Funny story, there's a model home on the Eastside complete with perma-Open House Realtor. This guy seems to show up everyday, surrounded by dead empty lots, and sleep. One day last week, I saw kids running through this model home, the Realtor had just sort of left it Open. He was gone for hours.
Doug Farmers data came out, and contrary to what the massive increase in inventory seems to indicate would happen -- lower prices -- prices were apparently higher. Volume was crushed however. 146 sales. I can only think some aggressive pricing on the Westside unstuck sales, and there were just more high-end closes than normal. The ranks of middle and lower class buyers was thinned considerably. There is a harrowing 14.69 months of inventory though. That is just death. Buyers and sellers are NOT buying or selling. They are staring at each other. No one makes money staring.
A reader posted the recent Bulletin article, "Bend Home Appreciation Rate Drops" on the previous comments. We dropped from No. 1 to No. 10. on a YoY basis.
Bend had the lowest quarterly appreciation from fourth quarter 2006 of all top 20 cities, which leads local brokers to suspect Bend will be out of the top 20 by the third quarter, which ends Sept. 30.
If you look back to Q4 2006, we also had quite low appreciation at the end of last year. Almost all the appreciation we have right now was done in Q2 - Q3 2006. Despite an apparent May surge in pricing, I still firmly believe that Q2 might begin a negative YoY appreciation rate in Bend home prices, but Q3 will be a virtual dead lock. We will be down YoY when Q3 is done.
The region is still trying to find its balance, Berger said, adding that he doesn't think Bend's appreciation will fall into the negatives, as is occurring in many once-hot California markets.
I'll say right now... Berger is Dead Wrong here. Another weird Berger-ism:
Conversely, "sellers feel, rightfully so, that they've been beat up pretty darn hard," Berger said. "And they're not ready to come down."
What? Beat Up? Beat up from what? The horrors of making more on their home than anywhere in the country over the past 5 years? Yeah... it must be awful. Bend homes are UP over 100% for the past 5 years. If that's "beat up", I wonder what the hell these people will do when prices are actually down in 5 years time.
There is also a pretty good article in the Sunday paper, "Planned projects focus on west side", about Redmonds expanding UGB. Quick quotes:
- Redmond's urban growth boundary expansion will increase the city's housing base and drive prices down
- developers are cautious about the number of years it will take to sell the lots
- Some projects will fall by the wayside, Crosby said.
- Median home prices in Redmond, meanwhile, have slipped to $255,500. By comparison, Bend's median is $372,075, according to the MLS.
- Affordable land supply is key to Redmond's future growth, said Bruce Kemp, president of Compass Commercial
- The completion of the city's urban growth boundary expansion process, approved by the state in December, will give Redmond a higher percentage of growth during the next 10 years than Bend, Kemp said.
- Upon expected buildout within 10 years, the mix of new homes could bring between 14,000 and 17,500 people, he said.
- Eventually, more affordable housing prices will attract more companies, said Bud Prince, manager of Redmond Economic Development. The number of speculators and investors who sought to buy a piece of property, then resell it for a profit, have slowed to a trickle at his office, he said.
- "That's a good thing, really," Prince said. "Because they drove the prices up for the end user."
Medians in Bend are $372,075? I looked, and could not find this figure on MLS Q1 report, nor David Fosters monthly report. And from the context of the article, it could be May. This would be the first median figure I've seen for May.
And it's the first time I remember a developer (Andy Crosby) going forward with a very large development, admitting that some projects will "fall by the wayside". Of course this is a basic admission that these things do not make economic sense anymore and won't get built. Of course Crosby's 1,400 home project isn't one of these poorly conceived black holes. He's smarter than those other guys... who are smarter than him... who is smarter than them... and so forth.
And I'm just curious what real estate speculators are doing at Bud Princes, the manager of Redmond Economic Developments, office? It flat out states that the flow of speculators has "slowed to a trickle" at his office, a fact that I'm sure he is very distraught over. Does anyone know if this guy is moonlighting as a Realtor? If so, I'm just relieved that we have officials responsible for Central Oregon economic development wining and dining real estate speculators when the market dictates.
And it's getting rather hard to hold back the bile when I read how happy Realtors are that walk-in speculator traffic has "slowed to a trickle". Oh, I'm quite sure that despite heroic efforts to hold the office door closed a year or so ago, these poor people were overwhelmed by the sheer force of will of these speculators to buy.
"I can't sell you 6 homes for that amount of money, it's TOO MUCH! I have an obligation to the tired, poor, and downtrodden. Oh no, don't hold a gun to my head! Oh no! I am being forced to engage in another real estate transaction! Please, listen! This is a financially irresponsible transaction because you don't have any income to make the payments, and it will artificially inflate prices for the rank-and-file, who I so dearly love! Please! Please, don't shoot! Just make the commission check out to cash and GO!"
Yes, Bend area Realtors are a selfless lot, who are finally able recover from the horrors of collecting huge commission checks from those bloodthirsty predators. My heart goes out to them.
Ah well. It's been a slow week, and I am basically waiting for David Fosters data to give a more complete picture of what happened in May. One thing seems clear, it was dead slow. May was actually slower than April, something I thought might happen, but I didn't really expect. May is NEVER slower than April. NEVER. 14.69 months of inventory vs just over 4 months in May 2006. And thus starts the Summer Selling Season In Bend.
Or should I say, The Summer Staring Season.
