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.

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……

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.

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)

Our weather here is still stuck in spring mode. I’m hoping it will get warmer soon, but who knows. My Web cam is still screwy. Time for a new computer, says my wife. A Mac!

What I do know about is how busy things have been. People are clued (or have clued, as this is the last day, wait, is that even a word?) into the tax credit, and Sellers and Buyers have sharpened their programs to get stuff moved. In fact, lots and lots of stuff has moved, though if you thought you were going to offer on a short sale and make it under the timeline, you woefully misjudged.
Last month, all eyes were on the quality of the inventory, and I have to say, there were some very, very nice properties that came (and went) to and from the market. We have written a number of deals that will qualify, and some of them have been very good bargains.

Lending and underwriting has also improved, and we are back around 30 days for a deal, perhaps a touch longer. Buyers have returned, however gingerly, to a position of “risk-taking” given they are well compensated, which is an improvement from a few months ago, where a buyer asked for such a discount as to make the purchase almost failsafe.

This STILL doesn’t mean prices are going up anytime soon. All the short sales that have gone under contract will only lead to a fresh set of underwater houses to come on the market. I suspect we’ll have a version of this for about the next year. I would have said two, but I’ve been really surprised at the speed that last batch cleared the market. They will have a dampening effect on the market however, especially in sieverkropp and the Westside addition near fox hollow.

The majority of the action is well under the $400,000 range, but some of the Summer buyers are coming up early to get a jump on things. I’ve gone from showing piles and piles of property under $300,000 to a bunch over $400,000 in just the last week. That’s a decent sign.

I’ve been noticing that as the market re-forms, there are different players this time around. I’m also noticing, that while conditions improve for some, hurt, and duration, and general stress abound…..There seems to be a lot of it in transactions these days…..

So, short term outlook? Weak until memorial day weekend, given the tax credit hangover and the upward pressure on interest rates. Probably a little firming through the summer, with what appears to be decent amounts of inventory clearing, and softness in the fall, firmed up in late October by the bargain shoppers, depending on interest rates, which could be the big, big uncertainty….
I’m always amazed by people who dare to wait until the last moment…..nerves of steel those people…..

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