Yesterday I had the opportunity to attend a seminar given by Steve Richman, a speaker from Genworth Mortgage Insurance company. We all tend to get a bit myopic when it comes to our market and it’s nice to hear from someone that is able to see more of a “big picture.” Most of the information shared wouldn’t be considered shocking to many of us; however, Steve is an amazing speaker and did a wonderful job highlighting and summarizing what is going on in our industry and our market.
What most people want to know is whether the real estate market has hit bottom or not. According to Steve’s information, we are close but not there just yet. Most of the statistics he shared with us suggested that we would see a more normalized market by 2014. Defining “normal” is the difficult part especially when taking unemployment into consideration. Until employment is stabilized and unemployment percentages return to a more normal level it’s hard to really predict what is going to happen to our economy and our market. Once again, I wouldn’t consider this shocking but it is nice to hear what we all fundamentally know to be true being stated so openly by someone who understands the economy on a greater level.
One of the areas covered that I am particularly interested in is what is happening with “shadow inventory.” Shadow inventory can best be described as homes that are currently not on the market that are financed with loans that are seriously delinquent. In other words, these are homes that should be on the market as foreclosures but for a mixture of reasons are being held off the market. The overall estimate is that the number of houses for sale in the market would literally double if these houses were put on the market. All I can say is I hope that someone smarter than me gets this figured out quickly – that’s a lot of homes to absorb into the market by 2014 (if that truly is when the market will normalize).
One of the things that Steve said multiple times during his speech was just how fortunate we are to live in such a beautiful place. Unlike some of the other areas that are trying to recover, Oregon is a place that people actually want to live. Contrast Portland with a place like Detroit, where they are literally bulldozing down homes to create parks and farms, and you have an idea of just how depressed some areas of the country are now. I feel thankful to live in this area every day – even the rainy ones.
I’d also like to take a moment to thank my company, Pacific Residential Mortgage, as well as Genworth and Fidelity Title for bringing Steve to Portland. He is a wealth of information and those of us that attended his class yesterday were very lucky to do so.