Clint is featuring a great sad piece of real estate propaganda on his site: "Oregon Real Estate Propaganda". The original site is here.
A couple choice quotes:
" Homeowners in it for the long-term nearly always come out ahead in building wealth."
Nearly is the key word here. In some cases it can take 10 years to recoup your investment, like the entire 90's in California. And Case Schiller has shown that housing tracks inflation over the past 100 years, today's prices are way over the historic average prices.
They're quoting Darin Provost as an expert? Who? He has 5 blog posts, and that makes him an expert? I' can think of 2-3 other Realtors with better sites off the top of my head, but I guess they weren't invited to this party.
I can't blame the real estate industry for cranking up the marketing, in a down market it's the smart thing to do.
But Clint and I can give you an alternative view, one that doesn't paint Portland with such rosy colors. Unlike this collection of industry insiders, this outsider wants to make sure you have ALL the facts, not just their hand picked facts.
Sunday, May 11, 2008
Friday, May 9, 2008
Money magazine predicts a 20% price drop for Portland
A reader sent this in, from Money magazine:
They are only predicting a 10% drop for Seattle, so it seems like they think that Portland was either more overvalued, or is facing some condition that will cause it to fall further (lack of jobs?).
I tend to agree with the 20% drop, that's about what I've been predicting. Any other thoughts? Should we start a pool?
They are only predicting a 10% drop for Seattle, so it seems like they think that Portland was either more overvalued, or is facing some condition that will cause it to fall further (lack of jobs?).
I tend to agree with the 20% drop, that's about what I've been predicting. Any other thoughts? Should we start a pool?
Thursday, May 8, 2008
RMV vs Sales Price
One of our readers sent in this guest post, thanks JS!
My wife and I bought a bungalow in NE Portland back in January 2001 and sold a year or so ago at a hefty profit. The "bubble fever" started out slowly but by 2004 it had started to infect several of my neighbors and by 2005 it had us all in its grip. If someone sold two streets over for well over their asking price we'd all know about it in about ten minutes. On the surface we passed such gossip over the back fence as business-like as possible so as not to appear greedy or otherwise unseemly. But as we related the news to each other our silly grins betrayed our true feelings: we're sitting on gold mines and getting rich by the minute! Many of us grew cautious and told ourselves not to get carried away by the wealth effect. Others tapped into their home equity for the most trivial of reasons.
During those seven years my wife and I had the Oregonian delivered daily to our home. My guilty pleasure during the bubble years was to read the weekly Bought + Sold column in the Thursday InPortland section. The column organizes home sales by zip code and shows both the sales price and the real market value (RMV) of the home. A firm called First American Real Estate Solutions provides the data to the Oregonian. Week after week the sales price would greatly exceed the RMV of homes throughout the metro area. What is the RMV? That's the estimate of the home's market value that Multnomah County's Assessment and Taxation Division calculates. They use it to help determine property taxes. If you have the street address of any property in the metro area you can find out its RMV by going to PortlandMaps and looking for its property value in the Summary section. Realtors will tell you that the figure is practically worthless and is far too low. And they have a point. The only way to know the true market value of a house is to put it up for sale and see what a buyer will pay for it. And yet, the estimate will put you in the ballpark at least.
So as I said, for all the years that I read the Bought + Sold column it always showed sales prices exceeding RMV estimates. And as I already mentioned, we sold our bungalow at the height of the bubble market. For a year now we've been renting, watching, and waiting. And it's a strange feeling. Now I'm on the buying side again and so I look at the Bought + Sold column from the perspective of a buyer. I want to see the trends. I need to know how much certain houses in certain zip codes sold for and whether they are over or under the RMV.
But I can no longer do that. Several weeks ago, without editorial comment, the Bought + Sold column dropped the RMV figure. Now they list only the sales price. Did the Oregonian's editors make this decision? Or do they farm it out to First American and they were the ones who made the decision? There is someone who does know and that's Michelle Brence, the InPortland Editor. I've e-mailed her twice to inquire about the change. But I've never received a reply. (If you're interested in giving it a try she can be reached at 503-412-7059 or by e-mail at michellebrence@news.oregonian.com.) It's a real hassle that the RMV is no longer printed. I've taken several street addresses from the column over the past few weeks and plugged them into portlandmaps.com to find the RMV. A surprising number of them are higher than the sales price. That means that a lot of sellers are willing to accept offers below the county's estimate, an estimate that realtors have said is too low to represent the real market value. But the average reader wouldn't know that because that information is no longer available. And that's a shame.
- JS
My wife and I bought a bungalow in NE Portland back in January 2001 and sold a year or so ago at a hefty profit. The "bubble fever" started out slowly but by 2004 it had started to infect several of my neighbors and by 2005 it had us all in its grip. If someone sold two streets over for well over their asking price we'd all know about it in about ten minutes. On the surface we passed such gossip over the back fence as business-like as possible so as not to appear greedy or otherwise unseemly. But as we related the news to each other our silly grins betrayed our true feelings: we're sitting on gold mines and getting rich by the minute! Many of us grew cautious and told ourselves not to get carried away by the wealth effect. Others tapped into their home equity for the most trivial of reasons.
During those seven years my wife and I had the Oregonian delivered daily to our home. My guilty pleasure during the bubble years was to read the weekly Bought + Sold column in the Thursday InPortland section. The column organizes home sales by zip code and shows both the sales price and the real market value (RMV) of the home. A firm called First American Real Estate Solutions provides the data to the Oregonian. Week after week the sales price would greatly exceed the RMV of homes throughout the metro area. What is the RMV? That's the estimate of the home's market value that Multnomah County's Assessment and Taxation Division calculates. They use it to help determine property taxes. If you have the street address of any property in the metro area you can find out its RMV by going to PortlandMaps and looking for its property value in the Summary section. Realtors will tell you that the figure is practically worthless and is far too low. And they have a point. The only way to know the true market value of a house is to put it up for sale and see what a buyer will pay for it. And yet, the estimate will put you in the ballpark at least.
So as I said, for all the years that I read the Bought + Sold column it always showed sales prices exceeding RMV estimates. And as I already mentioned, we sold our bungalow at the height of the bubble market. For a year now we've been renting, watching, and waiting. And it's a strange feeling. Now I'm on the buying side again and so I look at the Bought + Sold column from the perspective of a buyer. I want to see the trends. I need to know how much certain houses in certain zip codes sold for and whether they are over or under the RMV.
But I can no longer do that. Several weeks ago, without editorial comment, the Bought + Sold column dropped the RMV figure. Now they list only the sales price. Did the Oregonian's editors make this decision? Or do they farm it out to First American and they were the ones who made the decision? There is someone who does know and that's Michelle Brence, the InPortland Editor. I've e-mailed her twice to inquire about the change. But I've never received a reply. (If you're interested in giving it a try she can be reached at 503-412-7059 or by e-mail at michellebrence@news.oregonian.com.) It's a real hassle that the RMV is no longer printed. I've taken several street addresses from the column over the past few weeks and plugged them into portlandmaps.com to find the RMV. A surprising number of them are higher than the sales price. That means that a lot of sellers are willing to accept offers below the county's estimate, an estimate that realtors have said is too low to represent the real market value. But the average reader wouldn't know that because that information is no longer available. And that's a shame.
- JS
Saturday, May 3, 2008
Who'd like to guest post?
Would anybody like to submit a guest post? Or 2? Or 10?
Yours truly had a run in with a patch of gravel on my bike ride home on Thursday, and the gravel won. While I'd like to say that my biggest injury was to my ego (definitely bruised), my left arm did come out a bit worse for wear (minor fracture). My typing speed is way down with only one good hand, so the posts will likely slow down for a little while.
Which creates an opportunity for you guys and gals. Any hot topics you'd like to discuss? Buyer's looking for advice? Seller's looking for tips? Development info?
Think of it as an open thread with more visibility. We've got lots of smart readers and contributors out there and this is your chance to make it more of your blog.
If you're game send the post via email to me, and I will help edit. I can post photos or links to photos. The more complete the post the better.
Yours truly had a run in with a patch of gravel on my bike ride home on Thursday, and the gravel won. While I'd like to say that my biggest injury was to my ego (definitely bruised), my left arm did come out a bit worse for wear (minor fracture). My typing speed is way down with only one good hand, so the posts will likely slow down for a little while.
Which creates an opportunity for you guys and gals. Any hot topics you'd like to discuss? Buyer's looking for advice? Seller's looking for tips? Development info?
Think of it as an open thread with more visibility. We've got lots of smart readers and contributors out there and this is your chance to make it more of your blog.
If you're game send the post via email to me, and I will help edit. I can post photos or links to photos. The more complete the post the better.
Thursday, May 1, 2008
May 1 Open Thread - Thank You!
It's officially May, and hopefully summer is right around the corner.
I want to take a minute to thank all of you for coming here to read, comment and contribute to the blog. The discussions have been civil and I've learned more about the market because of them. Knowing I've been able to help a few buyers better navigate the current rocky real estate market has made it all worth it.
But I have also noticed things quiet down lately, which I think is good. I feel that there was a perceptible change once the local market moved into negative territory as I and others no longer needed to scream that it was coming. You'd have to be an idiot not to acknowledge that Portland will follow the rest of the country towards lower prices. I know I got pretty burned out for a while, but I am more committed than ever to sharing my insights into the market and exposing the tricks that used house salespeople are using to try to boost business.
Keep sending in interesting sightings, news stories, and misinformation you see, and I will post whatever I can.
So what's on your mind as spring springs and we enter "peak buying season"?
I want to take a minute to thank all of you for coming here to read, comment and contribute to the blog. The discussions have been civil and I've learned more about the market because of them. Knowing I've been able to help a few buyers better navigate the current rocky real estate market has made it all worth it.
But I have also noticed things quiet down lately, which I think is good. I feel that there was a perceptible change once the local market moved into negative territory as I and others no longer needed to scream that it was coming. You'd have to be an idiot not to acknowledge that Portland will follow the rest of the country towards lower prices. I know I got pretty burned out for a while, but I am more committed than ever to sharing my insights into the market and exposing the tricks that used house salespeople are using to try to boost business.
Keep sending in interesting sightings, news stories, and misinformation you see, and I will post whatever I can.
So what's on your mind as spring springs and we enter "peak buying season"?
Another Builder Goes Belly Up
According to a story today in the Oregonian, the soft real estate market has claimed another victim, local builder Tony Marnella.
"Clackamas County homebuilder Tony Marnella and three of his companies filed for Chapter 11 bankruptcy earlier this month.
"It's true that the Portland area remains vigorous relative to the weakness in much of the rest of the country. But the market in the area has slowed, as Marnella's own numbers show.
Marnella's various companies brought in $4.3 million in revenue in 2006 and $1.1 million in 2007, according to the bankruptcy filing. So far in 2008, the companies have generated revenue of $10,000."
Maybe you should have done something when your revenue dropped by 75% last year, and tricked to basically zero this year. But nope, you're committed to building more homes that people don't need and can't afford. Smart.
"Clackamas County homebuilder Tony Marnella and three of his companies filed for Chapter 11 bankruptcy earlier this month.
Landing Development LLC, 550 Investments LLC, Tony Marnella Inc. and Marnella collectively owe about $24 million, the bulk of it to two lenders -- Sterling Savings Bank and MW Housing Partners III LP, an affiliate of timber giant Weyerhaeuser."
""One of my biggest frustrations right now is the amount of FUD (Fear, Uncertainty and Doubt) being generated by the media about the state of the current real estate market and the local economy," Marnella said in a March 20 post."In my opinion, there is a lot of misinformation and a failure to acknowledge the positives about our local real estate market.""
"It's true that the Portland area remains vigorous relative to the weakness in much of the rest of the country. But the market in the area has slowed, as Marnella's own numbers show.
Marnella's various companies brought in $4.3 million in revenue in 2006 and $1.1 million in 2007, according to the bankruptcy filing. So far in 2008, the companies have generated revenue of $10,000."
Maybe you should have done something when your revenue dropped by 75% last year, and tricked to basically zero this year. But nope, you're committed to building more homes that people don't need and can't afford. Smart.
Wednesday, April 30, 2008
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