Putting my socks on….without sitting down!
Lest you think I’ve suddenly tired of writing about real estate stuff – perish the thought. That will never happen. However – I have decided to take a little break and ramble a bit about something that has truly changed my life – no kidding. A year or so ago my wonderful youngest daughter, Lori, gave me a 30-day free pass to Bikram Yoga. Gulp. But I’m ALL for any chance I can get to spend time with my children, so I put a smile on it and off I went. Now I should stop right here and say that I’ve been plagued by lower back and neck pain for years. I’ve been told that some of this is just about getting older and the rest caused by….stress and spending half my day hunched over a keyboard. I went to Yoga and actually realized some real benefit. But I quit going after the 30-day free trial because “other things were more important”.
Fast forward to three months ago. My eldest daughter is expecting and I’m “awaiting the birth of my first grandchild”. Now I realize that my daughter Nicole is going to do most of the work in this birthing process – but I’m doing a considerable amount of “awaiting”. It’s not easy work. I’m thinking just how much I want to be around to help my daughter and son-in-law and how I need to be healthy and happy to do all that. They live in Portland and I live in Bend and I plan on doing whatever needs to be done to ensure that I’m not an absentee grandparent. Ahhh….so you are asking what the heck this all has to do with Yoga???
Well….daughter Lori came after me once again and I decided to give this all another try. For the past 3 months I’ve been joining her, along with my beautiful wife Gloria, at Juniper Yoga here in Bend. We all go 3-4 times per week and I have to tell you the change in my mental and physical state is unbelievable. I feel better than I have in years and it is my belief that anyone can benefit from using muscles and other bodily parts in a way that we seldom use them in the course of an average day. My back doesn’t hurt….my neck is now the neck of a four-year-old, and I’m not as grumpy. This is a real plus because I’m told by Gloria that women despise being around grumpy men.
Going to Juniper Yoga certainly takes me WAY to the North of my personal comfort zone – but that’s part of the draw as well. There should be lots of men in the class but, sadly, they must all be at home on the couch with their Icy Hot wraps stuck to their lower backs. And I think that’s really sad because most men are like me – about as flexible as a piece of iron pipe. Juniper Yoga is “hot yoga” – which means it’s played-out in a room that is heated. It’s heated but you don’t feel like you’re visiting Thailand in the summer. It just warms up all of my 58 year-old muscles and tendons and ligaments so that I can stretch and bend them better. The atmosphere is really low-key; something I didn’t personally find at the Bikram Yoga place which was a little too structured for my tastes. I need to be able to make a few faces and laugh a little without getting the “look” from the headmistress.
If, like me, you want to be around to really enjoy your kids and grand kids and spouse and life in Central Oregon in general – then try something, like Yoga, that takes you outside your comfort zone and makes you expend some energy. You will lose weight, conquer pain, sweat a lot and feel different in the very best way possible. Nicole Rainey is the owner of Juniper Yoga and will gladly answer any questions you might have. You can call her at 541-389-0125 or check the studio out HERE. And hey….if you’re a guy, after a few months of yoga, you could be a real hit at the next BBQ and have everyone gather-round and watch as you put your socks on without sitting down. Another couple months of this and I’ll be able to jump up and put them both on at once! Just sayin….
Get out the Popcorn….It’s Showtime!
Videos are becoming more and more important to prospects searching the internet for a property. With the advent of YouTube and other video websites, there has come an expectation on the part of web-surfers that they will see a video presentation that will give them a better “feel” for a property. Our team has invested a great deal of time and money in the equipment, software and training necessary to produce quality video that has proven to produce showings for our clients. Video is totally different from the “Virtual Tours” that many brokers still use – and call it video. Virtual Tours are nothing more than slideshows; Usually slideshows of some very bad photos that move in and out to the sound of music. Video, on the other hand, is just that – high definition motion photography that is much more compelling and professional.
We strive to keep our marketing on the cutting edge by using media that really works. We all hear so much about Facebook and Twitter. But we rely on the numbers that tell us that people are looking for real estate on the three major real estate websites. We will soon be able to upload our listing videos to these sites and monitor the number of views that they get.
And no….that wasn’t me playing the piano for the attached video. You’ll just have to ask someone else to play at your next birthday party. Sorry. Back soon…
Only the Shadow Knows……
Shadow Inventory. Most of us have heard the term, and, in fact, I’ve mentioned it more than once in this blog. It is defined as that housing inventory that has been withheld by banks while they made sure that they had clear right to sell the property in foreclosure. So…are we going to see this ghostly inventory dumped into the marketplace or not? And what’s this we are hearing about the return of a Seller’s Market here in Central Oregon? Great questions…
First – there clearly is a return to a seller’s market. The inventory of homes has decreased from nearly 25 months of inventory 2 years ago to 2.5 MONTHS of inventory today. WOW….you say! Happy Days Are Here Again! Well….sort of…kind of. But there’s a great disparity in how fast homes selling under $400K are flying off the shelves and the still-stagnant market for high-priced homes. We ARE seeing more activity in ALL price ranges, but buyers in the upper price brackets are still very, very wary. They are deathly afraid they will overpay and this causes them to continue sitting on the fence.
We are seeing more all-cash buyers than ever before. These are mostly people who have been able to finally unload their property somewhere else and are moving to Central Oregon. The last two listings we sold for cash were BARGAINS for the buyers. And both buyers felt like they STILL might be paying a bit too much.
So what about this Shadow Inventory? Is it real? Some mythical scare tactic? Well…here’s an excerpt from an article that appeared April 2nd in the Daily Real Estate News:
Next Foreclosure Wave Coming: Reason for Alarm?
Economists have been warning that a flood of foreclosures will soon be hitting the real estate market, likely this summer. Increases in foreclosures traditionally pull down nearby home prices. So should home owners be worried?As of now, housing reports continue to show month-over-month drops in foreclosures. CoreLogic released a report late last week that showed completed foreclosures fell from 71,000 in January to 65,000 in February.
But as more banks look to clear a backlog of defaulting home loans from their books, economists say the public should expect a turn with foreclosures and the numbers are expected to soar in the coming months. Mark Fleming, CoreLogic’s chief economist, expects the wave to hit this summer.
However, Fleming doesn’t view the increase as a bad thing for the overall housing market. “I would like to see the pace increase, because that means we’ll be able to work off the inventory faster,” Fleming told AOL Real Estate. He says that recent improvements in the real estate market and economy may mitigate any traditional downward pressure seen on overall home prices by foreclosures.
In fact, despite an increase, Fleming still expects home prices to rise in some markets.
RealtyTrac has predicted that completed foreclosures will jump 25 percent this year, reaching 1 million.
“All of this will result in more foreclosure pain in the short term as some of the foreclosures that should have happened last year instead happen this year,” Daren Blomquist, vice president of RealtyTrac, said in a public statement in February.
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So…what do I think? I think we ARE going to see another round of foreclosures hit the local market and, in the short-term, this is going to keep pressure on home prices – especially in the upper price bracket. It is going to take very REALISTIC pricing on the part of home sellers if they truly want to move-out and move-on. Your guess is as good as mine relative to how much Shadow Inventory will be dumped into this market. But I believe it will happen and it will prolong our agony for a bit. And after that? Back to a more “normal” housing market where we will see prices at levels we saw in 2004. Back soon…
2011 – The Year of the Distressed Sale…
An article in today’s Bulletin made clear that 2011 was truly the year of the distressed property sale where Central Oregon real estate is concerned. In Bend, there were 1,684 single-family homes sold in 2011. Of those, 463 were short sales and 418 were bank-owned. That means that 52% of all single-family homes sold in Bend were DISTRESSED. Makes me a little distressed. It was even worse in Redmond where 68% of the single-family homes sold were short sales or foreclosed properties. For those who are counting, the number of distressed sales as a percentage of total single-family properties sold for other areas are as follows: Sisters: 29%. Sunriver: 14%. Three Rivers South: 49%. La Pine: 61%. Jefferson County: 61%. And finally…Crook County: 63%.
Is it any wonder that home and land prices have been driven downward – and are still headed in that direction as I write this. And just why is that? So many “economists” and other know-it-alls tell us that we have “HIT BOTTOM”. Really? What about all the properties that the banks have been withholding from the market while they all get their legal messes cleaned-up? Don’t believe what you may have read about the “Shadow Inventory” lurking out there all set to be dumped into the market?
Well…There are two homes on just my little street in River Rim that have been vacant for nearly two years now. The owners on title haven’t made a payment in that entire time. Both are finally being foreclosed upon but the process has taken FOREVER! According to the Notice of Default filed on these properties they are going to the Deschutes County Courthouse steps for auction this Spring. And so will many others that have sat vacant while the lenders got their collective hands slapped. Here they come….
What will this mean? It will mean that prices on traditional sales will be driven a bit lower while we work through this inventory. The good news is that homes selling at $300K and below are flying off the market. But before you pull out the party hats, check out what these homes originally sold for. The sellers are either long-gone or selling for nickels on the dollar because they have the equity to do so. And we are seeing a few more sales in the $800K and over range – and that’s truly a blessing for those who have been sitting on homes in that price range so long that their for-sale signs are rotting. 2011 was, indeed, very tough on sellers.
So what do we expect? Well….(shaking Magic 8-Ball here)…we can expect prices to slip a bit lower BEFORE we actually ARE at the bottom where price reductions are concerned. And then? Well….my nose tells me that we slide along the bottom for quite a while without anyone seeing any bump in home equity. True – there is only 3.5 months of total inventory if you just look at the Multiple Listing Service data. But this is because such a large percentage of the homes are for sale in the lower price brackets. If you look at the total Days on Market for higher-priced homes it’s a completely different story.
But all is not gloomy…Buyers are getting good deals and we ARE seeing buyers in the higher price ranges. Just not as many as sellers would like. I’ll watch the numbers and be back soon. We’re heading into the “selling season” and we shall see what that brings. Back soon…
Magic 8-Ball…..Tell Me True…
The other day I was talking to a local Bendite living in the NE part of town . He told me he was thinking of listing his home to move back to the Portland area to be closer to grandchildren.” But,” he told me, “I think I’ll wait and put it on the market this Spring when the market improves.”
I asked the gentleman what he was reading/watching that would indicate to him that the real estate market in Central Oregon would “improve” this Spring. “Well,” says he…”It’s bound to get better soon.”
The conversation made me think of the little black Magic 8 Ball that I received for Christmas when I was about 8 years-old. There simply wasn’t a question you could ask that couldn’t be answered by this magical round prognosticator. It never ceased to amaze me, at that impressionable age, that such a small device could be so doggone smart!
And as I look ahead at the local real estate market I must admit that reaching once again for my little 8 Ball friend doesn’t seem like such a bad idea. There is so much information coming from so many different sources that I ask myself what could it hurt to give the little sphere a good shake and see what it says. After all – there are 20 great answers inside that dark orb and one might just be as correct as another right now.
For instance; I could ask “Will the Central Oregon real estate market improve in 2012?’ And my friendly billiard ball might just reply with “It is decidedly so!” Awesome! Or….I could get “Reply hazy, try again”. Which just means that the Magic 8 Ball is just not sure. Or “Don’t count on it.” Yikes. And from what I hear on the news and from other real estate experts, any of these answers could be correct. Just depends on who you talk to and whom you believe.
We could shake the 8 Ball and be told to “Focus and ask again.” Hey…we could all use a little more focus – how can one argue with that answer? I always hated to hear “Better not tell you now.” Made me wonder what that Answer Genie was doing in there. Watching the news?
But if you shake me and ask about the Central Oregon real estate market, here’s what I’ll tell you; For years this area has relied on Baby Boomers to come here from distant lands to purchase our real estate. They came for the lifestyle – to escape whatever concrete jungle they called home at the time. They came to ski and bike and hike and get out of the rat race. But now that very group we have relied upon for so long have seen their retirement accounts diminish and their home values plummet just like we are experiencing here. All some can do now is hold on and try to make what they have left last as long as possible.
Does this mean that homes aren’t selling here in Central Oregon? Of course not. Homes sold in 2011 for $2.3 million and on down the price line. But fewer Baby Boomers are coming here to buy those homes at $400K and above because they can’t sell the one they have in (fill-in-the-blank). So when will this all change? And to what state will the housing market return in the next two years? Well…there are SO many variables that affect this answer that you might just as well get yourself a Magic 8 Ball and ask it. (Available on Amazon.com for about 9 bucks)
This economy has many would-be buyers frozen in place. Others are stuck where they are and, sadly, many of those in Central Oregon who are selling their homes are doing so based not upon what the market will bear, but what they feel they “need to get” to purchase another home once they sell the one they’re in. Pricing is not just important if you are a seller – it’s everything.
I’m advising my sellers to get their homes sold – soon. When I give it a good shake and ask the Magic 8 Ball if the real estate market will improve in the next 2 years I get; “Outlook not so good.” But there are so many variables that your answer might be “Signs point to yes.”
Time will be what truly answers this very important question. It’s a great time to buy and many will do so. Will I keep working hard to sell our listings? “You may rely on it.” Back soon…
Auld Lang Syne…..
Auld Lang Syne is actually a poem penned in 1788 by the great Scotsman, Robert Burns. The poem was then set to the tune of a traditional folk song and somehow became the little tune that we all sing whilst raising a cup on New Year’s Eve. The songs Scots title is often translated into English literally as “Old Long Since” or “Days Gone By”.
Well…another year has slipped by us – or maybe more clearly we have trudged through it; especially if one is in the real estate business or if you were engaged in selling real estate in 2011. I’m not sorry to see 2011 put behind us given the number of sellers I work with. It’s been exasperating for them – and for Gloria and me as well. Who ever heard of a listing being active in the MLS for over TWO YEARS?? Not me. Until the last two years came and went.
But some of our sellers are experiencing this particular trauma – mostly those with listings priced above $500,000. And these folks should not feel like they are the Lone Ranger. Some year-end stats from the Central Oregon Multiple Listing Service will help put this into perspective:
2,943 residential listings and homes on acreage were sold through the Central Oregon Multiple Listing Service in 2011. (does not count condos, town homes, commercial) These breakdown as follows:
$80,000 to $299,000: 2,189 properties sold
$300,000 to $499,000: 554 properties sold
$500,000 to $699,000 124 properties sold
$700,000 to $999,000 55 properties sold
$1,000,000 and over 21 properties sold (17 in Bend, 1 in Black Butte Ranch, 3 in Sisters)
So what gives? Easy. Lots of investors and first-time buyers scooping-up the homes under $300K and not so many buyers in the upper price ranges. And this hasn’t changed since 2008. And it’s really tough on those who are hoping to sell above $500K.
Buyers are still seeing prices drop. So they sit on the fence to wait and see how this all flushes-out. What will the next election bring? What will the economy in the U.S. be like in the months ahead? What will happen to the economy in Europe in the months to come? It is likewise difficult for someone to purchase here in Central Oregon if they can’t unload their nifty home in California – or wherever. So they wait….and watch.
So what to do if your home is one of those with a For Sale sign in front and is priced above over that magic $400K price point? Stick it out. Price the property at current market value and keep it on the market. Because all signs point to more confidence on the part of buyers and also because there are fewer bank-owned homes to compete with. And don’t forget: There was once a stigma attached to a property that has been on the market for more than a year. “Must have termites!!” That just isn’t the case any longer. Buyers know that there are more properties than there are buyers so they don’t pay much attention to how long a home has been listed. They are looking at price and comparing that to the price of homes that have sold. And remember my last post: A recent survey shows that 67% of current sellers don’t believe that this economy has truly affected the value of THEIR property. Well it just ain’t so.
I have a client looking at a commercial building that is listed at $525K. The current owner purchased it in 2006 for $400K. When I asked the listing broker what was up with the pricing, I was told that the current owner was able to purchase the property for $400K but it actually appraised at that time for $500K. I had just one question for that listing broker; “So What?” That appraisal was done nearly 6 years ago! But there you go….that seller must not think that his property was affected by the falling market since he purchased the building.
But Now Hear This! The stats that I am reading from many different sources say that the picture is certainly getting brighter and 2012 may see some settling of the downward trend. Please Note: I didn’t say we are all going to see an uptick in equity in the coming year – but we may not see the continual slide.
The National Association of Home Builders’ list of improving housing markets nearly doubled this month, as more cities showed signs of a rebound with their real estate markets.
The list now contains 76 improving markets, up from 41 in December, according to NAHB’s and First American’s Improving Markets Index, a monthly gauge that measures a city’s improvements in housing permits, employment, and housing prices for at least six months.
While no city in Central Oregon is on that list, it is indicative of some leveling-off. And boy could we use some leveling off!
It’s a great time for all those who have their properties on the market to ask their broker for a New Year’s Price Check. I plan to do this with all my sellers before the month is gone. I plan to simply send each one a Comparative Market Analysis that will indicate what a buyer will be looking at and what appraisers will be using when placing a selling value on their property. Does that mean that all my sellers will adjust their list pricing based on these reports? Nope. And I fully understand this. What it does mean is that I will be on the same page with the people I work for where the issue is concerned. If YOUR home has been on the market for a long period of time ask your broker to do the same thing for you.
Happy New Year to all. Positive things are in our future. It will just take longer for Central Oregon to climb out of the well we’ve fallen into. It always has. Back soon…
Merry Christmas, Bend! We’re Numero Uno – Again!
According to Mamta Badkar, writing for Business Insider, “The latest data from Fiserv Case Shiller shows that national home prices are expected to grow at an annualized rate of 3.2% between 2011 and Q2 2016.”
And guess what?…
When Business Insider combed the Fiserv Case Shiller data looking for the “best housing markets for the next five years”, Bend, Oregon came out on top! Number One! In the whole, En-Tire United States! So Merry Christmas to Bend…
You can read the entire story HERE. Do I believe this to be true? Yes…to some extent. There are still a TON of baby boomers who aren’t getting any younger. They are retiring – no matter what the economy is doing. They want a place to go that offers a more simple life – smaller, quieter, no freeways, outdoor activities – etc. What better place than Bend, Oregon? HOWEVER…I may disagree with some over the timing of this grand awakening – especially for sellers in the upper-tier where price is concerned.
There are people with money out there who figure if they don’t make their move now they may be too old to care before they find their way to that “simpler life”. A ranch listed on the Central Oregon MLS recently went PENDING at close to $20 million. I am finally getting showings on my listings that are priced over $600K. So buyers ARE buying again. But remember this, SELLERS…
Buyers are still deathly afraid that the market has not stopped its downward trend and do NOT want to overpay. So when they DO make offers they make low-ball offers to compensate for the fact that they think the market is still headed DOWN. Not fall-off-the-cliff DOWN….but not “scraping along the bottom” either as some would suggest.
A recent survey by HOMEAGAIN, a real estate related website, indicates that there is a “real discrepancy between sellers, buyers and agents perceptions of the housing market”. Here’s what an article about the HOMEAGAIN survey had to say…
“Homegain, a real estate related website, recently released the results of an extensive nationwide survey of Realtors on home prices and values. The results show generally that Realtors are of the opinion that home sellers believe their homes to be worth more than Realtors and home buyers believe that they are worth.
A recent Zillow poll showed that sellers were no longer ‘in denial’ regarding the U.S. housing slide. The latest HomeGain survey, however, underscores that while homeowners may be aware of falling home prices around the country, many believe that the slide doesn’t apply to their homes. Our survey shows that homebuyers and Realtors are telling homeowners their homes are worth considerably less than homeowners think they are.” The article went on to say this…
“Interpretation: 49% of homeowners believe there homes are worth 10%-20% more in value while 14% believed their home to be 20%-30% higher in value. An additional 4% believed their home had gained 30% or more in value over the past year. This totals up to 67% of homeowners believing their home increased in value in the last 12 month. When you add an additional 14% who believe there home has not lost any value, the result is an amazing 81% of homeowners do not believe there home value has been impacted by the current market. This is despite all of the information about excess inventory and foreclosures driving down prices and the fact that the Case-Schiller index of home prices showed an 18% drop in prices nationwide.”
So, in my opinion, there are several factors that will keep sales, in Bend, Oregon and elsewhere, at low levels until at least the end of 2012 and into the first quarter of 2013: More foreclosures as banks release inventory that had been caught up in legal issues, high unemployment (nearly 13% in Deschutes County!) and the fact that MANY sellers have priced their properties based on what they WANT to get for them – not what the current market says they are worth.
But…I don’t ever want to be thought of as Grinch-Like, so let me be the first to say that being first on the list is a GREAT thing for Bend – in fact for ALL of Central Oregon. Sellers just need to remember to look at the numbers EVERY month with an honest broker (like me?) who will tell them the truth rather than what they want to hear. Price the property where the market says it should be priced and it will sell. Price it above the current market and prospective buyers will sit back, wait….and watch. Back soon…
Jim
