It's ever funnier (or scarier) when you put this chart together with the recent news that Lawrence Yun (the NAR's cheif economist) was named as one of America's top economic forecasters.
And just so we're all on the same page, I'll believe we will have hit bottom when we see the sales decline plateau and start increasing, and inventory stop increasing. Prices will rise after that.
And don't forget, two data points is just a line. Three is a trend.
24 comments:
There is no way pdx has hit bottom. It is only at the first phase. Lower your price now if you are selling or hold for another year if you are buying.
These guys are spinsters. It's what they get paid for. If they were to pessimistic, they would get fired. While we can argue over whether or not they should be realistic, data can be interpreted many ways (though I am in agreement with you that there is not much, if any 'positive' data in real estate right now).
Also, if you're thinking of becoming a homeowner, it is potentially a good time to buy. Is there downward pressure on prices still to be played out? Probably. But if you see the place you'd like to call home for the next 5, 10 to 20 years, then I don't believe another year or so of downward prices is going to hurt.
And a slight correction to your post. They still do have your attention as you've posted a post on them.
"And a slight correction to your post. They still do have your attention as you've posted a post on them."
fixed.
Sounds like someone (juliestreeted) is a realtor.
Sure, it's a great time to buy assets when they just start declining. Such a deal!
This is only the beginning PDX! Price your home to sell right now. You will be ahead of next years prices. Foreclosures are going to rise. Home prices will be close to $200,000 lower than they were at their bubble peak. Trust me! There is no way I am buying for at least another year. If you are in CA, Pheonix, Vegas and Florida...now is the time to buy. The market is at the bottom or very close. The NW is going, going....
"And just so we're all on the same pag, I'll believe we've hit bottom when we see the sales decline plateau and start increasing, and inventory stop increasing. Prices will rise after that."
I think that people are reading that wrong and that the meaning is that we WILL HAVE hit bottom when we see... etc. If you have been reading this blog at all, there is no way that anyone (other than a realtor) thinks that we have hit bottom!!!
Correct, I am not saying that we have hit bottom in Portland, in fact we've just begun the decline.
I edited the original post to correct my poor grammar.
Honestly, I don't think ANYBODY knows how this will all shake out. We're in unprecedented times, have experienced an enormous run-up in prices and speculation that dwarfs anything we've ever seen.
As Americans we like to appear optimistic and reject the notion of severity but it just may be that we drop far and hard, a lot farther and harder than we can even imagine right now.
I think there are some policy-makers and analysts who "get it" but for the most part, we're just whistling in the dark.
My name is juliestreeted
I am a realtor
Boy, do i feel better getting that off my chest. Now back to my regularly scheduled "positivity".
I'd like to thank all of you that graciously pointed out that we have not hit bottom yet and it is not a good time for anyone to buy a house/home/investment property/reit or anything else that might in any way, shape or form have any relationship to real estate. I'd hate to have Mr. T show up at my house and tells me "I pity the fool that bys a house in this market".
That is the funniest thing I have read on a housing blog in a damn long time!
PS would you use a realtor that cannot spell...buy...?
I'm sure it's a typo.
To Ms. Julie: Perhaps we are a bit cautious but unless someone absolutely had to buy a house, why would they choose the most unstable, uncertain time in probably several generations to do so? If the RE industry had not played fast and loose over the past few years we wouldn't have the instability and bust we are encountering. Sure, the boom was fun but there's always a hangover when you overindulge.
Now wouldn't it have better for all of us if we just clicked along at a nice decent 3% appreciation a year and not gotten so greedy? Yes, there were winners but there will LOTS more who lose this game.
damn bearlee. i apologize for the typo. noticed it after i posted but am unable to correct it afterwards.
anon at 5:58, i agree with your thinking. personally, i have my own criteria for making a purchase. but i don't believe that i know what is best for everyone. buyers and sellers come in every shape, size and color. i do not get paid to make a decision for someone. i get paid to be a trusted consultant to someone. i show them the good, bad and indifferent in their real estate decision. but the final decision is theirs.
and yes i would have much rather had a steady 2-3% appreciation. absolutely, without a doubt. but then again, without the absurb growth and implosion, there would not be any bubble blogs.
You sound like a nice sort but I must ask: If realtors are trusted advisors, how did so many people get in over their heads and now face grim financial hardship due to purchasing a house they couldn't afford? SOunds like a lot of people weren't given very good advice. To what do we ascribe that? Caveat emptor, as Charles Turner hinted over on his blog?
I could live without the bubble blogs.
thank you for the kind words. let's start with realtors being trusted advisors. sorry, but i disagree with you there. i have to pay dues to the NAR to do my job. i'd rather not, but it's a reality that i must. and i'm not trying to badmouth all realtors, brokers or agents. but they're people like everyone else. some are good. some are bad. some are knowledgable. and some are not.
as for what got us into this real estate quagmire, people were lead by the desire for a quick buck. whether it be an agent, mortgage lender or a home buyer, many were.
when a 25 year old is able to buy 7homes, in 3 or 4 states, within two or three months, without proving his income, there are going to be problems. repeat that story throughout the country, then i guess you could say that everything is lining up for 'perfect real estate storm'.
I don't think realtors are to blame. The greedy mortgage industry is what has landed America in this RE situation. It is impossible to know where the bottom is....however, I suggest studying the states/cities that have already been hit by this storm. Boston was one of the first....it is now rebounding. Check out CA, PHX, Vegas, Florida....they are still freefalling. I think the bottom is coming soon. But that is at a $200,000 loss at least depending on the type of listing. PDX is at the first stage. Price your home to sell now. Otherwise, the market is going to keep falling and you will be chasing it. As for buyers...hold tight. Rent. That is what I am doing. We have about 1.5 years of price decreases to go. How do I know this? By studying the states/cities listed above. NW...welcome to the party!
As much fun as it is to compare the Portland market to Boston, Florida, California, Vegas, or Phoenix, it's also really misleading. Though we will likely face more price drops in the coming months (years?), they likely won't be as dramatic as the ones in those other regions because we simply didn't see the same kind of boom they did.
"As much fun as it is to compare the Portland market to Boston, Florida, California, Vegas, or Phoenix, it's also really misleading. Though we will likely face more price drops in the coming months (years?), they likely won't be as dramatic as the ones in those other regions because we simply didn't see the same kind of boom they did."
I disagree. We didn't see 50% appreciation rate here like Phoenix did, but we saw the same 20% rates that CA and other regions did, and prices have doubled in 5 years here in Portland, well above historic norms.
Go back and check this post:
Link
How far will values drop? I don't know and my crystal ball has been all fogged up lately. But something along the line of a 2-5% annual appreciation from 2000 prices, sounds reasonable.
Of course, some areas will end up better than others.
Regarding out of state prices, Sacramento is already back to 2004 prices. That's with the market still showing an enormous amount of inventory (12+ months).
Agreed Julie.
Areas that went through significant gentrification will retain value. Their rise wasn't simply the bubble but a combo of bubble and livability.
St. John's is a recently gentrified neighborhood that also has the highest number of funny loans in Portland making it a strong candidate for high foreclosure rate and short sales which will drastically bring down prices , IMHO.
True, but St. Johns isn't gentrified in the way Concordia, Alberta or Mississippi is. At least I don't see it as such. Still rougher around the edges. So it follows that the former places won't get hit as hard.
It cracks me up when I hear people say PDX is not a bubble market. Are you kidding yourself or what?
I think it's because many ascribe the price run-up in Portland to its popularity, not a bubble. That comes from actually living in the bubble of publicity and self-love Portland has been wrapped in for the last several years. The prevailing mindset is that Portland was grossly underpriced but then was discovered for the paradise that it is causing a mass influx of people and the resulting increase in prices. It escapes many that the increases also coincided with the bubble that was growing everywhere else.
It also escapes many that PDX is essentially a service economy. When a recession hits it will be hit far harder than similar cities with large cap economic activity.
PDX has has a longer run up than every major metro area. We started in the late 90s. Part of this may be due to the way local governments have given enormous tax breaks to housing developers. The current budgetary problems will likely cause the developer gravy train to come to an abrupt halt. I expect real estate declines in PDX to last much longer than in other areas. We might even see a decade of depreciation in this region! Now that would be really amusing.
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