They’re Going To Have To Come Down
A report from the Canadian Press. “Real-estate experts say low mortgage rates and more affordable homes in many markets are drawing out first-time home buyers in droves, but one independent analyst says the correction in Canadian home prices hasn’t been nearly as dramatic as some believe. BMO senior economist Sal Guatieri said the average mortgage payment has fallen by one-third or $600 a month from its peak, while average resale home prices have fallen 14 per cent from their highs. But Peter Norman, a consultant with independent real-estate adviser Altus Group, said the dramatic drops in home prices seen in places like Vancouver, Edmonton and Calgary are the exception rather than the norm. ‘This is not a housing adjustment period in Canada,’ Norman said in an interview.”
“‘Certainly housing demand has slowed down because the economy is the pits, but housing supply has slowed down a lot as well as a result…. Outside of a couple of sub-markets there hasn’t been much of a downward adjustment on price. There are a lot fewer of those stories of really rapidly selling houses, bidding wars, all that kind of stuff, so I think it can be a bit more of a sane market for somebody who’s trying to buy right now,’ Norman said.”
“‘If it wasn’t for the recession and the aversion to financial risk that people have right now, it would probably be a very active market and a very good market,’ Norman said.”
The Daily News in Canada. “A pair of luxury Vancouver Island condos will be sold by auction without minimum bids this month, a sales strategy that the president of the Vancouver Island Real Estate Board says is unusual and risky. One residence is a 1,211-square-foot, two bedroom unit at 145-2300 Mansfield Dr. in Courtenay, which has an assessed value of $311,000. It was listed for sale at $399,900 until September of last year.”
“VIREB president Ray Francis doesn’t think more people will resort to selling residential property in unreserved auctions even in a slumping housing market. ‘I don’t see this as being something that would be favourable to anybody in any market condition really, to auction off their property without reserves,’ he said. ‘I definitely wouldn’t see that as a trend people would go towards. It’s too uncertain.’”
“An Alberta man is putting the condos up for sale by auction because ‘he realized he doesn’t need them,’ said Kim Schulz, spokeswoman for Ritchie Bros. Auctioneers, which is handling the sale. ‘I’m not even sure he stayed in the Parksville one to tell you the truth,’ she said.”
The Abbotsford News in Canada. “New housing starts in Abbotsford and Mission plummeted by 89 per cent from January to March this year, compared to the first quarter of 2008. The statistic is just one of the figures released last week by the Canada Mortgage and Housing Corporation.”
“When comparing March 2009 to March 2008, the agency also reported that construction on new homes in the two local communities dropped by 96 per cent. CMHC spokeswoman Carol Frketich said Abbotsford and Mission are ‘following the trend’ of much of the rest of B.C. To put the numbers into context, she pointed out that the first quarter of 2008 saw some record growth in terms of the region’s construction projects.”
“In Abbotsford, Jay Teichroeb, the city’s economic development manager, said the $8.7 million in new housing starts for the first quarter of 2009 compares to $52 million in new housing from January to March last year.”
“With the real estate market slowing, and with a glut of multi-family complexes being built last year, Teichroeb said some of those units still need to be ‘absorbed into the market.’ That is now happening, he said, partly thanks to a drop in prices.”
Montana’s News Station. “A report released by the Montana Building Industry Association shows that housing starts declined 70 percent in Missoula. Meanwhile, the numbers fell for the seventh straight quarter when looking at statewide statistics. The housing market has been experiencing significant problems because of a lack of available credit and a large inventory of houses for sale.”
The Missoula Independent from Montana. “The plan for a subdivision at the mouth of blue-ribbon Rock Creek appears dead in the water. The Ranch at Rock Creek is listed for sale for $5.75 million. And Michael Barnes, owner of the 200-acre parcel, plans to pull his controversial 36-lot subdivision proposal Friday during a meeting with the Missoula Board of County Commissioners, according to Geoff Sutton, a mediator in the three-year-long talks over the proposal.”
“Katie Ward & Associates’ lists the ‘once in a lifetime property’ on its website. Barnes reportedly bought the land for $1.1 million eight years ago, and now plans to sell 142 acres. Sutton says Barnes is content sitting on the land but will sell it for the right price. ‘I don’t think anything will be happening for at least a few years, at the earliest,’ Sutton says.”
The Heraldnet from Washington. “The going got tough in Puget Sound real estate more than a year ago, and it wasn’t the tough who got going — not into another line of work, anyway. It was the agents who entered the market when times were good, when success in real estate meant publishing a listing, then kicking back until the bidding wars died down.”
“These aren’t those times. And mostly, the agents selling houses now aren’t those agents. ‘A lot of those agents who jumped in when the market was good, they don’t know what it really takes,’ said Michelle Macris, a Snohomish County agent. ‘When things are a little tough, it takes more than putting a sign in a front yard and crossing your fingers and saying, ‘I hope it sells.’”
“The secret to success in a recession-battered housing market? Macris advises realism, honesty and a strong aversion to just telling clients anything they want to hear. ‘Right now it’s all price,’ she said. ‘It has to be priced appropriately. If not, all your efforts go down the toilet.’”
“Clint Schlotfeldt, another of John L. Scott’s top sellers, said he’s seen a huge exodus of agents in the Puget Sound region — and it’s partly because they aren’t willing to adjust to the reality of the market. He’s finding buyers much more cautious than in past years. His role tends to more one of an educator these days, as clients want to research their options and get the best value they can.”
“‘Two years ago, we were still busy,’ he said. ‘But you didn’t have to get out there and educate the buyer.’”
“Holding a massive open house of many of the homes for sale in Snohomish County worked so well for agents last fall that they’re doing it again. This Saturday and Sunday will be open house weekend in the county, with as many as 500 homes available for inspection. There were about 400 homes opened at least year’s event.”
“It’s no secret that home sales around the nation have been slow during the recession, but Snohomish County Camano Board of Realtors director Nathan Gorton, said real estate agents are hoping to do something positive to get people thinking about a home. ‘The agents and I really feel there’s a lot of opportunity right now,’ Gorton said. ‘And it’s not just because it’s spring. It’s more that I think the market is starting to turn around.’”
“Gorton said it’s hard to guess the bottom of the real estate market. ‘But if it’s not here now, it’s not far away,’ he said.”
The Yakima Herald Republic from Washington. “Here’s further proof that Yakima is riding out the recession better than most places: We’re now among the nation’s top cities where bank loans to consumers actually grew last year, according to a recent study.”
“Octavio Saucedo is (a) 25-year-old Yakima caregiver was recently approved for a $70,000 mortgage to buy his first home. Saucedo will soon move with his wife and daughter out of his parents’ home and into a two-bedroom house of their own in Union Gap. ‘This is the best investment any person can make.’ he said.”
“All this positive attention for Yakima may draw outside investors into the area, said Nick Marquez, a real estate broker. ‘A lot of people are coming up here for the fact they lost their homes somewhere else and they’ve got to start from scratch,’ he said.”
The Oregonian. “Clark County’s jobless rate hit 12.5 percent in March, double that of a year ago and the highest peak since reaching that mark about a quarter-century ago. The county rate, unadjusted for seasonal factors, slightly exceeded Oregon’s seasonally adjusted 12.1 percent rate for the same month. Washington’s seasonally adjusted rate increased to 9.2 percent in March, up from February’s revised rate of 8.3 percent, according to the state Employment Security Department.”
“March is usually a month of job growth, primarily from housing construction emerging from a winter dormancy. But that didn’t happen in Clark County this year, and it’s impossible to predict when it will pick up again, said Scott Bailey, the state’s southwest Washington regional economist.”
“The grim news in Clark County recalled June 1983, the last time the county jobless rate hit 12.5 percent. In 1983, the unemployment rate peaked at 14.8 percent in February. In March of that year it was 14.1 percent. Construction of the Interstate 205 Glenn Jackson Bridge was completed the year before. The bridge was a catalyst for rapid housing growth in the county, which now faces a glut of unsold homes.”
“The good news in the Portland area: Homes started selling again in March. The bad news: They’re not selling for much. The median price of homes sold in March tumbled 14 percent compared with the same month a year earlier and are now down 18 percent from their peak. Both drops are the biggest since the recession began.”
“The inventory of unsold homes in Clackamas, Columbia, Multnomah, Washington and Yamhill counties dropped from a peak of 19 months in January to 12 months in March. But the supply of homes continues to outweigh demand. The federal government’s first-time buyer tax credit and aid to struggling homeowners could be helping stabilize the market just as spring home buying season begins. But the numbers show the Portland market may still be searching for a bottom.”
The Mail Tribune in Oregon. “There’s a tug of war between appraisers and real estate agents over establishing the value of residential property. In a forthcoming report, the Center for Public Integrity’s Land Use Accountability Project said it obtained copies of ‘blacklists’ containing names of thousands of appraisers, who refused to inflate home values.”
“The Washington, D.C.-based research center cited New York Attorney General Andrew Cuomo’s investigation, pointing to Fannie Mae and Freddie Mac’s purchases of mortgages without ensuring they were issued with accurate appraisals. A new Federal law goes into effect May 1, designed to deter buyers and sellers — or their representatives — and lenders from lobbying appraisers.”
“‘I think this is a bit overblown,’ said Steven Blanton, CEO of the Rogue Valley Association of Realtors. ‘There is frequently a bit of forecasting involved in appraisals no matter the condition of the market. This is true in up markets and down. I don’t think it’s a systemic problem. In an up market, there’s always a little bit of forecast involved and a tendency to factor that in.’”
“He recalled a California transaction during the up market when the property value rose $10,000 while the house was in escrow for 30 days. ‘Trying to be sure there is enough loan to value is important,’ Blanton said. ‘In a situation like that, there is a lot of finger-pointing after the fact. Conversely, in a downward market there is tension in the system. Do the appraisals lead to more of a downswing? No, I don’t think so, but there is a concern to get an accurate appraisal.’”
“Now that values are sliding, the use of comparable sales data is causing waves here in Jackson County. ‘Coast to coast, the biggest issue in the financing of real estate is the pressure put on appraisers to push numbers,’ says Medford real estate appraiser Roy Wright.”
“A recent memo from Rogue Valley Association of Realtors to local appraisers indicated current values would take a hit if recent historical data were carried forward, reducing a house’s worth. The memo noted that if two identical homes, side by side, sold three months apart, and the first fetched $200,000, the second one would be appraised at $195,500, based on an assumed 1.5 percent monthly decline from recent data.”
“According to the memo, the potential exists for transactions having to be renegotiated, driving down market values even more.”
“‘If your best comparable sales are six months old, then you’ve got to discount comps because they would have been worth less on the date,’ Wright said. ‘When prices are going up, real estate agents said we’re pushing prices out of everyone’s reach; so you get it both ways.’”
The Register Guard from Oregon. “They were a hot commodity three years ago. Million-dollar houses with frontage on the ocean, a lake or a river around Florence. Californians looking for a clean, quiet place to retire couldn’t seem to get enough. ‘The market rose markedly,’ said Tawfik Ahdab, analyst with the Pacific Valuation Group. ‘They brought with them lots of money and drove up prices. We have limited inventory, but we had a lot of demand. A lot of demand.’”
“But today, 67 high-end homes priced from $500,000 to $2.5 million are sitting on the Florence real estate market. At the current pace of sales, it would take 75 months to clear out that inventory. Even then, some of the properties might linger: Not one home in the $1 million-plus range in Florence has sold in more than a year.”
“Florence real estate agents say months go by before they find a prospective buyer to even look at the high-end properties. Million-dollar houses in the Lane County coastal community are severely overpriced, Ahdab said. ‘There’s no market response to them. They’re going to have to come down.’”
“Their owners have no intention of selling for less than they paid, Florence area real estate brokers say. More than half of the high-end homes are owner-occupied and the rest are vacation or investment properties, they say.”
“Upward of 90 percent of Florence high-end buyers came to the Oregon Coast from California, where they sold homes when the market was hot, said Dan Scarberry, principal broker at Coldwell Banker Coast Real Estate. Because they had comparatively large sums of cash, many put down upwards of 50 percent cash on their Florence properties. That means they can wait out the market now because their payments are low.”
“Besides, in the upper strata of properties, dropping prices a few $100,000 may not stimulate sales the way it would for the average house, said Dennis Johnson of TR Hunter Real Estate in Florence. ‘If you have someone with a place, for instance, for $1.7 million, dropping the price to $1.5 million isn’t going to sell it. You’re talking to the same customer, and if they really like it they’ll pay the $1.7,’ he said.”
“The problem is that well-heeled buyers from the Golden State are hard to come by in Florence these days. ‘They can’t sell houses in California to escape California and move up here,’ Ahdab said. ‘A lot of people are upside down in California, and they were the ones feeding this (Florence) high-end market. They may not be coming back for a while….If these people aren’t coming, we don’t have much of a market at all.’”
“Those Californians who do turn up have sold homes for from 30 to 50 percent less than they would have three years ago, so they can’t meet the sellers’ stubborn price point, he said. With less cash, they have to try for a jumbo loan to finance any half-million-plus house. ‘The jumbo loan market is not what it used to be,’ Ahdab said. ‘It’s evaporated pretty much.’”
‘A recent memo from Rogue Valley Association of Realtors to local appraisers indicated current values would take a hit if recent historical data were carried forward, reducing a house’s worth…According to the memo, the potential exists for transactions having to be renegotiated, driving down market values even more.’
Why in the hell are the UHS sending memos to appraisers? Jeebus, get out the tar and feathers!
Anyhoo, it’s always fun watching these late markets, with the denial and ‘I’ll get my price’ attitude. You’ve got to love the commentors at the Missoula site:
‘Comments
By BullPine
Good riddance to the punk from Oregone and please take your Realtor with you. Next up the demise of “The Ridge at Rock Creek” . Acres and acres of barren steep hillside with a magniciant view of the interstate . Nestled amongst the knapweed and road noise. What a joke. How’s that goin for ya Kate?’
‘By Native
Property prices have tanked in the last 2 years to the point where his original investment may be worth less then 500,000. Add up the cost to reclaim the parcel and Barnes may have to take less then one third of what he paid for the ranch. It wasn’t that long ago where dirt like this was sold for 1,000 bucks an acre and we may be going back there soon.Good luck Mr Barnes finding an appraiser to appraise this property as a piece of potential development property. It’s very clear now that no one will be able to develop it, even if there was a market for it.’
UHS = Used House Sellers
(I had to put on my thinking cap for that one)
We need an HBB Dictionary.
Ben, that memo from Rogue Valley Association of Realtors to local appraisers is merely code and cover for “They are watching us ..Chill IT!” or “The jig is UP…CYA(cover your a$$ and or assets)”
It’s come to a pretty pass when the opinions of the saleshelp are even considered, let alone published, as ‘economic’ or ‘market news’.
The only thing anyone should be asking them is how many customers have come through the door this month.
“Upward of 90 percent of Florence high-end buyers came to the Oregon Coast from California, where they sold homes when the market was hot, said Dan Scarberry, principal broker at Coldwell Banker Coast Real Estate. Because they had comparatively large sums of cash, many put down upwards of 50 percent cash on their Florence properties. That means they can wait out the market now because their payments are low.”
Uh — what if that 50 percent cash downpayment was funded out of a home equity loan on the primary residence in California?
I can’t help thinking that such a thing happened with a neighbor’s property. Purchased in a 100% cash deal back in ‘07. And now the property taxes are delinquent.
PB,
Oh I think they know perfectly ‘well’ that’s the case, it’s just more than their little minds can bear? The OR Coast has always been something of a mystery to me. Do CA’s actually believe… their trophy wives will be out there on the beach sunning themselves in bikini’s?
I can’t recall… the last time I saw a gal in a swimsuit on the OR Coast, anybody?
I think it’s people who come to the Oregon coast in July and August and marvel at the beauty, not realizing that the other 300 days of the year are gray and drizzly. I grew up in Oregon, and it would take about two months of living on the coast before I’d be suicidal.
ChrisO,
Oh I hear you and since I’m about an hour and half from there, I’m not doubting a word. Nice… place for a weekend? Yet I still can’t think of the last time I saw (a) gal there in so much as a 1 piece suit?
Recall seeing any of the trophy husbands in speedos?
Oregon coast yes I was at Seaside last August it was cold and some were in bikinis and they did have Condos for sale.
Turned down job offer in Hillsboro ( not intel ) because I figured I would freeze up there being from Phoenix.
Acually I didn’t like the price of homes in Hillsboro I think I looked off Sunset by the Junior College tall narrow homes with no yards fro over 300K. Short driveways so all the cars parked on the street. It was a pretty place though so green with rolling hills much different than the desert. Urban growth boundary.
Compared to Metro Vancouver, Oregon’s coastal weather is like Southern California to most normal people… Sure it might be gray 300 days out of the year, but here it rains 300 days out of the year.
I love the Oregon coast. LOVE. I recall years ago when I first saw it. And I recall when I last drove it, about 3 years ago and actually started crying at one point, when I saw what had been done to parts of it, the ruination, the wallowing of the greedsters…it was just sickening, tragic: you pick the sad adjective, ’cause it was allllll of ‘em.
It just makes my little heart skip and sing to think that this is coming to an end!
* heart dances the polka energetically *
Olympiagal,
Right. Yet somehow… through all of that unabashed greed, managing to retain “the unique qualities” that made life there so… “quaint”?
Ugh. I worked in Elkton, just 30 miles from the Oregon coast and in ten years I never completed the journey to the ocean. If you’ve seen it once, that’s enough. My goal is to never go there again. Wind. Rain. Cold. Same view for 500 miles North to South. And get this: no seafood to speak of. Just try to find some place selling fresh fish. Good luck.
Agate beach on the coast of Oregon. I told the kids if we moved there we could go to Agate beach and look for Agates. Well we didn’t move I wimped out and also didn’t accept the job back in Newbury Park CA were the weather is perfect half desert half forest.
So I sit in Phoenix with the cactus and wonder what could have been because they sure ain’t hiring now.
I kinda like the desert though house bubble wreckage and all. Dry windy place today.
Not all “CA’s” are MEN . . . just sayin’ . . . and not all CA women are “trophy wives” either . . . just sayin’. Probably a lot of cool strong smart California women, single or married, also moved out to Oregon. Guess I’m just surprised when someone’s entire life view seems to center around whether the menfolks’ trophy wives will be wearing bikinis or not.
socal,
Certainly not intended to be taken personally ( nor in leering fashion ) really just a “barometer” of how unhospitable our weather is much of the year?
The “trophy” comment arises from their u-n-b-e-l-i-e-v-a-b-l-e willingness to throw money at our coastal properties “as if” you would get -anywhere- NEAR the same utility as a beach property in MALIBU!!!
Tried to post earlier but…
The reason I suppose for the “trophy” reference is due in large part to a fundamental lack of understanding about our coastal weather? It’s a-w-f-u-l there much of the year and f/t residents are pale and pasty.
If you’re lucky you might be in shorts during a brief spell in late August? If CA’s truly knew how rare nice days are there, I doubt they’d be throwing money at those “trophy” properties? Besides, what’s so bad about wanting to see girls in bikini’s? Or guys in Speedo’s for the ladies? Whatever the case, you won’t see much of either at the Oregon Coast. They ‘do’ have sea lions though?
“This is the best investment any person can make”
it would be a big step forward when..
house=”your home”
where most people still thinks..
house=”investment”
Hooray! A PNW thread! Thanks, Ben!
And just up the road in Seattle…
http://tinyurl.com/cfajvu
“Topping off of condo tower marks end of high-rise boom”
The $350-million building is scheduled to start closing condo sales in October. It has offered up about two-thirds of its 270 to 275 condos for sale and gotten signed contracts on about one-third of the total, according to project officials and the display in the project’s sales center….
In addition to ample amounts of glass, marble, granite and Koa wood, ESCALA will feature four elevators, each accessing only one home per floor, and Club Cielo, a private social club that includes such amenities as a private screening room, two “endless” lap pools, a “wine cave” that can accommodate residents’ bottles and optional chef and maid services. ESCALA condos come with free club membership, but owners must spend at least $250 a month at the club…
Oooooh…a ‘wine cave’, even….:roll:
I’m going to remember to check out how ESCALA’s doing this October. Something tells me I will enjoy much hearty laughter at that time.
Like this: ‘BWAHAHAHAHAAHA!’
Way OT…but I thought you might get a kick outta this. How to make your own, very special tiara.
Oh. My. Sweet. Heavens… *whisper of joy and reverence *
Man! Thanks, bluprint! I’m going to leave work early and get going on this! Luckily, I already have a freezer full of bacon, being as I adore bacon so much.
Hmmm….I should probably make at least 3 bacon tiaras; a casual one for lunchtime, a slightly more formal cocktail one, and one for church, in case I ever decide to go to church.
Olympiagal
Please don’t ever go to church. With your true good character, your sins aren’t saucy enough, and the Mormons would not appreciate you genuine great sense of humor and wit. Just sick to the “wholesaler”, God.
I could see OG teaching the contruction of bacon tiaras in Homemaking meeting. That’s one way to rotate your food storage.
OG is pretty creative…,
How about a sausage link tiara OLY??
How about a sausage link tiara OLY??
Yer a genious, such is clear. And you know what else would be good to do is, to intersperse the links with decorative and nourishing golden cheese cubes and maybe also a crispy breadstick sticking straight up all majestic-like!
*falls off chair in excitement *
My tiaras tend to get sat on and broke on a regular basis. Also my barbies.
What happens if the elevator for *your* ‘home’ is out of service? The other three don’t go there, right? What am I missing here…
In a place with elevators there is always an emergency stairs exit.
Misread as “endless lap dance.” In Portland, the cranes fell silent on a seven-story hole in the downtown ground - a 32-story building is on hold, and chopped to 22 stories (the top ten were to be condos, which we have a lot of these days.
“The good news in the Portland area: Homes started selling again in March. The bad news: They’re not selling for much. The median price of homes sold in March tumbled 14 percent compared with the same month a year earlier and are now down 18 percent from their peak. Both drops are the biggest since the recession began.”
What, you mean it’s not actually different in Portland? Who’da thunk it?
What, you mean it’s not actually different in Portland? Who’da thunk it?
Oh, I know, ChrisO. What an astonishing and completely unpredictable outcome.
And it will surprise you even more when I reveal to you that it turns out we just miiiiiight not be ‘different’ here in WA, either.
But the urban growth boundary and the HOAs are supposed to ‘guarantee’ that prices will never drop here in Oregon. After all, everybody wants to live here.
I am about sick of the PUD that I rent in, but I am too lazy to move again. Why people pay what they do for these neighborhoods is beyond me. For those who don’t know what a PUD is, it is short for Public Urban Development. It is where they use a shoehorn to cram as many houses as close to each other as they can. About six feet exist betweent the houses and the streets are small. Parking only on 1 side of the street. You and the neighbors are on top of each other all the time - especially if someone in the neighborhood has guests. An HOA is required since the streets are private streets. I got spoiled with the space in AZ. However, when the sunshines, there is not a better place to be. I just need to find the right house to buy for 1/2 price in the next year or so.
Planned Urban Development. Sucks, but compared to typical mid and high rise urban hives such layouts are a paradise of equitably shared sun and air.
Who thinks that? Most I talk to still are taking bets that Portland rebound is right around the corner.
I spoke with an acquaintance this week who told me he is really busy right now with refinances and “lots” of buyers taking advantage of the $8000 giveaway. Spend $250k on a $150k house to save $8k? WTF? If its true I again ask who, with homeownership at still high levels, is buying houses??
And I guarantee most think their property will go up 10-15% over the next 18 months.
To each his/her own…
Lots of nice rentals in nice hoods in Seattle, lots. So no matter what they say, the market is tanking.
It’s a weird, weird market in Montana. While Cali is in full bust mode with devastation all around, we seem to be waiting to get started. Falling sales, huge supply of lots and houses, plunging construction, failed developments, etc. have been going on for a year or more. And yet prices still are not budging a whole lot. Foreclosures are creeping up, but just barely.
Local RE “pros” are still claiming we’re immune. And sometimes it does feel like the economic meltdown has passed us by. It’s the strangest thing.
The $8k credit may be helping sales some now. But houses are still unaffordable and supply is still too high, so I know it’s got to come down sometime.
That’s exactly what’s going on in Boulder, too. I have to concede one point to the “it’s different here” crowd…Boulder, through it’s tightly controlled growth policy, has managed to keep a lot of pent up demand in the burbs that would rather be in Boulder if all else were equal. My prediction, though, is that when prices start to fall VERY few of those people will be able to take advantage of the opportunity because they own homes that will have fallen much further. So I’m still betting on a quick fall here when the strong hands finally go down even though it’s still nowhere in sight.
Tango In Uniform,
Hey! Long time no see. Yeah, from the “Treasure Valley” east, they seem to be playing by their own set of rules? I noticed though that Ben started the thread w/ several Canadian references and when one looks at ‘your’ local market you can’t help but wondering if your economy isn’t more closely linked to ‘theirs’ than it is ‘ours’?
Since many of those f-a-i-l-e-d developments were conjured up by out-of-staters being chiefly marketed ‘to’ out-of-staters ( employing illegals anyway…) , what does ‘that’ have to do w/ the avg. MT resident?
Yep, long time no see to you, too! I don’t think you can claim that these out-of-stater developments are “isolated” from the real Montana. Take YC and the Big Sky area, for example. The recent success (or bubbliness) of Bozeman has very much been riding on the Big Sky excesses. Illegal labor is not nearly so prevalent here. Bozemanites have benefited from the Big Sky boom and are congratulating themselves for their business smarts.
And while YC and the like get all the headlines, this is a disease that’s affected the entire state. Many local-owned, local-bank-financed projects are scattered across the state. And the decisions made for these have been just as dumb as with the higher-profile out-of-stater projects. Many places have a decade’s supply of empty lots.
One thing I do wonder about is what a CA exodus could do the the northern Rockies. A small percent of west coasters coming this way could double our population. But then, where are they going to work?
Tango,
True, just how many out-of-staters WOULD it take to double your pop? LOL!
I may be leaning too heavily on our relationship to Bend, OR? In ways, it ‘does’ feel like it’s in a different state? Just yesterday someone linked an article from the Bend Bulletin that as early as the summer of 2006 a local moving company noticed that for every 10 people that moved ‘to’ Bend from Cali ( 4 of them moved on to AZ! )
With that so fresh in my mind, it isn’t hard for me to imagine a like scenario playing out in MT? “Come for the quick and easy profits and stay for the sportsman’s lifestyle!” ( or don’t ) ?
Hey, Tango! Nice to see you on the HBB again. If you ever pass this way again, let’s make a return visit to that Japanese restaurant.
Yep, was thinking the same thing! Maybe another year or two.
The sales collapsed started in 2005 but prices didn’t unhinge until 2007. Its a real long delay. Price drops still have not hit the western side of LA in a big way yet.
Market is rebounding this spring too.
The incentives are just going to drag things out over a longer period of time. Once they are removed, prices will fall more and will effect all the people who purchased. Same thing with interest rates. The fed is manipulating rates down? What happens when rates push upwards? Better hope the over supply will have cleared.
This could drag a long time. Its a good time to pay attention to wages and employment figures.
“…it’s hard to guess the bottom of the real estate market. ‘But if it’s not here now, it’s not far away,’ he said.”
Jeez, haven’t people learned by now that all bottom-calling (related to housing) has been inaccurate for the last three years or so?
‘I don’t see this as being something that would be favourable to anybody in any market condition really, to auction off their property without reserves,’
It’s favourable to the buyers of course. Auctions without reserves are also useful in establishing true market values rather than holding on to fantasy prices. I remember the property auctions with reserves in the US weren’t selling at all because the reserve prices were higher than the market value of the properties, and buyers knew that even after the “discount” off the original astronomical asking prices that the reserve price was still too high.
Since no one has said it, let me do it.. for your amusement..
Canada is different, we are special
Our bubble was almost non-existent
Our banks are solvent
Our economy does not depend on the US
Everyone wants to live here
Vancouver, Toronto and Montreal are first tier world class cities
Our house prices are based on real incomes
We are morally superior
Our pension plans will be able to pay pensioners
Our equivalent of the social security system can work without funny accounting
Everyone wants to buy natural resources.
..There you have it.. enjoy!
No, you’re wrong.
Australia is different.
Australia is special.
Our economy doesn’t depend on ANYONE.
And everyone wants to live HERE.
Everyone wants to buy OUR natural resources.
China to the rescue.
Get over yourself willya.
I know this is sarcastic, but it is largely true… sorry to break it to you, but the “bubble” here was confined to a few markets and was very short lived. Vancouver and parts of the west and that’s it.
The truth is a federal surplus for over a decade combined with sensible bank regulation means that while the economy is being hit hard it is turning out no worse than the last recession (early 90’s). No bank collapses, gigantic bailouts or unmanageable federal deficits (though there will be one this year - for the first time since the 90’s)
Canadians never lived as high-on-the-hog as our neighbours to the south, and it turns out there was some benefit to that. You might not like it but it is true.
Uhhh…you can add Ottawa and Sudbury to that list of “high-on-the-hog” places.
But really, they’re just pokey li’l po-dunk small towns in the midst of the most beautiful hinterland in the world. Not exactly hoppin’ employment prospects, EVEN despite the government in one and the nickel in the other.
My sister, who lives in Ottawa and has been a magnet for used-house saleshelp for lo these past two years, now considers a quarter-million-dollar mortgage “cheap”. (Her word, NOT mine.) My realtor buddy in Sudbury says he can’t understand why prices are suddenly so high in Central Ontario and the Prairies. Most of my family throughout Southern Ontario have multiple cars, including SUVs. And most rely to some extent on debt-financing.
I’ve known many Canadians, and while lovely people all, I’ve yet to meet ANY who I would say live “modestly” and within their means (by which I mean, NOT in debt). I see no difference in lifestyle at all between them and the Americans I’ve known.
I second this.
Having left the Greater Toronto Area about a year ago, I can tell you that houses have gone up to stupid heights there too. A friend of mine in Burlington, Ontario (about 30 miles southwest of Toronto) bought his 2000+ sq. ft. 4/2.5/2 fully detached home about 7 years ago for $220k, and about a year ago comparable homes were selling in the high $300k range. Some older freehold 2/2/1 townhouses were going in the $250k range.
The worst part of this is that you essentially can’t deduct your mortgage interest or property taxes from your federal taxes in Canada. Couple that with 40 year loans and a draining of RRSPs (Canadian equivalent of 401(k)) and you’re going to see an epic disaster in Canada too.
Rouge valley, huh Ben.
At least some on in this “late market” of New York are catching on — the condo builders.
http://www.crainsnewyork.com/article/20090415/FREE/904159974
“With buyers of individual condominiums in short supply, developers are bundling up unsold units in a half dozen new residential buildings in Manhattan and Queens and hawking them to investors in bulk at substantial discounts.”
And what are the investors going to do with the units? Rent them out. But of course New York City rents always go up.
Prices keep going up in my city in Canada and a few of my relatives have bought a house with-in the last year or two. They are young people. My middle-aged relative is going to probably buy a house this year. They are tired of renting which keeps going up at 3-6% even though we have rent controls.
llcarlos:
Tell me about it. My sister in Ottawa is always talking about “buying” a house. I love my sister but my family has always been poor (sometimes destitute) for the simple reason that most of us have TERRIBLE judgement with money.
She’s 1) a massage therapist 2) still paying off student loans 3) who thinks a quarter-million mortgage is “cheap”. (I told her a good rule is that when you say “million” anywhere in the price, it’s not cheap.)
Thankfully her fiance is older and level-headed and outright owns, so this is probably a thing of the past.
Ottawa, judging from the offers my sister’s run by me for the last two years, must be WAY drunk on their ‘government-town’ nectar!
must be WAY drunk on their ‘government-town’ nectar!
Yum! I bet that drink goes good with the Delicious Crackers of Doom and the Zesty Cheese of Despair.
Who you calling Cracker!!!!
(Although Delicious ‘anything’ of Doom sounds quite the compliment!)
..with a little frog liver pate Oly ?
Alas, my cousins in Mission did likewise - “starter” home, C$400K, five years fixed, then floating. It may be a nonstarter. But they’re hardworking and will come out of it one way or another.
This is Canada….we are different here. In Vancouver we have the Olympics. Prices will never go down. Sales are “recovering” from February’s lows. Buyers are jumping in at the low mortgage rates. People are still lining up to buy presale condos. And so on and on and on. So I hear in the media every day of my life.
WHEN WILL IT STOP???? Argh….still waiting, waiting, waiting…
It will stop when the Big Banks quit financing idiots whose eyes are bigger than their wallets. IOW, when the Big Bank share prices suffer enough, and enough bad loans weigh down their balance sheets, to make it not worth their while collecting debt serfs. That will take a nice long time thanx to our bank-lovin’ governments.
ALTERNATIVELY, it will stop when unemployment makes even the serfs retreat into savings and caution. I think in Canada, Aus, and other non-US “western” style countries, this will happen before the Big Banks quit handing out phat loans.
Friend told me this week that an RE investor she knows has 5 rental properties. All are in default and she’s simply sitting back, not paying the mortgage and waiting for the lender to call. This has been going on for at least a year.
I don’t know whether to be p!ssed as hell or laugh at the banks for their lack of due diligence on the front side. (As of right now, I’m p!ssed as hell)
This isn’t the only person my friend knows that is doing this. All I know is, partially because of these practices, that prices in Portland are still too high.
Damn the banks and the govy, I’m about to start marking-to-market. Take it or leave it. If you wait a year, my price is 15% off.
“A lot of people are upside down in California, and they were the ones feeding this (Florence) high-end market. They may not be coming back for a while….If these people aren’t coming, we don’t have much of a market at all.’”
Geez, how many other markets could you say that about, all the places where prices were driven up by CA equity locusts with their HELOC money? Now maybe the locals can actually afford to buy a home in their own town.
There isn’t much economic activity on the Oregon coast other than tourism and vacationers. A little bit of logging, but most of that got whacked by the spotted owl.
Actually, what’s whacking Oregon logging isn’t the spotted owl as much as low lumber prices. And speaking as a 40 mile one-way commuter through increasingly bare mountains of clear-cut forest, it looks like it hasn’t slowed nearly enough.
Count me as one who thought Portland would never fall hard…I was contemplating a move there last summer, but at that time couldn’t fathom how I could buy a home for my family of 4. Decided to move within the Midwest and took a bath selling our house of 6 years. Probably couldn’t afford to pay moving expenses out to PDX at this point anyway. Maybe prices will stay flat in PDX, so when I look again in a few years I won’t have missed the boat and have gotten priced out again?
Greetings from Vancouver!
Thank you Ben for a Canadian POV…
We ARE special here! We are one of the few cities in the world with OVER 10/1 mortgage/income ratio. Very poor with very expensive houses.
Here is a good example of a “future-leaky-guaranteed” condo. Nothing special… 3bdr + “dent” at 560K. Not even in downtown…
http://vancouver.en.craigslist.ca/reo/1118530731.html
Best regards
arit
The $300+K Courtenay apartment makes me laugh - for those who don’t know BC think about buying that in what is basically a fishing and tourist community at least 90 minutes drive away from most actual jobs, and fully 4-5 hours away from the mainland of North America after you take ferry+lineups into account.
“I may be leaning too heavily on our relationship to Bend, OR? In ways, it ‘does’ feel like it’s in a different state? Just yesterday someone linked an article from the Bend Bulletin that as early as the summer of 2006 a local moving company noticed that for every 10 people that moved ‘to’ Bend from Cali ( 4 of them moved on to AZ! )”
DinOr: help me understand the attraction Bend has for some people. Thousands of acres of dead Jack-pine forest and a mountain where you can ski. Drop-dead ugly. What gives?
My father grew up there just 55 years ago. There was one flashing yellow light. I understand Clark Gable used to vacation there in one of the surrounding lodges. Now its dying strip malls and houses with cinder landscaping trying to approximate English lawns. Sort of an aborted Vegas without the umbilical of gambling? It’s always been a mystery to me.