Well, what can we say about this last month? After all is said and done, we are busy, and things seem to be moving again. I’m really grateful for that. The economy is still in strain, but last year it was so focused on the post first timer credit, that, well, we all just basically melted. Everyone was concentrating on how BAD Real Estate was, that we just had a season of being the poster children of “lame jobs for the new century” Thank goodness that’s past.

This year, the action is all overseas with the potential for Greek default. In our little bubble, what we are seeing is a fair number of buyers out in the marketplace, but a very difficult time obtaining financing because of low appraisals, primarily due to Sellers, in some instances, running towards the buyers. This has, unfortunately, caused this sort of negative feedback loop. Strict underwriting has caused sale prices to be lower, has cause more appraisals to come in low, has, caused……well, you get the picture.

Further complicating the picture is the potential fallout of an event like Greece’s default. To me, that means tougher credit, but to some, that means a flight to the safety of the US dollar…..Love that one. Money pouring in, Banks still too scared to lend. I bet there will be a bifurcation of that credit access too. If you have GREAT scores, you’ll get faster, easier underwriting and a better rate. If not, you’ll get….nothing. I hate to say something as simplistic as the rich get richer, but It’s there, it real, and it’s happening right now.

In a bright spot amidst the carnage, one of our group projects that we help out on, managed to get past a huge milestone. I can see a double digit number of jobs moving to Hood River from that project alone.

I bet there’s going to be some firming driven by demand by new arrivals to Hood River in the future because of the surprising well of entrepreneurialism around here….. (AND, you can already buy cash-flowing rentals in Hood River as well, so there’s that, too)

On the retail front, we have all had a steady, not stellar, first half. Costs are high, but people are coping. We are also having a tough time finding good talent. Imagine that. All this woe in the national unemployment scene, Hood River, with an 8% unemployment rate, and we can’t find a good line cook.

It all leaves my head spinning, really. I’ve got some big, big worries about larger economic issues, but right now, in Hood River, in our areas….I’ve got to say, it’s a pretty decent time to be in the market. That could change tomorrow, mind you, but I have to say (With a wry smile) that its ok to jump in the pool…

Armageddon or salvation seems to always be just past our 30 day window. An answer that “auto magically” (my new favorite word) seems to adjust, and always be out of reach. Like the carrot dangling on the end of a stick, we’ll put on foot in front of another until we get there, eh?

See you all next month.

….I love our monthly market report for our region. They do such a valiant effort (As do I, mostly) of putting a good shine on.

This month they touted that the numbers were up from February to March! Big jump!…Until you look a bit closer and see that the numbers are down, year over year by 40%. Ouch.

While our closed sales YTD are tracking last years, you can see another potential for slowdown in the pending numbers, and the inventory numbers. It evolves by the day, and one good sunny day could have a big impact.

This should drop the inventory (It has) and stiffen the market (it has…kind of) but this month we are seeing quite the flood of properties on the market, so my inventory crash was quite short lived…..It turns out, you can’t score if you don’t play, so look for lots of people to have a ticket in that game, but listing homes that are essentially unsellable due to indebtedness. Our trends are very choppy, and clearly divided into the two markets, Those that have to, and those than can. We are running about the same as the national markets, with 40% of our transactions being defined as “short.”

Last month, I incorrectly identified that the market has two “ends” higher, and lower, and that the higher was made up of those that can…I want to clarify that there are examples of both types all over the market price ranges, and that this is leading to a really choppy presentation of properties in the market…..and the dreaded resets.

…And speaking of resets, just as the demand firms up, the appraisals from a bunch of foreclosures are hitting valuations. We are having a HECK of a time making negotiated value. Seems a lot more people want to live here than the appraisers think….

So, we continue bouncing along the bottom. We are having a big push of sales get in the pipe right now, so that seems positive, but the big news will be how that carries into the Summer, and especially, the Fall.

There are a couple of great updates on the blog over at Copperwest, too. In the index of the blog are a couple of links to pages that are “mini-searches” of sub markets in the gorge. They have the 10 newest properties, AND the ten largest price reductions. Kinda cool.

Next month, apparently, we are going to launch a mobile app too…..ooh pretty.

See you then. And have a great Spring, such as it were……

Oh, oh, so late, late late….Springtime is always such a hustle, especially when we’ve just had one of the coldest, and wettest (is that a word?) March on record.

Maybe that isn’t the best thing for a Broker to say, but with averages being what they are, we are in for an awesome Spring….once it gets started. Though I have to say, I’ve been paddle boarding a bunch recently (call me for free lessons everyone, I’m geared up!) and it’s quite the all season sport. A lovely gem if the trails are wet, the mountain is raining, and there’s no wind…..

Oh yes, Hood River Real Estate. Big, lumbering things happening. You don’t notice them if you aren’t staring at it, but these last few months are witnessing a fundamental shift in our markets, and Real Estate in general. If you had told me in November that we would be talking about dismantling Fannie and Freddie in March….well, I think I would have taken that bet, and lost.

Now, I think that ultimately that might be a good thing, but that’s in the long, long term. It’s the near to mid-term that’s going to hurt, as Government Sponsored Entities (GSE’s) retreat, but the replacement market only caters to something called the Qualified Residential Mortgage (QRM) market. (A QRM is a mortgage that qualifies as having a borrower and a property that are of a certain level of quality such that the entire mortgage may be sold off on the secondary market, thereby allowing the Lender to lend more. A non qualified mortgage (whatever that is, they are still arguing over the definition) would require the originator retain 5% of the loan amount to keep “skin in the game” (whatever that means. All it really means is that the whole game gets a lot stricter.)) Wow, double parentheses. It’s a nested Real Estate opinion. Things must be getting strange.

Copperwest, however has been moving quickly and quietly along, and doing quite well, though it still feels tough. For a brief moment there last week, I believe, we were the largest, by volume, agency in the entire Gorge. I’m certain we didn’t hold that title for long, (we only have five agents, including me) but one title we do constantly retain is the highest volume per agent. When you have the fewest agents of any office in the Gorge, and you are the largest by volume….well, you do the math.

We’ve been tweaking our compensation schedule too. I think I can say, with a really high degree of probability, that our office support, training and compensation schedule are the best in this region. (We have technology credits, and Celilo food cards as part of our package. I mean really……) And now I’d like to grow a bit, so we are out in the market, while some are retreating, looking for more brokers who want to out-produce the rest of the marketplace by a factor of two or more.

Oh right, Real Estate. While I was gushing there, things continue to change, and I have to say, the access to financing will severely impact Buyers in the market. There are many of them out there, but the gap is still quite wide in attempting to do a deal. Deals are getting done, though and the inventory in the City of Hood River is in decline, which will lead to an even more acute pricing strain this Summer.

Meanwhile, in the Dalles, the inventory is exploding. I think this too, shall pass, once the pricing gets down due to the glut.

The Hood River market could very well cleave in two. Sellers who can afford it, will list at the price they are motivated at which will be, in some cases 30% high. Buyers will remain indignant, but have nothing but extremely modest choices to choose from within their restricted ranges. (self imposed, restrictions, mostly)

So where does that leave us? An intense reliance on insider knowledge, and a stagnant market.

Our brokers are already working every single angle possible to get deals done. Private financing, Owner carry, asset swaps, you name it. We are deeply committed to making things happen, and trying to never take no for an answer. I think you are going to see a lot more of that, not less. It’s entirely possible (and this is happening now) that a team of people need to come to a transaction to work it. Short sale negotiator, mitigation and repair expert, financial expert, all in the form of one or more Realtors. It’s just getting more complicated, not less……………

See you next month!

September Market Action is out…… It’s on the front page of www.copperwest.com or click here.

It’s been a mixed month for us, but some big properties have suddenly moved. All out of town too. Lots of things that went pending in the Summer are scheduled to close, and I’ve noticed a few of them have come back on the market after a sale fail. Not many, but certainly a few. Higher than average, but not enough to be a trend.

Other properties are closing at pretty intense discounts……A recent highline property sold for $408,000 is very low, (Last list was in the $510,000 range) but some land off of dry creek in Mosier, posted a really good price. There are definitely a lot of sales specific to the Owner’s financial conditions, not the inherent value of the property…..

Even with that, It does feel like things are firming up under the market. Of course, as soon as I say that, the foreclosure mess comes to a head, and things get thrown into doubt….
….and a few words about that issue…. While everyone seems to be looking at the process, which the banks rightfully are dismissing as “technical errors” what was being missed in the whole discussion (though not anymore) is this:

Once you have cast doubt on a part of the process chain, (in this case, the far end of the process, the foreclosure process) it opens up a line of inquiry into the entire process. Once you start looking a little closer, you start to see that in fact, there were similar errors, and systemic ones at that, that occurred at the near end of the process, when the loans were originated, and then again when they were syndicated and securitized.

Now, as an investor, looking at large losses, wouldn’t you want the person who sold you that large loss to take it back? Yep, I bet you would. But you can’t, unless you prove that the process that brought the loan to you in the first place was flawed, or worse, fraudulent.

But you couldn’t do that, because no one was listening, until last week.

Now, you, and 50 state Attorney Generals are going to look a lot closer at the process, and soon, some of those banks are going to be taking bad loans back onto their balance sheets. Very soon. Any they aren’t the “extend and pretend” type loans either, they are fully ripe, “can’t-ignore-it-the-auction-has-been-scheduled,” type loans.

WHAT pray tell, does that mean to Hood River Real Estate? Incredibly, probably not much, except it will continue the uncertainty and fear that has been pervasive in this market. That keeps people on the fence, and if you are on the fence, you are not buying a house. It will most certainly have a dampening effect on price increases.

(And you knew this was coming) Now, however, while prices are low, fewer people can convert out of their properties, leading too……lower inventory, and increasing demand relative to supply and……well, call me next spring and I’ll tell you how it comes out.

But seriously, inventory is dropping (partly seasonal, partly sell-through, to be honest) Our unemployment is…..wait for it…..7.9% and there are jobs on the horizon. And more than a few at that.

Contractors are busy as well. Even with all the mess and uncertainty, It is a recovery, but it sure won’t feel like one….. And I don’t know how good you can feel while things are getting better, but you are still stuck in the middle of a minefield.

I do have to say, however, I’d rather be here than any place else in the US right now. It’s stable, its safe. Things are tough, but it doesn’t take much looking around to realize that the Northwest may not post the best numbers according to nationwide stats, but it is, on the whole, a load better off than other places. (for those of you who insist I name another region, I’ll say “Great Lakes” but I could just as easily say, Arizona, Nevada, California Inland Empire or Florida….)

Do I type that every month? Or is it only once every couple of months?

That’s it for now. Keep it together everyone. Thanks for reading and we’ll see you next month!

Thankfully, I’m not late to post this month………..Things have certainly been slower, so I’ve got time to catch up, that’s for sure. Weather has been amazing as well……and that’s why September is the best month of the year in Hood River!

All brokers are working this month and the buyer’s activity has been high. Year to date numbers show us selling the same units as some of our competitors, quite an accomplishment when you consider we are less than one quarter their size. Thank goodness for process.

Prices are stable to weak, with closings that occasionally firm up a price range, and others, that are destroying price ranges. Houses in the 500+ range are shrinking quickly, and we are now seeing multiple markdowns of properties that opened into the “dead zone” of 600+…..Inventory months will be dropping in the next few months, which is a traditional fall trend, but expect it to be a bit more pronounced this year.

Closings from Augusts rush are coming in, and if you are planning on doing something in Real Estate, especially refinance, PLEASE do yourself a favor and call us first, so you don’t spend $500.00 to find out your market got reset last week……I can’t tell you how often this is happening.

The constant drumbeat of price reduction has faded slightly, and in the last few weeks, the buyer’s have been overplaying their hands, much to their chagrin. Sellers are simply balking at another 15% off their already 25% marked down home, and where they don’t have to sell, they wont. Unfortunately, if they DO have to sell, it’s becoming a rare property that can get down into the correct range without going equity negative. Generally, you can look at a purchase date and get an idea. If you bought in 2005 more or less, you are a more likely candidate of getting through. 06-09 is tough, unless you came in equity heavy.

So now, the focus is on those few remaining properties that are equity heavy, but willing to deal……now, they do, however often come with those “quality defects” I’ve so often mentioned….but hey, at least there are buyers. I’d even hazard that the “confidence gap” has narrowed recently….

Foreclosure notices are now taking up a full two pages in the weekly Hood River News. Sobering. I remember when that was last the case, and it was all the way back in 1992….

I see some bright spots (like us being up 100% for the year) but it isn’t without its bare knuckle work. 4.375% 30 year fixed is the going rate, and that will certainly get someone interested, but with negotiation, appraisal, Automated Market Valuations, desk reviews, and jittery sellers, who are negotiating while they are coming to grips with “is that all I can get?” well…..

It is no country for old men, to use a movie title….. (Which was a terribly depressing movie…but very good. Who thinks of that stuff?)

October is looking weak, but traditionally we save it in the last selling week. (Which is last calendar week of September) The big test is November. We already have December in the books, so it’s a 60 day game, clock is ticking, and we are slightly behind…..

So, got to run, see you next month, Thanks for reading!

Of dead cats and a recovery

As I sat down (late again! Damn!) to write this months blog posting, the headlines blared “July existing home sales down 27%!” or something like that. (Actually, in Oregon it was 29.8%. Come on. Round up! I mean seriously……)

Tell me something I don’t know.

What I do know, that many don’t is that we have bounced, and are busy again. Decent August, big September. The inventory, is quietly disappearing. Not the properties I would have thought, mind you, lot’s of stuff over $400, but some at really aggressive discounts, up to 10%, some more, most less. (See Justin Fox’s Latest) If there is a bottom, 10% off this years already lowered prices is probably getting there.

Its funny how fast my news cycle has become. I don’t read the electronic newspapers dropped into my inbox every morning, because I read it on the news feed already. My cycle has become quite instant.

But back to granularity. Here’s what a real instant cycle and granularity get you in the HR market. The aforementioned news headline is based on data from July. Since then, (these last three weeks) We have had a large jump in volume of transactions, while the newspaper titles are still promoting that we languish, Buyers moved in and went for it. My impression from seeing recent sales, is that these closings are going to set off a reset in valuation in some neighborhoods. Not much, but that rash of closings, (discounted) plus the winter, plus the increased restrictions on mortgage financing will push the prices a touch lower (5%-maybe 10%, a la fox), touch off a good bump in September (because of low rates) that will close into October, but not reset anything, and then the winter buyers will move in for their traditional late season searching. Someone should send a memo out to the Sellers, so they don’t get blindsided by the raft of appraisals that are not about to make it…….Weirdly, and (insert raft of external event caveats here) I’m thinking 2011 Spring could be alright.

So it boils down to this….

Sellers, you are close, but you aren’t there yet. Keep up with the recent closings in your market, because appraisals will be required to use them. One meltdown by your neighbor, and you are stuck. Be open to compromise, and renting you home and remember, in a declining market, todays price is the one you should seriously consider. Tomorrow’s price will most likely be lower. And regardless, they will not be recovering for quite some time.

Buyers: Hood River isn’t a suburb in Reno. Understand, that this is the place you are choosing to vacation in, live in, grow your children in, and a community to be a part of (not apart of) Leave something on the table, you are moving here for love of a place, because otherwise, Reno would be perfectly fine. Others are moving here, and have understood that. They are getting the deals, and great ones at that.

See you next month.

….Been a decent January for us, but there’s still trouble on the horizon. New disclosure laws went into effect, specifically Good Faith Estimates and a SLEW of new reforms. I am not sure at all that any of it helps, but after a long talk and some research, I can say this……I can see where they are wanting to head, but they didn’t get there with the current GFE and closing documents……

I think they’ll get there, but the revisions, can’t come soon enough.

Near as I can figure, a mortgage broker will need a worksheet on the front end to explain all the terms to a borrower. Then they will have the required GFE (which they can’t change much, and in some spots its just indecipherable, but I KNOW the people responsible for this already know this) and then they will have to have a settlement sheet to explain what the GFE really says and what the borrowers need to do in order to close.

Oh, and you can’t get a GFE anymore without an actual property, and an actual purchase price….so, you most likely have to get a “quote worksheet” when you get preapproved, do the deal,  get through inspections, and THEN fire up the mortgage brokers to quote rates and closing costs for you…..

Bottom line, If your Realtor can’t explain this stuff to you, get another Realtor. As of right now, I think I could explain it to you….but I honestly couldn’t swear it. Don’t fire me!

This and a few things will push out closings for a bit, and then they’ll snap back to the usual 30 days after awhile. Why, I just closed one today that too exactly 29 days….clean and simple. (actually they had the home inspection completed before the offer, so…..that was cheating a bit.

Banks are still defending their liquidity, and I’m finally seeing big media pick up on the fact that the banks are still playing a bit of a shell game.  They still have to lend, however, so they are being picky, picky, picky……

Our local bank bit the farm this week too. Not that it was a huge surprise, but…..it was a big surprise.

I fully suspect the home owner’s tax credit program to be extended, things are just not healthy enough yet. I suspect that the secondary market buying programs will continue as well, probably until the end of 2010.  That’s just me guessing, but I’m seeing a recovery, but not an improvement. (Recovery= market reassembles itself with moderately sane people in it trading at arms length. Improvement=anything resembling firming, like price uptick, volume uptick for multiple months, of heaven forbid, multiple buyers again. I can dream can’t I?)

There seems to have been another round of capitulation in the market too, in January. Price reductions have happened, but when there’s no market (or the sector is hibernating) there’s just no market. And it opens the door to the other scary question (what’s the value of a property when there’s no market?) I suspect this will continue until March, when all those discounted places will get snapped up, and we’ll have another round of firming, there will be an even bigger flush of new properties, and then….well, you get the picture.

Hey, at least stuff is selling.

About the kookiest thing to come out of the prior RESPA reforms (actually the HVCC) is the completely random lowest cost provider Appraisers. In a market where the HVCC is supposed to reduce the chance of coercion, I’m commonly asked by appraisers who are not from the local area what good comps are for their target homes. They don’t know or understand the market, and subsequently come up with some of the most random valuations I’ve ever seen. Apparently, being a local appraiser doesn’t count for anything anymore. It’s pretty hilarious, and a glaring flaw in the theory versus reality. I’m confident it will change over time, as a lot of the appraisers from out of the area have determined that the travel time is too great, and have given up.

And finally, check out the FB page for Copperwest. There are three good topics on there, including the morality of walking away, a recent report indicating that housing sizes are shrinking, but that the kitchen is still king, and…..the 2009 Home remodelers report, which tells you what you can expect to get out or any remodel by type and region, great stuff at Copperwest.com, and It’s going to be even Bettter Next Month!

When a business walks away from a building, somehow it’s for the good of the investors. When a person does it….it’s a deep flaw in personal integrity. How’s that again?

Great article by Roger Lowenstein. Think about it….

… here we go…. Check out this article in the Oregonian. Heard that recently on this Blog? You know it’s bubbling when it hits the black and white………..

Baby Boomers Retiring to the Country……Especially quiet towns ringing the Metro area of Portland…….

Thanks for Reading! If you like this post, please feel free to digg, tweet or otherwise! I appreciate it! Watch the video too!

Overall, Hood River Real Estate has been pretty good this month. Lots of deal action, but loooower prices.

Last year, in the fall, Sellers attempted to hold onto their prices, and managed to do a pretty good job of it. This year? Different story. Sellers have capitulated, and are selling at some steep discounts. That makes it tough for those left in the market trying to sell, but it makes the Buyers very happy.

Of course, that hangover will be lasting for a long, long time, as appraisals will become tougher with this seasonal dip. I’m certain appraisers can factor in distress sales, but a number of these sales are not distress sales, they are open, free market sales, and that’s going to hurt…..

HERA and HVCC continue to be slightly problematic, but more problematic are the new bankers dealing with mortgage. Now we are returning to the old “bankers” model; you have to prove you don’t need a loan to get a loan…….

Investments are pricing at cashflow again, I’m guessing closer to 8-12%. Thankfully. Lending, however, is all but impossible. These days, its all about owner financing.

Still with all of this, it’s been a good month, and October looks strong and so does November. That leaves only one month after that to get past 2009……….

Long term forecast for the Hood River market will be flat, at best, with pockets of calamity, and a few wipeouts. Mostly, though, people seem to be keeping it together, and most of all, working together to figure things out…..All in all, survivable.

Thanks for reading! see you next month!

There has been a decent pick up in the sale of Hood River Real Estate. Our local trends are mirroring that apparent feeling that we are bottoming out, the same as the sentiment found elsewhere. That does bring into question, was the Northwest in synch with the rest of the country, but less impacted? or are we lagging the rest of the country? (Some estimates are by two years! Boy, I’d hate it if that were true)

It’s becomming clear to me that we are in synch with the rest of the country, and are experienceing some bottoming, but we are by no means out of this, anytime soon. I’ve been commenting to clients that there are so few markers of where we are at, that I’ve fallen back to intuition. I’ve been trying to determine how I feel about this market, and then map that feeling back to a point in previous cycles I’ve experienced. From my experience, I think we are halfway. We’ve got another long year ahead of us before things start to improve. I’ve always been a fan of the best inventory coming at the front end of a recovery, and the best deals are at the back….so we’ll see.

I’ve been pondering how “value” is measured in the market at the moment as well. I was reminded of a certain client a few years back, who bought a property because of the square footage. The house was quite plain, and so people didn’t buy it because of it’s perceive plain-ness. Over the ensuing couple of years, he managed to solve all of the perceived problems of the house, and was able to extract some great value.

These days, it really appears that “quirkiness” properties that have great attributes, are not being valued correctly. A bunch of years ago I used to write about the “quality penalty” where if your home wasn’t *exactly* right, you were penalized ruthlessly on value. Now, I’m seeing that this cycle is a bit oversold. Really interesting properties with pretty small “quirks” (OK, and some not so small) are practically being ignored. I think there are some values there.

Price reductions have caught fire. You’d figure about August it would really start up, and I think a bunch of people have jumped the gun and are marking down. The markdowns are significant, and I think they will help. They have ripped apart a deal or two though.

Actually closing a deal however, continues to be challenging, but everyone is going to have to change, or go away. It used to be that my number one question from clients was “when will the loan documents be here?” now its “Did I get my Loan?”

The HVCC (Please see my Prior post) has caused some headaches and delays, but it’s not the worst thing in the world. Even the new restrictions on disclosures, the HERA disclosure and cooling off adjustments (Please see that post) are just shifting the structure of deals. I’m pretty happy about that. Managing a transaction for the largest asset you’ll ever (well, most of us, anyway) own, should be handled by people who handle negotiating, networking in real time, counseling skills. people who are expert at communicating across distance in real time. (That usually means having e-mail on your phone, at a minumum) There used to be an old tip in Real Estate, something about looking at a person’s shoes to indicate how much money they have (seriously) These days, there’s a cell phone version of that. If your realtor doesn’t have a phone that accepts e-mails and doesn’t text. Drop ‘em.

That’s it for this month, I’ll try to post more frequently than once a month from here on out……probably a good idea, given the shifting landscape.

Don’t you all love charts. A good roundup of the current indicators. more sentiment, really, which appears to be positive. Ish. How does that impact Hood River Real Estate? Positive mood might get a few people off the fence……..