Hood River Real Estate and Columbia Gorge Real Estate

…Ok, My phone rang immediately upon that last post with a disgruntled Blog reader. This is what an “underwater Lock Down” is.

In Hood River, your average person buys, or owns a house. They get caught up in some of the market run up hype, but not in the way you might expect. Usually, they take out their new found wealth in the form of a refinance at the higher valuation, but they do not sell. Many of them don’t do sub prime but some do. (Figure more than 50% don’t) and here’s what happens.

Market corrects, but the total negative impact on these people is that their payment is high and they’ve lost money….but only if they sell their home.

They decide that it’s easier to sit tight and pay a couple hundred more dollars a month and wait for the market to recover…..so, they drive their cars a little longer, go out to dine a few less times per year, and generally trim back a touch….but they don’t sell.

What does this mean to Real Estate? The these houses do not come to market…..which is effectively a return to the Real Estate market of 1996-2001………general upside pressure, limited inventory, very little speculation…..

More or less…………….

Maketing report came out last week. The Highlights…….

Average Home Price in Hood River County is…Ready for it? $384,000.00. In the City of Hood River (Downtown) it was $403,000.

Yeow. Pricey. (“Spendy” is the local parlance) We are still having affordability issues, especially in the procurement of Land. A Couple of us are trying to start a land trust, but it too, is an uphill battle. Good thing about it though, is once you get something in there, it really is like money in the bank, earning interest….social and financial…..

Days on Market has gone waaay up, to over 120 days. That’s a loooong time, and expect that number to improve. It will be interesting to see what happend to the Average Sales price when the “Underwater Lock Down” starts to happen. My bet is that it will impact consumer spending more than it will impact housing prices, expecially in this area, and have a supporting effect…..

But then again, maybe not. Hey, What the hell do I know?

Wow-

I hear there’s another wave of writedowns in the offing. That would be unfortunate. I can’t see it coming from more foreclosures, but rather from the compouding effects on both the investment banks and the insurers….Most people think this is the impact of September/Octobers delinquency rate, and if that’s the case, this all wont be over until well into the Summer (height of the resets is January 08) With the freeze in effect, and other government intervention, who knows. It really is like a Hail Mary pass at the moment isn’t it?

I read this week also, that there were 8.8 million people who were going to be helped out by our government’s latest mortgage bailout, and that this number represented only 10% of those who were considered underwater. (Owe more on their house than it’s worth.)

Now that number scares me. 88 million people are underwater in their homes? Impossible. That’s got to be like 40-50% of the entire home ownership in America……If this is the magnitude of the problem, it looks completely different, but not what you’d first expect. It’s kind of like “home owner mobility lockdown”…..(i.e. It’s cheaper to stay put than it is to move and take the bankruptcy.)

Even with all the recent shenanigans in Hood River Real Estate, a majority of the home owners are still sitting on equity (unless they refinanced and took money out)So once again, Hood River is not too hot, not to cold, and in playing the long game, looks pretty good overall.

That, combined with rising value in resource lands, makes for a decent spring.

I cannot wait until I can stop writing about the Sup-Prime Mortgage market…….

See you next month. I’m still bullish on the Market, but my timeframe has expanded a touch. No strapping on of shoes (see last post) until Spring of 2009………