3727 Megan: 156K.
Houses have come down in price and are becoming increasingly affordable. The house below was a listing of ours. It’s at 3727 Megan Way in Eugene, Oregon. It’s 2 bed, 1 bath and 8 years old. Now here’s the best part: It was listed at only 149K. Principal and interest should be about $800 per month. So, it’s very affordable.
If you’d like information on affordable housing, give me a call at 517-6543.
Housing starts are up Nationwide and in the West, improving for over the last three months. Single family starts, nationwide, jumped over 14% from last month to 470,000 annually in June, 2009. This was the biggest monthly gain in 4 years, according to the WSJ. Home building in Eugene is improving, but is not brisk. If you’re wanting to build a house, now is a great time to do so.
Annualized Housing Starts Continue to improve in 2009
Nationwide (top) and Western (bottom) housing starts.
Eugene's economy is improving, but not racing yet.
Lane County’s economy is a long ways from speeding merrily along, but there are signs we’re improving. I had lunch yesterday with the head of a local temp agency; companies that provide temporary employees are one of the leading indicators of the economy. For the last three months, temp agencies have been increasingly busy. Companies in Eugene are starting to see increased work load, but aren’t ready to commit to full-time hires. The time until we’re back to normal: probably a year, or Summer 2010, according to my buddy.
As my colleague Jared Helton pointed out in response to my last post, he expects the market for Eugene Springfield houses priced at 225K or less to remain strong through the end of the year. I think he’s right on the money; this is the market segment that has shown the most life this year. Granted, our predictions are only 5 months out, but that’s a lot these days.
Here’s an example of the type of house you can get for the money. It was a short sale (or pre-foreclosure), 2,300 square feet, nearly new, and I had it listed at 229K, or under $100/s.f. That’s a good deal in any market, and it sold quickly.
If you’d like to know about the good deals in Eugene Springfield give me a call at 517-6543.
Short Sale priced at under $100/s.f.
Have we reached the bottom of house prices? Market peaks and troughs can only be seen in retrospect, but the pundits are saying we’re at the bottom. For the last 3 months, median housing prices nationally, in the Western region and in Lane County have risen. If the trend continues, we were at the bottom this spring.
The drop in median prices for the last year was much more muted in Lane county than either the nation or western region. Compare 6.6% (Lane County) vs. 15.4% (US) vs. 20.8% (Western region). The western region’s big drop was because places like California, Nevada and Arizona are part of the statistics, and they were hammered in price.
Are we likely to see huge rates of appreciation? Not anytime soon. There is still too much unemployment in the area and sales of distressed properties (namely short sales and foreclosures) will continue. I expect the market to stay flat at least until the end of the year.
Median House Prices up for Last 3 Months
One measure of how hot or cold the housing market is the amount of housing inventory. That is, how long it will take the existing houses on the market to sell. A balanced market is said to be about 6-7 months, meaning it’s neither a buyer’s or seller’s market. Inventory greater than balanced indicates a colder market with softer selling prices.
Lane County’s market has been a buyer’s market since about September 2007, which is roughly when the home loan crisis started. For the first time in 21 months, we’re now balanced with an inventory of 6.8 months. Who knows if it will stay that way, but it seems like a good sign to me.
When compared to recent national data, Lane County’s inventory is typically less. However, sales nearly stopped this winter, and we saw exceptionally high inventory in January and to a lesser degree in February. The chart below shows this.
Lane County Housing Inventory.
This is a good example of the buys that are available in Eugene these days. I closed on this house a few weeks ago. It sold at 262K and was listed at 324K before foreclosure. My first time buyers were thrilled to get this cleaned up and nice 2300 SF house in Ferry Street Bridge at a great price. And, there was zero down payment! Both zero down and foreclosures aren’t everyone’s cup of tea, but I like doing them.
I just closed on this house yesterday, and the buyers got a great deal. It was originally listed for 349K and was purchased at 211K on short sale. It’s a 2,100 square feet new house. Wow. Short sales occur when the seller owes more than the house is worth.
With the year’s half-way mark statistics released, it gives us a pretty good idea of the Eugene Springfield market. I look at Closed + Pending Sales and divide by New Listings to give an indication of how quickly inventory is moving in an area. It’s my own little metric, but matches what I see in practice as a Lane County Realtor. In general, the farther away from Eugene Springfield you go, the slower the market. The reason: People still remember $4.50/gallon gas from last year. It looks like there will be between 500 Million and 1 Billion dollars of residential sales in the greater Eugene Springfield area in 2009. Not too bad.
I doubt if the numbers hold for the rest of the year, but there were only a little over 6 months of supply of houses in Lane County in June, 2009. This indicates a surprisingly balanced market, which we’ve not seen in a long time. When there’s over 6 months supply, we’re said to be in a buyers market. My statistics come from the most recent data from RMLS.
Mid Year Market Stats: Eugene Springfield
One thing I track is interest rates on home mortgages, which have ticked up recently. In general, the lower the rates, the more your house is worth and vice versa. Average interest rate, as reported by the Federal Reserve was 5.42% in June 2009, which is the highest it’s been since November 2008.
A broker friend of mine in Milwaukee says the interest rise has actually stimulated his market because his customers think the end of the low prices may be in sight.