HOW DO I SAY THIS?

It seems as if everywhere you look, there's nothing but good news about the real estate market.  Even at the conference I attended most recently in Phoenix, all the buzz was about how the market is healed. 

Now that started to give me pause, because the attendees at this conference are the cream of the crop in real estate - the top 3% of agents in the nation.  And I know you all thought I was just a Negative Ninny four years ago when I said this downturn would last much longer than just a season.  So, NEVER wanting to be wrong, I had to come back and put this information into context, because this "feeling" everyone was having just didn't seem to square up with the numbers.

First of all, we've come off a year that included a Foreclosure Moratorium.  That moratorium has allowed about 49 months worth of inventory to stockpile.  It's commonly referred to in the press as the Shadow Inventory.  These are homes in some stage of foreclosure; everything from being 60 days late to being sold as a vacant house on your street.

Secondly, many of the Realtors I talked to in Phoenix were reporting they were having low inventory, multiple offers and sometimes offers over asking price.  How could that be, I wondered.  A closer look tells the story.

Many of these agents were from some of the hardest hit states in the nation; places like Florida, Arizona, California and Ohio.  In some cases, real estate has dropped up to 87% from it's high point in '05 and '06.  It's no surprise that investors are coming and grabbing up these deals.  That combined with that moratorium I spoke about - and you can see how it would "feel" like everything in just ducky!

What we've known for quite a while, though, is that this is going to be a see-saw recovery.  Up and then down and then up again.  And we all know that real estate is local.  So I thought it would be helpful if you could see exactly what's going on in our market.

Here's a map of the 6 major zip codes in the Mid-Willamette Valley.  As you can see, we've got some work to do here in the Valley before we start talking recovery. 

While this map is a little tough to take, the good news is our real estate market never fell like values did in the states of Arizona, California or Florida.  And besides - we're Oregonians....tough to the core! 

Amy's 2012 Real Estate Predictions

2012 Predictions!

Can I just say, 2011 was not my favorite year....not at all. But it's in the books, and I'd say as a benchmark, we've got some good things to look forward to in 2012. So lets focus on real estate!

1. We have historically low interest rates. If you're thinking of buying or refinancing - do it!

2. Nationally, home prices should be stabilizing. Locally we are expecting another dip in prices, because of our large dependence on government and our school district for employment.

3. The number of sales per year seems to have stabilized. We seem to have found the normal "set point" for the Mid-Willamette Valley.

4. We will see rising inventories as foreclosures again become more of a force in the marketplace.

5. Distressed properties will be an increasing part of the sales pie.

6. Improved Short Sale processes at the lender level will help even more families avoid foreclosure.

7. Homeownership rates will continue to fall, providing an opportunity for investors to purchase and provide housing for local families.

8. Foreign and domestic investors will make up about 25% of the buying market.

9. First time homebuyers will make up a signifcant portion of the market.

10. Buyers are still looking for a bargain; both in price and presentation.


All in all, we expect more of the same. In a way, that's good news. I'm often asked, "what is it going to take to turn this around?" My answer is always the same, "jobs." And that's what it is. No one is going to risk buying a home if they're worried about their job.

We're also advising our clients that given where we are, any real estate decision needs to be put in the context of about a 15 - 20 year plan. And No, I'm not kidding. It's really going to take that long.

Hopefully this gives you some insight into what to expect. We're here if you have questions, and we want to put the word out that we're available to come speak to any group who might want more insight into the Valley real estate market or the in's and out's of Short Sales.

Please don't hesitate to call. We're here to advise in all things real estate!

Happy New Year!