Cities on the Pacific Ocean are vulnerable to Tsunami.
Tsunami damage to Oregon following the terrible March 11 9.0 earthquake in Japan was relatively light although Governor Kitzhaber is seeking disaster-area status for some coastal areas. Damage in California was greater, and there was one known fatality.
Crescent City, just south of the Oregon border, was particularly hard hit—this area is unfortunately vulnerable to tsunamis and was devastated after the 1964 Alaskan earthquake.
Oregon’s major populations centers, namely: Portland, Salem, Corvallis and Eugene are all immune to tsunamis because the Willamette Valley is separated from the coast by tall mountains. However, coastal communities like Brookings, CoosBay, Florence, Newport, Tillamook, CanonBeach and Astoria are vulnerable. Fortunately, they have evacuation plans and procedures.
Since the Japanese earthquake occurred thousands of miles away across the Pacific Ocean, there was a warning period of hours, and evacuations in Oregonwent smoothly. The evacuations were prudent, but ultimately proved not needed to prevent the loss of life. Better, of course, to be safe than sorry—the loss of life in Japan is over 13,000 people at the time of this writing, and no-doubt will climb.
Many properties around Lane County are in flood zones and may require flood insurance. Typically, if you’re in the 100-year flood zone, your mortgage lender will require flood insurance. Most homeowners’ casualty policies do not insure against floods or earthquakes without special riders. You are only insured for what your policy says—not what you think you’re insured against. It doesn’t hurt to ask your insurance agent for what perils you’re actually covered.
Many Eugene residents don’t realize it, but we have our own 8” petroleum pipeline extending from Portland to Eugene at the tank-farm off Prairie Road. The pipeline brings in 1.8 million gallons per day to Eugene, and was completed in 1962 at a cost of $7 million.
The tank farm has a capacity of 700K barrels, or nearly 30 million gallons. Oregon neither refines nor produces liquid hydrocarbons so all that gasoline and diesel has to come from somewhere—and a lot of it comes from Portland to the Eugene terminal. Portland is fed by marine deliveries and two pipelines from refineries in Northwestern Washington.
In fact, 90% of the petroleum used in Oregon comes from just four refineries in Washington State, which get 80% of their crude oil from the Northshore of Alaska.
If your property has the pipeline running through it, your title policy should show an easement from about 50 years ago. However, if your property merely has the pipeline near it, local knowledge is about the only way to know it—that and pipeline warning signs.
Carrying petroleum to a town near you.
The amount of foreclosed homes is one thing still weighing down the economy. And many are stuck on the market because banks can’t find the ownership documents.
Why? Turns out Wall Street cut corners when creating mortgage-backed investments—and didn’t want old fashioned paperwork in the way. And now when banks want to evict people they are finding that the legal documents behind mortgages aren’t there.
Even worse, it seems that banks—in order to cover their tracks—hired companies to recreate missing mortgage assignments and provide the legally required signatures of bank vice presidents and notaries.
Now to avoid foreclosures, desperate homeowners are countersuing banks over the document disaster—leaving houses unsold indefinitely and stalling the recovery.
Many foreclosed banks are still stuck on the market because of lost ownership documents.
According to CNN, more homes are being purchased with cash these days. Obviously, if you’re purchasing a house with cash, you’re either well-off or, at the very least, not feeling the crunch of the Great Recession.
I took a look at the recent sales in the Eugene Springfield area as reported by RMLS to see if the trend held true to us. In the preceding month’s time period, about 20% were, indeed, cash sales.
That’s pretty high.
The homes did tend to be lower priced though. The most expensive listing sold during that month was my own listing—weighing in at nearly ¾ million dollars. It was not sold for cash, though; but rather a conventional loan was used.
High-end homes are still selling in Eugene.
Cap rates for LEED certified commercial buildings are ½ percentage point better than for standard, non-green buildings. Green building is a nice concept, but the marketplace’s acceptance will really help it take hold.
In Eugene and Springfield, there are very few LEED certified buildings so it’s hard to know how they’ll fare in the marketplace. One problem with both commercial and residential green buildings is that appraisers don’t yet value them appropriately. Of course, that will change—but for now it can cause problems if lenders are involved.
More buildings are going green these days.
In Eugene, as in the rest of the nation, lending standards for HUD insured loans—an increasingly popular option for home buyers—are becoming stricter. The following changes are scheduled or planned to occur this year:
- Increased mortgage insurance premium—beginning mid-April, the rate will be 2.25%, up from 1.75%
- Increased down-payment (10% vs. 3.5%) for borrowers with a FICO less than 580
- Reduction of seller concessions from 3% from 6%
These changes will make it harder for some borrowers to get loans, and will soften demand, somewhat, for house purchases. However, at least the changes aren’t too drastic.
HUD loans are a bright spot in a thorny lending environment.
Locally produced electricity for 13,000 homes will soon start to flow through Eugene’s power lines. Seneca Jones has completed construction of its $45 million cogeneration plant. Some two years in the making, before long, the plant will be feeding our power grid. The cogeneration plant will use woody biomass—a renewable resource—produced from the mill and forests.
The concept isn’t entirely new however. The old Weyerhauser mill in Springfield has a power generation plant producing over 2 ½ times Seneca’s 18.8 megawatts. And, old timers will remember that EWEB used to burn hog-fuel (a very coarse saw dust) at its facility on the banks of the Willamette River.
Eugene is known for being green and environmentally friendly. We also benefit from inexpensive electricity—keeping our cost of living down. It’s an interesting world in which brush from the woods can be powering our cars.
Cogeneration feeding local power.
Trees are very cool, and Oregon probably has more trees than any other state—except perhaps Alaska. In fact, residents here are probably outnumbered by trees some 30:1*. Even though numerous, the cutting of even a dangerous, diseased tree still makes headline news in Eugene.
Many don’t realize that Eugene has several pages of regulations about the cutting of trees. And while they’re a good idea in principle, compliance does increase development costs, which in turn runs up prices and rent.
*Assume 1 tree per 10’x10’ grid, resulting in about 4K trees per acre. ½ of Oregon’s ~62K acres are forested, resulting in perhaps 125 million trees. The population of Oregon is a little under 4 million people.
Eugene cares about its trees.
Opponents of ORI’s proposed $17 million, 80,000-square-foot building are still trying to stop its construction.
I’m the first to admit that I sometimes miss the point—and this might be one of those times. However, it seems like having an internationally recognized institution with nice facilities would bring Eugene the kind of jobs that everyone likes—no pollution and minimal impact.
The banks of the Willamette: Contentious real estate.