Portland Housing Blog

Thank God we don't live in Detroit

portlandhousing@yahoo.com (Clint8200) — Tue, 10 Nov 2009 02:29:00 +0000

Nearly 3 in 10 residents of Detroit need a job.
The unemployment rate in the city of Detroit rose to 28.9 percent in July, the highest rate of unemployment since Michigan started keeping modern numbers, according to the Michigan Department of Labor, Energy, and Economic Growth.

113,008 people in Detroit are without jobs, 277,815 people are currently employed.
Despite news of an improving economy, many residents of Michigan haven't felt the impact of the nation's stimulus programs. The state of Michigan has the highest unemployment rate in the nation at 15 %. Other large cities in Michigan are extremely challenges as well. The city of Highland Park had a 36% unemployment rate in July, Pontiac 35 % and Flint 28 %.

Portland is down to 10.9% last month.

August Case-Shiller data shows improvement for Portland

portlandhousing@yahoo.com (Clint8200) — Tue, 27 Oct 2009 16:18:00 +0000

The S&P Case-Shiller Index is based on observed changes in home prices. It is designed to measure the increases or decreases in the market value of residential real estate.

For each home sale transaction, a search is conducted to find information regarding any previous sale for the same house. If an earlier transaction is found, the two transactions are paired and are considered a “repeat sale.” Sales pairs are designed to yield the price change for the same house, while holding the quality and size of each house constant.

Sales pairs from the following counties are included in the Portland index: Clackamas, Columbia, Multnomah, Washington, Yamhill, Clark (WA), and Skamania (WA).

The first graph shows all historical data for Portland, Seattle, and the 10 city index. The Portland residential real estate market has fallen 12.6% in the last year.

The second graph highlights the changes since the Federal Reserve stopped lowering interest rates in June of 2003. The Portland index is currently at 148.51; a decline of 19.85% since the market peak. The last time the index was this low was June of 2005.

The final graph shows the year over year percent change since June of 2003.

It looks like Portland is following the national trend and might be bottoming out soon. There is some concern that the Case-Shiller data is not correctly adjusting for the positive seasonal trends so there might be some more negative news as the slow winter months get added to the graph.

Even if this isn't the exact bottom we are certainly closer to the bottom than the peak.

One month left to claim tax credit

portlandhousing@yahoo.com (Clint8200) — Sun, 25 Oct 2009 18:38:00 +0000

From The Oregonian:

Boye Oshin is gambling with a bank to win $8,000.

The 24-year-old Intel engineer has tried since June to buy a three-bedroom Hillsboro home. But the seller is still waiting for approval from the lender who would lose money on the deal. The house is underwater with the seller owing more than it's worth.

Oshin, on the other hand, needs the deal to close by Nov. 30 to score an $8,000 federal tax credit for first-time buyers.

Can he make it?

That's anyone's guess.

Oshin joins a backlog of buyers trying to close a home purchase before the tax credit deadline.

Home purchases -- when there's not a single glitch -- can move as fast as a month from the date the seller accepts an offer to the date the deal closes. With the housing market in tatters and underwriters under pressure to scrutinize deals, most sales aren't moving that quickly. Most deals need 45 days or longer to close.

For those still hoping to get the credit, mortgage bankers and real estate brokers warn that buyers should have an offer accepted within days -- at the latest
...
The National Association of Realtors has estimated that about 1.8 to 2.0 million first-time buyers will use the credit this year. But of those, the group said, only about 350,000 are people who wouldn't have bought without the credit.

Based on the group's math, the true cost of the credit is not $8,000 per buyer. It's actually $43,000 per each net new buyer, according to an analysis by the financial blog Calculated Risk.
...
Rick McDowell, Oshin's real estate broker, expected the bank would decide within three months of making the offer in June. But they're still waiting for what the bank calls a "Phase 2" and final approval.

"It's a bureaucratic nightmare," McDowell said.

With weeks to go before the credit expires, Oshin reluctantly paid for an appraisal. If the deal fails, he'll have lost the $500 fee.

"When I think about potentially getting that $8,000, it's worth it," Oshin said.

The appraisal alone can take two weeks. New federal rules limit mortgage brokers' contact with appraisers. The goal is to prevent brokers from pressuring appraisers to issue a favorable report, but it also makes it more difficult for brokers to control how fast the work is done.

Emory, Oshin's mortgage banker, said: "He's going forward because it's the only chance he has of making it."

This isn't the first horror story about trying to buy a short sale. Most people who are racing the clock to get the $8,000 tax credit have passed on any 'third-party approval' properties because of the uncertainty involve. My guess is that Oshin will not get the home.

A little more good news

portlandhousing@yahoo.com (Clint8200) — Mon, 19 Oct 2009 22:59:00 +0000

From the Oregonian:

Dick’s Sporting Goods, a Pittsburgh-based chain with 409 stores in 40 states, will on November 8 open six stores in Gresham, Tualatin, Hillsboro, Salem, Eugene and Bend in spaces formerly occupied by the now-defunct Joe's.
Dick’s, while declining to disclose specifics, said its Washington Square location has done extremely well since opening in March 2008. The company said that each of its new Oregon stores will employee between 40 and 60 people.

500 new jobs is always welcome but most of these positions won't help the real estate market out.

Green shoots appear in Oregon

portlandhousing@yahoo.com (Clint8200) — Wed, 07 Oct 2009 19:33:00 +0000

From the Registerguard:

Uni-Chem, a South Korean leather fabricator that is diversifying into the solar business, told the Associated Press Saturday that it plans to buy the west Eugene plant from Hynix for $50 million.

Uni-Chem could invest up to $1 billion to convert the Eugene plant to solar production and employ up to 1,000 employees in Eugene, said Roger Little, CEO of Spire Corp., a Massachusetts company that is working with Uni-Chem to retrofit the Eugene plant.
Local community, business and work force leaders all were cheered by the prospect of Hynix’s mothballed Eugene computer-chip plant churning out solar cells in a couple of years.

It would bring much-needed jobs to the community, help rebuild the anemic tax base, and strengthen Eugene’s position in the clean-energy industry, they said.

It also would give a tremendous “psychology lift … to our regional business community and our citizens,” said Dave Hauser, president of the Eugene Area Chamber of Commerce.

From the Oregonian:

SolarWorld, the German photovoltaic giant, is expanding its solar manufacturing foothold in Oregon sooner than expected, with a second facility nearing completion on its Hillsboro campus.

On Sunday, the company announced its new 210,000 square-foot facility, to be done in November, will house module assembly lines, the last step in the production of finished solar panels.
The expansion, which comes just a year after the company's launch in Hillsboro, will make SolarWorld the only company to sell solar panels made entirely in Oregon, starting from the first step of growing crystals out of silicon.
In Hillsboro, SolarWorld's new facility will help reduce costs with a greater economy of scale. By 2011, the company hopes to have 350 megwatts of capacity, a measure of a solar factory's output, and 1000 employees.

"The bottom line is that its sooner and more than we planned," said company spokesman Ben Santarris. "We're moving faster and doing more. We'll be fully-integrated in Oregon."

Both projects are legitimate good signs for the state. Both plants are a few years away from reaching their full potential but they are good signs nonetheless.

It is all but certain green energy will lead us out of the recession but what role with Oregon play in this? Green technology isn't competitive with traditional energy sources yet. The only reason we use it is because it is subsidized by the government.

If the industry's expansion and immediate future isn't based on fundamental factors such as cost per kilowatt, what is it based on? There is a high probability that this will be the next bubble and Portland could be one of the epicenters.

I have a lot to learn in this area and I'm sure you have a few stories and web links that might help all of us understand the economics of green energy and Oregon's role in it.

Please post in the comment section.

Baby boomers plan to retire in the country

portlandhousing@yahoo.com (Clint8200) — Sun, 04 Oct 2009 17:51:00 +0000

From the Oregonian:

It was balmy Honolulu, he was CEO of a life insurance company, and they lived in a spectacular penthouse with beach views – but it was still 800,000 people and gridlock traffic. When it came time to retire, Dick and Laurie "Lou" Fisk jumped to an acre of land between Medford and Jacksonville.

Now they know their neighbors by name, have room for dogs and say the area's medical facilities are outstanding. From the Medford area, they can visit their children in Boise and Portland, and can reach San Francisco in a seven-hour drive. They can golf and fish all they want.

At 74 and 62, they are the advance guard of an army of retiring baby boomers who researchers say will leave suburbs and flood rural America over the next 10 years. If past migration patterns hold, the population of 55- to 75-year-olds in rural areas will increase to more than 14.2 million by 2020, nearly double what it was in 2000.

Oregon's small towns, ranging from Joseph in the northeast and Klamath Falls in the south to Tillamook on the coast, will be changed and challenged by newcomers who arrive with their time, money and expertise intact.
They represent a migration that turns conventional wisdom on its head. Urban planners have until now proceeded on the assumption that retiring baby boomers will downsize to a high-rise and spend their days lapping lattes and taking the streetcar to the art museum.

A lot of them will. But new data from the U.S. Department of Agriculture says baby boomers will head to the country in big numbers, in the Northwest changing the face of rural Oregon, Washington and Idaho.

And it's not just because the 83 million boomer generation is the largest in U.S. history and all of their movements are out-sized. Demographers are talking about a genuine "deconcentration" of population near metro centers. Urban areas will see a net loss of people age 55 to 75, while in non-metro areas that age group will increase by 1.6 million nationally during the next 10 years.

Duy: The government is doing everything it can to re-create a housing bubble

portlandhousing@yahoo.com (Clint8200) — Thu, 01 Oct 2009 15:33:00 +0000

From the Oregonian:

Portland's housing market showed solid improvement in July as prices climbed for the second straight month, reversing what had been a 17-month run of record declines.

The closely watched Standard & Poor's Case-Shiller index published Tuesday showed Portland-area home prices were still down 20 percent from the 2007 peak. Small upticks this summer, even after accounting for seasonal swings, has economists wondering if housing is on the mend. Outside of Oregon, Case-Shiller's 20-city composite index also rose for the second straight month.

"No matter how you measure it, house prices looked to have bottomed, which is the much-needed ingredient required to bake this housing market recovery," wrote Jennifer Lee, economist at BMO Capital Markets.

Not every one is as rosy.

University of Oregon economist Tim Duy said the housing market is seeing a "speculative frenzy fueled by the government."

The market has been buoyed by a drop in supply thanks to homeowners reluctance to sell in a down market. There's been a bump in demand thanks to federal enticements. Those two factors helped stabilize prices and even prompted small growth, Duy points out.

But how sustainable is that growth?

"The government is doing everything it can to re-create a housing bubble," Duy said.

The federal government's aid includes low interest rates, an $8,000 first-time buyer tax credit and 3.5 percent down payment loans from the Federal Housing Administration. The tax credit is set to expire at the end of November and the Federal Housing Administration is having its own financial troubles.

South Waterfront part 2 takes shape

portlandhousing@yahoo.com (Clint8200) — Mon, 28 Sep 2009 21:34:00 +0000

From the Oregonian:

Portland has grand plans for the second phase of high-rise development in the South Waterfront district. But those plans will come with a grand cost. The city projects that a single road project will cost the public $66.5 million. That road -- six-tenths of a mile on Moody Avenue -- is far more than asphalt. It's a new pair of streetcar tracks, new utility piping and new bike lanes. All of that will rise up to 14 feet higher than the existing Moody Avenue to get above the flood plain and accommodate a light-rail line on its way to Milwaukie. City leaders, in a pitch for U.S. economic recovery grants, said the work would unlock prime riverfront land to new development and potentially growing companies. The project has regional benefits of corralling growth, cutting carbon emissions and expanding streetcar capacity to other neighborhoods, Portland officials believe.
"This is what will produce livable communities," said Art Pearce, senior project manager in the city's transportation office.
The Moody Avenue project is part of a $78 million effort to spark redevelopment in an area the city calls the "Innovation Quadrant." The area runs from Portland State University to Oregon Health & Science University to South Waterfront and across the river to OMSI.

The Innovation Quadrant? Seriously!?

2356 NW Hoyt is sold

portlandhousing@yahoo.com (Clint8200) — Thu, 24 Sep 2009 15:00:00 +0000

Charles Turner's flip project at 2356 NW Hoyt finally sold. The home was on the market for almost a year and saw several price cuts.

The Original asking price in October 2008 was $1,195,000.

In January he dropped the asking price $45,000 to $1,150,000.

In February he dropped the asking price $25,000 to $1,125,000.

In March he dropped the asking price $25,000 to $1,100,000.

In May he dropped the asking price $50,000 to $1,050,000.

In June he dropped the asking price $50,000 to $999,950.

In August he dropped the asking price $25,000 to $975,000.

The final selling price was $912,500 or 24% less that the original asking price.

Charles other flip project is still on the market. Oringal price was $699,000 but he is now asking $615,000 for it.

Auction ends with 40 of 41 units sold

portlandhousing@yahoo.com (Clint8200) — Mon, 21 Sep 2009 15:00:00 +0000

From the Oregonian:

As hundreds of people crammed a conference room, auction company Accelerated Marketing Partners turned on the rock music, amped up the mics and sent their whistling staffers skipping through the aisles to unload 41 condos.

Their hustle appeared to pay off.

Some condos sold for more than 40 percent off the original price. With those discounts, a pre-auction marketing blast -- which included a national ad in the Wall Street Journal -- seemed to generate the demand they sought.

They attracted a diverse crowd of curiosity seekers, investors and homeowners.

At the start, the auction company was short dozens of chairs, sending staff scurrying. One broker wondered whether the auctioneers did it on purpose to suggest demand was more than anticipated.

At the low end, a one-bedroom condo with a minimum bid of $169,000 sold for $254,000, a 31 percent discount from the original price. A condo with two bedrooms and a bonus room sold for $842,000, a 42 percent discount.

And when the 22nd-story penthouse came up, the auctioneer couldn't entice a single bidder.

The 2,300-square-foot condo that once listed at $1.3 million couldn't find a single bidder at $899,000.

South Waterfront residents fearful of new neighbors

portlandhousing@yahoo.com (Clint8200) — Sun, 20 Sep 2009 15:47:00 +0000

From the Oregonian:

The developers behind Portland's South Waterfront district sold a carefully crafted image of luxury living at Ritz-Carlton prices.

Portland's Ziba Design Inc. made the developers' pitch with a sales office patterned after Apple stores and a neighborhood brand defined as "Urban River Living."

Now lenders in charge of the district's glitziest tower are selling the Atwater Place as though it was a $499 mattresses on fire sale.

South Waterfront's glass cubes, granite countertops and million-dollar mountain views have been taken over by bargain hunters and sidewalk salesmen waving red arrows blaring "AUCTION CONDOS."

Not surprisingly, the Atwater's original buyers are none too happy.

"We understand it had to be done, but the manner kind of cheapened it in many of our minds," resident Michelle Cohen said. "We tried to talk to the realty people, but they aren't budging." ...

The auction makes residents queasy, with starting bids as much as 63 percent below previous asking prices.

"It scares the heck out of me," said Neustadt Storie, a lawyer.

Neustadt Storie and her husband, who works in sales, paid $705,000 for a 1,900-square-foot condo on the fourth floor in January 2008. The unit below them, which has the same floor plan, is up for auction with a minimum bid of $349,000 -- half what they paid 2 1/2 years ago.

At that rate, Neustadt Storie figures it could be years before her condo recovers the value she paid for it.

She worries too about who her neighbors may be after the auction.

Stevens said nearly all of the auction buyers plan to live in their condos and aren't speculators.

Neustadt Storie said the Atwater is full of doctors, dentists and lawyers but she has seen younger people with parents walk through the building since the auction promotion began.

"Just what I want, to live in a dorm," she said. "My concern is the parents will rent it out for a frat party until they can flip it after the kid graduates."

The auction is tonight, please let us know if you are going to attend it.

Portland RMLS Market Action Report – August 2009

portlandhousing@yahoo.com (Clint8200) — Wed, 16 Sep 2009 23:48:00 +0000

The Regional Multiple Listing Service released the Market Action Report last week and the median sale price for August 2009 was $249,900; this is a 10.8% decrease from the median sale price for August 2008.

The Portland residential real estate market peaked in August 2007 with a median sale price of $302,000. Prices have now fallen 17.3% from that peak.

Months of supply (total inventory/monthly sales) sits at 7.8 months compared to the 9.9 months of supply for the same month last year. A balanced market has about 7 months of supply.

The first graph compares the median and average sale price with the months of supply. Click on any graph for a sharper image.

The second graph shows the total supply of homes available for sale. This is simply a calculation of the months closed sales multiplied by the months of supply. There are currently 14,360 homes for sale; this is a decrease of 18.1% from the same month the year before.

The third chart shows closed sales by month. There were 1,841 closed sales during the month; an increase of 4.0% from the same month the year before.

The fourth chart shows new listings by month. There were 3,780 new listings during the month; a decrease of 14.1% from the same month the year before.

The final graph shows how affordable the median priced home is for a family of four. History indicates the ratio is usually between 2.5 and 3.0. Prices would have to fall 19.0% from the current median for the ratio to reach 3.0.

I’ve talked with a few buyers and realtors this month and here is what I’ve put together.

The main driver on the buy-side are people trying to take advantage of the $8,000 tax credit for buying a home. You only get the tax credit if you close by December 1st which means you really need to be making an offer by November 1st at the latest. Most short sales, third-party approval, and bank owned real estate don’t meet this accelerated timeline because of the long approval time.

Basically this means the pool of inventory available to the homebuyers is fairly small when compared to the RMLS number above which leads to some bidding wars. The good news out of this is that sellers who aren’t underwater have some buyers.

I don’t see the positive news continuing when the subsidy ends but the NAR is trying to extend the tax credit.

From the New York Times:

The real estate industry, including the powerful 1.1 million-member National Association of Realtors, wants Congress to extend the credit at least through next summer. The group hopes to expand the program to $15,000 and to allow all buyers, not just those who have been out of the market for at least three years, to qualify. The price tag on that plan: $50 billion to $100 billion.

Don’t get upset over the price tag because we’re not paying for this…our kids will.

Unemployment rate still above 12%

portlandhousing@yahoo.com (Clint8200) — Tue, 15 Sep 2009 15:00:00 +0000

From the Oregon Employment Department:

Oregon’s seasonally adjusted unemployment rate rose to 12.2 percent in August from the revised July figure of 11.8 percent. Oregon’s unemployment rate has been close to 12 percent for the six-month period March through August, following a steep run-up during the prior nine months.
Oregon’s unemployment rate was 6.5 percent in August 2008.

In August, Oregon’s seasonally adjusted nonfarm payroll employment declined by 6,600 jobs, following a gain of 500 (as revised) in July.

My graph is not seasonally adjusted

Corus bank financed over $300 million of Portland's condo development

portlandhousing@yahoo.com (Clint8200) — Mon, 14 Sep 2009 15:00:00 +0000

On Friday the FDIC closed Corus Bank. This bank kept funding condo developments long after other lenders pulled back so this isn't too much of a surprise.

The bank was active in the Portland market and funded over $300 million worth of projects.

Here is the rundown:
The Westerly $53,000,000
3720 $115,000,000 (converted to apartments)
The Strand $82,000,000
The Elizabeth Lofts $37,000,000 (no units for sale by developer so this had a good ending)
Broadway Condominiums $31,000,000

$68 million AmberGlen Business Center goes into foreclosure

portlandhousing@yahoo.com (Clint8200) — Sat, 12 Sep 2009 06:20:00 +0000

From the Oregonian:

In go-go days of May 2007, a San Diego company hunted deep into Hillsboro's Silicon Forest for a real estate buy that would produce a princely profit.

Equastone Real Estate Investment Advisors thought it found its prize when it bought 40 percent of AmberGlen Business Center, a sprawling glass and brick office park that bills itself as Oregon's largest.

With money easy to come by, the firm took out a high-risk loan to make the unsolicited $67.9 million deal, an eye-popping 24 percent increase from the last sale just 20 months earlier.

Two years later, Equastone's bet busted.

The firm's buildings - equal to about 28 high-rise floors -- are in default, the first step of foreclosure. Local brokers say the investors would be lucky to sell for half what they paid.

The article is a good one. I recommend reading the entire thing.

Here come the foreclosures

portlandhousing@yahoo.com (Clint8200) — Sun, 06 Sep 2009 15:00:00 +0000

From the Oregonian:

Portland-area foreclosure filings have begun ticking up again this summer, reversing a spring trend that showed mortgage defaults had leveled off.

County records show that the number of mortgage defaults - the first step in a foreclosure - rose less than 2 percent in Clackamas, Multnomah and Washington counties between the first and second quarters of 2009.

But this summer, new foreclosures are on pace to jump 9 percent in the third quarter to about 3,500 for the tri-county region, or 38 filings every day.

"We're not seeing any relief," said Sande Sivani, a consultant who researches property records and records documents for title companies. "It's going up and up and up."
...
IHS Global Insight's this week ranked Portland as the country's sixth most overvalued housing market. The firm says the Pacific Northwest is the final region to watch the froth of the boom years burn off.
Of the 11 markets labeled overvalued, seven fall in Oregon or Washington.

Remember when Realtors said mortgage rates would go up...?

portlandhousing@yahoo.com (Clint8200) — Thu, 03 Sep 2009 19:53:00 +0000

From the Oregonian:

Rates for 30-year home loans edged down this week, remaining close to record lows reached over the spring.

The average rate for a 30-year fixed mortgage was 5.08 percent, down from 5.14 percent a week earlier, mortgage company Freddie Mac said Thursday. Rates, while above the record low of 4.78 percent hit in the spring, are still at attractive levels for people looking to buy a home or refinance.

"Low mortgage rates are helping to keep housing very affordable," Frank Nothaft, Freddie Mac's chief economist, said in a statement.

State economists sees signs of a turnaround (again)

portlandhousing@yahoo.com (Clint8200) — Thu, 27 Aug 2009 19:10:00 +0000

From the Oregonian:

Oregon's economic free fall appears to be over, but economists predict the state will likely see a slow, jobless recovery.
"Yes, finally, recovery is in sight," state economist Tom Potiowsky said Thursday during a presentation of the latest economic data to members of the Legislature.
Signs of a turnaround should become more visible this fall, he said. At the same time, Potiowsky warned that Oregon will not likely return to peak employment growth until 2013.
Oregon's economic downturn and hoped-for recovery appear to be tracking national trends, with the exception of the housing market. Economists predict Oregon's housing markets will stop dropping by mid-2010 -- later than some states but still ahead of Arizona, Nevada, California and Florida.
Consumers may feel more comfortable about spending by the holidays and businesses may see healthier profits. But Potiowsky says employers are likely to wait a little longer before adding jobs.

Normally Potiowsky's forecast sounds like a NAR press release so this is a nice change of pace but I think his prediction on the housing market bottoming in 12 months is still too optimistic.

Maybe he'll get it right next year. Maybe.

CalPERS walks away from KOIN building

portlandhousing@yahoo.com (Clint8200) — Mon, 24 Aug 2009 15:42:00 +0000

From the Portland Business Journal:

The California Public Employees’ Retirement System has given up control of the KOIN Center, The Wall Street Journal reported Wednesday.
After action by a state circuit court in New York, a receiver can now be appointed to take control of the building and sell it.
A partnership of CalPERS and CommonWealth partners LLC of Los Angeles defaulted on a $70 million mortgage to New York Life Insurance Co.
The partnership paid $109 million to buy the 355,000-square-foot office building in 2007, at what was then the top of the market. The building, is one of the tallest buildings in Portland. It opened in 1984.
The decision by CalPERs to walk away from the investment shows even large institutional investors are choosing to give up on troubled properties rather than put more money into them, according to the Wall Street Journal.

SouthWaterfront condos goes to auction block

portlandhousing@yahoo.com (Clint8200) — Fri, 21 Aug 2009 19:55:00 +0000

Agent503 posted about Atwater condos going to auction next month. You can read more on his blog and the auction website.

Let us know if you are going to attend!

Here are the minimum bids...

Portland RMLS Market Action Report – July 2009

portlandhousing@yahoo.com (Clint8200) — Fri, 21 Aug 2009 18:56:00 +0000

The Regional Multiple Listing Service released the Market Action Report last week and the median sale price for July 2009 was $250,000; this is a 13.3% decrease from the median sale price for July 2008.

The Portland residential real estate market peaked in August 2007 with a median sale price of $302,000. Prices have now fallen 17.2% from that peak.

Months of supply (total inventory/monthly sales) sits at 7.3 months compared to the 10.0 months of supply for the same month last year. A balanced market has about 7 months of supply.

The first graph compares the median and average sale price with the months of supply. Click on any graph for a sharper image.

The second graph shows the total supply of homes available for sale. This is simply a calculation of the months closed sales multiplied by the months of supply. There are currently 14,512 homes for sale; this is a decrease of 20.7% from the same month the year before.

The third chart shows closed sales by month. There were 1,988 closed sales during the month; an increase of 8.6% from the same month the year before.

The fourth chart shows new listings by month. There were 3,907 new listings during the month; a decrease of 25.4% from the same month the year before.

A few comments:
The increase in sales is great news for the industry, the last time sales increased when compared to the same month the year before was in late 2005. This is obviously due to the $8,000 first time homebuyers’ tax credit so the enthusiasm will be short lived when the program ends in the next few months and sales continue their slide in the winter months.

Inventory continues to churn. In the first seven months of this year 27,000 new listings entered the RMLS system and only 9,200 exited via closed sales. Inventory only increased by 500 homes during this time period so that leaves 17,300 new listings unaccounted for. Since I am not a realtor I do not know how many of these are duplicate listings but it is very clear that the hidden inventory continues to grow.

Personal note:
I’m sure you’ve noticed my absence from the blog lately. The truth is I am burnt out and tired of all the bad news. The readers come and go from the blog when they want but I feel an obligation to keep blogging because I want to call the bottom of the market. The market will bottom and buying a home will be a great experience but it is still a few years away.

You should expect fewer posts from me going forward, maybe one or two a week. When the market bottoms and we start buying homes I imagine the posts will pick up again, until then I need a little break.

-Clint

Professor Duy on Bend migration and the 'creative class'

portlandhousing@yahoo.com (Clint8200) — Thu, 20 Aug 2009 15:19:00 +0000

Tim Duy's take on Bend and Portland's desire to attract the 'creative class':

For those in the Portland area, notice that relative income per capita has slipped below the low of the 1980s. One has to wonder if a development focus on attracting the "creative class" is yielding the expected results.

Read the entire post on his blog.

More details on Teufel Nursery bankruptcy

portlandhousing@yahoo.com (Clint8200) — Fri, 14 Aug 2009 18:52:00 +0000

From the Oregonian:
Teufel Nursery Inc., one of the area's largest nursery and landscaping operations, is fighting for its life after its long-time lender withdrew financing in May.
Textron Financial Corp. demanded immediate payment of the $5.3 million owed by Teufel, which forced the company to file for Chapter 11 bankruptcy in June.
Textron increased the pressure last week when it sued Teufel seeking repayment of its $5.3 million debt. The Providence, R.I.-based company also sued Donald Hauenstein, Teufel's chief financial officer, accusing him of fabricating financial records of non-existent receivables in order for the company to borrow more money from Textron before the bankruptcy.
...
Teufel's nursery and landscaping businesses have been hit hard by the economic decline and the deep slowdown in residential construction. The company's sales have declined by a third from $45 million at the 2006 peak to a projected $32 million this year. Its payroll has dwindled from 500 to 300.

Bend is 'poverty with a view'

portlandhousing@yahoo.com (Clint8200) — Wed, 05 Aug 2009 20:30:00 +0000

From the Oregonian:

This city in Oregon's scenic high desert once had one of the nation's hottest economies. Resort developers, bankers, construction workers and luxury car dealers rushed for a piece of the action.
Now some locals call Bend "poverty with a view."
The county it anchors, Deschutes, shows some of the most serious recession pain in the land, as measured by The Associated Press Economic Stress Index.
The county ranked fourth this spring among American counties of more than 25,000 people in a measurement of the yearly rise in the AP index. The index measures unemployment, foreclosures and bankruptcies at the county level across the nation -- the higher the index's number for a county, the worse the recession's impact...
Michael Hollern, chairman of Brooks Resources Corp., the region's largest developer, said the Bend boom coincided with the one in the Sun Belt. Brooks once owned the massive Brooks Scanlon Lumber Company, which was founded in 1915 and basically built Bend.
The building boom began gradually in the 1960s and took off seriously a few years ago. "We thought we were different, special, with real jobs and real people.
It turns out we weren't that different. And we realized prices were out of touch with reality. Now we need to work off our excesses."
Much of the work force is still around, he said. The quality of life is off the charts, and few people want to leave.
"Where are they going to go? Hollern said. "Conditions are the same everywhere. There seems to be a sense that it is better to be unemployed in Bend than in other places."

The article is more of a story than a business article so I'd recommend reading the entire thing.

2356 NW Hoyt still can't sell. Charles Turner drops asking price again.

portlandhousing@yahoo.com (Clint8200) — Tue, 04 Aug 2009 15:00:00 +0000

The stalled housing market continues to impact Charles Turner's flip project at 2356 NW Hoyt St.

He just dropped the asking price another $25,000. This is the 6th reduction in as many months.

The Original asking price in October 2008 was $1,195,000.
In January he dropped the asking price $45,000 to $1,150,000.
In February he dropped the asking price $25,000 to $1,125,000.
In March he dropped the asking price $25,000 to $1,100,000.
In May he dropped the asking price $50,000 to $1,050,000.
In June he dropped the asking price $50,000 to $999,950.

Now he dropped the asking price $25,000 to $975,000.

Total reduction is $220,000 or 18% and the home has been on the market for 9 months.

Records show Charles purchased the 'fixer upper' in May of 2008 for $535,150.00 under SAPPHIRE DEVELOPMENT LLC.

We do not know how much Charles has invested into the property but we do know he is personally liable if the LLC defaults.

It is clear Charles is chasing the market down and articles like this one from the Wall Street Journal probably don't help his cause:

High-End Homes Frozen Out of Budding Housing Rebound

Housing is fast dividing into two markets: Sales of low- and moderately priced homes are picking up and values have stopped falling in some parts of the nation. But on the upper end, sales remain mired in a deep slump and price declines are expected to accelerate.