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Released foreclosed homes hit local market

Released foreclosed homes hit local market

Hundred of additional foreclosed Jackson County homes held by lenders — from Bank of America to Wells Fargo — have hit the market in recent weeks. (Correction: See below.)

Part of the nation's so-called shadow inventory, some of the bank-owned residences were held back to avoid glutting the market. Others took longer to go through foreclosure after the federal government ordered some lenders to stop the process until paperwork questions were resolved.

While the county's residential inventory fell to less than 1,500 units at the beginning of November, the move by financial institutions in recent weeks has increased the number of houses on the market to well above the 1,912 homes that were available a year ago.

The influx was anticipated by real estate sales people, who said it will be a positive for buyers looking for houses in the $150,000-and-below range.

"It's been a good thing, because there has been a real lack of inventory on the lower end," said Terry Rasmussen, an agent with John L. Scott Real Estate in Medford. "The last two weeks, I've seen houses where there were multiple offers."

The multiple offers aren't the product of a low-ball bid followed by something closer to the price banks were anticipating. Rasmussen said the banks aren't flexible on the price until the house has been on the market at least 30 days.

"Their hope is to create a frenzy around the price so the response supports the price or drives it up. I've seen it to where the selling price ends up more than asking price in many of these situations. We're scrambling right now because we know there are other buyers out there and inevitably other offers will be coming in."

With interest rates dangling around 4 percent, there are a considerable number of qualified buyers on the low end. Once multiple offers come in, the price can rise 5 to 8 percent above the asking price, he said. That's a small move compared to the 20 percent shift when buyers were bidding up prices between 2004 and 2006.

The Federal National Mortgage Association, more commonly known as Fannie Mae, unloaded 207 houses on the market in the latest round. Bend-based Bank of the Cascades put out 150 houses, Medford-based PremierWest Bank added 30 properties, the Rogue Federal Credit Union put out four homes and a development in White City, while Umpqua Bank added 56. (Correction: See below.)

One apparent change in this phase, said Claudette Moore of Coldwell Banker Real Estate in Medford, is that banks aren't keeping investors at bay, as they were required to do before in some cases, so first-time buyers would have the first shot at making a purchase.

"For a long time when a house came on the market, first-time buyers have grabbed them," Moore said. "Last week I had an investor that didn't have to wait, but there were a couple of places with multiple offers."

Moore said the overall quality of this round was higher than in previous foreclosures.

"You aren't going to find dives anymore," she said. "These are cute places."

Ron Galbreath, an agent with Keller Williams Realty in Medford, said some of the newly released foreclosures were not listed before because lenders didn't want to put the market into a sudden skid.

"They slowly, slow it down," Galbreath said. "They didn't want to flood the market in the past and that way prices can stay stable."

Local single-family residence prices have averaged a 9 percent drop annually from the top of the market in 2006.

"Some say we've found the basement," he said. "Others say there is room to go down."

While job growth in Portland has led to a 2 to 3 percent rise in housing during recent months, the same isn't true here.

"It helps investors," Galbreath said. "But it's not affecting homeowners who are looking for equity growth,"

Reach reporter Greg Stiles at 541-776-4463 or email business@mailtribune.com.

Correction: Numbers and types of bank-owned properties have been updated and corrected in this story.

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