“Speculative Buying Was A Driving Force”
The Bend Bulletin reports from Oregon. “A Portland developer proposed in January a nearly 300-unit, four-story hotel-condominium project. for Bend-based Brooks Resources Corp., which is developing the project. Brooks has seen a slowdown in Prineville’s market in the last year, said Randy Jones, project manager.”
“‘We’ve looked at the last year and what’s been selling and the price point of what’s available,’ he said. ‘A lot hasn’t sold because it’s been so bloody expensive.’”
“Local real estate broker Mark Southworth called 2007 a ‘regrouping year’ for investors who have lost the incentive of lower-priced properties in Prineville compared with other parts of Central Oregon.”
“‘It’s been a feeding frenzy the last two years,’ Southworth said. ‘Investors were getting 35 to 80 percent return on their money in a six-month period. Speculative buying was a driving force.’”
“‘A lot of people are waiting to see the impact of Brooks because they have the capability of going really low (on price),’ he said. ‘It’s hard to say what it’s going to do to the housing market because right now people aren’t buying.’”
“In Crook County, median housing prices rose to $198,000 in the first quarter of 2007, up 1.3 percent over the median price for all of last year. Meanwhile, residential housing has slowed year-to-date from 95 homes sold in 2006 to 40 homes sold in Prineville through Wednesday, according to Southworth.”
The Register Guard. “The housing market continues to be a bit of a mixed bag in Lane County. The supply of homes on the market continues to grow, with more homes being listed and sales lagging.”
“In March, 686 new Lane County listings appeared on the Regional Multiple Listing Service’s rolls, up from 599 for the same month a year ago. That brings to just under 1,800 the number of houses that have come on the market so far this year, an increase of 15 percent over the first quarter of 2006.”
“Deals closed on 347 home sales in March, down 9 percent from the same period a year ago. An additional 411 sales agreements were signed in March, also down from the year before, when 471 homes went under contract. That means buyers still enjoy more of an advantage in the market than they have for the past two or three years.”
“On the coast, the Florence area reports a total of 375 active residential listings with RMLS. The area added 67 new listings in March, with 28 pending sales and 30 closed sales during that period.”
The Tacoma Daily Index. “Though downtown Tacoma’s residential construction boom shows promise, it fails to target young and first-time homeowners, according to a study.” “The 120-page study notes that home buyers between 25- and 34-years-old represent a huge market segment, yet find it difficult to purchase homes that meet their taste and affordability standards.”
“A high level of concern was reserved for the St. Helens neighborhood, where seven new developments with 596 apartments and condominiums are slated for 2007 and beyond. Deanna Sihon, principal and director of research and consulting at New Home Trends, said homes would need to be ‘carefully released so as not to create an oversupply.’”
“The study also seeks to explain the demand for downtown housing development, and points to a lack of affordable, market-rate housing in King County. ‘There was a shift 10 years ago due to affordability,’ explained Sihon. ‘People can no longer afford to live in King County.’”
“She pointed to statistics compiled in February that show the average list price for a detached home in King County equals $728,972; in Pierce County, the average list price is $415,047. Similarly, the average list price a condominium and townhome in King County is $513,438; in Pierce County, that figure is $372,900.”
‘Local lender shuts hastily amid turmoil in industry’
What was the prize for first reply?
“Speculative buying was a driving force.”
Speculative buying was THE driving force of this whole bubble. That becomes obvious when one considers the number of vacant resale homes on the mls. And, as has been talked about recently, speculators are still buying. It’s disturbing, really. I don’t understand how, in the face of depreciating prices, these people are justifying these purchases. It was bad enough when they didn’t cash flow but were appreciating. When they don’t cash flow, and depreciate, I cannot understand the attraction.
Interesting little blurb here from the last article, the Seattle Times piece:
“Staffers knew their situation was precarious when the number of mortgages being processed fell from 40 a day to 10, the employee said.”
From 40 a day to 10 a day, that is quite a drop off. I thought Seattle was booming still…laugh…
There were plenty of people buying the S.S. Enron on the way to the bottom.
You have to conclude one of two things:
People don’t know what’s going on (in which case, they’re ignorant), or
People are perennial optimists (in this case, equals stupidity).
“When they don’t cash flow, and depreciate, I cannot understand the attraction.”
Real estate invester think:
‘Since buy-the-dips worked so well for tech stock investments, maybe it will work for houses, too…’
Many in our area of greater Seattle firmly believe that there will be no market stress or ramifications to housing prices/health. I hope they are right. The 100 or so laid off staff at MILA (probably many have been only employed in R.E. for the last three or four years) probably feel otherwise.
Relax. Watch the shiny bauble. You are getting sleepy. There is no Housing Bubble…
Snap snap. Ok! We got another one. Bring me in the mortgage papers for him to sign.
Stop giving the FB’s excuses! I be hypnotized. LOL!
the avg list price in King county is $728K - OMG. This is unbelievable - and selling prices have not started falling yet. What the hell is wrong here
It’s really good Kool Aid.
“She pointed to statistics compiled in February that show the average list price for a detached home in King County equals $728,972; in Pierce County, the average list price is $415,047. Similarly, the average list price a condominium and townhome in King County is $513,438; in Pierce County, that figure is $372,900.”
She should really stop drinking in the morning. It is affecting her work…
March 2007 King County Median Closed Price
SFH : $454,950
Condo: $281,000
All: $399,500
Inventory is up 37% and sales are down 8% YOY
This is soooo irresponsible that someone tries this sh!t and even more irresponsible that some lazy reporter prints it.
Take a look at the Eastside, $526k medium price compare to $476k a year ago, that’s 10.39% yoy. Seattle is special!
Simple…Seattle is one if not the last domino in the long line to fall. I just love how up here all these latte drinking soccer moms start talking at a party and a year ago it was “how much did you make on your flip?” and this year is “do you think IT could happen here?”…..
There is a LOT of speculation up here. Last year I looked at about 30 rental homes and 20 of the 30 had an owner who didn’t even live here (most in LA) and about half of those were obviously foreign (accents).
The first sniffs of “fear” are in the air but denial is still in full bloom…just like the bloom of inventory which is up almost 50% from a year ago. Median prices holding steady due to continued activity (i.e. CA Equity Locusts) in the high end…but everywhere else…cracks are appearing.
But it is all for not because in the end we all know Seattle is different….
SeattleMoose, have you actually heard the latte drinking soccer moms thinking about whether that it could happen here? Was a east-end wine event (ugggh) last weekend, and there was still happy talk. In fact, overheard breathless talk about a new type of outdoor fireplace - i really dont know the details - except that it is probably mucho $s. Too many microsoft and amazon spouses.
Last domino will be 150 miles up the I-5, the city where “It’s different here” and “RE will keep going up until the 2010 Olympics” are religious creeds. Vancouver, BC.
Well I’m certainly hoping that Seattle starts the descent soon, out here in Eastern Washington we seem to be lagging the coast… California spillover bubbled Seattle/Portland/Bend, and Seattle spillover bubbled Pullman. Now everything is going in reverse and we’ll probably be the last place to realize the party is over.
Oh, but I met a local flipper yesterday who adamantly assured me that “Pullman is different”!
“I hope they are right.”
Do you mean to tell me that warnings have not been issued yet for the tsunami that is rolling your way from California that was triggered by the subprime earthquake in Orange County? Time to run for high ground!
how does the market in portland OR compare to seattle WA in terms of affordability and speculation? anyone have any hard data or anecdotes?
‘Despite a slowdown in housing that began last year and a more recent run-up in gasoline prices, Clark County’s overall economic performance remained solid in the first quarter. Home sales were down 26.3 percent from 2006. Home construction as measured by building permits was off 14.4 percent from the year earlier.’
But while the housing market adjusts to a lingering inventory glut and higher mortgage loan rates, commercial business expansion appears strong in Clark County, said Mick Shutt, spokesman for Clark Public Utilities. ‘On the residential side, things have cooled quite a bit, but we’re still seeing significant growth on the commercial side,’ Shutt said.’
Is residential an indicator of where commercial is headed? At some point commercial has to reign it in.
I’ve been assuming that commercial is reaping the benefits of at least 3 years of a HELOCed residential market, just like the general economy.
“But while the housing market adjusts to a lingering inventory glut and higher mortgage loan rates, commercial business expansion appears strong blah, blah, blah.
Wasn’t Florida supposed to pick up all of there unemployed residential housing workers via the strong commercial growth? Didn’t they report a slow down in commercial construction in the last few weeks?
Commercial construction will not save the boom.
The commercial sector is also collapsing… I know of a realtor who converter to SPA supervisor after getting out of a career in commercial real estate since things are very bad there for quite a while now.
Without residential prosperity, no shopping malls, no stores, no office space.
Like in the .com boom, do those idiots expect businesses to indulge in a sort of perpetum mobile where one sells to the other and then buys from it. Back in the .com boom most .com’s revenues where from other .com’s…
Recently a study out of UNLV showed 7-of 14 leading indicators were declining. Gasoline sales, visitors @ McKarren airpoert, permits, R.E. sales,lower sales taxes, were among them.
Yet the LV builders have 119 developments under construction. Some are actually in the 200’s again.
One lady, purchased her home in 2004, @ $376,000 sees on Zillow that her market value is now only $304,000…..she doesn’t believe it! The public trusts the governnment & media, scratch that “depends” on the government & media to spoon feed them information.
Another couple have a condo(2B){4plexes} near UNLV purchased 30yrs ago for $28,000. Rents for $600/mo. finds on Zillow their property is worth $147,000. Makes about $800/annually after taxes.
How’s that for an ROI? /i mean dollar devaluation!
I guess one day the media /government will come clean and everyone will be “shocked” how quick it all happened…
“Who could have saw this coming?, they will say it’s all to unbelievable.
[new homes] “carefully released so as not to create an oversupply” - got news for you: at current prices there is already an oversupply.
“MILA’s Web site claims that it averaged $400 million in loans a month, using a proprietary evaluation system that can give mortgage brokers a commitment on their loan request within 30 seconds.
Awww… they lost their 30 seconds.
Seriously, no time has been spent on those loans compared to the work required to process a loan 5+ years ago. So bummer it now has to be done closer to right; I understand the market for mortgage loans is still pretty loose, but slowly it is approaching a rational market. Bummer for the brokers/Realtors ™ that it always overshoots the other way.
Got popcorn?
Neil
I see dead condos.
I suspect speculation was the only thing making builders build condos… especially in San Diego.
Houses take up a lot of space and indeed there is enough wealthy people here to buy them at roughly 1/2 of today’s prices. But condos will collapse 90-95%
Back in 1998 you could get a 900 sq.ft 1 bdrm 1 bath in Rancho Bernardo for 90k… chances are in 5 years from now you will be able to get a piece downtown for 70k or less. At which point the illegals and lower populace will have filled the remaining units for renting.
Seattle:
what are you thinking King / Pierce
avg list price free standing 720+ / $413+
condo’s 500+ / $370+
Do you all have stock options on that overvalued Boeing stock?
How much income must one have to own a home in King or Pierce?
Check…not moving there besides it rains to much!
The rain/long gloomy winter is bad enough. But the TRAFFIC is the killer up here. I lived in LA for 10 years and Houston for 10 years and I would rate (scale of 1 to 10 with 10 worst) the traffic as follows:
10 - Los Angeles (the “gold standard” for gridlock)
8 - Seattle (this “wannabe” city has bad traffic in common with LA)
6 - Houston/Austin (slows down at rush hour but hardly ever grid lock)
Seattles infrastructure expansion is more constrained than LA and Houston which only makes it worse.
Honestly, if I had not been transferred up here I would prefer to live in the Hill Country around Austin than in Seattle or LA. Yep, there are 5 months of hot summer but the rest of the year is beautiful. Granted, the traffic is getting worse but home prices are nowhere near those of LA and Seattle. And Austin is a very progressive city.
“In Crook County, median housing prices rose to $198,000″
Am I the only one who noticed the county’s name?
6 - Houston/Austin (slows down at rush hour but hardly ever grid lock)
I wouldn’t group those two cities together. Austin is nice, but Houston is a sh!thole, and traffic there sucks. Spreads out forever, no zoning. yuck