Hood River Real Estate and Columbia Gorge Real Estate

Rural Shock, Jumbo Caps and the three words you want to hear………

Yes, things are very fluid at the end of October, 2008. Some would say historic.

While the internet allows us a front row seat to the carnage, there is a pretty sever disconnect down on the street level. Even among the “injured” class, people just see a weekend visit to Rural Oregon as a nice treat.

Traffic, at least, has been strong in Hood River Real Estate, and the weather has been a dream. People are shocked when they come into the office to look at prices, shocked they are holding up so well.

….Which isn’t to say that they are, entirely. There has been a pretty orderly mark-down of properties in the last 45 days, and I expect there will be downside pressure into the Spring. The question is who can hold out that long.

Inventory keeps dropping, and that’s a worrisome sign for me…..mostly it portends a tough, thin market in the spring. I’m still saying to my clients…”If you like it buy it!” but at 6.5%, well, that’s a tough rate to swallow…………

On top of that, the Jumbo Cap is only $417,000 right now. Anything over that, and the cost of your loan skyrockets (think 7%), assuming you could even get it. That will put a damper on properties in the “aspirational affluent” category…….over $750,000.

That makes the following three words music to a transaction………….

Owner. Will. Carry

See you next month. Next up, Credit Cards!

Check out this article in this weeks Oregonian. It’s about the projected growth rate in Oregon. Let’s see…… tight inventory, population doubles….

hmmm….

*Things are moving so fast, you get two views this month…..*

OK It’s fall and I’ve got time to wonk out about the markets, but you have to admit, it’s a pretty incredible time.

On the ground, there’s a slight improvement. The near total freeze of a couple of weeks ago has eased, and a few great deals are getting through.

Just for the record, and I really want to be clear on this, because I’m taking alot of heat. The NATIONAL RATE OF FORECLOSURE at September, 2008 was around 7%. That’s less than one in ten homes in foreclosure. While that is a historically huge number, it doesn’t wipe out multiple International companies with tens of billions of market cap. Credit Default Swaps do.

No, the Community Reinvestment act is not the cause of all this, no matter what the you tube video tells you. “people who can’t afford a mortgage” are not the cause of all this, Credit Default Swaps are. Got it? Credit Default Swaps wipe out billions, not small mortgage holders. Small mortgage holders writing down loans make for uncomfortable quarterly reports and analyst phone calls, but they do not wipe out billions and reshape banking in america. Credit Default Swaps do, and none of this is over yet.

Most mortgage holders will still be able to pay, becasue they are not generally parties to a trillion dollars worth of swaps. They may own stock in, or work for a company that does, and that will be unfortunate. By and large, however, most people, especially in a place like Hood River, have a good sense of themselves, and will continue to do so.

Hood River Real Estate County rates an approximate…..are you ready for this? 1 Foreclosure per 1,500 homes. Want to know how many homes there are in Hood River County? About 3,000. The Stat’s don’t see the granularity, one of those foreclosures on the record actually encompasses a developer with about a couple of lots that were, or are, unplatted, so we could increase that amount a bit, and I know there are others out there, so at a worst case scenario, let’s consider it about 10 total. That’s rough, to be sure, but it sure isn’t ARIZONA.(1 per 250, Honestly) If you think you can pick over the whopping inventory of ten properties, well, good luck. Every client I know is too picky to buy those properties at any price.

Buyers ask me all the time to give them an edge, but the funny thing is, when I point it out to them, many don’t take the advantage. Everyone should stop waiting for the “wave of forclosures” because at worst, it might be 20, maybe 50. Of those, not that many will be in the category of properties you would invest in. Meanwhile, unseen in the hype, is the falling inventory. All the nice ones with motivated Sellers are selling now and will soon be gone………. Until the next wave, but the quality of those properties will wane, and wane. and before too long, demand will outstrip supply, and we’ll get going again.

Or we’ll all be wearing burlap sacks and clubs, which a friend pointed out to me yesterday, is “definitely now within the realm of not unbelievable…..”

See you next month. If it’s still there!