SOME GLOOM. LESS DOOM

In the mid '90s when I was a stockbroker and and it was the middle of the dot com rise and fall, I heard a lot of the same things I am hearing now regarding asset value.

With the recent changes in the real estate market (which I will not characterize by any one term, as different markets are experiencing vastly different scenarios), you are hearing the same laments: “I've lost $XXXX on my home!”.

Well, new flash: You HAVEN'T.

Sure, you're probably experiencing a decline in asset value, but that really doesn't come into play unless two scenarios exist:
1)You want to leverage more of your home equity for a loan. or
2)You're looking to sell you house and get top dollar for it.

This was the same in the dot com rise and fall. “I lost $XXX in the market” No, you didn't. Yes you lost it if you sold at the bottom of the market, but who would intentionally do that? Isn't that what business is about? You buy when the prices are advantageous (low) and sell when there is an opportunity to make a profit (high).

So what's the missing factor here? What is the catalyst that turns this mundane and common-sense situation into one that keeps us up at nights?

Confidence. Actually, Fear which relates to confidence.

This causes us to doubt our decisions, doubt our future, and worry about our present.

The only time you really have cause for concern in this market are if a couple of circumstances exist:

1)for whatever reason you HAVE to sell your home and the market in your area is a strong buyer's market.
2)You need to leverage your assets for credit.
3)You have had some other change in your life and are no longer able to afford the payments.

If none of those scenarios exist or have a strong probability: get over it!
Markets fluctuate.
That is the only certain thing about them.

The strongest position to have in any declining market is the ability to buy in when opportunities present themselves.

Don't you often wait to buy something you've your eye on, like that big screen TV when it's on sale??
Certainly.

Do you worry about how the sale price will affect the value of the TV you already own?
Not likely.

So, the lesson here: it's a buyer's market, so as long as your in a position to buy, then do so. Take advantage of the low priced opportunities, government assistance, credits, any all the other incentive available to you, as long as it doesn't financially compromise you and put you in a risky situation.

And if you don't have to sell then DON'T.

Which means you will not have lost money and when the market tides shift and it becomes a seller's market again, the value will again increase.

Real Estate opportunities abound in the current climate. And in many areas, investors with cash, and first time buyers are clambering over each other to snatch up real estate bargains. This trend is accounting for about 50% of real estate transactions right now, and it is affecting the markets by defining “bottoms” and creating signs of a turnaround in SOME markets.

Are you feeling better now? You should be.

REAL ESTATE CHARTS SHOW RECOVERY FROM WHIPLASH

Median single family home sale prices followed a long, slow decline from Summer of 2008 from $350,000 and hit a bottom in March and April 2009 at around $310,000 showing a $40,000 (11%) decline. Since the beginning of may this has recovered $10,000 to a median sale price of $314,485.

Another factor: # of Days on the Market for sale properties showed a sharp decline in February from a high of about 147 to a low of about 80. This has now stabilized somewhat around 99-102 days. This is a reverse trend from those in most communities, but still shows a sign of stabilization for the past eight weeks.

The number of single family homes available for sale which has been as high as almost 5,500 in August of 2008 has since stabilized at around 4,250 since the end of February, 09 and has remained in that range since.

The neighborcity.com site is currently showing over 5,800 property listings in the greater Portland area and 2,300 foreclosures.

In many communities these numbers have already established a trend of stabilizing and increasing prices on the lower end spurred by first time buyer incentives and affordable housing costs for cash investors and first time buyers. This is confirmed in today's Wall Street Journal article.

Some of the above statistics are harbingers of some stabilization, but the sales numbers have yet to catch up with the trends in other communities.

Memorial Coliseum Tear Down Update

Great discussion about the possible demolition of the Memorial Coliseum going on here, at Portland Architecture.

If my opinion mattered, and it sure as hell does not, I would agree with Brian, the editor of said blog. Why tear down a beautiful structure to save a parking complex?

Of course its not the simple. To complicate things further, the public process itself has come under scrutiny. City leaders appear to have decided to ask people's opinion after telling them they were plunking down a new baseball stadium and appear to be in a rush to get things started.

From Ryan Frank and Mark Larabee's April 14th column in The Oregonian:

"In a city built on public process, the abrupt schedule leaves the city without much time for public debate or a thoughtful plan to remake inner North Portland. It means the city will have to scrape together an expensive financial plan just as it faces budget troubles amid a worldwide economic crisis."

Which brings me to the more pressing issue,why are convention centers always so ugly?

Portland Housing Resources

The Portland Housing Blog is great for a number of reasons. I, for one, enjoy the graphic elements, (aside: Is that weird? The aspect I enjoy most about a RE blog is the graphs?) along with the level-headed analysis, the site is a must read for those looking for detailed information. They cater to the "in the know crowd" and therefore might not be appreciated by the casual viewer. However, I do feel that there are posts that benefit even those just interested in the Portland estate environment. I intend to point those posts out here


Below, I've included a couple of their graphs, and a link to their post on the recent release Case-Schiller Index



"The graph (above) highlights the changes since the Federal Reserve stopped lowering interest rates in June of 2003. The Portland index is currently at 153.80; a decline of 17.5% since the market peak. The last time the index was this low was August of 2005."



"The graph(above) shows all historical data for Portland, Seattle, and the 10 city index. The Portland residential real estate market has fallen 14.0% in the last year."

"The final graph shows the year over year percent change since June of 2003."
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Portland Mall Light Rail Update

North Mall: 5th and 6th avenues between Irving and Burnside

Light Rail Construction
All major light rail construction in the North Mall is complete, including work on the Steel Bridge. Minor work involving cables will continue near the tracks. 3rd Avenue now is open north of Glisan Street.

Station Finishing/Electrical Systems Installation

Major station finishing work is complete on the 5th and 6th avenue between Irving and Burnside streets. Crews are installing trees and amenities. Crews are working on Electrical systems, constructing a foundation of covered bicycle parking, and stalling trashcans, shelter finishes and furnishings. Work Occurs Monday through Friday from 7am to 3:30pm. Vehicle traffic may encounter short detours and intermittent lane closures. Pedestrians will be directed around construction zones, but will access to buildings and business will be maintained.

North Mall Merchants are open for business during construction. Please join is in supporting the businesss locaed on 5th adn 6th street.

$175 Million Dollar Stimulus Signed into Law

From the Oregonian:
"Barely a half-hour after the House voted it out Thursday morning, Gov. Ted Kulongoski signed into law a $175 million public works package that backers hope will start putting Oregonians back to work."

"The contentious package is the first major act of the 2009 session, passed over strenuous objections from minority Republicans who said the plan digs Oregon further into debt and does little to counter a stubborn recession. But Kulongoski, a Democrat, applauded his colleagues for their speedy work. With him at the signing ceremony were Senate President Peter Courtney, D-Salem, and House Speaker Dave Hunt, D-Gladstone.
"With less than 30 days into this session, the Legislature crafted an economic stimulus plan that will put Oregonians to work in every corner of our state," Kulongoski said. "The state is prepared to move quickly to break ground on projects from Portland to Pendleton by April 1 of this year."