Sunday, October 28, 2012

Housing. It's Alive!

"Housing Show Signs of Life."  Bulletin, 10/28/12.

I'm sorry, it's pretty hard for me to take an article about housing seriously that consists of quotes from real estate agents.

Uptick in building and deed activity?  From what I've read elsewhere, the supply of million dollar homes in Central Oregon is sky high.

From what I've read elsewhere, most of the sales activity has been in the lower priced homes.

Three other things that seem a little off in the reasoning.

One.  They are comparing sales in the last year to to horrid, horrid sales of a couple of years ago.  Fair enough, if you are trying to pick the bottom of the market.  (Though I think quoting a buyer as being concerned that they missed the bottom is a little ridiculous.)  But I think it's more that the patient has been moved out of the I.C.U. but is still critical.

Two.  The sales are resulting from prices dropping drastically?  So that's good, right?  That everyone is taking a haircut?

Three.  Less bank owned sales.  That would seem to be more a matter of the banks having held back for legal and logistical reasons than because the banks don't have a ton of homes to sell.


Anonymous said...

So a comic book store owner is in a better position to comment on housing?

So because one part of the market is struggling the rest of the market should be suspect? If your high priced items aren't selling does that mean the rest of your store isn't doing well?

So what's wrong with comparing sales this year to sales last year? Don't you do the same thing?

And your speculation as to the bank owned inventory is as good as anyones ...... because everyone is guessing. I've been hearing of the impending bank owned inventory flooding the market since 2008. Maybe it's still coming .... I'll believe it when I see it.


Anonymous said...

From the Oregonian numbers I do not recall seeing in the local fishwrapper.

Deschutes County, which has seen its real market value fall to $21 billion from $37 billion in 2008, assessed about 2 percent less in property taxes last year.

45% drop, damn near half...

As for the bank owned houses, they can not dump them all on the market at one time. That would depress the prices even further and require the banks to write off even more losses as they sell off inventory. Not something they are keen on doing.

So the banks are propping up the market to maintain value in what they got stuck with from the crash they caused in the first place.

H. Bruce Miller said...

"I'm sorry, it's pretty hard for me to take an article about housing seriously that consists of quotes from real estate agents."

SOP for the great "journalists" at The Bullshittin.

God, that paper is getting weaker and weaker. Today they filled the bulk of the Local section front page with a photo essay about grooming cats.

Anonymous said...

No way housing is coming back any time soon. Not locally, not nationally. The numbers tell the tale. The FED is now buying $45 Billion a month in MBS...bad mortgages. I understand builders wanting to get back to work. This is what they do, build. Homes are selling because big money is sucking the real assets back in before the next leg down.

Builder_Dude, I hope you're building for someone else and not carrying loans yourself because it's gonna get fuggly sooner than later.

Buckle up kids, it's going to get bumpy after the election. Reality is on hold until after the election but at some point, what lurks behind the curtain will be reveled.

Anonymous said...

"'s gonna get fuggly sooner than later"

It's BEEN fuggly the last few years! Now it might get fugglier .... we'll see.


Bend Economy Man said...

One thing you can say about The Bulletin is: they're loyal. There used to be whole full-color sections in the Sunday Bulletin that must have been 30 pages long, full of real estate ads. Not any more, but The Bulletin keeps plugging away trying to bring the housing market back.

If you look on any real estate website at all the houses for sale in Bend, particularly those at $500K and up, and you think about the financial profile of the person qualified to buy a place at that price ($100K down, 6 months' mortgage payments in the bank account, >740 FICO score), and then you go ahead and look on other real estate websites for Ashland, St. George (Utah), Sedona and any other resort / retirement community in the West and see the same thing, and of course in any of those places there's no jobs locally that would actually pay enough to cover the mortgage on a half-million-dollar house so the buyers have to be independently well-off, and you very quickly realize: the target market for all those second homes and leisure properties just doesn't exist.

It's not a matter of convincing potential buyers or getting them off the fence or promoting the community - even if anyone were listening, or even if anyone out there still dreams of living in a 3500-square-foot home in a recreation-oriented resort community, there's not nearly enough people out there with the means to buy and afford these high-end houses for sale.

Those houses are going to sit there and not sell until the prices go way way down, and if a house with an asking price of $800K in 2012 sells in 2015 for $400K, then you can bet a house with an asking price of $250K in 2012 will be worth $125K.

So prices are going to keep going down and down and down. Back in 2005-2006 when I was saying prices would come down by 50%, people thought (I think sincerely) that I was absolutely crazy. But I wasn't pessimistic enough. 75% from the peak doesn't sound unrealistic to me now.

Anonymous said...

B_D wrote:

"It's BEEN fuggly the last few years! Now it might get fugglier .... we'll see."

It's been ugly but we've yet to see fuggly. The economic engine is sputtering and apparently QE3 is not enough to prop up the markets. The next 4-5 years is gonna suck to the highest of sucktivity and it matters not who sits in the oval office.