How important is the Distressed Property market?

Everywhere you turn these days in real estate, you see terms like Bank Owned, Short Sale, Auction or Distressed Property. Are distressed properties driving Portland Real Estate? Well not exactly.  Distressed properties are playing an important role, but they are not the leading source of sold of homes in Portland.  In the past 30 days, 63% of the properties sold were traditional sales. That is one property owner selling his or her property to another without bank intervention.

Bank Owned properties came in 2nd place in terms of units sold, and they captured 28% of the market, and Short Sales when the seller owes more than the property is worth, was only 9% of the sold units. The combined Bank Owned and Short Sales categories accounted for 37% of sales, so a little over a third of the sales in the past 30 days were Distressed.

Bank owned properties were the cheapest at $110/sf and the average sale price was $167,000. The average price of a short sale home was $235,000 at $135/sf. Traditional sales averaged $159/sf and $316,000.

Some observations: the average sale price of traditional sales came in at almost double that of bank owned properties. This is largely due to the fact that it is the lower priced neighborhoods that have been hardest hit by the real estate crisis. The close-in and established high-end neighborhoods have not seen large numbers of short sales and bank owned sales. In general the closer the property is to downtown, the lower importance and influence of distressed properties.

5 Comments

March 14, 2011 21:24
richard said:

Great article I'll definitely keep reading. Thanks for being great Portland Realtors who consistently deliver timely Portland Real Estate updates.

March 18, 2011 06:33
John Lockwood said:

Wow, this puts in perspective how local real estate markets are. In Sacramento County the number for non-distressed sales was 28.3% in February versus your 63% figure for Portland. A friend of mine whose wife is in the business mentioned today that where we are we're at "ground zero". So Friday greetings from the bomb site. :)

March 25, 2011 21:08
Ned Carey said:

>Some observations: the average sale price of traditional sales came in at almost double that of bank owned properties. Most non investors don't realize that if a property needs much work at all an investor needs to buy at 50% or less of market value to make a profit. So that statistic doesn't surprise me.

January 03, 2012 09:22
Gary Gesler said:

I understand, short sales and foreclosures are more time consuming and precarious. Does all cash offer, help? I need a place soon. My home of 27 years in LA closes on the 11th of January , 2012. In this market, I lost 600k equity, so I don't have much money to work with. Which is why I am looking for a small, simple modern well designed space, Pearl area, looks appealing. I am from Portland, but have not lived in Oregon for 40 years. I am a retired, licensed family therapist, who will focus on writing, and resting, writing and resting, etc.., heard that phrase from a lecture on writing from Pima Chodrin, a Buddhist nun. Peace, Gary

January 03, 2012 09:41
Brian Porter said:

Hi Gary, You can find a good value if you buy a short sale or a foreclosure; however, your inventory options are limited. There are a lot of foreclosures in the suburbs, but not too many in the close to downtown neighborhoods. If you pay all cash, you can definitely get a better price on major fixers, but if the property is in good condition the cash offer does not have as much effect. The seller gets all cash at closing from a cash sale or from a financed sale. I will be happy to meet with you to discuss your housing needs. Please let me know what day and time works for you. Best wishes, Brian

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