eugene oregon

by

Owning vs. Renting

Most people intuitively know that it’s better to own a house instead of renting a place. The NAR recently looked at the data and found that the net worth of home owners exceeds that of renters by a factor of 50 to 1, with the main difference being home equity. 50:1 – wow.

There are still plenty of affordable good buys out there. This house was in a quiet neighborhood and was in the 160’s. It’s been remodeled and is on a large lot, and subsequently sold.

If you’d like information on affordable homes in Eugene Springfield, give me a call at 517-6543.

Another affordable house in Eugene Springfield.

Another affordable house in Eugene Springfield.

by

Eugene Springfield Housing Inventory

I looked at housing supply by area for Eugene Springfield. A six month supply is said to be a balanced market. Less than 6 is a seller’s market, and greater than 6 is a buyer’s market. Areas with modestly priced housing stock that are closer to town are doing the best. The original data came from June 2009 rmls. My analysis is below.

June 2009 Housing Inventory

June 2009 Housing Inventory

by

Housing in Eugene More Affordable

3727 Megan: 156K.

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.

by

Home Building Increases

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

Annualized Housing Starts Continue to improve in 2009

Nationwide (top) and Western (bottom) housing starts.

Nationwide (top) and Western (bottom) housing starts.

by

Eugene Entry Level Houses Strong

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.

Short Sale priced at under $100/s.f.

by

House Prices Trending Up

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

Median House Prices up for Last 3 Months

median-price-drop, last 12 months

by

Home Mortgage Rates up in June 2009.

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.
int-rate-june-2009

monthly-pymt-june

by

June Median House Price Lane County, Oregon: 1/4 Mm

One measure of properties’ appreciation or depreciation is average house price. It’s not exact–it’s really a measure of the average selling prices of houses in any given time. So, for instance, if during hard economic times, people with lower incomes were disproportionately affected, which caused them to sell their houses, where better-off people may choose not to sell, the average price of houses sold would probably be lower.

There’s no doubt that house prices are lower now, in July 2009, than they were in previous years, namely 2008 and 2007. How much lower is a good question. One of my appraiser friends uses 7% in his reports but will tell you privately that it’s more like 10%. This corresponds with my anecdotal evidence of $165/SF to $150/SF from market peak to now, at least in Eugene.

There are 3 measures of central tendency, mean, median and mode. If you look at mean (what most think of as average) and compare it with mode, you can tell (if you remember your statistics) if there are more high-end or low-end houses sold in comparison to the median. Median price in Lane County for June 2009 was: 209.65K, while mean was: 228.5K. This indicates that there were more high-end houses also sold, above the median price. Those numbers come from the most recent RMLS stats.

house-price-june

by

Eugene Market Time Decreases

One thing sellers frequently want to know is how long will their house sit on the market before it sells. The most recent stats released by RMLS, the Multiple Listing Service used in Lane County, reveals our current days on market in June 2009 at 124 days, or about 4 months. This is the lowest it’s been since October of last year. Total market time is measured from the time a property is listed until there’s an accepted offer. Decreasing market time is can be an indicator that sales are improving.

market-time-june-2009

by

How Long the Recession Will Last

So, how long is it? Hard to tell in the dark.

Economics is a rather dark art and will only tell us when the recession is over after it’s over. But only a long time after. My prediction: end of 2009. The reason: the government stimulus should take about 9 months to show up in the economy. And, with some 1 trillion dollars plus being pumped into the economy, that will do something. That’s the equivalent of the government lending each citizen in the U.S. over $3,000.

It is thought that the U.S. consumers account for some 10% of the world’s economic growth, and nearly 3/4 of the U.S. G.D.P. Currently, consumers have zipped their wallets and purses. As soon as the news stops scaring the hell out of us and confidence returns, spending will tick up, and things should improve.

How does this affect housing prices? It should remain a good time to buy through the end of 2009.

Low Consumer Spending Will Change

Low Consumer Spending Will Change