Rising Inventories Suggest Sellers Have Lost Leverage
A report from the Oregonian. “The Portland-area housing market continued its slow drift downward in June. The median home price for the Portland area dropped to $295,000, from $297,000 in May, according to the Regional MLS. That marked the first May-June decline since 2000, and indicated to economists who follow the local market that housing is weak and could become weaker through the end of the year.”
“‘I think it’s going to be a long time before we fully adjust to the excess inventory,’ said economist Bill Conerly of Lake Oswego. ‘It will be deep into 2008 before we hear any good news.’”
“After striding past the national housing slowdown for about a year, the local housing market is showing signs of losing its stamina. Rising inventories suggest sellers have lost leverage, and the widespread exit of first time buyers and investors have cut severely into demand.”
“‘We’re in a buyer’s market,” said economist Jerry Johnson in Portland.”
“Recent price gains have simply out-paced incomes, Conerly said, making homes less affordable. ‘It’s the prices compared to three or four years ago — that’s what is keeping first time homebuyers out of the market,’ he said.”
“There were 2,731 closed sales in June, 18.5 percent fewer than a year ago. There were 13,752 homes for sale as of July 2, 60.4 percent more than a year ago.”
“‘The story of the last few years had been a lot of first time home buyers moving out of apartments and people who wanted to try their hand at real estate investment,’ said Conerly.”
“Johnson said home builders need to cut production deeper than they have. ‘In the long run, you don’t want to have 5 months inventory on the market — you want three to four,’ Johnson said.”
“Across the state line in Clark County, Wash., the median price in June was $265,500, down 1.6 percent from a year ago. There was 6.8 months of inventory on the market compared with 4.7 months in June 2006.”
“In Lane County, which includes Eugene and Springfield…inventory is also on the rise. There were 902 houses listed with the RMLS. The number has risen steadily since January, when just 558 properties hit the multiple listings.”
The Register Guard from Oregon. “In Lane County, but June’s numbers showed…a jump in new listings. Last month, 902 houses were listed with the Residential MLS, compared with 804 in May. The number has risen steadily since January, when just 558 properties hit the multiple listings.”
“‘It appears that sellers held off longer than usual into the year to put their homes on the market,’ said Sue Jakabosky, eco-broker with Re/Max Integrity. ‘I think everybody was adjusting to the slower market, and they were hesitating because of all the (national) news that the sky was falling in housing sales, waiting to see what would happen here.’”
The Bend Bulletin from Oregon. “Bend developer Darrin Kelleher says he’s still in the market for buildable land in Central Oregon this summer, even though the housing market is ‘certainly on its nose.’”
“The reason: Kelleher, a self-described optimist, thinks the region will shake off its excess inventory by spring 2009, opening the gates again, the gates, not the floodgates, to new growth.”
“On the other hand, the market numbers are bad enough right now that even an optimistic developer has to concede that the pessimists might be right about a longer downturn. ‘It comes,’ Kelleher said, ‘with an element of fear.’”
“In Bend, the region’s most expensive market, 1,550 single-family homes without acreage, or homes on less than an acre, were for sale on June 11, according to appraiser Mike Caba’s tracking numbers, an inventory level that could take 10.9 months to sell if the average monthly sales rates of the first six months of 2007 continue to hold.”
“The number of houses for sale in Bend alone has risen 27.7 percent since the third week of January, according to Caba’s numbers, but price and sales weakness have been evident all year in nearly all of the region’s local markets.”
“In Bend, sales numbers plunged 25.8 percent from the same period in 2006 to 850, dipping to levels not seen since 2003. Redmond’s sales slide was even steeper. The city’s 298 sales came up 42.9 percent short of the same period in 2006.”
“Kirk Schueler, president of Central Oregon’s largest developer, said he and the Brooks board of directors don’t expect local housing prices and sales to stabilize, at this point, possibly until 2009. Brooks opted to pull the plug on a high-end riverfront townhome project in Bend earlier this year, partly because the company expects weakness to continue in that market for at least another year, Schueler said.”
“‘I’d say it’s going to be a good buyers’ market for most of the next six to 12 months,’ Schueler said.”
“In Sisters, non-acreage home sales slid 37.8 percent to 46 for the first half of the year, sliding below the pace of any year since 2002, according to the MLS, while median prices dipped only 3 percent from the first half of 2006, to $396,383.”
“In Redmond, condo sales plunged 55.8 percent to 23 compared with the first half of 2006. Predictably, the sales of raw lots plunged in most markets, falling 38.9 percent in Bend with a 5.46 percent price reduction from the first half of 2006, and diving 41.9 percent in Redmond with a 28.6 percent price cut compared with the first half of 2006.”
The Columbian from Washington. “Clark County home values showed signs of softening in June for the first time in more than five years with a 2.8 percent decline in home prices from a year ago.”
“‘I believe it’s the first month this year that there has been a significant change,’ said Mark Cannucci, head of sales and marketing for the ‘benchmarks’ service.”
“Total home sales were also lower last month than in 2006, dropping by 21.9 percent. A total of 813 new and pre-owned houses were sold, down from 1,041 home sales in June last year.”
“June’s declining home sales in Clark County were consistent with a 20.7 percent drop in second-quar ter home sales. A total of 2,311 homes sold in the three months ending in June this year, compared with 2,914 homes sold during the same period last year.”
The Idaho Stateman. “Home sales in Ada County are still lagging behind the record-setting numbers recorded in 2006, according to the Intermountain MLS Sales Survey reported today by the Ada County Association of Realtors.”
“June closings were 710, 35 percent less than the 1,135 recorded during last year’s near-record highs.”
“‘Buyers who are on the fence should reconsider their position, and look at their local market again. They’ll never have better inventory to choose from…Those who wait too long are going to find fewer homes to choose from and the possibility of higher rates not too far down the road,’ said ACAR President Sue Nielsen.”
“Nielsen said the number of sales last month ‘are more comparable to a normal market.’ The median sales price in Ada County last month was $235,090, down slightly from June 2006.”
“‘Sales in the $400,000 to $500,000 range were down by 41 percent. Most families are looking for homes that they can afford, and most families can’t afford $500,000,’ Neisen said.”
From KTRV 12 in Idaho. “Some of Mircron workers laid off may soon have their house on the market if they move to Pullman, Wash. That may not help the latest numbers on Ada County home sales, which show the market continues to lag.”
“The biggest reason is that the market is not like it was a few years ago, which is why experts say for Treasure Valley residents, right now may be the perfect time to buy.”
“But it seems home buyers are waiting to make their American dream come true. Agents say interest from out-of-state buyers is not as strong as it was last year.”
“‘I actually think the market in most of the market sections. I think the market is having difficulty finding equilibrium and it’s still leaning towards a buyer’s market,’ said Idaho Real Estate School Director Mike Gamblin. ‘I think some of the buyers who are on the fence now maybe should take a look at buying because we have our inventory which is bigger than usual.’”
“‘A good agent will know the market, they will know how to price your home correctly if your goal is to sell, you have to price it right, period,’ said real estate agent Laurie Barrera.”
“The Portland-area housing market continued its slow drift downward in June. The median home price for the Portland area dropped to $295,000, from $297,000 in May, according to the Regional MLS.”
My wife and I left the Portland metro area in ‘96 for greener employment pastures in D.C. IIRC, the median house price in Portland was at that time about half of what’s stated above; it seems totally ludicrous that it’s doubled in a decade, especially from what I remember of the Oregon economy. It must be different now, just like it is in Colorado!
Crud, I forgot to add a sarcastic cackle to the end of my post… Ngahahahahaha!
It certainly is different now, Bob. It’s a buyer’s market!!
OK, can we throw Sue Nielsen in jail for violating SEC rules? No? Come on, the real estate pimps need to be held to the same standard as investment advisers.
“They’ll never have better inventory to choose from.”
Never. Not at 6pm this evening. Not at 8pm. Not even at midnight. Never!
Yeah, it’s unbelievable, literally. I bought a PDX house in late 94 for $125K, sold it in 2000 for $156K. Similar ones are priced at $279K today. First-time buyers: You have been WARNED.
Many thanks to Alan Greenspan and the “Do Nothing” Fed!
Hey, the Fed does plenty! They make a tremendous contribution to inflation.
Also in 2000 you could buy a POS 3 BR 2 BA in santa ana, ca for $156K - which would have sold in 2006 for $450-$500K during the foolish lending days. Whatever $$ PDX falls by, it’s going to be a multiple of that throughout Cali and will take down many banks. I bought in ‘05 with a 30 year time horizon and fixed rate mortgage, so I’m not worried, but PDX does offer relatively lower housing costs compared to Cali, while the wages aren’t that much lower for non secondary-education level jobs.
Got diversified assets?
Hell FRB - it’s doubled in about 5 years! Totally rediculous. I live in Tualatin and I saw my first short sale advertised on craigslist today. FB’s bought last September at $835K and its on the market as a ’short sale’ at 799K. That’s almost 5% off in 10 months. Funny, I haven’t heard a real estate agent tell me prices have come down. LOL!!
Anything over $400k (heck, $300k) in Tualatin is just ming-boggling to me…
Don’t forget to check out the Portland Housing Blog.
Is Seattle still in the “it’s different here” stage, or have they progressed to the “hmmm…” or “uh-oh” stages?
Most of my friends there still bring the “there’s more millionaires here per capita….” and “Seattle is the only place where prices are still going up.”
They state the second comment as if to suggest that every market in the US started going up at the same time and every market went down at the same time. Except Seattle, which keeps chugging along thus proving that it’s different there.
I just bite my tongue and take another sip of my Black Butte Porter.
Prices continue to be amazing both on the East side and downtown. I am stunned at the new condo prices in Seattle. Cant wait for this to crest …
I’ve been saying the same thing about downtown Chicago. New homes everywhere at ever-higher prices. How many people can pay $500,000 for a one-bedroom?
Seattle observations: I have one friend in the Madrona neighborhood (very upscale, 60-70 year old homes with Lk Washington views) still trying to sell their un-updated house after 11 months, down from 1.2M to 995 I last heard. I hear from several patients who live on the north side (Lk Forest Park and Bothell) of trouble selling their homes after 6 months. This isn’t the picture the Seattle media paints of the lava-hot but gradually cooling market here.
What we need in Seattle, more specifically Mt. Rainier, is a little Lahore, similar to a baby Mt. St. Helens mud flow. Then you will really see a buyer’s market. Just make sure that your casualty insurance isn’t by All State. They will probably screw you like they tried to do to the people who live in Mississippi.
In my neighborhood around Microsoft, it appears that prices have peaked, and the new homes that are selling are priced at or below last year’s levels.
I’m also seeing completed new homes (landscaping is even completed) with ‘for sale’ signs out in front of them for several weeks now–this hasn’t happened in years. New homes used to be sold before the siding went on. The specuvestors have stopped buying at any price.
Prices still need to come down a long ways to become affordable IMO. Median income in Redmond is around $70K, and you used to be able to buy a house here at 3X that up until 6-7 years ago. Microsoft employees aren’t making anywhere close to enough to afford current prices, and can’t count on stock options any longer either (tiny violins play in the background).
Does MSFT even hire “regular” employees any more, or are they all temps?
From what I understand, still plenty of regulars and they’re hiring more (as well as in India, China, Ireland, etc at their development centers in those countries). Because of the threat of a class-action lawsuit from many contractors (who were effectively full-time employees but weren’t getting any benefits) a few years back, they have made it more difficult for contract workers to be there on a constant basis–when a contract ends, now, they have to be away from MS for a few months before coming back.
And my neighbor (who works there) has said that MS is having a hard time keeping their top talent–Google and others are stealing them away. You gotta love the free market sometimes.
Also stunning are the prices I see for ‘attached homes’ — townhouses — East of Seattle. Simply stunning to see $550k townhomes, 1800 sq feet, no backyard to speak of. And though on the MLS a bit longer than last year, homes priced at or just under ‘market’ are moving. Crazy.
(btw: sold our Seattle home last year. Renting on Eastside until market shakes out — was thinking a year, but 2 seems more realistic for any downward movement)
Just crazy! Keep renting! Let houses drop to under $200k
I think we’re at the threshold of the “hmmm” stage. Sales are down significantly YOY in King County and inventory is going parabolic, but median price is still up (for now).
Most people in Seattle aren’t aware that there is a housing slowdown in the rest of the country. When they read ’slowdown’ I think they mean in terms of appreciation, not nationwide falling prices. Most people don’t attribute the run-up in prices to loose credit, so any drama of foreclosures and tightening credit in “newspaperland” is still half a world away.
Folks who bought a couple years ago amid the torrent of investors bidding up every single property, they remember the pain involved in losing bid after bid, and I think there’s still a lingering assumption that that’s how it’s supposed to be… despite ‘for sale’ signs everywhere everywhere everywhere.
A friend of mine has purchased a second house before selling the first, and now it’s been sitting for about 4 months. “But it’s the best house in the neighborhood.” Pain is setting in for the minority that need to sell… but I don’t bubble-talk around these people, since there isn’t much productive that can come of it.
“‘Buyers who are on the fence should reconsider their position, and look at their local market again. They’ll never have better inventory to choose from…Those who wait too long are going to find fewer homes to choose from and the possibility of higher rates not too far down the road,’ said ACAR President Sue Nielsen.”
But she should have said:
“‘Sellers who are on the fence (about lowering their price) should reconsider their position, and look at their local market again. There’s never been more inventory to choose from…Those who wish too long are going to find even more homes to choose from and the certainty of higher rates not too far down the road. And I’m tired of eating ramen noodles damn-it!”
No kidding. I pray daily (to whom I have no idea) for higher rates.
It may not be a prayer, but this is what I have to say to Mr. Bernanke:
“‘Do the Volcker’ and drain the liquidity cesspool before we all drown!”
What if the FED knows its no longer in control. Raise rates and prove to the world you have no control? Or live in the lie quietly, making up excuses for your impotence so people still hang on your every word?
reminds me of this bubble gem!
Young potential first-time buyers are waiting, perhaps expecting prices to plummet, said RE/MAX Realtor Mike Lebecki.
“They’re very cautious, and I don’t think they’re thinking their caution through necessarily,” he said. “If all their friends are being cautious and not thinking it through, then they’re all doing the same thing, and they’re going to continue to … buy BMWs and pay rent.”
http://www.dailynews.com/santaclarita/ci_4498114
Who is this guy kidding - it doesn’t suit him *now* that there’s groupthink?
Because in 2005-06, everyone and their mother was buying in the Alt-A Bay Area - they they were “not thinking it through” and “all doing the same thing.”
“Rising inventories suggest sellers have lost leverage”
Oh, they have plenty of leverage. Unfortunately for them, it’s financial leverage but there’ lots of it…
“Some of Micron workers laid off may soon have their house on the market if they move to Pullman, Wash.”
Did I miss something? Why would laid off workers from Micron move to Pullman? Is there a holding cell for former Micron workers there? What happens if they move back to Mountain View?
Groundhogday, can ya help a brother on this one?
Here you go, Sleepless… http://tinyurl.com/2dwwya
Thanks, we had one here in Portland… must have seen the writing on the wall. We paid to move him, too. Good for him! (he’s a nice guy).
Thanks.
When I attended WSU, Schweitzer labs had ~25 employees. It is now is the second largest employer (behind WSU) in the area and is driving Pullman’s growth. Schweitzer and Micron sell completely different products into completely different markets, so I was a little surprised that the reporter thinks they’ll be this huge migration from Boise to Pullman.
The Schweitzer thing is really over blown. FIrst of all, Scheweitzer is looking for staff all over the country, so I wouldn’t expect a huge influx from Micron.
Secondly, SEL is growing and hiring, but most hires are relatively low paid manufacturing or clerical staff. And SEL is located here precisely because they can offer lower salaries relative to major urban centers. So SEL employees, on the whole, can’t afford Pullman housing any more than WSU employees.
Finally, in response to high local housing costs (it is getting more and more difficult to hire and retain good staff) Schweitzer is starting to develop and build their own affordable homes… Potterville in reverse.
“I think it looks great. My phone is ringing. I have really great sellers right now, I have great buyers, it’s in balance,” said real estate agent Laurie Barrera.”
You sure that ringing isn’t from all the hallucinogenic drugs you’re taking Laurie ?
Meanwhile, in McMansion land (from an article proposing tax breaks for smaller houses):
The average U.S. home size was 2,434 square feet in 2005, up from 983 square feet in 1950, according to the National Association of Home Builders.
Link to article? Thanks.
http://www.time.com/time/nation/article/0,8599,1643151,00.html?cnn=yes
Sorry, I’ll learn to use Tinyurl!
983 sq ft? I don’t think my parents lived in a place smaller than 2000 sqft since 1968. What is 983 sqft — the size of a 1 bdrm apartment? I wonder if that 983 was artificially deflated by the surge of returning GIs buying those tiny little 2br starter homes around 1950.
Heck, except for the college years, I don’t think my dad had ever lived in a house smaller than 2000 sqft).
I grew up in a house with three other kids and 1200 SF total. I didn’t have my own bedroom until age 10 (when we converted a carport storage area)
…and I would have expected the average SFH to have been around that size back then. But, an average of 938 implies that there were houses that were smaller than that.
~1000 square feet is small, but I see plenty of those in the northeast USA. Those sell for $20k to $75k depending on location. Barely big enough for one person. 2/1 with basement.
Ol’ Darrin Kelleher ought to have a look at Bend Craigslist… it has just what he claims to be looking for: One SUBDIVISION all site-prepped with streets and all in Klamath Falls, and another shovel-ready in Redmond (near Bend). Bwaahahahahahaha!!!! Crack smoker…
Dear sleepless, employer SEL in Pullman WA is here in town recruiting former Micron employees for supposedly 100 positions they have to fill (i.e. the comment about moving to Pullman).
Ah, Schweitzer, thanks. Odd that the article didn’t mention that.
Sellers have not lost leverage. In fact, it is leverage which explains why they have to sell.
it’s tough when you’re chained to an alligator named Leverage.
This string of articles inspired me to check in on the people who bought my house. They hadn’t sold their’s prior to purchasing mine.
Granted, in good faith to them, I was hoping they would sell their’s quickly but thought they were at least $75K overpriced for where it is.
Just sold last week for $5000 less than list price, a 2% discount. Grrr….maybe this Portland market still has some legs…..
Yes, but I’m sure they paid closing cost and other fees. And maybe a few other bonuses.
Sure, and it looks like they also had some non-permitted work that had to be permitted before it closed.
But even with all of that, they doubled their money in 4 years. From $200K to $400K. Incredible.
Well if they bought another house in the PNW, that 200K profit is just funny money, transferred from one overpriced property to another. The only way to turn it to real $$ is to rent, or buy in a less inflated area.
This is one big reason why I plan to leave FL. Even if prices drop there, id rather be elsewhere on many acres of land for cheaper than FL with much less problems.
Well, that is some consolation since they did buy my overpriced house whereas I took my “winnings” and stashed them and am renting.
I can see only 2 geographic regions that haven’t turned down severely yet: the Oil Patch and Pacific NW. Each has an economic driver not available to the rest of the country - rising energy prices and Boeing to be specific. But in both areas we are seeing early signs of distress: rising inventories and flattening prices. Even if price changes are still positive YoY, the rate of change is falling.
There are also smaller sub-regional pockets of strength but they are shrinking in number and size. NYC, SF and to some extent Chicago have held up better than the national average. It’s no coincidence that these areas’ economies are all heavily driven by finance and the financial tail has been wagging the economic dog for years now. NYC has Wall St, SF with tech banking and venture capital, Chicago has the CME and CBOE, the largest futures markets on the planet.
These metro areas held up well for a while and are still better off than the national average. But the suburbs and outlying areas are beginning to suffer the same pressures as everyone else. RE problems are rising in Chicago’s western burbs, the East Bay, Queens, Brooklyn and Jersey. The only areas of undiminished prosperity are core cities - especially Manhattan. The waning power of speculative finance is still sufficient to keep income and spending rising in the top wealth strata but is no longer throwing off enough money to keep the whole metro area afloat.
I don’t see how Boeing does anything for Portland, or any non-Seattle NW metro area for that matter. Seattle also has Microsoft, plus the requisite IT cottage companies that have grown up around it. Agreed the area has an advantage in that respect, but not enough to offset the disparity between median house prices and incomes.
Seattle had all of these same advantages in 2002, before prices shot up. They don’t explain the change.
Boeings orders have quadrupled and deliveries more than doubled since 2002.
http://en.wikipedia.org/wiki/Image:Airbus_Boeing_net_orders_2002_2006.png
Final assembly is still done in Washington. Even if Boeing itself is not directly employing a lot more people, they are still creating a lot more output. Heavy manufacturing has tremendous multiplier effects since it is very resource and energy intensive. Those assemblies manufactured elsewhere still have to be transported, a lot more electricity has to be generated, raw materials shipped, etc, etc. Each of those activities creates jobs attributable to Boeing but outside the company. These are in addition to facilities contruction, telecommunications and general support jobs created in the service sector by any expanding enterprise.
Those are all incremental changes since 2004, much less 2002. As evidence, let’s look at median housing prices in Seattle.
http://mysite.verizon.net/vodkajim/housingbubble/seattle.html
Notice how prices went up less than 10% during the 3 years 2001-2003, then accelerating in 2004, then more sharply since. Note the correlation to order activity at Boeing. This should at least strongly suggest a connection. Especially in light of the fact that RE was weak in Seattle but strong nationally during the years when Boeing was losing out to Airbus and overall orders were weak. Now that Boeing is roaring, Seattle is in decent shape despite a very weak national trend. For contrast, let’s look at LA, where housing prices moved up continuously until last year - soaring right through the 2001-2003 period.
http://mysite.verizon.net/vodkajim/housingbubble/los_angeles.html
Notice
I think a much better explanation is that Seattle lagged the CA real estate boom as equity locusts ravaged the west. This explanation works for ALL of the Pacific Northwest from Portland to Pullman to Boise, all of which saw a rapid appreciation of RE at approximately the same time… Only one of those places had Boeing.
Seattle had Boeing, Pullman had Schweitzer Engineering, and every other place had some sort of local explanation for the rapid appreciation in RE. BUt now ALL of these places are seeing RE sales drop rapidly, growing inventory and the initial stages of price erosion. Guess what Boeing is still going strong in Seattle as is Schweitzer Engineering in Pullman.
That explanation doesn’t work. LA troughed in 1997, the same year as Seattle. They have mostly risen together since, just like the rest of the country. Those are national trends at work over the last 10 years. What has to be explained is why Seattle was so much weaker than the rest of the country from 2001-2003 and so much stronger over the last 2 years. Lagging the LA data doesn’t do it.
Well then, if if you want an explanation for the lag, you need to make that explanation work for Portland, Seattle, Salt Lake, Spokane, Pullman, Boise, etc… I fail to see how Boeing explains RE trends in all of these locations (and more).
I’m trying to explain to you that there is no lag. There is strong correlation over 20 years between Seattle and LA. That correlation breaks down for 2 periods: 2001-2003 and 2005-2007. Those breakdowns correlate strongly to the periods of weak and strong business at Boeing respectively. That’s just what the data show: the national trend dominates and when Seattle deviates from the national trend it does so in the same direction as Boeing’s business.
I understand perfectly well what you are saying. But you have NOT explained why Boeing would be correlated with the REST of the PNW and many mountain range communities. Please do so rather than continue to state the same thing over and over.
And you still need to explain why Seattle RE is tanking this year when Boeing is simultaneously going gangbusters. Why is Seattle inventory rising dramatically? Why are sales falling? These are the leading indicators of a falling real estate market and completely contradict your thesis.
Let me add one final point. I heard the EXACT same argument here in Pullman last year: RE is booming because Schweitzer is hiring. But when you run the numbers, look at how many people are hired at various salary levels it simply didn’t add up. And now, with Schweitzer still hiring the RE market is tanking.
If Boeing is having a dramatic impact on wages we should see that reflected in rapidly rising aggregate wage statistics for Seattle. But that hasn’t been the case. RE has appreciated at a much greater rate than wages.
Boeing keeps being touted as a local economic savior, but the truth is, many of the jobs that used to be at LOCAL suppliers are now scattered around the world, as the company outsources its manufacturing jobs in exchange for promises of new plane orders. That’s why they’re flying in pieces of the new Dreamliner from all over the globe, rather than building these pieces locally, as has been done up to now.
Here’s some approximate numbers to keep in mind:
Boeing employment in the late 1980s: 120K (includes defense side)
Boeing employment in the mid 1990s: 100K
Boeing employment now: 55K
(Loss of) jobs at local Boeing subcontractors: (???, but not negligible)
I told my MS-employed neighbor this last night, and he exclaimed, “You mean Microsoft now has more employees than Boeing?”
BINGO!!
No, because 2/3 of MSFT employees are TEMPS.
Here’s some irony: I have an acquaintaince who went back to work at Boeing this spring (3 yrs after her early retirement) because her realtor husband (in Auburn/Puyallup area) has had such a drop in his income this year.
Bear Sterns - funds worth 09 on the buck-tops !
I saw that! That’s worse than I was thinking, even. And that’s the less leveraged fund. The highly leveraged fund is a complete write-off.
Portland has Precision Castparts, which has been on a tear and does lots of aerospace; there’s a small Boing plant here in Gresham, but Freightliner has been letting people go.
Jeez, is Precision Castparts still around? They were dropping off a cliff when we left the area. On the other hand, it seems reasonable that a company named “Boing” would spring back from economic adversity.
It’s been Boing for years - up and down (I’m a SEA native). Castparts has been booming the last few years, buying up other companies.
“‘Sales in the $400,000 to $500,000 range were down by 41 percent. Most families are looking for homes that they can afford, and most families can’t afford $500,000,’ Neisen said.”
A confirmed idiot sighting here. Way too many homes priced above 400K, and those damned unreasonable family types have the gall to look for homes they can afford. Mr. Obvious Niesen is right at home in Real Estate.
Here in Portland a year ago, I told a newly-arrived 30-something (with all the answers, of course) to wait before they bought. Of course they didn’t listen. They bought a place in the Alameda Arts district (NE) for $450K or so. Oh well. If they don’t have to sell, they’re fine, but if they decide to leave PDX, well, bring the checkbook to closing. One hopes they did a fixed-rate loan.
I smell another foreclosure. That can only bring prices down for the smart guys like us who wait for the bottom.
A seller in Hillsboro must have got the word that prices are coming down. Their house had been on the market for nearly a year. They had already moved so the house was vacant as well. They were asking 379,000 and then lowered it to $299,000. A couple of weeks later I see a sale pending on the sign out front of the house. Now I wonder if the buyer will be able to get financing.
The owners had lived in the home several years and had the ability to cut the price. I am sure the neighbors trying to sell their homes are mighty upset that their neighbor would “give the house away”. The home didn’t look worth more than $225,000 to me. Oh well, 80K does get me a bit hopeful that the housing may be affordable some day. For the next house in the area to sell, the seller will need to take 100K off the price since the last seller got the only FB willing to buy for 80K less.
It is “shocking” to see properties go down in price since most here in the great Northwest tell me it is different here and prices don’t go down. I simply reply to them that I believed the same thing when I lived in AZ and then put my house on the market only to drop the price.
Great being a renter this summer.
Add a bit more to the above comment. The house is located in an older neighborhood where the houses are at least 30 years old and more. These are the areas I see the houses sitting the longest (no surprize).
However, when looking at some Don Morissette homes, they had empty homes and empty lots avialable and their didn’t appear to be a stamped of buyers signing up. Which is quite different to the heyday of AZ when you got a lot by winning the lot lottery from the builder.
I saw a place out my way that started last year at $699 - it’s down to $599, but now it’s empty and the landscaping hasn’t been maintained - and there’s a tarp stapled over the pole barn (garage) roof. I think they’re going to ride it all the way down.
“‘It appears that sellers held off longer than usual into the year to put their homes on the market,’ said Sue Jakabosky, eco-broker with Re/Max Integrity. ‘I think everybody was adjusting to the slower market, and they were hesitating because of all the (national) news that the sky was falling in housing sales, waiting to see what would happen here.’”
We are seeing a lot of homes pop onto the MLS very late in the year as well (Pullman, WA). It is VERY easy to explain: it has finally sunk into the Pacific Northwest that real estate is collapsing here and speculators are running for the exits.
Evidence: the vast majority of these late arrivals are rental quality homes at the lower end of the market.
Well, there are about 5 late arrivals that just came on in Lake Oswego, a high end market in Portland.
There are dozens of homes in this neighborhood that have been for sale since I moved here (January). This is a part of town that is stop #1 for transplants with money. And nothin’s movin’.
So, speculators and owner-occupieds in the high end are trying to get out too…..
SOrry, didn’t mean to imply that all speculation was on the high end everywhere. But for this little town, that is largely the case. FOr one thing we don’t have much of a high end. Secondly, our speculation was driven in large part by parents of college students… who by and large don’t want to buy a nice place for Junior to tear up with keg parties.
On the contrary, I thought you were saying that the speculation was on the low end.
I was trying to make the point that there appears to be plenty on the high end, too.
Whereabouts in LO? I’m seeing a recent uptick in starter homes bought in the last couple of years trying to sell while prices are still high(er). LO inventory was in the 200s just a year ago - now its in the 500s. As recently as the late 90s the median income could truly afford the median house…
I’m actually up on the hill in Dunthorpe, close to Rt. 43, near Tryon Creek SP. I take Country Club from downtown LO through to Kruse Way to work. Lots of stuff through there, not to mention the stuff on the grid (A, B, C…. streets) in LO. A few recent “solds” but mostly just crickets out there…..
Nice area. The high-end is definitely crickets. There’s a guy who posts under the screen name Lake Oswego Mortgage Broker on http://www.portlandhousing.blogspot.com and has some interesting anecdotes, if you haven’t seen it.
Thanks Steve,
I hadn’t seen that blog. This one keeps me too busy trying to keep up! I have seen http://www.portlandrealestateblog.com but an RE agent runs it….
Yeah, there’s not a lot of activity but it’s good to have a non-realtor PDX blog. Also on http://www.seattlebubble.com/blog they occassionally include PDX - for example: http://seattlebubble.com/blog/2007/06/27/seattle-just-maybe-behind-the-cycle/
I had a conversation with a friend from Portland about a year & half ago. He was pandering to the dinner group that he was going to become a house flipper -lots of great & distressed properties coming to market at the time in Portland- and since his income from being a mortgage broker was slowing down. I warned him about his very words “lots of distressed properties & slowing mortgage closings.” But no luck in convincing him. He make me feel stupid for asking some common sense questions. I zipped my lip for the rest of the night. Current update: recently heard that he was successful in getting family and friends on board to invest with him in “many” homes. Their houses are not selling, losing money as prices drop and are underwater in their highly levereged positions. Sad, very sad. He is a family man with a house full of kids and a working wife. Maybe he can go back to brokering subprime loans. Not.
You warned him, he had fair warning. Let him learn the hard way. His loss will be first time buyer’s gains as prices get forced down, down, down!