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."
His analysis:
"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.
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Well, as long as rents remain higher than mortgage payments on comparable properties, anyone who a)needs to move, b) wants to stay in Bend, and c) can pass the financial colonoscopy of getting a mortgage, buying will be the better deal in the near term even if you end up underwater for a few years. Now better doesn't mean good, but it does mean that there is a steady supply of buyers and maybe, eventually the hangover will wear off....
Californians cashing in their equity have always driven the real estate market in Bend, which means that until the California market recovers there will be no recovery here. And the numbers you cite don't give much reason to believe California is recovering.
OccupyWallStreet
News and Logistics for September 17th
*
Arab Spring comes to WALL-ST today, 17sep,
The demands are simple, all BUSH&OREO crony's go to prison, an everyone on wall street.
There will be blood, and the ameriKKKan empire will see many of its children slaughtered by 'gubmint', USA cops will make Syria cop assasins look like sock puppets.
The 911 excercises last week were not for terrorism, but to control this event that starts today.
"OCCUPYWALLSTREET" - google today and learn.
$200k is the 'sweet-spot' for nice west-side homes, as there are lots of folks from PDX, there are on buyer waiting lists, and yes when the sweet stuff comes up it has many bidders,
More can be said that there are few 'sweet homes' that come on the market, most homes in Bend are dog's.
Let's remember that all this non-sense only works at 3% interest, which on $200k is little more than $600/mo for payments. This will all change rather quickly as interest rates will go up, the day of US selling its debt for ZERO is Bend OVER(tm).
Higher interest rates are coming, then the tiny sales will stop, and prices will once again collapse for all.
The reason for 'sweet spot logic' is that for monied PDX buyers $200k sounds like a good deal. There are many middle-age people in PDX that would love to have a sweet west-side vacation/retirement home, and they're all on the list(s) for bargains.
I have written about this before but I guess I have to again, a sweet west-side home: near newport market, big-lot, off street parking, large fenced yard, house with real foundation, ... the problem with MOST Bend real-estate is that they're small lots with no off-street parking, and shitty little upgraded mill-houses. Everyone's dream is finding a nice home near drake-park for $200k with off street parking and a large yard.
All this is irrelevant as the majority of RE in Bend, is SHIT on the east side on postage stamp lots, and this shit is worth $50k.
There seems to be a tug of war on this foreclosure process, watch the auctions in Bend, most never happen, most are postponed forever.
Sellers want to keep the dark-matter/dead-matter off-market. Banks want to keep their books good by booking the loans as Sales Value. Non-Performing loans seems to be the norm. Bend seems to be terrified of wholesale bottomless drop in prices, and thus 1,000's of homes are kept off market, and as we all know all this does is defer the day of reckoning.
The people that haven't left Bend are waiting this out for prices to return, the RICHE that control Bend, all sit on $5M homes now worth $500k, and they're waiting it out, and they too don't want prices to collapse. The future of Bend is fucked, very fucked.
With regards to 'rent', yes everybody wants to rent and rent can be cheap, as many dark-matter homes are rented out even though owned by the bank. I known many kids paying $500/mo for nice Brok-Top mansions, where college students take turn using the homes on the weekends, for 3-4 kids its cheaper than a night in a hotel once a month. This brings lots of kids into Bend on the weekend to drink beer and party, which is always good for business.
Prog: Resets still 2012+, add Bend lag, we're in a long term depression. There is nothing special about being in Bend to ride out this depression. Prices for everything essential will only sky-rocket in Bend. Bend is a shitty place for health-care if your old, the doc's have the highest level of malpractice, think Mayor Friedman.
HairLip Chronicles ...
DEJA-VU
Had a good drink tonight with me old friends here in Kunming(china).
Drinking bai-jiu most of the night.
What struck me the most is they still ask about USA and I tell about un-employment, they just don't understand, its now saturday night, and most have to work tomorrow, well accept the teachers who were off today, and started drinking at 8am, I have to be honest, I started at 6pm, but had one at noon with the boyz.
But the majority of the guys all have grad-educ, work 7 days a week, 12+ hours a day, and its just life, and always been this way.
This is the folk that USA hair-lip is competing with!!
Globalization, has really been a bad-joke played on the walmart crowd of Bend, for all their dollar-shit, in the end their children are Bend-Fucked(tm). In some ways I have to be honest if USA wanted to save itself, an inward look and massive tarrifs and re-invention of the USA wheel would be essential. But alas the BANKERS own the USA and they're obvlivious to the pain on main-st. Now China&India have 10% growth into perpetuity, and USA/EURO is a big zero and dropping. Ahh the advantages of old-age and edooocation.
So fucking sad that the voter's of ameriKKKa have been sucking exhaust pipes for 40+ years. I think at this point death by asphyxia is preferable to realization or action.
Sorry to all, just like good old times in Bend, a few drinks and a little blogging. Ahh just so you know to use 'blogger' in china, you have to use deep-tunneling. As blogger(google) and facebook are rightly banned. Being tracking tools of the evil empire.
"Everyone's dream is finding a nice home near drake-park for $200k with off street parking and a large yard."
If you can find homes like that at that price I'll buy five of 'em.
Well they did a PDX with 'occupy wall street', e.g. they banned protesting at the site.
Funny that long ago, protesting at the public square was an 'ameriKKKan right', ... yeh right.
Dissent was never an ameriKKKan activity, which is why Mark Twain, and Ben Franklin, authored their works in anonymity.
There's something odd with all the houses being "bid up" and I can verify that buyers are being told just that.
A relative had been looking for acreage recently but literally everything they bid on has "multiple" bids and the official story is the bank is going to take the highest offer so bid your highest offer. Both times they've won...first property the bank came back and said they thought the property was worth more and asked for more after accepting their bid. To which the relative said, "fine, keep it". The second property failed inspection and the relatives said they no longer wanted it due to the high cost of making the place livable. It was back on the market the next day and is still back on the market despite the other 9 offers they had. Me thinks this is the standard line to get the max bid. Things are selling but it's not what it may seem to a clueless buyer right now. I'm 100% positive that the dark matter inventory is so big they have to keep it off the market or local RE prices would be down another 15-20%. Private sales are rough, most of what is selling are short sales and bank owned. The recent claim that defaults are way down might be true in actual numbers but just because the banks aren't foreclosing doesn't mean folks aren't walking away. I think the relatives are crazy for buying now when the RE market still has a 20% drop ahead of it. The RE industry can say what they want but eventually they won't be able to hide that sort of pain.
Re deals were often shady during the boom and since nothing has changed regulation wise, my guess is that new shady tactics are being used to make things sell.
We're closer to the bottom but we ain't there yet.
Let's remember that all this non-sense only works at 3% interest, which on $200k is little more than $600/mo for payments. This will all change rather quickly as interest rates will go up, the day of US selling its debt for ZERO is Bend OVER(tm).
Higher interest rates are coming
not for at least another 2 years...nobody should be buying now based on fears that interest rates are going up. The fed has spoken, ain't gonna happen.
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