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!

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!

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!

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.

Total inventory is slightly lower ytd than last year, given the quality of the inventory, (pretty good) I can guess at a couple of things. We might have chewed though the “easy foreclosure” properties and be delving into the “hanging on for dear life” inventory……I’ve also noticed the average ask for the most recent new listings have been over $500,000…..also, potentially indicative of something more sinister.

Good news this month comes from others, smarter than I looking deeper into the SD issue. It turns out, with limited early data arriving, that the average home value drop would have to be off 62% or more, before home owners decide that an SD is the way to go…..That’s a long, long way…..especially around here.  Score one for moral fortitude.

Interestingly, when you calculate the total home value in the US against the total mortgage debt outstanding, (and this calculation has been done by a couple of sources, so I’m mostly reposting) what apparently shows up is this tidbit….that given the value of the housing inventory in the United States, the indebtedness is too high, indicating an erosion of equity, which is an indicator of increasing foreclosure pressure. (We didn’t need a macro-economics calculation of tell us that, but anyway……)

That’s certainly a big picture view, to be sure, and includes the traditional wipeout zones,(CA, AZ, NEV and FLA.)  We are not one of those areas, but comes troubling data from a couple of blog sources that Oregon is the #3 foreclosure state in the country…..I’m not sure of #3 of what (per capita? Rate per 100?) I went and looked at Realty Trac’s heat maps for Oregon, and we show 10 foreclosures for June, (1 in every 891 units, which is a screwy calc, for a whole number of reasons…)……So, moderate. Not sure where this is coming from but……….Oh wait, I figured it out…. It’s from This Article…

Ok, now that I’ve read it….it’s #3 in the rate of filing….ummm..nevermind. That was totally overhyped. Late to the party, still on the steep part of the curve…..

Which brings me to my next point. The media, blogosphere and others are tweaking the scare-o-meter too much. Don’t get me wrong, It’s bad, it’s tough, and it’s going to be a tough and long, and hard road, but claiming we are #3 in the nation for foreclosures is just patently inaccurate, and it’s meant to scare people. Unfortunately, it’s working. (see: “birds on a wire” below)

Ok, back to Hood River.

Regardless, however, the price reductions have begun, as the sellers are seeing the Summer wane, and now pivot to a strategy for Fall. Rent or Reduce? That is the question. It’s about 50/50 now, but I know that buyers are out there, sitting, watching, and waiting.  I refer to it as a group of “birds on a wire” (Forgive me, anyone whom I’ve told this to in the last week) They will all sit there, until one of them makes a move, then they’ll all move at once…..The interesting thing is this, there are more birds than there are properties they are interested in, so when one moves, expect that all of them will move at once……just in a specific section of the market (I’m not telling what part, but you could easily intuit it.) but I can assure you they are there, and they are ready for the signal. Problem is, I’m not the guy in charge of the signal…..

So, expect soft pricing, and low rates for the rest of the Summer, with a random vaporization of a segment of the market around…..first week of august. Earlier if someone clues in and jumps on the best deal first (which happens to be one of my listings! Yipee!)

Lets all go get outside and on the water. Don’t have to worry so much out there……See you next month.

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!

Things are quieting down; the last of the fall push is getting through. There are still buyers in the marketplace, buy they seem to be doing reconnaissance for early January. Lenders continue to be harsh, and I’m starting to determine that there is some sort of secondary market negotiation going on. It appears that one day a lender will let something through without a comment, and on another, they will call it out. I can tell the items that are getting called out are not related to any sort of government guaranteed program, so I’m left thinking that it’s some sort of other underwriting standard, especially with the appearance of randomness. Take away? MAKE SURE you have a strong lending package before you start looking for a home, and MAKE SURE you are looking at homes that you and your broker feel is a quality home, within the zoning of the area, and that it has at least a reasonable valid reason for being there (often called “properly entitled”)

The tax credit extension was a welcome sight, but it does appear that most of the people who could have taken advantage of the program, actually did. The new program (for current homeowners) that allows up to $6,500 in tax credit for a qualifying transaction will hopefully drive some spring sales…..

Everyone is looking to the Holidays, and getting ready for 2010, however, listing volume jumped a bit as new properties refilled the inventories. Pricing, however, remains soft.

One interesting development I read about this week is the I-banks out of New York have been buying portfolios of loans, and then segmenting them into risk groupings, and selling them off. Sounds a bit like the mortgage pools that caused the problem in the first place, but this seems to be moving the inventory out of the marketplace, which ultimately, is a good thing…..

For this month, I think we’ll take our outlook out of “prices are firming, but not rising” back down a small notch to “prices are slightly declining” although it’s a close call. Mostly seasonal…………

See you next month!

So that’s that in October. Time to settle in for a loooong haul until next spring. There’s some commercial activity as people look for projects, assuming they have financing, etc.

The Columbia Gorge Hotel has apparently been sold, there’s talk of a couple of new projects, but it’s still lean out there for the trades. Last winter there was lots of talk of a “die-off” of some businesses. We have been in here for so long, that I think there’s still a fair bit of carnage to occur. Hopefully it won’t be us, but there’s still a decent amount of uncertainty out there…….

On the computer front we now have a Face book page, our plan is to post new listings to that page, and updates. The Copper West Facebook page is located here.
Our twitter feed is @CopperwestHR

My Personal FB page is here.
And my Twitter feed is @Mauim

I keep the personal and business accounts quite separate, so you may choose, either neither or both!

And Finally, We are now posting the Monthly Market Reports from the RMLS on our website. They are located in the newsletters section under the about us tab at Copperwest.com

Cash. Cash cash cash……I’ve never seen so many all cash buyers in this market. Cash being King however, means something else…….discounts. And how.

Lots of discounted offers, and lots of deal making and negotiating. How these impact comparable sales can be devastating. Look for troubling signs out in Fox Hollow, and Country club, as appraisers attempt to swallow recent sales that are 20, and 30% below the asking prices. Other markets are marking to more traditional prices as sellers finally come back to earth in Hood River.

As prices grind lower, however, more and more buyers are showing up. The first wave and,  (in my opinion) the best deals have come and gone. If this does prove to be a bottom, July and August will be the floor. Remember about a year ago when I was talking about toxic events? I think I can say that barring another toxic event, the structural instability in residential is all priced in at this point. It’s only the bleeding that’s caused by long term unemployment that’s left, and that tends to come out slowly, and over time.

I hear in Florida, Nevada and California, there’s booming business in “foreclosure tours” but not here. Here, each deal is a one off, each motivation, unique. Neighbor to neighbor, house to house, block by block and marriage by marriage, it’s all playing out on a very small, and very personal scale. This is the downside of hyper-local.

As for mortgages…….Not too many troubles on the HERA adjustments, but I’m certain we’ll see some stuff here soon. Key factor to avoiding those issues, is don’t renegotiate the contract after appraisal has been ordered, make sure you intend on closing the deal with the mortgage broker you start the process with, and allow about 4-5 days ahead of closing to begin escrow……….

September is loading up, Hoping October will be strong as well. It’s been a long spring and Summer in Hood River Real Estate, see you out here soon!

Market picked up, only to be shelved by a spike in interest rates

5% is still a great rate, but since payment is so closely tied to purchase power, there has been some struggling to get once easy deals through.

The May Market Action report shows that our inventory is down in Hood River Real Estate. I question the trend because it feels busier for us, but June will probably clarify things

There’s an apparent average home price reduction in houses in Hood River, but the data is more a function of the type of homes being sold, not the prices. Things are clustering around the $250,000 to $300,000 price range because that is what is easy to get through under a normal “conforming loan”

However, price reductions are starting to make an appearance in Hood River Real Estate for this Season. Customers are preemptively dropping prices to make sure their houses sell this Summer. For example, the Frankton Estate dropped 10% to make sure it was the best in class for this price range. Slightly ominous sign, but coupled with the lower inventory, I’m hoping we’ll get down to 10 or 9 months worth of inventory here before too long.