‘When The Audience Left Everything Was Overpriced’
The Mail Tribune has this update from southern Oregon. “Just about everything turned out as builder Jim Green had anticipated in his first two attempts at selling high-end speculation houses in Ashland, the second selling even before the roof was on. But that was October 2004.”
“Today, Green’s third house, a 3,645-square-foot structure originally priced at $1.15 million early this year, is still on the block with a current price tag of $979,000. ‘It’s fairly obvious there are more properties than there have been in the past and that’s adding to the length of time on the market,’ Green said.”
“He wonders why there are so many more houses on the market compared to recent years and if the percentage of speculation homes is higher than usual. ‘Then you wonder,’ Green said, ‘how many people went in short-term for a quick buck?’”
“Even among more modest-priced housing, it’s taking more to induce sales. John and Jani Lockwood put their 1,351-square-foot home on the market last December with a $399,000 sticker price. They slashed the asking price to $359,000, hoping to hasten their move to Medford. But with 281 houses available through the MLS, the waiting game has gotten longer.”
“‘The market is glutted I’m afraid,’ said John Lockwood, a 13-year Ashland resident. ‘People are having to adjust out of last year into this year. Things got over-inflated and when the audience left everything was overpriced.’”
“Lockwood theorizes that even though the median price has climbed, the underlying market may be in retreat. ‘Probably 10 percent,’ Lockwood estimated.”
“The inventory of available houses throughout the county surpassed the 2,000 mark and is 180 percent ahead of where it was a year ago. East Medford saw a 32.9 percent decline in activity. Central Point had its biggest sales month since last September, but still trailed July 2005 sales by 27.1 percent. Eagle Point’s activity was barely half what it was in 2005.”
‘Lockwood theorizes that even though the median price has climbed, the underlying market may be in retreat. ‘Probably 10 percent,’ Lockwood estimated.’
If this commercial landscaper can figure this out, why can’t reporters that cover this sector? Here are a couple more Oregon/Washington quotes:
‘Although unit sales are starting to slow a bit along with other parts of the country, Northwest housing prices are remaining relatively strong. So while the seller perceives that the market has peaked and he may have to come down in price, the buyer is going to get a bargain, but the median price will still look like it is going up, Crellin said.’
the buyer is going to get a bargain, but the median price will still look like it is going up, Crellin said.’
Where do these jackass folks keep coming from?
“They slashed the asking price to $359,000, hoping to hasten their move to Medford. But with 281 houses available through the MLS, the waiting game has gotten longer.”
Does not look like 10% is going to do the trick. If he really wants to sell, try another 10 to 15% and do it soon.
…A co-worker is planning on putting her home on the market in Central Point as a FSBO. Purchased ‘04 for 264K……..planning on pricing it “under 400K”…..”which is more than the Realtor “appraised” it for…so we have bargaining room, like a 10K reduction”…. 1864 sq fit/small lot. Do let me know how this turns out…. Hey…We still have an astonishing number of clueless GF’s here…. But then, we surely are different…
ot but grim has something really good
Ethical” Listing Advice?
From Gary Watts, economist for the Ocean County Association of Realtors (California):
B. Listing Agent Advice
1. Price Reductions:
Please do not put a “price reduced” banner on your listings, and if you have one up, please take it down. It “falsely” advertises to the neighborhood that prices in the area are going down. What is more true is that sellers are lowering their expectations and becoming realistic.
Plus: For we who show property, it does not instill confidence in our potential buyers.
http://nnjbubble.blogspot.com/
It “falsely” advertises
Very curious use of quotation marks.
Grim’s post was based on an article I wrote titled “Gary Watts And the Incredible Logic Shrinking Machine”
Not pumping myself, but there is so much more there than meets the eye… and I was only reviewing maybe 1/3 of the document he puts out on a regular basis.
He is the real estate pumper’s god in Socal. Everyone in the RE industry just believes everything that comes out of his mouth without fact-checking or skepticism.
sorry.
have seen it first at grim
credit to you!
http://www.immobilienblasen.blogspot.com/
Wow, it gets even worse, see item number 3, nothing like advising a little collusion among RE agents to fool buyers:
3. Signs: If you have a listing where there are other (or many) for sale signs nearby, I would recommend that you call the other agents and see how many of them will remove their signs from their listings. At the very worst, rotate your signs until one (or more) of the listings sell, then make sure it has a sold sign on it!
Check it out for youself at the following link - click on the mid-year outlook July 2006
http://www.homesforsalehuntingtonbeach.com/economic_outlook_2005.shtml
This type of semi-illegal business would NOT be tolerated in anything other than real estate. I hope the advent of the Internet kicks that A$$ out of that sector.
same as stock brokers- after the crush commisions will be shit
so, even if Suzanne researches this, she’s not going to tell the fool buyers
Suzanne lost her job and is now a homeless crack ho
In the July 2006 report, he states that seasonal sales patterns will be “inverted” this year and promises to explain why later in the document but never does.
Anyone stupid enough to be taken in by this charlatan deserves to lose money.
Exactly Brokers, Sellers, Buyers alike. This guy needs a competency hearing.
The part of this that is partly *true* in our area (VA) is that we have a very large amount of listings with “wishing” prices that are even higher than last year’s. Putting a “reduced” sign on those is just silly. I’ve noticed “price reduced” listings are often higher-priced than those that were not as high-priced to begin with.
Any time I see a “Price Reduced” sign, it indicates “Overpriced Home” or better yet, “Greedy Seller” to me and I would be much less likely to even look at the home should I be buying. I think the industry probably should do away with those signs as I don’t think they fool anyone into thinking they are getting a good deal.
Posters need to e-mail the heck out of Lasner to cover this a**-hole in the OC Register as the fraud he is. Expose this bastard!
One of my favorites parts:
2. It is extremely important they understand the difference between factual and accurate.
♦ The Media: Median price over the past year has risen 7.1% (June to June) – Factual
Resale homes (YTD vs.‘05) are up 11.5% and resale condos are up 10.8% - Accurate
Odd, I was under the (evidently mistaken) impression that mostly high-edn homes were selling –often for same or less than they were 6 months ago– and this was skewing the median HIGHER not lower.
♦ Affordability Index: The numbers state that so few can afford a home - Factual
A seriously flawed index using archaic methods that are no longer relevant – Accurate
So basing affordability on 10-20% down & full-doc 30-year FRM is now “archaic” and not “relevant”? Sounds like a New Paradigm to me.
♦ Foreclosures: The media states that foreclosures up 44.4% - Factual
In June of last year, 9 homes had gone to foreclosure vs. 13 this year - Accurate
Really? Only 13 foreclosures for all of CA? Or is that for just Huntington Beach? Or is that just for one agent’s territory? Lies Damned Lies and Statistics, I guess…
♦ Interest Rates: Rates are up – Factual
The 10-Year Treasury rate has risen from 4.5% to 5.03% since January - Accurate
And up from as low as 3.33% as recently as 06/2003
http://www.federalreserve.gov/RELEASES/h15/data/Monthly/H15_TCMNOM_Y10.txt
As an Oregon native, I can say that the area around Ashland is some of the most beautiful country on Earth, but the economy in southern Oregon is just about zilch–heavily based on the timber industry, and that has mostly dried up. Those houses are gonna fall bigtime once the California equity refugees stop arriving.
As a second generation Oregon native, I have a hard time believing the California equity refugees will stop arriving. I’ve heard complaints about them for at least 30 years that I remember. What’s going to make it stop? Comperatively their property will always be worth more than ours, won’t it? Besides, the people moving to Ashland from California don’t need jobs, so what does the timber industry have to do with it?
Comperatively their property will always be worth more than ours, won’t it?
Yes, but they won’t be able to monetize the CA property to pull off the move.
Ahh, but the people who change the Californians’ bedpans and serve their meals will need places to live. Perhaps southern Oregon will become like Hawaii, a “paradise ghetto.”
Maybe you’ll get your wish. Californians will stop showing up and the place can go back to nature! Those pesky Californians and their wealth are just a curse everywhere they go, aren’t they?
My Fiancee and I just got back from a 3-day weekend in Portland (we live in San Diego). We have close friends who are “equity refugees” and moved to Tigard a year and a half ago after cashing out and leaving the SoCal Rat-Race. Currently, they are trying to sell the place they bought to move into a smaller home. In the first 2 weeks they listed they had heavy traffic looking at their house. However, in the last 2 weeks they have had ZERO calls on the property. They dropped the the price $20K and still nothing. Not even a peep.
In addition, we were SHOCKED at how many places are on the market. Worse, there seems to be new homes being built everywhere.
Sadly, it seems everyone up there thinks “it’s different here”. The only difference I see in the Portland area is the timeline of the bubble.
Anyone know of any Portland-specific Bubble links?
I am quite sure the intitial flood of traffic took one look at the place and all drew the same conclusion. This is an overpriced POS. If a place is priced right even today, it sells. Those who want to sell do, those who are greedy and stupid don’t. It is that simple. My house closed on 6/29/06 here in Washington. My OLP was $10k below where my agent wanted to start (or was it 20k below?). I had an offer immediately (full price plus and extra thousand). But I am not greedy like most of the vultures out there. I don’t sit around and lament that I “could have gotten 10 or possibly 20k more”. If your friends wake up from their greedy stupor they will sell for a decent price. If not, they will ride it down and cut their own throats. We are talking about “equity nomads” so don’t try and tell me they are even close to selling at a loss. I have no pity for them. Greed is to blame for this whole mess. Hopefully someday, amidst this sea of plastic, materialistic, self centered, money hungry egocentrists, I find a woman who shares the same values as I.
I think that Oregon communities that have potential to attract upscale retirees will perform the best in the comming slowdown. Ashland and Bend may be somewhat overpriced but the Californians will keep on coming as their cities become more unpleasant because of the bubble troubles. Other southern Oregon communities may have more trouble. Medford and other inland areas are not really very desirable places to live. The Southern coast is just too isolated to attract the many new residents. The larger towns on the Central and Northern Coast will probably attract alot of retirees in the next decade. so I think demand will increase for residential properties in that area. Vacation homes and areas will probably not do as well. The Valley will flatten but demand will remain strong in the “blue cities” and “wine country” “red” areas will probably not see demand rise as much. The Columbia gorge will also continue to grow. Oregon is going to see almost as much population growth as NV or AZ in the next 10 years and is a more desirable area for liberal and more educated consumers. In summary, I think the vacation homes and some local bubble areas will suffer drops other areas will flatten for a while but demand will stay strong and prices will rise in the future. Im betting on it.
I could not disagree with you more. Oregon has always had one of the highest, and many times, the highest unemployment rate in the country. The whole retiree, equity locust, wealthy second home thing only goes so far and cannot completely dictate housing prices. The old fundamentals of housing prices mirroring local economies will start to enforce their will over time. And as far as your “prices will rise in the future…i’m betting on it” comment, that is way too general and vague. What is your timeline, 2 years, 30 years? C’mon. I don’t disagree that Oregons population will increase, but don’t look for strong demand and higher prices in housing for the foreseeable future. Oregon has exceeded the stupid prices level. I expect significant decreases in most areas with the exception of some high end coastal areas. People want to believe that the recent demand was real but the speculation in Oregon was/is absolutely staggering. Talk to some locals sometime.
The area where I have my home on the Oregon Coast is 100% owner occupied by full time residents, except for our home which we are currently renting out. The rent would not cover PITI but the buyer’s in the area are looking for a home to live in. there are only about 50 homes like the one I have in the town I live in and they can’t build anymore with a similar view because all the land is already built. future developments will have to be in outlying areas which are not as desirable for full time residents. being near the center of a Community while still having a “million dollar +” view is just what the retirees are looking for. The price for a 2200sf 4bd 2ba is still under $500,000. Even stormy days are beautiful when you have a view of the crashing surf. I think plenty of Equity locusts will keep on coming in numbers high enough to keep prices rising. my neighbors on both sides sold out in the city and banked equity after buying with cash. They are both incredibly happy at the coast. Many, many californians will still hae this type of equity even if there is a 50% crash. If you don’t have to work life is simply better on the oregon coast than in southern california for someone with a 1 or 2 million dollar nest egg. In my opinion it is also far better than anywhere in the desert, but to each his own. Utilities for the house have averaged less than $70 year round. I think that soon the 3 rules of real estate will be coming back. Location, Location, Location.
Um, if the view is so fabulous and the land all built up etc, why can’t your rent cover PITI? Thou protest too much, methinks.
Mateo. Can you please specify this “special” city in Oregon you are referring to?
Newport
Now that Measure 37 has passed and been upheld, there will be PLENTY of land available for new housing. They ARE making new land, and will for many years. Case in point: In Washington County, where I live, Stimson Lumber filed a claim for 50 new 20-acre lots. The lumber companies, who own much of the state, want to cash in on their holdings near cities. That’s why they backed Measure 37, to wipe out Oregon’s land-use laws. If you think your place is that special, I have news for you…
Such liberal narrow-mindedness is amusing.
Probably they won’t stop coming…but the deluge has slowed to a trickle, as they can’t sell their own overpriced homes. Check what’s happened in Roseburg - when the prices here escalated overmuch…… Ashland and surrounds will still inherit a handful of wealthy, but then those folk have many more places to choose from…. It’s the middle and upper middle class folk dripping in here now…..verrrrry slowly.
Wouldn’t the credentials for claiming the area around Ashland to be some of the most beautiful on earth involve having traveled all over the earth rather than just being an Oregon native?
“He wonders why - more houses on the market - if the speculation homes is higher than usual. ‘Then you wonder,’ Green said, ‘how many people went in short-term for a quick buck?’”
- Note to Jim Green - look in the mirror.
John and Jani Lockwood put their home on the market @ $399,000 sticker price. They slashed the asking price to $359,000, hoping blah, blah, blah. Not sold yet blah blah.
Hey, John and Jani…..cut 25% to $299250.00
John Lockwood, a 13-year Ashland resident. ‘People are having to adjust out of last year into this year. Things got over priced.’”
“Lockwood theorizes that even though the median price has climbed, the underlying market may be in retreat. ‘Probably 10 percent,’ Lockwood estimated.”
- John Lockwood, your theory is Horse#hit!
‘Probably 10 percent,’ Lockwood estimated
1. Then he should “slash” his price again by 10% to prove his theory.
2. If he’s lived there for 13 years then he should have some equity but he’ll probably chase the market down anyways and lose any he’s built up.
‘Then you wonder,’ Green said, ‘how many people went in short-term for a quick buck?’
I have been wondering, ‘How many people bought multiple homes (besides their primary residence) for a quick buck?’ I expect the study that answers this question to offer shocking revelations about US housing demand.
Or…”how many people bought multiple homes USING their primary residence as a vehicle to do so?” That is where many will be in ruin!
test
Compared with an increase by $827 billion in 2000, credit and debt growth has quadrupled. Total outstanding indebtedness rose to $41.8 trillion, equal to 334% of nominal GDP and 376% of real GDP. In the first quarter, $4.30 of additional debt was added for each dollar added to nominal GDP growth and $7.50 additional debt for each dollar added to real GDP growth. Until the late 1970s, this credit-to-GDP ratio had held at a steady rate of 1:1.4 for over 30 years.
http://www.itulip.com/forums/showthread.php?t=325
Along with Ashland (granted quite pretty) Bandon, OR has seen a tremendous run up as well. Many CA’s are attracted by our lack of a sales tax and b/c so many are now in pure “consumption mode” (out of the work force) we’re just that much more appealing. Sadly though we will be forgotten as equity locusts run fresh out of bubble bucks and when the ones already here realize their home isn’t escalating in value by the “Zillow Week” they’ll want to list and move on too!
I really do not see the attraction of Ashland. To me it is cheap knock off of Jackson Hole without the mountians. Jackson can get cold though. But still Ashland. I think Weed California is prettier. There you got Mount Shasta.
Oregon. Shakespeare. Festival.
wci uppedt to outperform! from jmp sec.
this is insane. this is one of the weakest builders around with a debt to capital ratio close to 60%
http://www.immobilienblasen.blogspot.com/
“They slashed the asking price to $359,000, hoping to hasten their move”
They forget to mention they paid $150,000 12 months ago. UUHHH wonder why it’s not selling, we SLASHED the price??
My sentiments exactly JMAN. All of this sobbing going on and the bleeding has not even started. Let us sit back and anticipate the real horror which is right around the corner…
This gives Gary Watts (In the Bag) an even lower opinion of him in my book. And that is a major accomplishment. We have found the true king of the Jackasses. Burn in Hell, Gary.
Gary is just trying to confuse his realtor buddies with all sort of irrelevant statistics. He should address this central issue: “What follows increasing inventory and decreasing demand”. He never address this central issue with all his stupid statistics. The brainless realtors who follow Gary advice will find their faces on the grill of the train by the time they realize that this is a housing bubble and is crashing. Anyone disagrees with my analysis of Gary’s presentation?
Come on now, “Scary Gary” is just doing his best to keep the Hindenburg up in the air a while longer…..knows its burning but doesn’t want to lose out on a few more commission checks. The people who really deserve to be skewered are the idiot journalists who NEVER seem to ask the intelligent questions when it counts the most. I’ll know that the bubble is truly deflating when Bill O’Reilly starts grilling the Gary’s, Leslies, and Davids….and maybe even tells them to SHUT UP!
That would probably be the only tuime I would relish the thought of watching Bill O’Reilly. That would be great to watch.
It’s taken me a long time, but I’ve come to the conclusion that most journalists simply aren’t educated enough on the subject to ask the right questions. Call it laziness or ignorance or both, but they never got close to the real truth because they never thought that there might be one. They just reported what they were spoon fed by the (X)AR.
I actually disagree. I’m thinking that Gary is waiting to become “Scary Gary” again. Since his outlook for 2006 was 15-18%, he missed the turning point –this was because his forecast had to be done by late 2005 and he just didn’t have the data to support it and is too disconnected from fundamental information and the economy to know when that turning point is.
I honestly believe that next year or the year after, he will turn extremely bearish. This is to save his a$$ and his consulting business (which coincidentally is his main business, not selling homes). It will all be about the buck to him. No skin off his back.
All this, and I think he’s a classic follow-the-trend moron. Now, if I could just get paid like he does for doing better research…
John Doe
Nicely put!!! That would probably be the only time I would relish the thought of watching Bill O’Reilly. That would be great to watch.
How much do you all think that we a going to see in losses. I am thinking loss of 40-50% by end of 2009 and that will be about the bottom.
2003 prices in 07 then flat city…………
2004 prices reported in some cities already
yahoo has a new DNN real estate news thingy- as in DOWN ?
says rocky mtns are hot !
roflow
I have a friend who sold his home in Laguna Niguel a year ago this month.He says he has 2 MBA’s but from his actions he looks like grade school drop out. You see he went to Grants Pass , Ore and with in 6 weeks he purchased a $500,000 home on a hill and said it was a steal. I cannot believe he did this as we spoke about the coming real estate bust. Pressure,Greed,Status I am sure played into his decission. Wonder how he feels now? or how he will feel in a year or so.
People with MBA degrees are some of the stupidest herd animals I know when it comes to economic decisions.
Stupid is as stupid does, no mater what your credentials.
Hey! I have one but am prudent financially. Can’t say that for other MBAs I’ve known. Friends who are accountants, controllers, and CFOs seem to be even worse!
Is it the logic that they have to pinch pennies at work that causes them to splurge and take greater risks in their personal lives?
Hey now, don’t throw ME in that bucket! (MBA/controller). I’m paying my house off! I plan to live there until I come out, feet first. It’s a manufactured home on five acres - bought six years ago in Oregon. It ain’t for sale, and we haven’t borrowed against it.
Do any of these newspaper types know how meaningless the median price comparison is?
Without some supporting statistics like ave. sq ft, types of counters and other accoutrements of sold houses in each time period, naked median prices tell you little.