I have a friend who's looking to buy a house in the 200K range. He said, every time a house dribbles onto the market, it's bid up in price.
That's just crazy. And wrong. There have to be 1000's of houses in the Bend area that are eventually going to become available. But if the pretend and extend is only allowing 50 houses on the market at a time, and 75 buyers build up, then it looks like there is an inventory shortage.
It's being manipulated, obviously. I think it's systemic -- a slowdown from top to bottom. Everyone seems to understand that the longer this plays out, the longer they can keep their jobs. The longer they can stretch the process, the more money they can squeeze from underwater householders.
I don't believe the foreclosure crisis is anywhere close to resolving itself, despite noises from the local real estate businesses.
These guys are relentless and it's their business, and those of us who doubt their spin just kind of get tired of contradicting it. We eventually raised our eyebrows, shrug our shoulders, and say, "Whatever."
But I'm trying to keep up the good fight.
The idea that the shadow housing crisis is resolving itself in 2011 is equivalent to the ridiculous idea in 2007 that there was no housing surplus. Both statements could be back up by statistics -- and both statements are ludicrous to anyone paying attention. People still bought houses in 2007 based on the real estate assurances, though by that time people like me and BEM and Paul-doh and Buster had been blogging about the bubble for a couple of years. Then they bought houses in 2008 and 2009 under equally manipulated statistics.
People are amazingly naive. But a market depending on naive people isn't a good market. Just using Oregon statistics, for instance, as proof is being disingenuous. Bend isn't reflective of the Oregon real estate market -- we look more like the Las Vegas market. When Bend walks into the Oregon room, it drops the net wealth by a significant percentage.
My own impression is that not much has really changed in Bend. Rumors make me believe that whatever surplus money was floating around is drying up. There are times when you just have to trust your gut, no matter what the vacancy rate is, or what people are saying.
It reminds me a lot of the mid-80's when people would open businesses in Bend with great fanfare, only to fall the heavy weight of a depressed town a few years later. Eventually downtown scraped together a viable group of businesses, but it took nearly a decade. It also reminds me of when sports cards sales started to fall off the table in my store, while --by all appearances -- they were selling like gangbusters elsewhere. But my gut said it wasn't real money, and my gut was right.
Just so this won't be all my "gut" as proof, I give you the following from Mish's Global Economic Trend Analysis blog from yesterday. The headline:
"Mortgage Default Notices Surge 33% Nationwide, 55% in California, 200% by Bank of America; Corresponding Jump In Foreclosures Will Follow."
"Housing will not bottom in many areas as long as there is a mile-high stack of foreclosures in the pipeline. Thus the faster forecloses increase the better. The bad news is this process will still take a long time.
Those numbers are distorted by various delays, yet even with the pickup in foreclosures, it may takes years to get back to normal."
I don't bring this all up so that you'll climb to the top of your roof and jump; it's meant to be a friendly reminder not to get ahead of yourself, buckle up, wait for true improvement before you do anything foolish.
2 days ago