The Regional Multiple Listing Service report for December, and the end of the year is out. With this report we can leave 2009 in the books.
Summary and characterization of the last 2½ years:
1. August 6, 2007: The Shot Heard Round The World. Seemingly overnight, American Home Mortgage, one of the largest mortgage companies in the US, closes its doors, /wp-content/uploads/ for bankruptcy, and leaves thousands of pending loans abandoned.
2. 2007 August- December: Shock and awe: what is happening? Is the sky falling?
3. 2008: The housing industry, with the economy in tow, is braking and skidding, and then crashes as all of the nation’s investment banks are wrecked by the end of the year. Financial paralysis closes out 2008.
4. 2009: The heavily burdened train leaves the station, moving down the tracks in the right direction but chugging oh so slowly. While the market is in recovery and sales numbers are increasing each month, prices also drop dramatically as short sales, foreclosures, and worn-out, impoverished, and desperate sellers want out regardless of losses.
What is in this report?
Compared with the end of 2008 the numbers are up dramatically and at a historic rate, but that is really a commentary on how bad last year ended, not on how good 2009 was.
Declining numbers since November is normal and consistent with the seasonal and holiday dynamic.
In 2009, we climbed back to late 2007 levels of pending sales and closings. Essentially we recovered from the dilapidated sales numbers in 2008.
Prices declined in 2009 by 11-12% from the previous year. On average, prices in the greater Portland metro area are at levels last seen in December of 2005.
Sales volume (dollars sold) is at a very low level, one not seen since 2001.
Market time to sell is very high (200 days average in Yamhill County- one of the highest) and especially high in luxury areas and for luxury homes (235 days for West Linn and Lake Oswego- the highest).
Conclusions:
We are going in the right direction.
We have a long way to go yet.
Prices are still declining and have not yet stabilized.
Things are improving very, very, slowly.
What is next? There seems to be universal consensus that the first half of 2010 will continue the trend of modest gains in sales, but also continued depreciation of values. For the latter half of the year and into next year we find dramatic polarization:
1) One school sees another Tsunami of mortgage failures due to resets of adjustable rate mortgages (ARMs) coupled with the effects of a crashing commercial market and its own lending and appraisal crisis.
2) The other school sees the economy and the housing market return to a chastened normalcy. The historical recession cycles (now the longest recession since the Depression), and the optimism of Wall Street (65% S&P recovery from March 9, 2009 to December 17, 2009!), would argue for this direction. Not that Wall Street is infallible, but they certainly are the most forward thinking actors in our economy and have had plenty of time to evaluate the remaining consequences of the past problems.
3) We are banking on an improved real estate market with more sales, a break-up of the log-jam of homes needing to sell, and thus a stabilizing of pricing. We hope for this to happen by the middle to end of the best selling season in the summer. Everyone knows that interest rates are bound to rise with market improvement and increasing risk of inflation. When will we see that? It is too soon to call. We hope it can hold off for another year, but be prepared, it must come eventually.
I would say that I have tried not to sugar coat anything, but I doubt that the above commentary would lend to those accusations. In spite of the reality, we are optimistic for the coming year and firmly believe that the worst is behind us. We look forward to finally getting the job done for many of our weary sellers, and it is always a joy to find a buyer and get help them buy in such a ripe time as this.
We are pleased to report that Bella Casa Real Estate Group helped more buyers buy property in Yamhill County than any other brokerage in the county for 2009! We also achieved the second highest volume of sales. While that infuses us with satisfaction and motivation, we are working to dramatically improve those numbers for 2010. Thank you for your patience, your trust, and your loyalty. We will never back down until the job is done.
Best regards,Randy McCreith, Principal BrokerBella Casa Real Estate Group503-310-9147 CellThe Marshall Building207 NE 19th Street, Suite 100McMinnville OR 97128866-281-6653 Faxrandy@thebellacasagroup.comwww.TheBellaCasaGroup.comTax Credit Incentives & Market InformationBella Casa BlogBuy. Sell. Be Happy.