NR Market Watch

By Neil Hummel

Century 21, Roseburg, OR

Greetings:

What great news!  Osama bin laden is dead!  As a former combat marine in Viet Nam, I admire and am very proud of those seals that raided his compound and the brave young men and women who are in harm’s way each and every day so that you and i can enjoy our country and all that it has to offer us.  Say a special prayer of thanks that you have these young people defending us against the people who want to see our country destroyed.   God bless them and God bless America!

The real estate economy continues to suffer, however, in the past month we saw signs of improvement throughout the United States, especially in the west. Housing experts predicate that annual home sales will top 5+ million in 2011 which is 7-10% better than last year.

They go on to say that we should expect the average sales price to continue to drop as much as   20% nationally.  They said that this is due in large part to the number of foreclosures and short sales on the market.  As we all have been hearing, the banks and lending institutions have plenty of money to loan.  However, the majority of buyers that are applying for loans do not meet the new requirements, which has been hampering sales.

Also, the appraisals are coming in lower than the sales price in many cases.  Real estate sales have been challenging for all the buyers, sellers, lenders and real estate brokers. Unfortunately we are now in the 4^th year of this downward trend.    I am often asked, “When do I see a turnabout in the real estate market?” To be honest, i don’t know. Has this real estate market been tough? Yes it has.  We must accept the fact that we need to enjoy where we live and forget about making money on our homes that we live in.

Real estate sales activity for Douglas county experienced a decline in April 2011 when comparing it to a year ago with closed sales down 279 to 261 (-6.4%) and pending sales declined from 120 to 78 (-35%).  However, if we compare April 2011 to last month’s activity closed sales grew from 67 to 76 (+13.4%) with pending sales declining from 99 to 78 (-21.2%).   The average sales price increased from $152,600 (2011) v. $152,100 (2010).  As we look back in time in the real estate world, the last time the average sales price was in the $150,000 price range was October 2001.

Our average sales price was over $250,000 in april 2007 and has been declining since that time.  The value of the average sales price has dropped over $100,000 or a 40% decline. Is this a good time to buy?  Yes, yes, yes, and yes…because of the downward trend in house prices, high inventory of homes available, and low interest rates that makes many homes affordable.

Yes, there is a silver lining to this housing crisis and both buyers and sellers can benefit.  As sellers take less when they sell, I advise them that chances are they will be able to purchase for less when they move.  To buyers, I am telling them to buy now because of the reasons stated earlier.

Remember this Memorial Day to keep all those that have died serving our country to keep it free and all the active servicemen and women who are presently serving our county.   The freedoms of this country that we all enjoy are not free!!!!!

From Neil Hummel, Century 21

GREETINGS,

Have you been to the gas pump lately??????? Everyday there is a new price!!!!! The oil companies are blaming the investors who are bidding up the prices because they foresee a shortage due to the conflicts in the Middle East.  The consumers are blaming the oil companies for gouging us at the gas pumps. The vendors at the gas stations blame the lack of supply and the need to drill more.

Real estate values continue on the downward trend with prices continuing to drop in most areas throughout the United States.  Until we get the foreclosure issues resolved and the inventory of those properties sold we will continue to see this negative trend occurring in the real estate market.

I just attended a 2 day commercial marketing session in our area where commercial real estate brokers from Oregon, Washington, California and Idaho were in attendance.  These brokers presented over 100 properties and the only properties that generated any offers were apartment complexes.  People that are being forced from their homes through foreclosure need someplace to live so they are moving to apartments.  As we discovered that there were some people that were never supposed to own properties and will probably be renters for the rest of their adult lives.  Even though i have seen several recessions in my 38 year career in real estate, i have never seen one go this long and cut this deep into our economy.  We are now in the 4^th year of this recession and it is believed by most economists that this recession will last at least another 2-3 years.

Douglas county sales activity experienced a decline in March of 2011 when you compare March 2010.  Closed sales went down from 80 to 67 (-16.3%) with pending sales falling from 101 to 99 (-2.0%) and new listings fell from 250 to 167 (-33.2%).  At this month’s rate of sales, the 1,026 active listings would last approximately 15.3 months.  The average sales price for March 2011 was down -18.1% ($137,200 v. $167,600).  The average sales price for our area is now what it was in 2001.  We have seen the average sales price in Douglas county drop over $100,000 since 2007.  W0w, all this happened in four short years.

We have been advising our sellers’ that they to re-price their properties in order to generate a sale.  Since the first of year our prices have dropped over 35% and sellers’ need to lower their prices or they will not get their properties sold.  I advise sellers’ that they may have to take less but more than likely where they are moving they can also buy for less.  Furthermore, our homes are places where we raise our family, live in desirable neighborhoods and we don’t necessarily make money on.  That is the real fact of life.  Enjoy the spring and honor your mothers on their special day.

From: Neil Hummel, Century 21, Roseburg, OR

Greetings:

Wow what a wind storm that blew into Roseburg on the 13^th.  It caused a lot of havoc in blown down trees and power outages, however, we seem to manage.  I guess the old trite saying of  “March has the roar of a lion…” is really true.  Right now, I am real excited about the college basketball tournaments that are going on around the country leading up to the final 4.  Speaking of the final tournament, my son-in-law invited me to accompany him to Houston where the top 2 teams in the nation will square off on April 4^th.  I am so fortunate this year because I saw the BCS Championship Bowl in January and now the Championship game in basketball.

Existing home sales fell in February following three straight monthly increases, according to the National Association of Realtors.  Sales dropped nationwide by 9.6% to a seasonally adjusted rate of 4.88 million.  Lawrence Yun, NAR chief economist, expects 2011 to be an uneven recovery for housing.  He went on to say, “housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by 2 main problems.  Unnecessary tight credit of borrowers and a measureable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers.”

Douglas county sales activity experienced a decline this February as well which follows the national and state trends.  Comparing February 2010 with February 2011, closed sales went  from 57 to 52. (-8.77%) Pending sales fell off as well from 95 to 75. (-21%)  New listings were down  from 198 to 181 or -8.5%.  As we compare January 2011 to February 2011, closed sales fell from 66 to 52 (-21.1%) and pending sales dropped from 78 to 75 (-3.9%).  New listings increased from 169 to 181 (+7.1).  At the month’s rate of sales, the 1,054 active residential listings would last approximately 20.3 months which is up 4+ months over last month.  Current listings are taking longer to sell as well, so seller’s need to adjust their prices to meet the market prices or price them slightly below market prices in order to generate a sale.  The average sales price for February 2011 was down (-15.2%) compared to February 2010.  This is a significant downward trend, however, prices dropped (-24.8%) comparing prices this month to the prices in January 2011.  Thus the average sales price is down -$46,200.  ($186,400-$140,200)  I was not surprised because we continue to see the rate of foreclosures in our county increases as well as the number of short sales.  I think that we are going to see prices continue downward compared to 2010 and will probably mirror 2009.  Our average sales price today is the same as it was in February 2004 and down (-$100,000) from the high of $240,000 in February 2007.

So what does all this mean, we are still in a very soft real estate market and unless we see some stabilization in the national, state and local economy this trend will continue.  We need to grow jobs in our county by encouraging our already businesses to hire as they can.  I think that we will remain in our state of affairs for some time, so keep the faith.

Remember to keep our military and their families in your thoughts during these turbulent times of uncertainty in the world.  Count your blessings and love on your loved ones, they need you and you need them.

From: Neil Hummel, Century 21, Roseburg

Greetings:

Well, the Oregon Ducks were so close (Auburn 22-Oregon 19).  Cathy and I attended, along with 40,000+ Oregon Duck fans, the BSC Bowl and had a blast!  Yes we lost, but our team represented themselves and the state of Oregon very well.  They made us proud and many of the Auburn fans complimented the team and us as very nice and considerate people.   We had our opportunities but as in college football, we made some bonehead mistakes.  That is why I enjoy college sports so much for you never know what those young men and women are going to do next.  The weather was super, the fans were fun and I now have 20 new friends from Alabama that I can hang out with.

According to the National Association of Home Builders new home sales rose +5.5% and are on target to finish at 290,000.  This is well below the almost 2+ million new housing starts in 2005.  Home builders nationwide are seeing some improvement mostly in the west region.  In fact, building permits in Oregon are up +15% and in Douglas County about the same which is encouraging.  Many economists predict that homebuilding nationwide and in Oregon will remain at a slow to moderate growth rate for 2011. Nationwide, existing Home sales jumped in December and are (more…)

Merry Christmas and Happy New Year!

Our National Association of Realtors chief economist, Lawrence Yun, predicts that 2011 will experience a moderate gain in home sales.  He forecasts that homes sales should settle in at 5.2 million up slightly from 4.1 million in 2010.  He goes on to say that new home sales should also be up to about 400,000 which is still an increase from the 316,000 in 2010.  This is good news for builders and all those associated with the building trades.

It is down significantly from the 2 million housing starts we saw in 2005, however.  He does feel that there will be another stimulus bill enacted in 2011 at about 900 billion, which should see the GDP grow by 3% up from 1.9% and job creation could easily top 2.5 million.  He feels that even though these upstarts are predicated on what the Government does to (more…)