June 5, 2008

The Light At The End Of The Tunnel Is Definitely There

A report from the Idaho Statesman. “The number of Treasure Valley homes entering the foreclosure process in May was down 17 percent from the previous month, according to statistics released Wednesday. A total of 345 notices of default - the first step in the foreclosure process - were filed in Ada and Canyon counties in May, compared with a yearlong peak of 415 in April.”

“The 345 filings were still 141 percent ahead of the 143 default notices filed in May 2007. Moreover, the Valleywide total of 1,843 default notices filed between January and May of this year represents a 139 percent increase over the comparable period a year ago.”

“Charlie Nate, president of IdahoDataProviders, which compiled the statistics, said the lull in May was because banks are being swamped with repossessed properties. As a result, he said, lenders have become reluctant to pull the trigger on a foreclosure, choosing instead to try to negotiate a ’short sale.’”

“‘Lenders are more likely to go along with a short sale now,’ Nate said. ‘They already have a ton of properties on their books. So, they might wait (on foreclosure) to see if they can get a short sale approved.’”

“‘I think two out of every three homes in foreclosure are upside down,’ he said.”

“Shaun Tracy, an associate Realtor in Boise, said the decline in foreclosures last month isn’t necessarily a sign that the local real estate market is turning around. ‘I’m not sure that the public is really aware just how many foreclosures there really are out there,’ Tracy said.”

“But it may convince consumers sitting on the fence that home prices will not fall any farther and that this is the time to buy a home, Tracy said.”

“The slowdown in home sales during the past year resulted in May’s bankruptcy protection filing for Hunter’s Point, a subdivision of more than 500 housing units encompassing a golf course in Canyon County.”

“However, a developer and real estate professionals say Eagle’s Legacy, with about 1,300 homes, surrounding golf, tennis, swimming and soccer facilities, has great potential because of its upscale 1,800- to 4,000-square-foot homes that range in price from $249,000 to $449,000, and its prime Treasure Valley location.’

“‘When you look at Eagle, that is a very attractive price,’ said Shaun Tracy, an associate Realtor in Boise, who is not connected to the Legacy project.”

“During the first quarter of the year in Eagle, only three new homes sold for an average price of $484,000, according to the Intermountain MLS. And only 13 of the 78 homes listed for sale around $250,000 are 2,000 square feet or more, and only six of the 13 are new construction, Tracy said.”

“‘At the $250,000 price point, they (Legacy) have no competition,’ he said.”

“But at a time when high-end home sellers and builders are struggling, how did Legacy finance and maintain such a development? The development was in the planning stages five years ago, before land prices soared, Legacy developer Todd Santiago said.”

“Legacy also partnered with Holmes Homes, a Utah-based company that has built more than 16,000 homes in Idaho, Utah and Arizona. ‘They came in with a far better price point than most builders, and that allows a home to be priced more aggressively,’ Santiago said.”

The Bellingham Herald from Washington. “Until recently, Bellingham and Whatcom County bucked national trends when it came to residential home prices. However, in the first quarter of 2008, the median price of a home dropped 3.4 percent compared to the same period last year. Also, home sales are down 14.1 percent, according to Lylene Johnson of The Muljat Group South office in Fairhaven.”

“‘Homes were on the market sometimes as little as 15 days in previous years are now taking 100-200 days to sell,’ says Tom Follis, managing partner in Wm. T. Follis Realtors.”

“So what is the future going to bring to our local commercial real estate market? One trend that has become quite prevalent here particularly in Fairhaven is the mixed-use buildings, combining commercial and residential units.”

“‘It is, in many respects, the wave of the future,’ says Follis. ‘With more people living in the core areas like downtown Bellingham and Fairhaven, it has tremendous appeal to business owners. They have instant customers living right above their business.’”

“People in the industry say that the market has shifted some. There are fewer spec homes being built. With the market for work on new homes slowed from the high of the last five years, many business people are hunkering down expecting a decent, but not busy, summer season this year, followed by a much busier 2009.”

“Del Jacobson, president of the Building Industry Association of Whatcom County, said he hears stories about contractors who were building spec homes and are now stretched thin. And he said most business owners are worried that the perception that things are bad, reinforced by national news stories, will lead to more of a slowdown.”

“‘I think we are all a little nervous,’ Jacobsen said. ‘But from what I can see, compared to the national side of things, we are doing a lot better here in Whatcom County.’”

“Pat Rose, owner of Rose Construction, said her sign of how things are going comes from her phone. She is getting fewer calls this spring than the last few years, and the phones were basically silent during the winter - silent, that is, with the exception of sub-contractors calling her to see if she had any work.”

“Those kinds of calls almost never came during the super-busy times the last three or four years. ‘I talked with other remodelers I know and there is a definite, significant lull in the winter,’ she said. ‘But it’s now picking up some.’”

“The perception that things are worse than they really are can be blamed on two phenomena, those in the industry say. First, any slowdown would seem bad compared to the frantic times in the industry in the past five years.”

“‘It was really amazing, and it went on for so long,’ said Rose, who has been in business for 22 years. ‘It got so crazy. Any lull would seem like a change for the worse after that.’”

“Even locally, the largest failures tend to get the biggest press. So residents are reading about developers who are giving up on would-be housing projects or residents facing mortgage problems or that Washington Mutual closed its Bellingham Home Loan Center in response to the market struggles in California.”

“‘We are not running at the pace we were two or three years ago,’ said Jim Wynstra, president of Homestead Northwest. ‘But those were remarkable periods.’”

“In support of the industry, the Building Industry Association of Whatcom County has been running an advertising campaign trying to persuade potential customers that now is a great time to buy or remodel.”

“Still, said Bill Quehrn, executive officer of the BIAWC, things have slowed a little. He said the builders he talks to and works with know that and most are prepared to weather the storm.”

“‘We have been in a boom cycle, no one would argue that,’ he said. ‘If you are fairly new in the business you might just think that’s where our market is. But most veterans would say we have just come back now to where our market usually is.’”

The Heraldnet from Washington. “A sign of sinking home prices in Snohomish County is on its way in the mail. New values issued this week by the county assessor show an unprecedented 2 percent drop from last year.”

“‘I don’t think I can remember a year where we’ve decreased residential values countywide since I started working here in 1987,’ county assessor Cindy Portmann said. Her chief residential appraiser, Steve Lightle, said it hasn’t happened in his 35 years with the county.”

“The drop comes after issuing years of double-digit increases in property values. Homeowners have seen double-digit increases in property values each year since 2004. The new assessments are based on property sales in 2007, which steadily declined starting last June. They’ve continued to slide.”

“Citing economic reports, Portmann said the overabundance of cheap credit caused a housing bubble that inflated the price of land and housing and caused many developers to build more homes than there were buyers.”

“The 2 percent decrease seems to accurately reflect last year’s slide in prices, said Nathan Gorton, executive officer for Snohomish County-Camano Association of Realtors. Overall, housing prices are about 5.5 percent lower than they were 18 months ago, he said.”

“Based on sales figures, Snohomish County median house and condo prices dropped to $330,000 in April from $350,000 in November.”

“A decrease in property value shouldn’t worry homeowners, Gorton said. ‘If you look at it like a stock, then, yeah, you might panic a little bit,’ he said.”

“Homeowners who hang onto a property for five to seven years will probably make money, and some statistics show the price of a home doubles every 10 years, he said.”

“‘We’ve got to get away from looking at houses like the stock market,’ Gorton said. ‘There’s intrinsic value. You live there. You raise a family there. You make memories there.’”

Salem Monthly from Oregon. “In March, Salem Monthly reported that Salem was weathering the real estate woes that were facing other parts of the country. But recently the Willamette Valley MLS released statistics showing a decline in the average sale price in the Willamette Valley compared to this time last year.”

“Melina Tomson of Tomson Burnham, a real estate agency in Salem, says there are two main reasons for the decline. One is the oversupply of newly constructed homes, which raises housing prices because they are generally more expensive. Second, she cites the lack of sales of luxury homes in the area.”

“‘It really comes down to supply and demand,’ Tomson said. ‘We have little demand and a lot of supply. As such, buyers are demanding lower prices and when sellers are willing to come down, buyers are buying.’”

“Prospective sellers should be aware that multiple sources have called it a ‘buyer’s market.’ But Tomson does not believe there is a best time to buy or sell.”

“‘I think if someone is planning to live in a home for a short period of time, renting might be a better option due to the increasing inventories and difficulties in the lending market. I think sellers need to be realistic about the change in the market,’ she said.”

From KTLV 10.com in Oregon. “Home Appraiser Roy Wright is considered by many in the Jackson County real estate business to be the expert when it comes to tracking market trends. Wright says the Ashland housing market tends to be an indicator of where the rest of the county is heading, which could be good news for sellers.”

“‘I believe we are seeing the beginning of the end,’ says Wright, after three years of a struggling housing market.”

“‘We’re not out of the woods. But we definitely see a light at the end of the tunnel, and it’s not a train coming at us, you know, hopefully. The light is definitely there,’ he says.”

“Wright says more than 300 fewer homes were sold this year than during the first 5-months of last year. He also says foreclosures are expected to continue which is devastating news for those losing their homes, but is promising for first-time home buyers looking for better priced houses.”

The Tigard Times from Oregon. “Tualatin resident Jon Hanson could be a motivational speaker. He could be a politician or financial investor. But instead, he is a real estate agent, which sort of pulls all these facets of his personality together.”

“Only a handful of months into his career as a real estate agent with Keller Williams Realty in Oregon and Northwest Properties Brokers Network in Washington, Hanson brings a refreshing perspective to the housing market.”

“For 24-year-old Hanson, a love of houses and people came naturally. ‘I’ve always had an interest in houses because there are unlimited possibilities,’ said Hanson. ‘Who doesn’t love real estate? People always love to tell their real estate stories, whether it’s the house they should have bought or if they are just asking about the market.’”

“Despite nationwide murmurs about the real estate market’s downturn, Hanson insisted the Portland market is ‘relatively wonderful.’”

“With lower interest rates and competitive home prices, Hanson said now is the time to buy. ‘After we come out of this downturn,’ Hanson said, ‘people will realize they should have bought at a discount a year ago.’”

“Jeff Barram purchased his first home in Vancouver, Wash., with Hanson’s help. The process, Barram said, ‘was really nice because we didn’t really have to do very much at all. He ran everything. Being first-time homebuyers, we didn’t know anything. There are so many forms.’”

“‘I have goose bumps thinking about the opportunities out here for people,’ Hanson said. ‘Right now I’m working with a number of buyers. They see that real estate might not be this affordable again.’”

“‘Every day when I leave my house,’ he said, ‘I’m not in the real estate business; I’m in the trust business.’”

“And in his business, Hanson said, he must eliminate the fear of failure. ‘Failure does not exist’ he said.”




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110 Comments »

Comment by Al
2008-06-05 08:11:56

“‘I have goose bumps thinking about the opportunities out here for people,’ Hanson said. ‘Right now I’m working with a number of buyers. They see that real estate might not be this affordable again.’”

Buy now or get priced out forever.

“‘Every day when I leave my house,’ he said, ‘I’m not in the real estate business; I’m in the trust business.’”

And I abuse that trust on a regular basis.

“And in his business, Hanson said, he must eliminate the fear of failure. ‘Failure does not exist’ he said.”

Until after my commission check clears.

Comment by Beer and Cigar Guy
2008-06-05 08:41:01

“‘I have goose bumps thinking about the opportunities out here for people,’ Hanson said.”
Oh, so you’ve already got goosebumps now, Cupcake? Just wait and see some of the opportunities coming up in the next 12 months. You’ll have boils all over your ass.

 
Comment by lmg
2008-06-05 08:48:42

There’s a great line from Joe Mantegna’s con-man character in David Mamet’s movie “House of Games”, explaining his relationship with a ‘mark’:

“I give him my trust, and he gives me his money”.

Comment by combotechie
2008-06-05 08:57:51

Great movie!

 
 
Comment by Olympiagal
2008-06-05 09:09:49

“Tualatin resident Jon Hanson could be a motivational speaker. He could be a politician or financial investor. But instead, he is a real estate agent, which sort of pulls all these facets of his personality together.”

THIS GUY SOUNDS…excuse me, started out screaming there…okay, *deep breath*…This guys sounds like he could be SATAN.

“And in his business, Hanson said, he must eliminate the fear of failure. ‘Failure does not exist’ he said.”

Okay, a retarded Satan, but STILL Satan.

Comment by combotechie
2008-06-05 09:43:23

These silver tounge guys are able to do their work by reaching into and stimulating the innermost recesses of the brain where the emotions reside. The best way to counter to their ploys is by reason well armed with facts.

The problem is getting people to listen to reason; they’d much rather believe in the dream offered by the silver tounges than the harsh reality of the Case/Shiller or ARM reset charts.

At least that’s been my experience.

 
Comment by SanFranciscoBayAreaGal
2008-06-05 11:10:46

Olygirl,

I will finish the screaming for you. He is 24 YEARS OLD. “Only a handful of months into his career as a real estate agent with Keller Williams Realty in Oregon and Northwest Properties Brokers Network in Washington, Hanson brings a refreshing perspective to the housing market.”

And to top it off with ““Jeff Barram purchased his first home in Vancouver, Wash., with Hanson’s help. The process, Barram said, ‘was really nice because we didn’t really have to do very much at all. He ran everything. Being first-time homebuyers, we didn’t know anything. There are so many forms.’”

“THERE ARE SO MANY FORMS” Another FB that will claim he was sold up the river by the SATAN spawned real estate agent.

Wow oh wow there is blood in the water and the shark is circling.

 
Comment by JCG
2008-06-05 18:00:14

DAMIAN!!!!!

 
 
Comment by Happy Renter in Vancouver
2008-06-05 11:42:59

And the reason I would trust a 24 year old for financial advice is….?

I have underwear older than this real estate punk.

Comment by ChrisInBirmingham
2008-06-05 12:09:03

Ewwww….

 
Comment by Esoteric
2008-06-05 14:57:19

Not that I’m going to defend this obvious shmuck, but seems to me the “experienced” and “knowledgable” financial analysts and Realtwhores are the ones who got us in this mess.

There’s nothing worse than someone who is so set in their ways and so self-confident that they make mistakes like under pricing risk.

So although in this case, this 24 year old is quite obviously a douche, it has nothing whatever to do with his age and everything to do with him being a douche. There are many brilliant and innovative 24 year olds out there.

 
 
Comment by flippo
2008-06-06 02:29:58

“24-year-old Hanson” who is “only a handful of months into his career as a real estate agent” certainly qualifies as the kind of seasoned expert whom i would depend upon and trust to give me the right kind of advice about real estate (or for that matter, much of anything).

Real estate is one of the few businesses in the world where thousands of otherwise smart people entrust lots and lots of money to the experience, judgment and ethics of untrained, uneducated, morally challenged, off-the-streets, money hungry morons.

Oh, wait, I’m sorry, they ARE trained…….. by the NAR affiliates
AND tested for competency and ethics………… by the local Board of Realtors or some government agency controlled by the Realtors.

But that should make you feel better. So find yourself a 24 year old rookie, listen to his advice, and jump it (but watch out for goose bumps!!)

 
 
Comment by Lost In Utah
2008-06-05 08:16:00

“And in his business, Hanson said, he must eliminate the fear of failure. ‘Failure does not exist’ he said.”

Talk about a quote prime for comments! Truly delusional.

On that note, saw 2 houses today on my list in W. Colorado that have been reduced, one 20k and the other 100k. It’s now getting a good start in this part of the world, behind a lot of other places, but here it comes.

But not to worry, failure does not exist. Time to make an espresso and call on that latest contract I just got, tell them it’ll be a few months late, I need some time to talk to a shrink - I’ve been living my life backwards, thinking I have to work and all that…

Comment by edgewaterjohn
2008-06-05 08:31:24

“…could be a motivational speaker. He could be a politician or financial investor. But instead, he is a real estate agent…”

Look how these “occupations” are so easily interchangeable: politician, motivational speaker, real estate agent, financial investor. It’s people like him that need to get punched in the face…before they even leave the womb.

Comment by Lost In Utah
2008-06-05 08:33:56

Probably wouldn’t do any good, it’s hardwired in their DNA.

Comment by joeyinCalif
2008-06-05 09:04:57

the duplicity gene..

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Comment by Olympiagal
2008-06-05 09:18:42

Then their MOMS should be punched in the face. And their dads as well, if they even have a handy human one and didn’t arrive via ‘Rosemary’s Baby’ style, which I think is most likely.

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Comment by Pondering the Mess
2008-06-05 09:42:24

There are those who contribute to society, and there are those who leech off of the work of others. Guess which type of person is most common today and is thus hailed as a “genius?”

 
 
Comment by Lost In Utah
2008-06-05 08:32:29

As for it getting going in this part of the country (cue in the song, “I’ve been waiting SO long”), the newspaper in a nearby town (Price, UT) has an article today on a dramatic rise in theft, and they’re blaming the economy. This is a coal mining/oilpatch town and is supposedly immune (according to the RE delusionists).

 
Comment by aimeejd
2008-06-05 10:44:35

“And in his business, Hanson said, he must eliminate the fear of failure. ‘Failure does not exist’ he said.”

This is pure, unadulterated Amway/MLM/Prosperity Cult Bullsh*t. Revolting.

Comment by Al
2008-06-05 10:51:36

Thank you. I knew that kind of garbage sounded familiar but couldn’t place it. I had a roomee that got sucked into MLM, but it was long enough ago that I couldn’t place it.

 
 
 
Comment by awaiting wipeout
2008-06-05 08:18:46

For 24-year-old Hanson , a love of houses and people came naturally.

“With lower interest rates and competitive home prices, Hanson said now is the time to buy. ‘After we come out of this downturn,’ Hanson said, ‘people will realize they should have bought at a discount a year ago.’” (Portland OR)

24 year olds know everything. If you don’t believe it, just ask them. My mother use to say this to me growing up, using my appropriate age.

Comment by combotechie
2008-06-05 08:28:36

Youth is wasted on the young.

Comment by Olympiagal
2008-06-05 09:11:37

Not always. I’m making pretty good use of mine.

Comment by Lost In Utah
2008-06-05 09:39:19

Me, too, Oly, make hay while the sun shines, even though it’s raining and flippin’ cold here. Hey, where ya been? People asking about you yesterday…

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Comment by Olympiagal
2008-06-05 09:52:15

Oddly, it’s raining and flippin’ cold here, too. It has been 10 degrees colder than normal for a few months now.

Yesterday I was out doing that stupid ‘make a living’ thing. I had to go to meetings and talk to a bunch of bald monkeys who would be better employed by growing some fur and sitting in trees and chittering. Charles Darwin was surely sitting in Heaven crying his little eyes out at all the wasted evolutionary potential.

Later I ate a whole bag of black licorice and watched ‘The Amazing Screw-on Head’ and that cheered me right up.

(And thank you for asking. :))

 
Comment by Lost In Utah
2008-06-05 10:03:42

What!!! No animal cookies??? :)

 
 
 
Comment by Blano
2008-06-05 09:45:59

It’s not wasted on that NAR kool-aid drinking punk. He should be slapped.

 
 
Comment by NoSingleOne
2008-06-05 08:59:01

His generation has never known a time where real estate hasn’t been a (mostly) good investment. Come to think of it, neither has mine…I’m Gen X.

You have to go all the way back to 1930 to find anything remotely parallel to what is happening today (or 1985 if you look at Japan).

Comment by ronin
2008-06-05 09:20:33

or 1990 in California and New England.

Comment by lmg
2008-06-05 11:22:04

I thought things were plenty bad for San Diego, from the late ’80’s to mid-90’s…

…however, this time it will be worse.

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Comment by NoSingleOne
2008-06-05 11:34:53

Those were mild downturns. That’s like comparing a mild head cold with the Black Plague or HIV.

 
 
 
 
Comment by Pondering the Mess
2008-06-05 09:45:43

Ah, yes, the “discount” of the current year, where houses only sells for 5 times median income vs. 6 times. Unaffordable is still unaffordable, regardless of what “flavor” of “deal” one is getting on the overpriced shack.

Comment by In Colorado
2008-06-05 11:08:18

Yup. Even at 20% off, few people can afford a new Ferrari.

Comment by Faster Pussycat, Sell Sell
2008-06-05 12:01:26

Why is this simple argument so hard to understand?

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Comment by combotechie
2008-06-05 08:20:10

“… banks are being swamped with repossed properties.”

Reportably some homebuyers go for over a year without making a mortgage payment and still don’t get a NOD from the bank.

Comment by Lost In Utah
2008-06-05 08:27:45

If my LL was smart, she wouldn’t send the keys in to the bank, but just quit paying the mortgage (which she already has) and keep collecting rent from me. I wouldn’t have known the difference until the bank showed up. She might’ve had a year’s free money.

It’s not like she’s a model citizen, she’s just not aware of what’s going on and how big this mess really is. I know she’s not a model citizen from discussions I’ve had with people here in town who she owes money to. As was discussed on this blog some time ago, it’s come to the point where renters need to run credit checks on their LLs and also require references.

Comment by combotechie
2008-06-05 08:44:41

“… she’s just not aware of what’s going on and how big this mess really is.”

Few people are.

But they’re about to learn. Stay tuned …

 
Comment by Olympiagal
2008-06-05 09:14:13

How’s the Squatter Saga going, losty? I’m hungry for details.

Comment by Lost In Utah
2008-06-05 09:58:17

Squatter’s Update: I’m leaving tomorrow for a three-day vacation at a condo in Moab with my cats and dogs (fun - they like to party). I don’t want to be here when my LL moves her stuff as it will be too chaotic, plus she wants to spend the night. I’m also taking photos today of the house in case the bank ever shows up and wonders what it used to look like before she took everything (if she does).

I’m thinking it’ll be best if she just gets her stuff and disappears, which she says she’s going to do. She seems to be blaming the bank for the fact that she took out 100k and spent it and is now losing her house, and I’m sure she won’t be in a partying mood.

But I had a revelation, I realize that I come from a fine tradition of squatters, being part Scot and all (part of me is frugal, the other part not so much). I read about how squatters are part of the elite class in Aussieland (wikipedia, squatters - pastoral) and many of them were from Scotland and England and ended up owning half the country, MOL. In fact, the song Waltzing Matilda talks about a squatter running an itinerant worker off for stealing sheep:

Down came the squatter, mounted on his thoroughbred,
Up came the troopers, one, two, three,
“Who’s that jolly jumbuck you’ve got in your tucker bag?”
“You’ll come a-Waltzing Matilda, with me”.

See, squatters and thoroughbreds and all that and they even had the troopers on their side…so I’m thinking maybe somehow I can follow tradition here and make out like a bandit (and I’m not speaking figuratively, either). :)

Oh, and it finally quit raining!! Wahooo!! Moab or bust (and down there you don’t have to say flippin’).

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Comment by sleepless_near_seattle
2008-06-05 10:01:10

Your landlord wants to spend the night with you? That’s weird. And I’m confused.

 
Comment by Lost In Utah
2008-06-05 10:04:47

Yeah, and she’s a she!!! Too bad…

Now you should REALLY be confused… :)

 
Comment by Meshell
2008-06-05 11:15:56

That is SO weird that she wants to spend the night in the house you are living in. You must be hot ;).

 
Comment by Lost In Utah
2008-06-05 11:26:15

Of course!!! :)

But no, she’s living 100 miles away and it will take her all weekend to pack and move - she basically just walked off and left everything, dishes, furniture, etc., which worked for me, since all my stuff’s in storage, so it does make sense - kinda, as much as this whole escapade makes sense…

 
Comment by NoSingleOne
2008-06-05 11:48:50

“Waltzing Matilda” brings tears to my eyes, and I’m not even Australian!

I thought “LL” meant lesbian lover…lol. I was thinking “no wonder you’re Lost in Utah”! 8)

 
Comment by lmd in big D
2008-06-05 13:07:08

LOL @ this whole conversation!

 
Comment by Lost In Utah
2008-06-05 13:10:43

BWAHAHAHAHA!!!! Yeah, Utah might not be the best place for that, unless you have a REALLY big closet.

And I feel the same way about that stupid song. When I was a kid, I used to drive everyone crazy singing it. Chet Atkins and Tommy Emmanuel have a nice rendition together.

 
 
 
 
 
Comment by Doug in Boone, NC
2008-06-05 08:33:00

“‘We’re not out of the woods. But we definitely see a light at the end of the tunnel, and it’s not a train coming at us, you know, hopefully. The light is definitely there,’ he says.”

Would the last person to be forclosed on please turn out the light at the end of the tunnel!

Comment by eastcoaster
2008-06-05 08:38:58

I believe we are seeing the beginning of the end, says Wright, after three years of a struggling housing market.

I haven’t even seen any substantial price changes in my area yet. How has Oregon been struggling for 3 years? I thought the boom peak was more around late 2006 / early 2007.

Comment by sleepless_near_seattle
2008-06-05 09:11:26

He’s in Ashland which more closely tracks the California market than Portland/Salem, which has been slowing for the last 6-12 months.

Comment by leosdad
2008-06-05 09:40:55

or rather “the tunnel at the end of the light?!”

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Comment by Professor Bear
2008-06-05 11:06:38

Sorry to say, but the light at the end of the tunnel is definitely there, AND IT IS A TRAIN!

 
 
Comment by AbsoluteBeginner
2008-06-05 08:53:33

“For 24-year-old Hanson, a love of houses and people came naturally. ‘I’ve always had an interest in houses because there are unlimited possibilities,’ said Hanson. ‘Who doesn’t love real estate? People always love to tell their real estate stories, whether it’s the house they should have bought or if they are just asking about the market.’”

Mmmmm bop, bop. Shoobie doobie do bop bop. She bop bop.

Comment by hwy50ina49dodge
2008-06-05 09:48:56

‘Who doesn’t love real estate? People always love to tell their real estate stories, whether it’s the house they should have bought or if they are just asking about the market.’”

Hey Ben, see you’ll never be loose & carefree again…but you might be able to sell a syndication to Merv Griffin… Popcorn & trout for everyone! :-)

 
 
Comment by sleepless_near_seattle
2008-06-05 09:23:11

Wow, this Hanson chap really struck a nerve here based on all the first comments.

As I read the article, visions of Kevin Bacon during the movie-ending parade scene in Animal House come to mind.

Comment by Olympiagal
2008-06-05 09:41:44

Well, Jeebus, sleepless! Every word that comes out of this man’s head smacks of glib posturing, or is somehow vaguely sinister or worst of all, is just plain really really fookin’ annoying!

Listen to these gems, from the article:

–“We found a place that we really liked,” Barram said. The process, he added, “was really nice because we didn’t really have to do very much at all. He ran everything.”

–Hanson often awakes at 4 a.m. to start his day.
“If I get up early and take hold of the day, I create my day,” Hanson said. “If I wake up late, the day happens to me.”

– “That depends on where the opportunity is in real estate. I’m only as limited as my imagination. I enjoy life and try to make the most of it,” Hanson said — “just like everybody else.”

Who IS this bizarre construct inside a meat suit? I mean, he wakes up at 4! a.m.! Man’s a freak!

I’m scared. Someone hold me.

Comment by Blano
2008-06-05 09:47:58

The more I read about that punk, the more he needs to be slapped.

Comment by Lost In Utah
2008-06-05 10:06:16

Blano, you need to come on down to the river with me and throw rocks…

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Comment by SanFranciscoBayAreaGal
2008-06-05 11:17:25

Lost,

I head for the ocean, just 15 minutes over the hill, stand at the shore line and scream at the top of my lungs. Helps.

 
Comment by Lost In Utah
2008-06-05 13:15:14

yeah, there’s lots of cliffs out here and every once in awhile I can hear a very faint echo of desperation/anger/frustration coming from somewhere out your way…now I know what it is :)

 
 
 
Comment by sleepless_near_seattle
2008-06-05 09:51:04

Whatever. Surely his positive tongue and Stepford-esque clam nature has motivated you to fulfill your dream and secure habitation while it can be secured at a discount.

Comment by sleepless_near_seattle
2008-06-05 09:52:25

Ahem….”CALM” nature….not…erm, clam

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Comment by aladinsane
2008-06-05 10:01:30
 
Comment by Lost In Utah
2008-06-05 10:07:35

I liked it better the first round…

 
 
 
Comment by Lionel
2008-06-05 11:10:59

Hanson often awakes at 4 a.m. to start his day.
“If I get up early and take hold of the day, I create my day,” Hanson said. “If I wake up late, the day happens to me.”

Maybe we could all pitch in and buy him a case of this stuff –

http://blogs.villagevoice.com/forkintheroad/archives/2008/06/adventures_in_p.php

Or kill him. Either would be fine.

Comment by Lost In Utah
2008-06-05 11:30:38

Turns out, this is a carbonated, grape-flavored beverage spiked with melatonin, valerian root and rose hips. Apparently it is “very, very popular in Houston”

ROFL - slow your roll!!

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Comment by Lionel
2008-06-05 16:13:03

Utah, that detail made me giggle too. Why Houston? You’d think that with all the humidity you wouldn’t need anything to slow you down.

 
 
 
 
 
Comment by weinerdog43
2008-06-05 09:31:57

Kevin Bacon was in Animal House? Where in the scene?

Comment by sleepless_near_seattle
2008-06-05 09:35:45
 
Comment by Mo Money
2008-06-05 09:41:13

In this case I think the part where he is bent over saying “Thank you Sir, may I have another ?” is most applicable.

Comment by Blano
2008-06-05 09:52:27

Absolutely!!

 
Comment by sleepless_near_seattle
2008-06-05 09:55:59

Fine. Here’s more Animal House fun:
http://www.imdb.com/title/tt0077975/quotes

 
 
 
Comment by Pondering the Mess
2008-06-05 09:35:49

“‘It is, in many respects, the wave of the future,’ says Follis. ‘With more people living in the core areas like downtown Bellingham and Fairhaven, it has tremendous appeal to business owners. They have instant customers living right above their business.’”

Isn’t that the way of 3rd world countries, where people are stuck jammed together in little boxes above and surrounded by businesses? Oh, wait - 3rd world country is the style of the future!

Comment by Al
2008-06-05 10:43:25

I’m opening up my own little shop downtown where I’m going to sell fresh chickens. The best part is that the shop has an apartment above it where the chickens and I can live!

 
Comment by Bub Diddley
2008-06-05 12:24:38

Look around you. The U.S. is a third world country. We more resemble Brazil, Mexico, or Russia in terms of distribution of wealth than we do the countries of Europe or Japan. About 300,000 people in American have 95% of the dough. But hey, that’s just because they worked harder than everybody else, right?

Comment by Lost In Utah
2008-06-05 13:17:29

Well, I know they sure as heck worked harder than me! :)

 
 
 
Comment by Prime_Is_Contained
2008-06-05 09:36:17

“Homeowners who hang onto a property for five to seven years will probably make money, and some statistics show the price of a home doubles every 10 years, he said.”

“‘We’ve got to get away from looking at houses like the stock market,’ Gorton said. ‘There’s intrinsic value. You live there. You raise a family there. You make memories there.’”

In one breath, he says we need to not look at houses like the stock market. But mere seconds before, he talks about values doubling every 10 years! That sure smacks of stock-like investment to me (7% implied return).

He sure talks out of both sides of his mouth…

Comment by sleepless_near_seattle
2008-06-05 09:40:46

I’m ready with my pitchfork and torch if you are!

 
Comment by Blano
2008-06-05 09:50:43

“some statistics show the price of a home doubles every 10 years, he said.”

Almost a direct quote from the latest NAR propoganda ad.

 
Comment by Lost In Utah
2008-06-05 10:01:57

Your comment reminded me of that pseudo-German soldier dude who comes up out of the bushes and talks out of both sides of his mouth…you know, in Laugh-In - that old TV show (watched some youtubes of it last night, weird and funny at the same time…)

Comment by CarrieAnn
2008-06-05 15:12:34

pseudo-German soldier dude = Arte Johnson

http://www.youtube.com/watch?v=qIfbCCtWr5I

Comment by Lost In Utah
2008-06-05 17:05:36

That’s cute - LOL

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Comment by tresho
2008-06-05 18:49:12

Veddy eenteristink.

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Comment by Professor Bear
2008-06-05 11:08:03

“Homeowners who hang onto a property for five to seven years will probably make money, and some statistics show the price of a home doubles every 10 years, he said.”

I would sure love to see those statistics. Could someone please furnish a reference?

Comment by packman
2008-06-05 11:22:46

There has been exactly one 10-year period in American history where home prices did indeed double - from 1997-2007. There is no “every 10 years”, there is just “the 10-year period ending in 1007″ (or 2006).

Thus the fact that that 10-year period was a bubble.

Otherwise - generally home prices double about once every 20 years. There’s a huge difference.

Comment by packman
2008-06-05 11:24:06

1007 = 2007 I mean of course.

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Comment by sf jack
2008-06-05 14:19:26

“There has been exactly one 10-year period in American history where home prices did indeed double - from 1997-2007.”

*****

Congratulations and thanks are due to such fine bubble blowing work.

I have to say:

“Many, many, many thanks to Alan Greenspan and the ‘Do Nothing’ Fed!!”

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Comment by SanFranciscoBayAreaGal
2008-06-05 11:23:15

Reminds me of a scene from the Wizard of Oz:

“Dorothy: Now which way do we go?
Scarecrow: Pardon me, this way is a very nice way.
Dorothy: Who said that?
[Toto barks at scarecrow]
Dorothy: Don’t be silly, Toto. Scarecrows don’t talk.
Scarecrow: [points other way] It’s pleasant down that way, too.
Dorothy: That’s funny. Wasn’t he pointing the other way?
Scarecrow: [points both ways] Of course, some people do go both ways.”

“We’re off to see the Wizard the Wonderful Wizard of Oz.”

 
 
Comment by MEaston
2008-06-05 09:51:27

Banks may have to decrease dividends - Sacrilege
http://biz.yahoo.com/rb/080605/usa_banking.html

Is that a glimmer of truth telling by the FED?
http://www.bloomberg.com/apps/news?pid=20601087&sid=a.uAzQHA.Er0&refer=home

Time to put investment banking back in its box? Well past it I’d say.
http://www.bloomberg.com/apps/news?pid=20601039&sid=abao965FJY5s&refer=home

 
Comment by aladinsane
2008-06-05 10:07:43

“Under capitalism, man exploits man. Under communism, it’s just the opposite.”

John Kenneth Galbraith

Comment by joeyinCalif
2008-06-05 10:33:32

One difference is that under communism, if man cannot exploit man, he murders him or, in a gesture of charity, sends him to a corrective labor camp.

Comment by measton
2008-06-05 18:53:17

Plenty of examples of man exploiting man unwillingly in our own capitalistic system. Read Grapes of Wrath.

Comment by joeyinCalif
2008-06-05 19:31:27

I hate to point it out, but The Grapes of Wrath is one of Steinbeck’s fictions.

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Comment by taxmeupthebooty
2008-06-05 11:20:54

was he a poof like Keynes ?
socialists are defeatists

Comment by joeyinCalif
2008-06-05 12:06:34

What’s wrong with defeatism?
We all agree that pessimism is a mark of superior intellect. — John Kenneth Galbraith

And it turns out that, although it’s been allowed to grow wild on the Internet, Galbraith did not originate the “Under capitalism, man exploits man…” quote. That qoute has been popular behind the Iron Curtain for generations.

 
 
Comment by packman
2008-06-05 11:40:58

“Under capitalism, man exploits man. Under communism, it’s just the opposite.”

John Kenneth Galbraith

This is very true.

However to get the full picture, you have to add some text:

Under capitalism, man is willingly exploited by man. Under communism, man is forcefully exploited by man.

Comment by measton
2008-06-05 18:49:38

Plenty of examples of capitalism exploiting men unwillingly. Read grapes of wrath.

 
 
Comment by Bub Diddley
2008-06-05 12:33:21

The moral, which Friedmanites refuse to understand, is that capitalism allowed to go unchecked will eventually become just as coercive as communism. It’s totalitarian either way.

The current state of capitalism in the U.S. has become a doppelganger of communism, just as corrosive to liberty. It will eventually collapse in the west just as communism did in the Soviet Union.

Luckily, the Chinese have developed a system where you can combine all the “best” (ha ha) aspects of both systems, to create a communist/capitalist hybrid utopia!

Comment by measton
2008-06-05 18:55:05

The end game of unregulated capitalism is monopoly. When a handfull of people hold all the wealth.It doesn’t matter what economic/political system you have. It will be manipulated for the benefit of the few.

Comment by joeyinCalif
2008-06-05 19:47:23

The end game of unregulated anything is distasteful.. but what’s your point?
Do you see unregulated capitalism? If so, where?

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Comment by joeyinCalif
2008-06-05 19:16:21

Communists are willing to split hairs when trying to equate communism with capitalism, and will do so at the slightest opportunity… Why is that? Do they wish in their heart of hearts to be capitalists?

Capitalists, on the otherhand, abhore any comparison or connection with commies… and rightfully so.

 
 
 
Comment by Mike
2008-06-05 10:22:12

“Five years of home ownership and the owner will probably make money.” Let’s expose this myth. Of course, nobody will listen but truth is, to make money (or equity) when buying property is like buying a stock. You make money when you buy as near to the bottom as possible and you sell when it gets as near to the top as possible. Of course, if you buy a good blue chip stock when it’s low and hold it for many, many years, you MIGHT make money. Just lik those who bought property 25 to 30 years ago. However, in the past, there were plenty of stocks which were regarded as blue chip that didn’t make money. Guess what? The same applies to property. If you bought in a good area which goes down-hill (you fill in the blanks as to why) then you will either lose money or break even after many years of ownership.

Where property is concerned, I’m going to use my own experience as an example. Before I become (reasonably) experienced in financial matters (forced to do so by getting caught up in the tech bubble because of in-experience and losing big time money) I bought property simply as a place to live while I worked in a non-financial industry. In my case it was the entertainment industry. In 1988, I bought a condo in West Hollywood for $225,000.

I didn’t realize it but it was very near the top of that property boom which was much, much, much smaller that the one we have just been through. In the next few years, prices nose dived. My condo’s value dropped to around $160,000. The guy next door bought for $325,000 right at the top (1989 I think). His dropped to $200,000. Suffice to say - he walked away. I heard that the bank eventually unloaded for around $190,000.

In 1998 (after 10 years later) my condo reached the original price of $225,000. First things first. That means it took 10 years to get back to my original purchase price (no equity) during which time I had to pay condo fees, insurance, etc, which put my monthly outgoings waaaaay above what I would have paid to rent a similar apartment. So much for holding on to it and making money after 10 years.

Okay. Point #1. In or around 2000, when Greenspan started to give away free money, the boom appeared, took root and started to gather momentum via fraud and corruption until we witnessed the abomination we are seeing today. Masses of foreclosures, masses of inventory, bankruptcy filings going through the roof, etc, etc. This WAS NOT the case in the late early 1990’s. It was bad but NOTHING like this.

Now to the REAL facts. Property at current prices are STILL waaaaay over-valued. As much as 50%. This is a guess (using my old condo as an example) but if things had been normal, with no booms, hype, b.s, fraud, corruption, etc, that condo should now probably be worth about $300,000. TOP. It is now valued at $600,000.

ANYONE who buys now is probably buying way too soon. Again, using that condo as an example, even IF it was valued at $400,000 now (which it isn’t) going on the assumption that a mini-boom had taken place, it would take years and years for that condo to reach $600,000.

Several reasons. The world has changed. The US economy is bad despite what b.s merchants like Bernanke and Paulson are saying. Most are struggling and certainly not saving. Things are going to get worse. We might be looking at a severe economic decline which could last several years. The government, Fed, etc, got their ass’s burned because of Wall Street’s greed. To the point where the Financial system has come under serious strain. They ARE NOT going to allow anymore booms in property to grow as big as this one without taking action.

Finally, you can make money (accumulate equity) in buying a property but you have to get in at the right time and, if you decide to sell, get out at the right time. Just like a stock.

Now is NOT a, “Great time to buy.” “Now is a great time to rent”, until (A) The direction of the recession becomes clear, (B) Most of the inventory has been cleared, (C) You stop seeing FOR SALE, BANK OWNED, FORECLOSURE signs sprouting up like weeds, (D) People stop using credit cards to pay their mortgage and gas bills, (E) Builders stop bleeding money, laying off workers, abandoning property, (F) The NAR stop hyping a dead market with their usual, “NOW is a great time to buy,” b.s because THEY DON’T HAVE TO because the market has started to work normally.

There’s no need to panic if you are thinking of buying property. When the bottom or near bottom is reached, it will NOT turn on a dime. If it does, it’s a “fakeout”. Just like stock are faked out and those who bought too early will be stuck and left high and dry as the value declines and drops below the price they paid. The one difference between stock ownership and property ownership is that (usually) you can sell a stock quickly. A property takes much longer.

When the bottom is in, it will stay there for a looooong time, forming (in stock market terms) a “base”. A strong “base”. Not a 3 month pause then it’s off to the races again where it will fail a year or less down the road. It will form a “base” which will take many months or even years to form with slow valuation increases in step with the economy.

Comment by joeyinCalif
2008-06-05 10:46:55

Everything you say makes sense, but the individual RE investors’ profits aren’t tied to appreciation in the overall market.. if they are, it’s a borderline dumb investment and is little more than a long term “flip”, imo.
There is no end to the creative ways some particular property might be bought and manipulated so as to produce a healthy return.. but don’t expect easy money.

 
 
Comment by joe momma
2008-06-05 10:40:29

I see the jobless claims improved. No surprise. People now have to get a second job to pay for their reckless behavior. Stay at home moms also have to get a job. It is amazing what happens when you cut off the credit.

People actually start to work for a living. Oh the horror!

 
Comment by Doghouse Riley
2008-06-05 10:53:21

“‘Every day when I leave my house,’ he said, ‘I’m not in the real estate business; I’m in the trust business.’ - Jon Hanson

“There is the dangerous cliché in the financial world [that] everything depends on confidence. One could better argue the importance of unremitting suspicion.” - John Kenneth Galbraith

Comment by Professor Bear
2008-06-05 11:09:17

One could also argue the importance of actual results to back up the jawboning that is used to inspire confidence.

 
Comment by NoSingleOne
2008-06-05 11:37:09

He’s in the “trust business”, i.e. the “confidence business”.

That makes him a “con” man.

 
 
Comment by Mormon_Tea
2008-06-05 11:56:42

“‘Every day when I leave my house,’ he said, ‘I’m not in the real estate business; I’m in the trust business.’”

Yeah, that’s right - TRUST BUSINESS.

Now picture this, grasshopper: You have been asked to place your chin on the Anvil of Truth.
Notice the muscular chap with the scowl and sledgehammer? His name is Business. He’s right behind you. In your mind, can you picture the sledgehammer coming down towards your skull as Business swings it high over your head? Can you picture that? Keep your chin on the Anvil. Listen to the sledgehammer cutting the air above you. You start to feel to feel a terrible crushing pain and unpleasantness in your head.
Do you still trust Business? You should. You’re young and inexperienced. Business will fix that.

Comment by Lost In Utah
2008-06-05 14:03:03

Hey, you and Sammy Scheudenfruede are birds of a feather when it comes to vivid images (he with buzzards, you with sledgehammers).

 
 
Comment by FreddyFender
2008-06-06 20:40:59

I’m like, you know, really naive, and kinda stupid n’ stuff, n’ I just give a shark free reign to bite my leg off, cuz ya know, I kinda like getting taken, like I trust people totally.

 
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