Month: December 2008

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Commercial Space In Eugene: Rented

If you were looking to buy or rent Commercial Space in Eugene, 2162 W. 7th Avenue was a good deal. It’s across the street from the old Timber Topper in the Big-Y complex, next to Wentworth Buick and fronts W. 7th Avenue.

Good visibility and high traffic counts

Good visibility and high traffic counts

The building is 2,800 S.F, and would require a little finish-out. It was listed at a good price: only $239,900. At that price, it looks cheaper than replacement cost to me. The site has good visibility and high traffic counts.

If you have questions, give me a call at 517-6543 .

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Metal Buildings

There’s no doubt that things are slow in the construction industry, but there are some things being built in Eugene, and now is a great time to do so. This building, at 445 Highway 99N, is being put up by Ken Evans of Evans Building Company, 485-8071.

Ken is building it for Bathcrest, a company known to builders for working magic on damaged tubs. It’s 50′ x 125′ and will house Bathcrest’s operations.

Ken Evans on Site

Ken Evans on Site

Ken, a Professional Engineer, does anything involving metal buildings, from remodel, to in-fill, to new construction. Prices are surprisingly low. A simple agricultural building may run as low as $16/s.f., and other buildings run from $25-$100/s.f., depending on the complexity. Metal buildings go up quick–you can move in 3 to 6 months after the building permit.

Ken runs the company with his dad Jim, and his brother Russell. While being a small family company, they still do big projects. Some of their buildings have been over 2 acres in size. They’ll build anywhere in Oregon. When you choose Evans Building Company, you’ll always be talking to an Evans.

An interesting thing about Ken is that he owns our very own Eugene Generals Hockey team.

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Commercial and Investment Realtors

The Lane County CID (Commercial and Investment Division) realtors held their annual Christmas Party at the DAC. About 75 revelers attended. The evening was MC’d by Brent McLean, CID’s current President. Special toasts were given by Ken Kime, Dick Sage, and Mike O’Connel, Sr.

CID is a group of about 100 Eugene-area realtors, lenders, design professionals, and agencies devoted to the sale, purchase, lease and development of industrial, income, and commercial properties.

President McLean said it best when describing the group: “This is the one group of realtors you can bring a customer to and not worry about other agents poaching them–there’s always a spirit of helping, combined with a can-do attitude of problem solving and getting things done.”

President Brent McLean

President Brent McLean

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Zero Down Payment!

Is 102% financing for home mortgages still possible? YES! That means you can still buy a house with no money down. Surprisingly, it’s the USDA that is making this possible. That’s right, the United States Department of Agriculture. More surprisingly, your house doesn’t need to be a farm, have livestock, crops or even be within sight of a tractor.

Last week’s WSJ ran an article describing the new found popularity of the Rural Development Guaranteed Loan Program. There are a couple of notable things to qualify. Firstly, the property must be in an area of low population density. In Lane County, everything but the greater Eugene and Springfield area meets this qualification.

Secondly, there are income limitations, which are based on the number of people in your household and where you live. In general, your adjusted gross income can be about 50K to 60K in Lane County, depending on household size. The specifics of the program are best determined with a loan officer.

One of my friends specializes in writing these loans. His name is Cody Gielish at Countrywide. He can be reached at 681-4353.

Specialist in Rural Loans.

Cody Gielish: Specialist in Rural Loans.

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Increasing House Prices in 2009?

The 10 year US Government Treasury Note dropped to historic lows of just over 2% last week. A year ago, the rate was over 4%, double the current rate, and has been as high as 6.77% this decade.

Unless you’re a risk-averse investor buying such bonds, you probably don’t know or care about the 10 year Treasury rate. However, mortgage rates parallel the 10 year Treasury.

Normally, the spread between the 10 year Treasury and the fixed conventional 30 year mortgage is 1.6%, according to Professors Hubbard and Mayer, in the December 17, 2008 Wall Street Journal. The mortgage market isn’t operating properly (Fannie and Freddie were nationalized in September, which is as far from normal as you can get). And, spreads between Treasuries and mortgages are closer to 3%.

The professors argue that if the spread diminishes and mortgage rates fall to 4.5% then housing prices should be stable or even increase in 2009. Let’s hope for 4.5%.

Fed Target Rate

Fed Target Rate

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Office in Eugene: leased

I’m always quick to point out a good deal. If you were looking for Office to Lease in Eugene, 630 Bertleson is a bargain.

It was listed by a friend of mine, Brent McLean. The building is ~1, 750 square feet, has good visibility, and has several bright offices. Here’s the best part: It’s only $1,450 per month, which includes taxes, lawn care and exterior building maintenance.

630 Bertleson

Floorplan: 630 Bertleson

If you’d like more information, give me a call at 517-6543.

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NO inflation–at least for now

The Fed’s number one enemy, inflation, isn’t a worry. At least for now. They’ve turned the economic throttle to full to get us out of our BIG recession. Short term interest rates are near zero, and they’re also increasing the supply of money.

This is like flooring the gas pedal on a muscle car–things are going to happen but it may be a little hard to control. The long term effects of lots of cheap money sloshing around will be inflation. However, the short term worry seems to be deflation.

The Fed has done all it can with the cost of short term money by ratcheting rates down to zero. It is also tinkering with the quantity of money in the financial system, namely increasing it. Both actions should stimulate the economy, and in turn help house prices to eventually rise.

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Now is a great time to have a house built

The Eugene Register Guard reported lay offs and extended shutdowns for area lumber mills. They cited Weyhaueser, Swanson Group and Southport Lumber as companies that will be decreasing production, at least temporarily.

The culprit is a historic downturn in lumber consumption, expected in 2009 to be about 50% of its peak in 2005, of 64 billion board feet. Low demand, coupled with near historic lows for lumber prices will be challenging for our local timber industry.

The recent composite price for framing lumber price was $213/MBF. A board foot is the equivalent of a 2″ x 6″ or 1″ x 12″ that is 1 foot long. A 10′ long 2″ x 6″ would contain 10 board feet, and cost about $2.13, if I got my math right. The average house of 2K square feet will use 8 board feet of lumber per finished foot of floor area. So, 16MBF at a cost of $3,400 for framing lumber.

Most wood consumption is used in building, and housing starts are way off. Most of our local builders are selling off their inventory and aren’t starting new at the moment. If you’re wanting to have a house built, now is a great time to do so.

Housing Starts Have Plummeted

Housing Starts Have Plummeted

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Mortgages at new lows

Mortgage interest rates have dipped to historical lows. Last week, three of my mortgage writing friends were quoting par rates (no buydown) below 5% in Eugene. This was for a fixed-rate, conventional, 30 year loan (my favorite).

Principal and interest payments for a $175,000 loan would be in the $900/month range. These days, lenders are wanting credit scores above 680, at least for the best rates.

My title company friends have said business is increasing, which you might expect with refinances. But, with more rigorous standards for loans as well as potential difficulty in getting properties to appraise-out, the tsunami of refinances hasn’t happened yet.

Lower mortgage rates are bound to help stabilize housing prices. When? My guess is by summer of 2009

Interest Rates Have Plummeted.

Interest Rates Have Plummeted.