Hood River Real Estate and Columbia Gorge Real Estate

Greece, Contagion and the words “Strategic Default”

Interesting uncertainty has quietly crept back into the market. I’m thinking that the heated buyers market that suddenly cooled had something to do with the tax credit, and the fact that everyone is waiting to get done with school, and into the Summer. I polled my brokers, and they are still seeing buyers show up, but everyone is early in the cycle, so it looks like summer buyers to me. I’ve been distracted with County Budgets and such, I’ve not been working the market like my brokers…..Who by the way, along with me, make up three of the top ten agents in the market this year. That makes 2/3 of our Brokers in the top ten……And our market share continues to grow……I’ll take it.

Couple other things happening in the market these days, the new phenomenon of “jingle mail” now has a slightly more serious moniker, (which means its becoming more widespread, and less novel) called “Strategic Default”

Now, there’s foreclosure, and it can be caused by a lot of things, not any of them good, but here is one that really, really scares me. SD isn’t a default because of a catastrophe, it’s a default because of choice, essentially, a business decision.

Let me be critical for a moment. Strategic default is a symptom of denial. It says you care more about your standard of living than you do your neighbors, It’s like having a campfire in a national forest, in august, and then falling asleep while it’s still going. If this takes off, it could lay waste to whole neighborhoods due to markdowns, and that could take a long, long time to recover from… Have I made my point clear?

There, now that I’ve said it, let me turn the coin. Strategic default CAN be a reasonable option for people in the right situation, for the right reasons. Like I mentioned a few months back, when this first came to light, it doesn’t sound right when a person makes a decision to strategically default, but when a company does it, often times they are rewarded for making a “shrewd business decision” (I’d hate to be on the receiving end of anything being referred to as a “shrewd business decision” these days) I don’t think there’s much of a difference between the two except for perception.
What’s really unsettling here, is this. Where does this thread stop? (see Contagion, below)

And there’s more! Compliments of Realtytrac. (www.realtytrac.com) Guess where 50% of ALL FORCLOSURES IN THE US ARE? ….You have to go no lower than #5 to encompass the top 50%. Can you imagine how bad that must be? Even with decreasing numbers of foreclosures, it’s still a scary set of numbers. Imagine if the word CONTAIGION crept into the discussion. Strategic Default leads to neighborhood contagion of SDs…..

This brings a whole new light to the phrase “keeping up with the Jones’” Thank goodness I don’t live in California.

That’s it for this month, keep an eye on inflation, which, according to Paul Krugman might not be the right thing to look at. He says we could be more Japan than Greece. I think I might take that over rioting over enforced austerity measures……

This choppiness is looking all so May of 2008……….

(postscript- Volume has just shot up, way up. New listings, New buyers, most in the higher ranges……whiplash! Also, so very 2008)