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Oregon Real Estate Market: When will Home Values Return?

The western part of the country isn’t experiencing the best of luck when it comes to the real estate market, and Oregon is no exception.

Take, for example, the fact that Oregon now holds the dubious title as being the state with the third highest foreclosure rate (Nevada and Florida hold the first two slots). This is due, in part, to the fact that foreclosures jumped a whopping 20 percent during the first quarter of 2010.

The Result of Entering the Recession Late in the Game

In should be noted, however, that Oregon was late to enter the recession. Therefore, it only makes sense then that its foreclosure rates will peak long after other states. According to the Fiserv Case-Shiller Indexes, home values in Oregon will not likely return to their 2007-2008 peak numbers until between 2013 and 2014. Expect Northeast Oregon’s home values to return between 2015 and 2025.

Regardless of when Oregon began its rise in foreclosures, it still doesn’t bode well for the economy. Unfortunately, the situation is expected to get worse before it gets better. Job growth, of course, is a key to rising home values, but any type of growth in this area is not expected to return until the late part of the year.

The U.S. Treasury Department recently announced that Oregon is one of 20 states hit hardest by foreclosures. As such, it has allocated $88 million in federal assistance for homeowners caught in the middle. Oregon Housing and Community Services are set to disperse the money to nearly 6,000 struggling homeowners soon.

As of January 2010, at least 23,000 Oregon homeowners are either in foreclosure or more than 90 days delinquent on their mortgage. The Federal Reserve Bank of New York, however, estimates that these numbers are quite conservative and do not depict the full picture.

Has Oregon Hit Rock Bottom?

Oregon has proven to be quite vulnerable to the worst of the recession, as this state has a large numbers of construction workers, timber product workers and mortgage and real estate professionals. Oregon has also paid its employees low wages. Combine these facts with the quickly appreciating home values during 2007-2008, and it’s quite clear what went wrong: too many Oregon homeowners got in over their heads.

Has Oregon hit rock bottom yet? Many industry experts say probably not, considering that the state’s employment rate has remained stagnant at 10.5 percent. Lending is still very tight in this area of the country, leading to a problem with obtaining mortgages.

Overall, Oregon has quite a bit way to go before it can begin to see the light at the end of the home value tunnel. If you own property in the state, home values in Oregon are not expected to return until 2013 in the eastern and southern part of the state, and between 2015 and 2025 in the northeastern part of the state

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