A Frenzy Of Overbuilding That Was Bound To Slow Down
The Mail Tribune reports from Oregon. “Sales of existing homes in Jackson County for the last quarter of 2008 held steady when compared to a year ago, with notable increases in Central Point, Eagle Point and White City. But prices continued to trend downward. New home sales countywide dropped considerably, from 56 in 2007 to 21 in 2008. Steve Blanton, SOMLS CEO, issued the report with an upbeat note, saying the statistics give ‘reason for hope’ because buyers are being enticed by a market that shows double-digit percentage decreases in median price, combined with historic lows in interest rates.”
“‘It is a great time to be a buyer. Essentially, housing is on sale right now,’ he said.”
“Showing the biggest drop in median price for existing homes from a year ago was Jacksonville at 37.4 percent. The median price was $280,000 in late 2008 compared to $447,500 a year ago. However, these figures are based on a small number of sales — only 11 homes — and shouldn’t be interpreted as a significant trend, said broker Colin Mullane in Ashland, spokesman for the SOMLS statistical committee.”
“West Medford posted a decline of 23.4 percent, with median price dropping from $197,000 to $151,000. This figure is about the same as five years ago, the report said. East Medford dropped 14 percent from $256,250 a year ago to $220,000 now. Ashland, the most expensive town in the county, put in a comparatively good showing, with median prices dropping only 12.2 percent, down from $419,000 a year ago to $368,000 now.”
“Longtime housing sales statistician and appraiser Roy Wright, who also puts out quarterly charts, was optimistic about the outlook for 2009. ‘If all goes well and no more crises show up, we’ll see real improvement in the first and second quarters,’ Wright said. ‘I think there will be a marked improvement by April if interest rates don’t go wildly upward and unemployment doesn’t increase.’”
“The worst year for housing starts in post-World War II America led the Boise, Idaho, wood products firm to announce it will close the Antelope Road plant and lay off 110 workers on March 13.’Personally, I never thought we’d see anything as significant as the early 1980s,’ said Bob Smith, human resources manager for Boise Cascade’s Western Oregon Region, referring to the last deep recession. ‘But I think we’re now in a down cycle that is worse.’”
The Missoulian from Montana. “Within the last 12 months, the national housing market tanked, unemployment rose and economists declared a recession. Here, the number of construction projects going up has slowed. A December permit report from the Missoula Building Inspection Division puts the value of new construction this fiscal year at roughly $36 million. That’s compares with some $61 million the same time last year.”
“‘Quantity is just down year over year for everybody,’ said Adam McQuiston, president of First National Bank of Montana.”
“Nearly 150 employees are being laid off at Montana lumber mills by Plum Creek Timber Co., bringing total recent job losses at the company to more than 250. They are the latest in a long string of northwest Montana layoffs, which since summer have affected the mining, manufacturing, high-tech, construction and retail industries.”
“‘What we have,’ said company spokeswoman Kathy Budinick, ‘are some really unprecedented conditions in the housing sector. Housing starts have just collapsed.’”
The Columbian from Washington. “A call center business that plans to open a Vancouver operation this month took in more than 800 applications during a Tuesday job fair. The event was held…to fill between 20 to 30 positions. Call center job wages are between $10 and $12 per hour.”
“Clark County’s home building downturn was worse last year than in other parts of the state. From January through December, only 592 permits were issued to build single-family homes in unincorporated Clark County, down from 1,245 permit in 2007. Permits issued in 2008 were worth an estimated total of $130.4 million, down by nearly 50 percent from the $250.8 million in 2007. That means the local economy — builders, subcontractors, lumber and electrical suppliers, plumbers and dry wall crews — took at least a $120.4 million hit.”
“Subdivision builders took full advantage of Clark County’s desirable proximity to Portland’s job market, which led to a frenzy of overbuilding that was bound to slow down, said Brett Bryant, executive vice president of Vancouver-based First Independent Bank. ‘It’s important to realize that past housing markets were artificially inflated,’ he said, perhaps more so than in other parts of the state.”
The Olympian from Washington. “The number of Thurston County homes newly listed for sale rose 13 percent in December 2008 compared with December 2007, a possible sign that more foreclosed properties were coming on to the market, according to Northwest MLS data. The data show that 216 homes were listed for sale in December 2008, up from 191 in December 2007. Although December listings were higher, year-over-year sales fell 33.8 percent to 174 units from 263 units, combined condominium and single-family home data show.”
“Thurston County Realtors Association President Mark Steves said the increase could be a sign that more bank-owned properties were put up for sale, or that more homeowners in foreclosure were forced to sell their houses.”
“Also promising is that inventory levels continue to fall, combined data show. Total active listings for December fell 5 percent to 1,652 units from 1,739 units year over year. Having fewer homes being sold should help the housing market, he said. When there are more homes on the market, ‘buyers don’t have a sense of urgency to write a (purchase) offer’ because there is so much to choose from, Steves said.”
“Thurston County is home to 1,041 real estate agents and brokers who do business here, said state Department of Licensing spokeswoman Christine Anthony. Based on December’s 174 home sales, that’s one transaction for every 5.9 real estate professionals, according to licensing data.”
The Seattle PI from Washington. “Seattle planners are reviewing about 150 master-use permit applications that are large enough to require city design review, but pretty much none has a hope of getting construction funding in today’s market. ‘Right now, there’s nothing available to finance projects,’ Seattle developer William Justen said.”
“Lower construction costs will make it easier for developers to adapt to the current market by offering more affordable apartments and condos, rather than aiming for the high end, said Leslie Williams, president of Williams Marketing, a Seattle firm that works with developers. ‘In the past 12 to 18 months we’ve been pushing for smaller condos, more price-conscious.’”
“The lack of new projects breaking ground now will lead to a shortage, predicted Blaine Weber, a Seattle architect with a dozen high-rise buildings in some stage of the development process. ‘At some point in the next couple of years, we’re going to see a fairly serious lack of supply.’”
CanWest News Service from Canada. “The Canadian housing market is cooling but is not facing a U.S. style meltdown, builders here say. ‘A few commentators have drawn a parallel between the Canadian housing situation and the extreme difficulties in the housing market in the United States,’ the Canadian Homebuilders say in a report that dismisses such comparisons. ‘There is absolutely no merit in drawing such a parallel,’ it said in a report that contends the pace of housing construction in Canada is merely returning to a level that is consistent with underlying housing requirements following the boom of recent years.”
“‘The housing situation in Canada is totally different from that of the U.S.,’ it said. “There will be some price moderation in some markets, but there is nothing to suggest that housing markets in Canada are vulnerable to the oversupplies and plunging prices that characterize many markets in the U.S. We did not experience the same housing boom conditions that occurred in the U.S., and there is no reason to expect that we are in for the serious pain they are currently suffering,’ it said.”
“Michael Gregory, senior economist with BMO Capital Markets, said recently that ‘we won’t even come close’ to what is happening in the U.S. thanks to stronger employment and income growth here as well as banking system that ‘continues to make mortgages’ available to Canadian consumers.”
“But he cautioned that if unemployment rises in Canada, there will be a larger fallout for the domestic housing market. ‘Anyway you slice it, if you don’t have a job, you can’t get a mortgage and you can’t buy a house,’ Gregory said.”
The Province from Canada. “Earlier this week, Western Forest Products announced a further 720 layoffs on the coast. And Rick Jeffery, president of the Vancouver-based Coast Forest Products Association, believes more than 5,000 coastal forest workers are out of work. ‘2008 was the worst year on record for the B.C. forest industry in its history,’ Jeffery told me. ‘And 2009 is predicted to be even worse.’”
From News 1130 in Canada. “The latest issue of Maclean’s magazine has dire a prediction for the Canadian job market in 2009, with more than 250,000 job losses expected. The manufacturing sector will account for many of those job losses, but it’s not the only sector which will feel the pinch.
Maclean’s writer Jason Kirby spoke to economists about where they believe the job market will go this year. He says the exact figure for job losses in B.C. will depend on what happens to commodity prices and the housing sector. ‘We’ve got ten per cent of jobs in B.C. are tied to construction.’”
The Westerly News from Canada. “Most property owners in British Columbia will see identical or lower numbers on their property assessment notices compared to last year. Connie Fair, President and CEO of BC Assessment, said the move is in compliance with action taken by B.C. Premier Gordon Campbell at the beginning of November, 2008.”
“Acknowledging that real estate values have fallen since property assessments were done July 1, 2008, Campbell said he took the action ‘to help people cope with the turbulence in the housing industry.’”
Pique News Magazine from Canada. “While it still remains to be seen what municipal property tax rates will be this year, residents will at least be guaranteed that their share of the tax burden will stay the same or go down compared to last year. Pat Kelly, owner of the Whistler Real Estate Company, said the province did the right thing by freezing assessments.”
“‘I can only speak from my personal experience, and that is my property in Pemberton was assessed the same as the year before, as the provincial government outlined,’ he said. ‘The market situation didn’t change in that period of time between assessments, 2007 to 2008, and we’re getting the benefit of a lower assessment than we maybe would have seen in July 2008, when the market was still strong. What will be interesting is to see values when they’re taken again on July 1, 2009, given the economic challenges we’re facing.’”
“And while sales volume may be down, that could change — with mortgage rates and prices coming down, Kelly said, it’s a buyer’s market. Kelly pointed out that assessments are based on home sales, among other things, and that ‘price always follows volume.’ He says the volume of sales in Whistler is much lower now than the last two years and that he expects to see prices drop slightly in the next year.”
“‘Certainly we can expect to parallel the Vancouver experience right now, and right now the Vancouver Real Estate Board is saying sales are down about 35 per cent over last year,’ said Kelly.”
“In the past two years the median price of homes in Whistler has ranged from $1,045,000 in the fourth quarter of 2007 to $1,395,000 in the first quarter of 2008. What is interesting to note is the number of homes sold in Whistler in 2008 is down significantly. In 2007 there were 186 homes sold in Whistler, compared to 100 homes from January to October in 2008, the last month data was available last year. There were 58 homes sold from July to September 2007, compared to 26 in the same period of 2008.”
“In Squamish, the median price for homes increased from $433,500 in January to March 2007 to a high of $522,500 in April to June 2008. That median dropped to $499,000, as did the number of homes sold. From July to September 2007 there were 80 homes sold, compared to just 35 during the same period in 2008.”
“The situation was similar in Pemberton, although Jason Grant, Area Assessor for Vancouver Sea to Sky Region, says its hard to attach significance to the numbers because of the relatively few homes sold. From January to March 2007, the median price of homes was $430,000, increasing to a median of $575,000 from April to June 2008. The median dropped to $535,000 from July to September, while the volume of sales ranged from six homes to 18 homes per quarter.”
The Globe & Mail from Canada. “Greater Vancouver’s seven-year housing boom snapped in the middle of last year, with existing home sales falling by 35 per cent compared with 2007, according to 2008 year-end data from the Real Estate Board of Greater Vancouver.”
“Condo sales fell by 54 per cent in December from the year before, the largest drop in activity by housing type. Sales of attached properties fell by 50 per cent, and attached properties by 49 per cent. Sales of residential housing units, including detached, attached and apartment properties, fell to 24,626 compared with 38,050 in 2007. Property listings for the year rose by 14 per cent to 62,561, compared with 54,945 in 2007.”
“Benchmark prices for residential housing units have fallen by 11 per cent between December, 2007 and December, 2008, the report said. The slide started in May of last year. In the last eight months of 2008, the benchmark price for residential housing has fallen by 15 per cent in Greater Vancouver, to $484,211 from $568,411, the report said.”
“At the start of the boom in December, 2001, the price of a single-family, detached home in Greater Vancouver was $357,770. Despite the decline last year, that average price had risen to $648,421 in December, 2008.”
“‘Trends in the latter half of 2008 showed a consistent month-over-month decrease in residential housing prices, a departure from the rising home prices and record-breaking sales that were experienced in Greater Vancouver for much of this decade,’ Dave Watt, president of the real estate board, said in a statement.”
The Vancouver Sun from Canada. “Figures released Friday showing lower housing starts, building permit applications and job losses in construction indicate that British Columbia’s building boom is ending in the climate of recession and tougher economic times. Building-permit applications across B.C. in November dropped 29 per cent from October to hit a value of $607 million, the biggest decline among all provinces. Within that figure, Metro Vancouver builders took out $350 million worth of permits, a 22-per-cent decrease from October.”
“Keith Sashaw, president of the Vancouver Regional Construction Association, said the decline in permit applications is a reflection of difficult economic conditions overall, something the construction sector expects to continue until consumer and investor confidence recovers. ‘We are definitely in the downside of the cycle,’ Sashaw said. ‘However, the industry has come off a very robust and sustained period, and the current levels of [non-residential] construction are above where the industry was in mid 2006.’”
‘The housing situation in Canada is totally different from that of the U.S.,’ it said. ‘There will be some price moderation in some markets, but there is nothing to suggest that housing markets in Canada are vulnerable to the oversupplies and plunging prices that characterize many markets in the U.S. We did not experience the same housing boom conditions that occurred in the U.S.’
‘In the past two years the median price of homes in Whistler has ranged from $1,045,000 in the fourth quarter of 2007 to $1,395,000 in the first quarter of 2008. What is interesting to note is the number of homes sold in Whistler in 2008 is down significantly. In 2007 there were 186 homes sold in Whistler, compared to 100 homes from January to October in 2008, the last month data was available last year. There were 58 homes sold from July to September 2007, compared to 26 in the same period of 2008.”
“In Squamish, the median price for homes increased from $433,500 in January to March 2007 to a high of $522,500 in April to June 2008. That median dropped to $499,000, as did the number of homes sold. The situation was similar in Pemberton. From January to March 2007, the median price of homes was $430,000, increasing to a median of $575,000 from April to June 2008. The median dropped to $535,000′
From the standpoint of history and the housing bubble, it’s interesting to note this aspect of a mania. Here they are, looking right in the face of it, and yet they can’t see it.
Often, people will deny symptoms of a serious illness because carrying on like everything is fine beats the heck out of acknowledging the alternative.
How healthy is the Canadian economy now that North American auto sales are in the tank, the price of oil is in the tank, and the Asian countries that supply legions of Summer tourists are either in recession or heading that way?
It’s easy to criticize countries like Iceland and Ireland that put too much emphasis on their financial sectors, but even diversification is no haven when everything goes south at once.
A primary symptom of heart attack is denial that it is happening. Housing markets all across North America have succumbed to heart attacks, and in almost every case, MSM denial has been an early warning sign, as amply documented on this blog.
I would diagnose it as slow progressing cancer that will develop for several years , since people are still holding to their properties in order to sell it in hope for another “housing bubble” to come for the near future… maybe next year…
“From the standpoint of history and the housing bubble, it’s interesting to note this aspect of a mania. Here they are, looking right in the face of it, and yet they can’t see it.”
I think that they see it, but they’re in denial.
Ohhhh Can-a-da / It’s diff-er-ent up here….
Yes.. it will get much worser .. but canucks are too oblivious, brainwashed or afraid to face the obvious.
I hope some wonderful person (perhaps you, Ben?) writes some sort of book about the history of this thing, drawing from these newspaper reports from 2005 to 2009 so future generations can learn about the gory details of a RE market collapse, just as I was able to read about the 1920’s last year in “Only Yesterday” and about the 1930’s in “Hard Times”.
“What people have learned from history is that people don’t learn from history.” - W. Buffett
Two great books. “Only Yesterday” is one of my favs, and written so beautifly written.
What I would like to see is a book of quotes from all “kool aid” drinkers in the last 5 -6 years and what they are doing now and get their “non-kool-aid” comments today. These could be every day j6p to high level “kool-aid drinkers sipping on a martini glass” like the CEOs, politicians, etc.
Yes, but lost in the “then vs. now” comments is the context of actual events relative to when they made their comments.
What I mean is, the simple rebuttal would be, “well, we changed their minds as the facts changed.” Lost in that attitude is the fact that they were hyping long after it was obvious to us that the cycle had turned and only repeated bank failures and bailout attempts alerted them to reality.
Your right Ben. We had a lot of Canadians buying homes and condos here, (we know of several who own in Birch Bay Village). The prices have been dropping in both Birch Bay and Semiahmoo and it seems to be working its way to Bellingham WA. It will be interesting to see how many more listing hit the market once their economy changes. Also I don’t think the 2010 Olympics will be their golden goose, (it wasn’t for Utah).
or maybe in an oil based economy you might be cautious
maybe
I saw an economist on a Canadian news program stun the other newscasters with her statement: “Essentially we sell rocks and trees.” It elicited nervous laughter, but she didn’t back down from her message that the Canadian economy is terribly vulnerable to the whims of the commodities market.
Oh just like the builders here.
http://www.thespectrum.com/apps/pbcs.dll/article?AID=2009901080324
Its a big pipe deram baby, flush with s&%T. Liquidate now or lose the govement (taxpayer) money.
Sullivan of S&S (S-it and Shinola?) said,’It’s a better time to buy a home than anytime I’ve been in business’. What a dork. He must be getting messages from the moon, from Yun, Lay,or Gaylord.
The Whistler stuff will be a whistling bomb after the 2010 Olympics. Sure, it’s nice and all that, but really.
I have several relatives in BC, one shortly retiring from condo-tower construction management (timing perfect!) and others who recently bought their first place with the idea of living in it for five years, then moving “up.” They’re good hardworking folks who will be fine, but I hope the lesson I suspect they learn isn’t too painful.
Thanks, Ben, and happy New Year!!!
Hey,
Currently at the beachside Bar & Grill having a 22oz longboard lager…x3 cheers to Ben…Ann gogh joined us at the Potato Shach…San Diego RE bear is enroute…beautiful day in Encinitas/Leucadia…stop by the Centurty 21 real estate office…update coming
Neat-o! Tell us more, Hwy! And take photos for the gallery! And don’t barf into your keyboard–take it from me, that ain’t a laughing matter.
Well, okay, it IS a laughing matter, but only as long as you’re the one watching, and not the key-board owner. Then it’s as funny as heck.
* Ahahahahahahaha! Laughs loudly, remembering…. *
canucks are a delusional bunch who define their identity by ” not being like the US”. Of course, over 90% of their trade us directly or indirectly linked to the US. Banks in canada are just as overleveraged as anywhere else, but no one asks questions because ” we are not like the US”. The media, agencies, politcians and canucks play along with this charade.
But I gave a good feeling about this time, as I can see that reality is going to kick the brains out of their skulls. The canuck economy is based on selling natural resouces to the US, making some stuff for the US, tourism catering to US citizens and many useless government jobs. I have a feeling that this economic crisis will result in a nice 20-25% unemployment rate by the same time next year. Between that and rampant underemploymemt, things should get interesting.
Just got fun- Try comparing median household income imposed Canadian cities (statistics canada) and peak and current median SFH and condo prices. You will be surprised to realize that the canuck bubble with exception of montreal (a has been city) and ottowa (very snowy winters + very humid summers) was larger than the US bubble -Compare Top 10 cities on each country.
Yes… I heard from Canuckistanis this year that Vancouver was way more inflated than DC. Okay, it’s pretty, but still–!
Canadia was in a hellish recession only, what, ten years ago? I expect they know how to buckle down and survive.
(I hope they used some of their bubble winnings to pay down their national debt…)
Vancouver has been “way more inflated” than about anywhere in North America, and for longer. We had a blogger who tried to keep tabs on it (Vancouver housing bubble blog) but he gave up a while back - probably from exhaustion. However, the mania talk is really not much different from the FL or CA bubbles.
As to the national debt, we haven’t paid it off but we have had pretty good fiscal management with zero deficits since the Liberals were in power. This places Canada in a better position to run a debt for stimulus purposes. Very much unlike the USA. Not sure where USA is going to get the funds with a running deficit as ridiculously hi as they currently have. (Oh and we actually get services for our taxes - instead of bigger aircraft carriers named after bushes. Wait till the legions of unemployed start demanding some health services!)
“Try comparing median household income imposed Canadian cities (statistics canada) and peak and current median SFH and condo prices. You will be surprised to realize that the canuck bubble with exception of montreal (a has been city) and ottowa (very snowy winters + very humid summers) was larger than the US bubble”
Sounds like a fun comparison to do - but I wonder how to go about getting that data …
The bubble here in ‘has been’ Montreal may not have been as big as in the US but there has been a bubble here nevertheless … essentially there was practically NO residential construction here at all between the election of 1976 and the election of 2003 — then all the pent-up fantasies hit the street with a veangance and cheap condos (C$100k - C$200k) sprouted in virtually every vacant or abandoned lot with little regard for location or building standards … while condo ownership has now become quite trendy, this city remains ‘rental central’ for the vast majority however … and now that the bubble has burst the city is littered with semi-demolished homes and abandoned semi-constructed condo blocks which will likely remain that way for another thirty years again until people start building here again …
(The Ottawa building stats have been down since the election of 2006 reduced the out-of-control growth in the ‘civil service’ which is practically the only business in that artificial town and just about the only reason anyone would want to live there …)
Sorry for the typos, the iPhone sucks for writing long messages! The browser is very good though.
‘… Rick Jeffery, president of the Vancouver-based Coast Forest Products Association, believes more than 5,000 coastal forest workers are out of work. ‘2008 was the worst year on record for the B.C. forest industry in its history,’ Jeffery told me. ‘And 2009 is predicted to be even worse.’”
Wheeeee! ‘I love trees! I love trees!’ That’s my chant, when I get up in the morning and get ready for work.
Now, HERE’S a thought–let’s leave some of those tree thingies standing up in the world, instead of turning all of ‘em into ugly, tacky, McShacky horrors in jammed-together sub-divisions, all of which are named ‘Whispering Orchard Farms*’ or ‘Piney Creek Coves’**, etc etc?!
Huh huh huh?! Alright!
‘I love trees! I love trees!’ Say it with me, friends!
Man, I feel great! Thanks for the thread, Ben.
* I betcha million board-feet of cured alder that there ain’t no ‘whisper’, no ‘orchard’, and also no ‘farms’.
**I betcha ANOTHER million board-feet of aged alder their ain’t no ‘pines’, no ‘creeks’, and no ‘coves’, neither.
One of my pet peeves when looking at raw land years back, was when the greedy SOB’s logged off the entire property in order to capitalize on the lumber, then tried to sell it as stump land at some pie in the sky price which dwarfed that of a nicely wooded parcel. My response: “You f***ing ruined it!”
What do you suppose the recent flooding did to the housing industry in W. Washington? I read they think 1500 houses were flooded. There’s also the perception of not wanting to buy anywhere there are floods, whether you’re in the actual floodplain or not.
‘What do you suppose the recent flooding did to the housing industry in W. Washington?’
I sure am eager to find out. *looks out window * Yikes! Look at all that water! It’s raining like mad here. I love rain. I just had a nice long nap by the fire, after eating the rest of my pot-roast. I bet I even drooled a bit, I was so relaxed and cozy. But my point is, there was a LOT of building in flood-plains here in WA. We saw how good that worked out last year, when we had a 100 year flood event. And now we’re seeing it again THIS year, when we’re having another 100-year flood-event…hey, wait a minute…can’t these floods COUNT?! Stupid floods! And don’t they know we want to cut down alllll the stabilizing trees by the rivers and then build wherever we want?!
Well, a little rain ain’t a’gonna stop our building plans, by gum! Oh, wait…
None of the news reports I’ve read mention if the areas flooded last year are the same as what’s currently underwater. Since it’s along the I-5 corridor north of Portland I’m guessing it must be. Had this area been rebuilt over the past year?, or is part of the problem due to drainage infrastructure not in place?, combined by multiple 100 year floods.
The same areas flooded this year that flooded last year in Lewis County, the area where I-5 was submerged, though the devastation was not nearly as bad. The main reason was that the storm moved on in the nick of time, and we didn’t see as heavy a rainfall. Still, my river, the Newaukum, crested higher than the flood of 2007. That has been referred to as a 500 year flood. But, since there have been 3 such events in less than 15 years, it’s quite obvious that some soul searching is in order for those in that area of expertise.
You mean like this from the 2007 flood?
Oh, that looks so Northwest-y! I miss that place & all the rain and green.
Still raining???
Holy smokes, we get about 8 inches a YEAR out here, as you so very well know. Except for the time Parley Pratt or maybe it was John Lee wrote about in his diaries where they had 40 days straight over where he had settled somewhere near Cedar City or Parowan (?). All the buildings melted (adobe). Sometime in the late 1880s.
At least Washington doesn’t build with ‘dobe, I hope. But people forget that water flows downhill, always has, always will.
Trivia of the day…
My Great-great-great-grandmama was married and consequently divorced John D. Lee. He was her second husband, her first threw her out into the snowy night in Jackson county because she joined with the saints.
She met my GGGGpa in SLC after he got back from marching with the battalion in the Mexican war. They were married and lived happily ever after. He died exactly one month after her in spring of 1903.
Smart woman, divorcing John, his tale is not a good one. I personally believe he was a scapegoat, but a sad fate indeed.
Interesting, dude.
You also just made me do some research on this, and I got all distracted and kept reading more and more…
Or as my one friend said (as a metaphor for something else): “If the mountain wants to move…..YOU LET THE MOUNTAIN MOVE!”
Or how about this Weyerhaeuser special? Poor logging and development practices have led to some of the most devastating floods in WA history. They need to stop clear-cutting steep slopes, and filling in flood plains.
Can you push some of that rain down this way Olygal? I miss the rain. I miss the sound of rain, the smell of rain, the feel of rain.
Ah, but the key words are ” tried to sell.” You didn’t buy it, did you, and probably nobody else ( well, with a brain in use anyway ) bought either.
“Ashland, the most expensive town in the county, put in a comparatively good showing, with median prices dropping only 12.2 percent, down from $419,000 a year ago to $368,000 now.”
I thought prices in the Bay Area were riduculous, WTF with Ashland? Are there jobs in Ashland that pay enough to support the prices of houses?
The only two things I remember Ashland had going for it was Southern Oregon College and the Shakespeare Festival. Has that changed?
“I thought prices in the Bay Area were riduculous, WTF with Ashland? Are there jobs in Ashland that pay enough to support the prices of houses?”
No, they are completely dependent on outside money, equity locusts from CA and FL, primarily.
I looked in Ashland after I sold in Marin County in ‘04, and people were throwing money at houses there even though there was no way to earn much of a living. My guess is prices will drop to where the locals will be able to buy, as the outside money spigot isn’t what it was during the bubble.
Yep, and in every example I bet their reason was some form of escapism from “the others.” How do they feel now that “the others” have followed them?
The grass is greener….
Ashland is in ruin. A once lovely little town. Nothing but rich people now and those who serve them. I believe they’re down to one elementary school now after closing three over the last decade. California retirees don’t have many kids. All the workers, firefighters, police, teachers, etc., have to live in Medford or White City.
joelkton,
That’s too bad about Ashland. My grandparents lived and worked in Ashland for over 30 years. My family lived there for about two years. When I reached the age of consent, I spent a few summers visiting my grandparents. I really grew to appreciate Ashland at that time. Enjoyed the plays, the 4th of July parade, Crater Lake, Lake of the Woods, rafting down the Rogue River.
Ashland is San Fransisco north catering to rich
liberals who’ve brought all their values north
with them.
Trendy eating places, expensive shops, college
kids on daddy’s dole, high end autos, and free
internet connections.
We make it a habit of going there once a year
to remind us why we don’t. Almost like going
to Taco Bell.
The place can remind one of Mill Valley in the
bay area. A place filled with people who know
it all and aren’t afraid to tell you so.
Isn’t it peculiar that every area of the country now has at least one place that matches your description of Ashland to a tee?
It’s called shunning.
Rancher..Thats my take on Ashland also even though the first impression is its a neat little town…By the way, I you don’t have a contractor for your new house yet, a camping friend of mine “Paul Bostic” I believe is considered one on the better builders around grants pass…
so i’m looking now at the full-page ad the desperate, glugging NAR bought on the back page of the hard-copy Politico. i hope it falls on deaf ears. its demands to Congress are ridiculous and so clearly meant to keep starving NAR whores from having to work in Hooters and Chick-Fil-A. It prominently says it has “over 1.2 million members” to frighten vote-counting lawmakers.
just 2 snips from a page of demands :
“Take action … to restore homebuyer confidence and jump start mortgage lending … Pass housing reforms NOW that will grow our economy, spur home buying, encourage lending and curb foreclosures.”
good f—-g god, we need to have the military machine-gun NAR HQ someday. Is it so selfish it would have our overlords destroy the economy and start a perpetual depression just so its members could score some more commissions?! Homebuyers have lost confidence b/c they realize you LIED to them all these years. And why should we be running out to buy houses and sign up for more fantasy loans, since you guys are about to have the social status of NAMBLA members?
“good f—-g god, we need to have the military machine-gun NAR HQ someday.”
Staff Sergeant Exeter reporting for duty sir. Just when I thought I’d already done my patriotic duty, I’m called to a noble cause.
NAR and is local slime have no idea the level of contempt so many have for them.
Just returned from 8 days in Toronto. Everyone there is rich. Retail seemed a little off on the street and in the smaller malls. Big malls were packed, but I have no idea if anyone was really shopping. Boxing day has become Boxing week and then some. Lots of sales everywhere we went.
Housing is crazy there, but condos are cheap and plentiful. My friends live in a house in the city that a Chinese couple own and landlord from China. $800,000 is what the landlord paid, my friends rent it for $2200/mo. It’s big, but not worth $800k. Only one shower/bath in a 3 story, 3 bath, 3 bedroom house. The water to the shower stops flowing if another faucet is opened.
I loved the exchange rate, 1.22 Canadian to the dollar. My Citi card didn’t levy a surcharge for the exchange. If I had listened to my friend I could have bought 1.33 to the dollar.
So many new condo towers in all stages from just breaking ground to finished and occupied that I lost count. Most along the waterfront, but they are planning to tear down and replace lots of older towers in the city. Most I saw had units starting at $200k Canadian.
I forgot to mention that the bathroom counter tops were recycled from a hotel remodel. They had double tp rolls and a hole for tissues.
“Everyone there is rich.”
Riiiight… just like here (NCAL Bay Area). *Everyone* here can afford a dilapidated 800sft tear-down shack for about $1200/sft. Pay no attention to the 11:1 peak prices-to-HH incomes ratio, or the 3:1 ratio for mortgage payments (FRM) to equivalent-house rent payments.
Reddy, were you hired as U.S. spokesperson for the Canadian NAR, or were you being snarky here?
Snarky. Lots of people look rich though. Not so much on the bus and subway, but the cars at the mall and supermarket were very nice. The neighborhood I stayed in just off Eglinton had a McMansion built on the corner that took the place of 3 older homes. I was told that it had been on the market for over a year though.
The radio seems to mention that it’s different than the US pretty often.
I’ve been wondering about the Canadian market. They’ve been saying that they can sustain the high prices and that they don’t have a bubble for several years.
The only thing that surprises me is that it has taken this long to start to show signs of falling apart. It will come down pretty far, is my guess. Their median incomes are pretty low, and who is going to want to pay these exorbitant prices for real estate in areas that regularly get to minus 20 degrees F?
commodity bubble has only popped in the last few months.. wait for the fallout.
The Mail Tribune article about closing the Boise-Cascade mill had an interesting sidebar.
“A half-century ago, the average house in the U.S. was 1,100 square feet, according to research in the Journal of Industrial Ecology. In this decade, the average house is between 2,300 and 2,400 square feet. National Association of Home Builders figures show a typical 2,082-square-foot home requires 11,550 square feet of plywood or oriented-strand board.
“Not only has the number of new housing starts dropped, but the size of the homes today is bigger than during the last recession,” Smith said. “So, it’s a double-whammy relative to wood products demand when housing starts drop.” ”
So the size of the recently built houses acted as a multiplier effect on the downsizing of the demand for building materials.
2,082-square-foot home requires 11,550 square feet of plywood or oriented-strand board ??
The industry was self serving….Back 30 years ago or so they did not use anything close to the amount of lumber or metal (see; Simpson Strong ties) for that matter…Create the need through a “safer/better” concept and you create a bunch of unnecessary jobs and multiply the material to build a house by 3x…
A 4′ by 8′ sheet is 32 square feet, so 11,500 / 32 = 359 sheets of plywood or OSB. That’s a heck of a lot.
I remember exactly when the changeover started here. The average 3/1 ranch was suddenly popped up half a story with a daylight basement underneath. Voila, a split-level! I’m in one now because that’s all I could find. I would be deliriously happy to live in 1200 sf instead of 2400.
“So, it’s a double-whammy relative to wood products demand when housing starts drop.”
Why? Maybe when comparing now to 50 years ago. Why is reverting back to sustainability after 8 years of mania considered a crisis?
I think what is happening is the overshoot (or undershoot) we’ve all anticipated.
I think the OP was making a comment along the lines of “the farther they come, the harder they fall”…
The folks I visited in Ottowa over the holidays are starting to get it. One reality that they cannot ignore is the loss that retirement funds are reporting. “Houses aren’t selling”.
I did find a real estate oddity. There was a large house on the corner that they pointed out as having been for sale all year long. “Who wants a corner house?” they laughed! Apparently the tax doubles, as it’s based on the length of sidewalk.
Also found it odd that the city rail station isn’t downtown, it’s out in the middle of nowhere. There’s commuter friendly design! Not that I could actually figue out where downtown is anyway.
That’s an odd basis for property tax. It would lead to people favoring zero-lot line “Chinese” houses.
Well you build it and they will come….all the businesses and high rise condozes all right near the rail station…we don’t need no stinkin downtown!
———
Also found it odd that the city rail station isn’t downtown, it’s out in the middle of nowhere.
“But he cautioned that if unemployment rises in Canada, there will be a larger fallout for the domestic housing market. ‘Anyway you slice it, if you don’t have a job, you can’t get a mortgage and you can’t buy a house,’ Gregory said.”
Or better said. ” if you lose your job, you can’t pay your mortgage, and you lose the house”
I don’t think people are buying houses right now. You have to look at the people that already own a house and if they are going to get foreclosed in the future.
I have two books at a Canadian printer right now, they underbid everyone (USA and Asia) and the salesman, who I’ve worked with for years, was very very grateful for my business, even though they’re short runs.
Methinks things are hitting up north, also.
I know this goes in Bits, but with 488 comments, the rig I’m using choked halfway through loading the page. Anyway, I had to share this description of the Dutch Tulip Manian (relating it to the medieval carnival):
Michael Pollen, The Botany of Desire, p. 101. Emphasis mine.
(great book, btw)
Baghdad Dave’s mea culpa:
http://online.wsj.com/article/SB123152099299568447.html
Wow, that article has some of the highest schaudenfreude per square inch on record. A sampling:
“Mr. Lereah now works [from home] in a small upstairs office that doubles as an exercise room. He has started his own company, Reecon Advisors, that puts out a weekly newsletter on the housing market and provides consulting services. …
He charges $495 annually for the newsletter, and currently has fewer than 50 paying subscribers - a number Mr. Lereah aims to increase to 1,500 by the end of this year.”
–Man, that is some good schadenfreude! ‘Fewer than 50′, eh? 10 fewer? 39?
–More schadenfreude? Well, as a rule I normally wouldn’t, but ok maybe this once:
“He’s starting to make some money off it now, not much,” says Mrs. Lereah. “We have an expensive lifestyle: a big house, a housekeeper once a week, college tuitions, the country club.”
–Delish! Wifey not too happy about being married to this decades O.J.! I simply must have the recipe!
–But please, that’s enough for me!
–Okay, just a teensy more, if you INSIST:
“Mrs. Lereah, a CPA who also works at home, decided the only way she and her husband could work in the same house was if they pretended they were at outside offices. They communicate during the day by email and cellphone. Every morning, Mr. Lereah drives to a Dunkin’ Donuts or McDonald’s and eats in the car, just as he would have on his commute to NAR.”
–Schadenfreude overload! Not another bite for me, I couldn’t possibly!
Vancouver BC is building 1100 units for housing athletes for
the 2010 Winter Olympics. Afterwards they are to be converted to luxury condo units and sold for a mix of market and below market costs for social housing.
It’s a complicated mess made in secret but the city provided the land worth $200 million and also provided another $100 million in cash. Construction costs are estimated now at $875 million, $125 million more than forecast. So $1.075 billion for 1100 units means to break even they need to sell after the Olympics for an average of at least $977,000 each.
Conventional banks won’t lend money for this deal because the city keeps the land till the project is complete. So funding came from a hedge fund called Fortress. They are now backing out of this deal due to cost overruns and the general economic conditions.
They are on a decent waterfront location off False Creek in but there is no way they will sell for that much.
Vancouver city taxpayers are on the hook for this.
http://www.vancouversun.com/news/City+hook+billion+dollar+Olympic+village+blunder/1163365/story.html
They got him, the REIC, they kidnapped Ben! I’m preparing the extraction team now!
(Looks over to HBB proving grounds, sees DinOR cursing at mustard, OlyGal blowing glitter, Darrell & Hoz playing no limit Hold ‘Em, drunk on scotch, exeter punching a life size inflatable of Vermont, combotechie reading a bedtime story to a wad of $100’s. *Sighs* grabs pen and starts writing Ben’s eulogy, crumples up paper, in last-chance effort hands sniper rifle to reuven and tells him to pretend Ben’s captors are in fact the IRS, gold plated chopper descends, a short, bald man wearing a green hat let’s Ben out… turns out he predicted Ben’s capture years in advance…)
I have been looking at real estate data from the Panic of 1893. The information from that period is very telling; frightening but telling. Twenty years earlier, 1873, there was a similar depression to today that was brought about by the collapse of the banking and financial industry. It was global in scope and started in Europe which was the dominant financial hub at that time, much like the U.S. is today. That collapse was caused by, you guessed it, a real estate bubble. Twenty years later real estate had returned to pre 1873 values but here’s the irony…
By 1893, very few individuals owned real estate in the United States. Home values and real estate in general subsequently declined for the next 25 years after the 1893 Panic. Think about that. For twenty five years, not until 1919 or 1920 was it profitable to own your own home. In other words, real estate was a speculative venture, not an investment. We have been conditioned by the real estate industry since the 1950’s, for the past 60 years, to believe that real estate is an investment rather than a commodity. Apparently, whether it is a commodity or an investment depends on the era in which you live.
I see talking heads on TV nearly every day who say the real estate contraction is almost over. Real Estate values have declined approximately 30% since 2006. That percentage is roughly equivalent to the percentage that real estate values declined in the 1930’s, the Great Depession. So their argument is that real estate has already declined as much it did during the worst economic period in history. But, as Paul Harvey would say, here’s the rest of the story…
While that is all true, there were very few home owners in 1929 when the stock market collapsed ushering in the Great Depression. Why? because the value of individually owned real estate had only recently, the last 10 years or so, become valuable enough to own. It wasn’t until after World War I ended that real estate began to increase in value. Most people either lived in or near the city and rented or they lived on rural farms as hired hands or tenant farmers or share croppers. Very few people owned their own homes. In fact, there aren’t even any statictics on home prices from that time period. Therefore, when the stock market collapsed, real estate values were already near their all-time lows having barely recovered from the Panic of 1893. Still, real estate suffered a 30% drop in value. If you take the relative value of a property at it’s peak in 1893 and compare it to its lowest value during the Great Depression the loss in value is between 85 and 90% of its pre-1893 peak value.
What that is saying to me is this: Do like the “peeps” you alluded to, wait and see. No way would I buy a house at any price until I know it will increase in value. I can rent a very nice home on the water with a boat slip and be perfectly happy. But then that’s just me.