Comments on: West Linn Real Estate Activity – November 3-6, 2008 http://www.move2westlinn.com/2008/11/10/west-linn-real-estate-activity-november-3-6-2008/ News, Statistics, and Commentary about West Linn Oregon Real Estate Wed, 23 Jun 2010 15:10:28 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Stuart http://www.move2westlinn.com/2008/11/10/west-linn-real-estate-activity-november-3-6-2008/comment-page-1/#comment-464 Stuart Thu, 13 Nov 2008 20:15:19 +0000 http://www.move2westlinn.com/?p=241#comment-464 Well, "finally" the new listings average price per square foot is coming down! Anyone would think we had been talking about Lake LostEgo pricing. The latest numbers show an average $160/sqft. Still high for family incomes, and given the lack of funny money mortgages, this will come down, or at best stay static for a loooong time. It would appear that the 500K to 800K market is softening significantly, but there's still a lack of capitulation at the <$500K points. If you own an $800K+ home, you're pretty much toast in this market. New listings are still overpriced on average though. Look at the sale price for some of these listings from 6 to 10 years ago and extrapolate at the nominal 5% real estate growth rate: 2468 19TH ST. Sold in 2001 for $180K. Extrapolate 7 years at 5% yields $253K. Asking $335K. 1955 ARENA CT. Sold in 1998 for $262K. Extrapolate 10 years at 5% yields $426K. Asking $475K. 2110 CLUBHOUSE DR. Sold in 1996 for $274K. Extrapolate 12 years at 5% yields $492K. Asking $499K. 5325 SUMMIT ST. Sold in 1998 for $332K. Sold in 2004 for $475K. Extrapolate 10 years at 5% yields $540K. Asking $599K. 21380 HORTON CT. Sold in 1993 for $315K. Extrapolate 15 years at 5% yields $655K. Asking $650K. Still a way to go in the "normal income" house buyer's range. No Californians moving on up. No over-optioned dot-com whizz kids. No Mentor/Intel/Tektronix tech types with mega bonuses or cashed out options. Not enough Blazer's to keep the game going. An average $140 per sqft by mid to end of 2009 is what I'm looking for. Income taxes will be rising from both Salem and DC, bonuses will be non-existent in tech and finance. Property taxes will increase with lots of extra bonds and junk added at the last minute to what will now be non-super-majority ballots. Job losses will accelerate. Boomers' 401K's and investments have tanked. And there's another wave of ARM resets coming in 2010..... Well, “finally” the new listings average price per square foot is coming down! Anyone would think we had been talking about Lake LostEgo pricing. The latest numbers show an average $160/sqft. Still high for family incomes, and given the lack of funny money mortgages, this will come down, or at best stay static for a loooong time.

It would appear that the 500K to 800K market is softening significantly, but there’s still a lack of capitulation at the <$500K points. If you own an $800K+ home, you’re pretty much toast in this market.

New listings are still overpriced on average though. Look at the sale price for some of these listings from 6 to 10 years ago and extrapolate at the nominal 5% real estate growth rate:

2468 19TH ST. Sold in 2001 for $180K. Extrapolate 7 years at 5% yields $253K. Asking $335K.

1955 ARENA CT. Sold in 1998 for $262K. Extrapolate 10 years at 5% yields $426K. Asking $475K.

2110 CLUBHOUSE DR. Sold in 1996 for $274K. Extrapolate 12 years at 5% yields $492K. Asking $499K.

5325 SUMMIT ST. Sold in 1998 for $332K. Sold in 2004 for $475K. Extrapolate 10 years at 5% yields $540K. Asking $599K.

21380 HORTON CT. Sold in 1993 for $315K. Extrapolate 15 years at 5% yields $655K. Asking $650K.

Still a way to go in the “normal income” house buyer’s range. No Californians moving on up. No over-optioned dot-com whizz kids. No Mentor/Intel/Tektronix tech types with mega bonuses or cashed out options. Not enough Blazer’s to keep the game going.

An average $140 per sqft by mid to end of 2009 is what I’m looking for. Income taxes will be rising from both Salem and DC, bonuses will be non-existent in tech and finance. Property taxes will increase with lots of extra bonds and junk added at the last minute to what will now be non-super-majority ballots. Job losses will accelerate. Boomers’ 401K’s and investments have tanked. And there’s another wave of ARM resets coming in 2010…..

]]> By: dj http://www.move2westlinn.com/2008/11/10/west-linn-real-estate-activity-november-3-6-2008/comment-page-1/#comment-463 dj Thu, 13 Nov 2008 19:20:41 +0000 http://www.move2westlinn.com/?p=241#comment-463 Also, for the first time since this website went up, it appears that the new listings' have much more realistic asking prices. It's about time. However, I still believe prices will continue to fall in the months ahead, regardless of what government programs may be put in place to stem the tide of falling real-estate values. With fear, uncertainty and doubt about the economy, and the lack of credit liquidity, home buyers are not going to risk a sizable portion of their income and what's left of their investments to purchase overvalued homes that, in most likely will continue to depreciate for a while. I'm not sure where the bottom is for WL real-estate, but we're not there yet. Also, for the first time since this website went up, it appears that the new listings’ have much more realistic asking prices. It’s about time. However, I still believe prices will continue to fall in the months ahead, regardless of what government programs may be put in place to stem the tide of falling real-estate values. With fear, uncertainty and doubt about the economy, and the lack of credit liquidity, home buyers are not going to risk a sizable portion of their income and what’s left of their investments to purchase overvalued homes that, in most likely will continue to depreciate for a while.

I’m not sure where the bottom is for WL real-estate, but we’re not there yet.

]]>