Hood River Real Estate and Columbia Gorge Real Estate

June Market Action is out. It’s posted here.  As expected, pending sales were waaay down, though still up for the year, overall. Days on market spiked in late April, then crashed through that date (offers rush in late April) expect that to rise steeply for July’s report.

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.

….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!

First, we have a nice Facebook page now, find us on the web, or visit Copperwest.com and the feed from FB on the Front page. We like Facebook because we can quickly post new listings, and comments on the web, and it gets broadcast easily. It also pushes to twitter, where you can follow us at copperwestHR.

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!