity is continuing to require the agreement when doing foreclosure business with Bank of America, however."

"Insurance" for a deed/title on a distressed property - Trick or Treat?