Who’s Financing Transactions for the First Six Months of 2010?

Doug Marshall, CCIM
Market Assessment


In my last market assessment we analyzed the transaction activity for the first 6 months of 2010 compared to previous years.

This information was taken from the CoStar database for transactions above $1 million, for investment properties (no owner occupied) and for the geographic area from Kelso to Eugene along the I-5 corridor including Bend.

To summarize, there were a total of 59 sales transactions for the first half of this year; transaction activity peaked in 2007 at 251 and has stair stepped downward each subsequent year to where we are today. This represents a 76% reduction in sales activity since 2007.

For more details on the sales activity in our geographic area since 2006 I encourage you to read my last market assessment.

Of the 59 transactions closed in the first half of 2010, 51 transactions identified the lender. Shown below is a summary of these lending sources:

	All Cash Buyers	17	33%
	Loans Assumed	2	4%
	Local/Regional Banks	7	14%
	National Banks	10	20%
	Fannie Mae	6	12%
	Seller Financed	9	18%
		51	100%

There are a couple interesting tidbits from this data: 1) 54% of the transactions did not require conventional financing; they were either all cash buyers, the existing loans were assumed or seller financing was used; and 2) there were no life company loans, which refutes the myth that the life companies are actively seeking loans. If they are, it doesn’t show up in the data.

Another tidbit of information from the sales activity that you may find of interest is broker representation.

Of the 59 transactions, 48 identified the broker’s involved; eleven did not provide sufficient information to know if there was broker representation in the transaction. But of the 48 transactions that provided information on broker involvement this is how it broke out:

	Both sides represented	29	60%
	No buyer's broker	11	23%
	No brokers involved	8	17%
		48	100%

In other words, there were 69 paydays (29 x 2 + 11) for the brokerage community in the first half of 2010. It will be interesting to compare 2011 transactions with this year’s sales activity.

A year from now will we look back and see that we have turned a corner? For all of our sakes, I hope so.