The ATM Known As Your House Has Shut Down
The Missoulian reports from Montana. “The Missoula Symphony Orchestra is not in the business of selling houses. But that hasn’t shielded the local orchestra from feeling the effects of a slowdown in the Missoula housing market and the broader economic downturn that is sweeping the nation. Late last summer, the MSO learned that two of its major sponsors - one of them a local real estate company, which John Driscoll, executive director of the orchestra, declined to name - would not be supporting the orchestra with cash donations this year. Driscoll’s sentiment is echoed at other local arts organizations and businesses around the area. Though none says it is panicking, most have begun to see signs of a slowdown in charitable giving. And all are worried that they’ve only seen the tip of the iceberg.”
“‘Fundraising has been a struggle,’ said Tom Bensen, director of the Missoula Cultural Council. ‘There are a lot of longtime funders who are either taking a break this year or are contributing less than in the past, and it’s been hard to get new donors. If you don’t have an established relationship with a potential donor, nobody’s in a state of mind to add more donations and advertising to their budget.’”
“Ram Murphy, operator of Murphy-Jubb Fine Art, hasn’t seen any real signs of a slowdown in sales at his downtown fine art gallery. In fact, he wonders how much the national economic crisis has really hit home in Missoula. ‘Right now, we seem to be doing fine,’ said Murphy. ‘Who knows,’ he added, “by March we may all be on our knees. But not yet.’”
The Hungry Horse News from Montana. “Plum Creek Timber Co. announced last week it would cut 68 jobs from its plywood plants and has also informed its four logging contractors that there’s no work for them. The lumber markets are the worst in almost three decades, notes Shawn Church, editor of a publication that tracks lumber markets for the wood products industry.”
“Church said that some lumber prices are actually lower, even if they’re not adjusted for inflation, than they were in the recession of the early 1980s. ‘The industry as a whole is dealing with a historical downturn,’ he said.”
The Capital Press from Oregon. “Tree seedling nurseries have been hard hit financially on two fronts. The housing market free-fall has sunk lumber and timber prices, reducing logging operations and thus cutting demand for seedlings for reforestation. At the same time, large numbers of Christmas trees have been reaching maturity and tree prices have fallen in recent years, reducing that industry’s demand for seedlings as well.”
“‘We’ve seen a tremendous downturn in orders,’ said Tom Jackman, CEO of IFA Nurseries, which produces seedlings for forestry in numerous locations in Oregon and Washingon.”
“A downturn of this magnitude is probably unprecedented in the industry, Jackman said. ‘Before, we were saying, ‘At least it’s not as bad as the early 1980s,’ he said. ‘Now, the consensus is that it’s much worse than the early 1980s.’”
“According to the Random Lengths information service, the composite price for framing lumber fell to $234 per thousand board feet - a 50 percent drop from the most recent peak in August 2004 and the lowest price in at least the past decade. Tom Jackman of IFA Nurseries said that market conditions have gotten so bad that customers would rather abandon their contracts and lose cash security deposits than buy pre-ordered trees.”
“‘People aren’t harvesting, they’re not logging,’ he said. ‘People are just leaving them with us.’”
The Lake Oswego Review from Oregon. “Struggling homebuilders are looking for a lifeline from local governments, asking for flexibility on rules and fees to help them get back to building. Joe Keizur, interim vice president of government affairs for the Home Builders Association, said builders are essentially calling in favors from governments after being generally cooperative with fee increases while building was lucrative. ‘Right now we need some reciprocity,’ said Keizur.”
“The Oregon Employment Department noted 11,000 construction jobs were lost in the development sector between September 2007 and September 2008. Many small-scale home builders and contractors aren’t counted in those figures, or in the current unemployment rate of 7.3 percent, because they are self-employed. ‘It’s probably as bad a building environment than it’s been since the ’80s and given that, we need jurisdictions to help us out,’ Keizur said.”
“In other communities, larger problems loom. In Happy Valley, Bethany, Sherwood and Wilsonville along with other areas of both Clackamas and Washington counties, stalled construction projects and vacant subdivision plats blight the communities.”
“In Tualatin, Mayor Lou Ogden plans a meeting with the Home Builders Association where he is likely to grant extensions for approvals and permits in that town. Ogden said he was open to talks about any action Tualatin could take to get building back on track there. ‘We’re interested in looking at ways to not pull the rug out from under these builders as they try to wait out the storm,’ he said. ‘We’ll talk about whatever their issues are. We’re all in this together.’”
The Oregonian. “Shoppers throughout the Portland area swarmed the malls as they hunted for gifts and deals. Debbie Jackson and Annie Montgomery always shop together the day after Thanksgiving. Jackson’s just doing less of it this year. Her husband’s heating and air conditioning business has seen things slow down because of the housing downturn.”
“Montgomery, though, plows ahead with her shopping. She’s a real estate broker from Bend, where the housing market is in tatters, but Montgomery remains upbeat. ‘It’s going to turn around,’ she said. ‘People just need to get some confidence in the market.’”
“Ryan Strasshofer is the Bend-based representative of a Eugene company that is Oregon’s leading buyer of homes at foreclosure auctions. It’s his job to sift through the ever-growing number of homes entering the foreclosure process to see which ones his company might buy and rapidly resell. ‘To summarize our business model, we sell them cheap because we buy them cheaper,’ said John Helmick, Strasshofer’s boss.”
“Defaults seem to come from every economic caste, but there are common causes: divorce, layoffs, luxury purchases and too much leveraging of falling equity, said Strasshofer, who operates as a private contractor. ‘It’s amazing how many homes I drive by and see a new boat or motor home in their driveway, and they’re in foreclosure,’ he said.”
“According to company statistics, of 111 homes put up for auction in Deschutes County in October, five sold. The rest reverted to the lenders holding the liens. ‘What’s happening is that the banks have not dropped the price low enough to get interest from buyers,’ Helmick said.”
The Newport News Times from Oregon. “For many, the holiday season means extra spending - on gifts, travel, accommodating guests, etc. And for those who may not have any savings stored away, the weeks prior to the holidays are an ideal time of year to earn a little extra cash with a seasonal part-time job to help out with extra expenses. But this year is different. With the economy in turmoil and the future looking bleak, many Lincoln County businesses have scaled down or outright eliminated their hiring of extra help for the final months of the year.”
“The number of seasonal or temporary job postings by local businesses are at an historic low, said Sandy Mies-Grantham, business representative for Newport’s Worksource Oregon. She said that retail industry employers are those that typically hire the most seasonal or temporary help. ‘I’ve never seen numbers this low,’ she said. ‘It’s just not happening.’”
“‘The easiest place for any business to save money is by limiting its workforce costs by cutting back as much as possible on hiring, especially during the holiday season,’ Rob Abbott, work force analyst for the Oregon Department of Employment, wrote in a statewide September report.”
“He continued, ‘If the holiday hiring pattern of previous years holds true, look to see fewer holiday-related jobs this year than we have enjoyed in recent years, with the December peak in holiday-related retail trade possibly dropping to 2005 levels. We are wrestling with the uncertainty of an election year, high energy prices, a housing downturn, and a credit crunch in the banking sector of our economy. With all of these things coming to bear on our economy, the outlook is less than stellar for holiday employment in Oregon. Many stockings won’t be brimming with the plenty of recent years.’”
The Seattle Times from Washington. “Real-estate agent Jonette McGrew is willing to do what it takes to make a property competitive in the market. Sometimes, that means weeding flower beds, washing windows and painting interior walls. McGrew recently began offering free staging services for her clients. ‘In this market it is a must, no question,’ she said.”
“‘The days of just taking the listing and putting it into the [Multiple Listing Service] and letting the MLS sell the property are gone,’ said Brigitte Pascutoi, managing broker at John L. Scott Real Estate’s Bellevue North office.”
“Bill MacDonald, (a) 20-year real-estate veteran recently broke out the toolbox to add double-crown molding to kitchen cabinets, replace light fixtures and install oil-rubbed bronze hardware in a client’s home in Woodinville. MacDonald picked up the listing in July, after it had been on the market a year. He worked with the owners to modernize it with new carpet, paint, landscaping and other changes. He also got them to drop the price $70,000 to $839,000. Now, he’s scheduled multiple Sunday afternoon open houses at the property to entice potential buyers through the door.”
“‘It’s vacant. It’s staged. It’s absolutely perfect inside,’ MacDonald said. ‘And yet it’s impossible to get somebody in to look at it.’”
“For some real-estate professionals, the change in the market is a reminder of why they got into the business in the first place. ‘I didn’t really like the frenzied market,’ said Dennis Brown, president-elect of the Seattle King County Association of Realtors. ‘People had the conception that Realtors were foaming at the mouth. We were so busy. But our business is all about relationships, and when the market is that busy, you don’t have time to build long-lasting relationships.’”
“Seattle architecture firm Weber Thompson had 82 employees when it moved into its new headquarters building in South Lake Union this spring. Now? 54.”
“Seattle-area architects are feeling the chill as the local and global economies cool. The development pipeline on which they depend is drying up. Several firms have laid off employees because there simply is less work. The Architectural Billings Index, a national measure of industry health devised by the American Institute of Architects, declined more steeply in October than in any previous month in its 13-year history.”
“Part of the problem is many larger projects with plans and permits in hand are stalled, often because developers can’t get financing. Weber Thompson’s Web site, for instance, shows eight high-rise projects the firm has designed in downtown Seattle. Two are built. One is almost finished. The other five are on hold.”
“‘When you look at financing and equity requirements, the landscape has changed completely,’ said Mark Woerman, a principal with Seattle firm CollinsWoerman. ‘People just truly don’t know what to do.’”
The Spokane Journal of Business from Washington. “Including transactions involving new and older dwellings, single-family home sales in the first 10 months of the year in Spokane County totaled 4,359 units, down 28 percent from 6,042 sales in the year-earlier period. Meanwhile, the median price here for home sales closed in October was $177,000, down 4.3 percent from $185,000 in the year-earlier month, says Rob Higgins, executive vice president of the Spokane Association of Realtors. ‘We’re having a modest reduction in prices,’ Higgins says.”
“It’s more common for the number of homes on the market to decline around the holidays, when fewer sellers choose to list their homes, says Ken Lewis, the broker at Prudential Spokane Real Estate, which has offices in Spokane and Spokane Valley. He believes, however, that the reduction in inventory between the end of August and Oct. 31 is more than just a normal seasonal adjustment, and says he’s encouraged by that.”
“‘Maybe we will get inventory down to a manageable level,’ he says. ‘The market here isn’t terrible, it’s just that buyers have a lot of choices.’”
The Columbian from Washington. “Higher-end retailers are showing signs of a struggle this year, said Mike Merrill, co-owner of Pro Golf, a shop that offers golf equipment, clothing and custom golf services. ‘In the Portland-Vancouver area, eight independently owned golfing stores have recently gone out of business,’ he said.”
“Merrill blamed the uncertain economy for a 20 percent drop in his store’s sales in recent months.’Golfers are going to buy from you anyway because it’s their passion,’ Merrill said, although he blamed his store’s slipping sales, in part, on Clark County’s plummeting home-building industry. ‘Our bigger customers have been the Realtors and home builders. Now we can’t count on them,’ Merrill said.”
“Local home sales that were down by 33 percent through October have also affected furniture stores, said Keith Koplan, owner of Koplan’s Home Furnishings in downtown Vancouver. ‘Our sales are down significantly,” said Koplan.”
“Koplan predicted big-ticket sales would continue to slide into 2009, primarily because cash-strapped homeowners can no longer secure the home equity loans that helped finance those purchases. Slowing home sales and declining values limited the ability to obtain loans, which homeowners routinely borrowed against.’
“‘The ATM known as your house has shut down,’ Koplan said.”
