Rags to Riches to Rags: Foreclosures move into tony ZIP codes (Portland)

[El Pinko]

This West Linn home sold for $3.3 million 2006. But the owners now can't sell it for $2.5 million.


http://www.oregonlive.com/business/index.ssf/2008/02/foreclosures_move_into_tony_zi.html


Foreclosures move into tony ZIP codes
by Ryan Frank, The Oregonian
Sunday February 03, 2008, 8:25 PM

Oregon has so far dodged the mass defaults and plunging home values that plague parts of the country. Through September, Oregon had the nation's third-lowest rate of delinquent loans, and the rate remains far below the state's highs from the 2001 and 1980s recessions, according to the most recent figures from the Mortgage Bankers Association.

But more recently, real estate brokers who specialize in foreclosed homes say the nation's foreclosure troubles have crept into the Portland area.

Foreclosures are unfortunate but routine events in working-class neighborhoods in bad economic times or after a divorce or death. Now, some brokers see more foreclosures circle through prestigious neighborhoods that used to be largely immune. Brokers blame overly liberal lending practices that allowed buyers -- and investors -- to score 100 percent financing and low introductory interest rates to buy far more home than they could really afford.

Bankruptcy lawyer Michael O'Brien is seeing more people who bought expensive Happy Valley homes with a 10 percent down payment, then pulled out what little equity they had to go shopping. "They needed new furniture to furnish that big Happy Valley house," he said.

[blondeatlast]

1. I don't doubt it's hitting the high priced market, but as to this particular structure--

that is one fugly luxury home. No grace, no charm.

If I had 2.5 mil to spend, I sure as hell would move on to something else too. Even painting the trim other than white would help a lot.

Yucko.

[El Pinko]

2. Seems like most of the newer "luxury" homes look like that.

Tacky stucco, fake stone accents, bizarre hodgepodge of architectural motifs and styles.

The McMansion effect.

[blondeatlast]

4. We've got a lot of those in AZ, too. The newer, true mansions are

ugly as hell--Tuscan style piles plopped into the gorgeous High Sonoran desert. I know development is going to happen, and a lot of architects and builders pay at least a passing respect to Mary Coulter* (I live in a neighborhood where her influence is rather obvious though the builder didn't even know who she was; they'd obviously been impressed by the Grand Canyon architecture, though)and FLW for semi-custom and custom homes, but the cookie cutters are hideous.

*You may note that I'm a HUGE Mary Coulter fan. ;)

[enid602]

3. driveway

And what's with all that concrete driveway?

[blondeatlast]

5. No kidding. A little Northwestern forestry would go a long way to improving

that monstrosity but noooo.

That place is hideous, it just really is.

[KharmaTrain]

6. Lots Of Empty McMansions

I live near some very high-end areas. For the past decade areas were being "super-sized" with these monsters. I sold my parents house in 2002 and within 6 months there was a monster on their lot with a 1.5 mil asking price (and they got it). But then with "creative" financing, anything is possible. I used to get calls from several realtors who kept trying to talk me "up" into one of these, but I had heard there were lots of problem with the workmanship and if the mortgage didn't eat you alive, then the heating/cooling and other maintenance costs would.

Recently, I went through one of these built-up areas and it looked like a ghost town. We saw a bunch of houses with no curtains or lights on and others that were in various state of construction that appeared to have stopped a while ago. We don't hear as much about these foreclosures or problems as that would totally tank what's left of the real estate market, and until recently, there still were people who were looking for these caverns.

Not long ago I read about the real estate speculation and busts of the 20's...it took a decade to straighten that mess up. Looks like we're back in that boat...but in the end, it could be a good thing for those buying in 2 or 3 years in a more realistic housing market.

[Freddie Stubbs]

7. Journalists are the only people I know who use words like 'tony' and 'hardscrabble' to describe

neighborhoods.