Real Estate Information Archive

Good Monday Morning!

What a grorgeous and Sunny weekend it was!  It looks like more of the same for the week ahead.

The National Association of Realtors released their statistics for national home sales last week.  The second half of 2005 saw a significant decline in home sales nationally.  The fourth quarter of last  year saw the largest change.  The one thing that stands out is that the Eugene and Springfield area home market is holding up much better than  the overall national market.  From all indications, the market here is actually beginning to heat up again.  This is something that most other parts of the country will be envious about. 

Have An Awesome Week!

Home sales fall; show faint life-signs By MARTIN CRUTSINGER, AP Economics Writer
Fri Jan 26, 6:34 PM ET
 

WASHINGTON - New home sales fell in 2006 by the largest amount in 16 years, but they were up for a second straight month in December, raising hopes that the worst of the housing downturn is coming to an end.

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The        Commerce Department reported Friday that sales last month rose by 4.8 percent, following an even bigger 7.4 percent rise in November.

Those two increases, however, were not enough to salvage the entire year, with total sales of 1.06 million units, down 17.3 percent from 2005. That marked the biggest decline since a 17.8 percent plunge in the housing downturn of 1990.

On Wall Street, the Dow Jones industrial average had another down day, falling by 15.54 points to close the week at 12,487.02.

The housing bust is occurring after a boom in which sales of both new and existing homes set records for five consecutive years. The lowest mortgage rates in four decades powered a surge in sales that was bolstered by investors making purchases in hopes of turning around and reselling the properties for quick profits.

Analysts attributed the big declines in 2006 to a cooling of that speculative boom. That reversal has given the housing industry its toughest downturn since the recession of 1990.

The slowdown trimmed 1.2 percentage points off overall economic growth in the July-September quarter. Analysts are looking for an equally severe hit in the final three months of the year, with housing expected to be a continuing drag in the first half of 2007.

The downturn has meant a break for home buyers, as double-digit price gains during the boom years have slowed considerably.

The median price of a new home sold in 2006 rose by 1.8 percent to $245,300. That was far below the 9 percent price gain turned in during 2005.

David Seiders, chief economist of the National Association of Home Builders, said he looked for home prices to continue to be depressed in 2007 as builders scramble to reduce near-record levels of unsold homes.

He said his organization's January survey of builder sentiment showed continued extensive use of incentives to clear the backlog, with 60 percent of builders surveyed offering optional items such as kitchen upgrades or decks at no charge. That's up from 41 percent at the beginning of 2006.

Other incentives include paying closing costs, which 52 percent of builders said they were doing, up from 31 percent a year ago, and paying purchasers' financing points on loans, something 30 percent of builders in the survey said they were doing.

Seiders said he looked for new home sales to be essentially flat for 2007. He predicted that new home construction, which fell by 12.9 percent last year, will fall by another 14 percent in 2007.

The cutback in building has led to thousands of job layoffs in the construction industry.

The report on new homes followed a report Thursday that sales of existing homes dropped by 8.4 percent last year to 6.48 million units. That's the biggest decline in sales of previously owned homes since 1989.

New home sales were up in all parts of the country in December except the West, which posted a 4.4 percent drop. Sales rose by 27.3 percent in the Northeast, 26.6 percent in the Midwest and a much smaller 0.3 percent in the South.

Analysts cautioned that part of the strength seen in November and December could be weather-related, given the unusually warm temperatures during those two months.

In a separate report, the Commerce Department said that orders to U.S. factories for big-ticket manufactured goods rose in December by 3.1 percent, the largest gain in three months.

The increase was led by a huge jump in demand for commercial aircraft and the biggest increase in orders for cars and trucks in more than two years. That gives hope that manufacturing activity will not be seriously affected by the housing-led slowdown.

Excluding transportation, orders for durable goods posted a solid 2.3 percent increase, the best showing in this category since last March. It's also much better than analysts had been expecting.

For all of 2006, new orders rose by 7 percent, a slight slowdown from an 8.6 percent increase in 2005.

Economic growth slowed to a lackluster 2 percent in the July-September quarter, raising concerns that the steep slump in housing could trigger an outright recession.

However, in recent weeks a number of reports have shown the year ended with stronger-than-expected activity, easing worries about such a general slowdown. Many analysts now believe the overall economy grew at a respectable 3 percent rate in the October-December period, a figure that the government will release next Wednesday

Good Monday Morning!

What a gorgeous weekend it was!  We all deserved it following the snow and ice of the prior weekend.

The statistics are in reflecting on last years Real Estate market in the Eugene and Springfield area.  The Median home price in 2006 rose 15% to $225,000.00.  This was in comparison to a 25% increase for the previous year.  The average time it took a home to sell was 53 days in 2006 in comparison to 45 days in the prior year.  The average time for a home to sell had increased even further to 68 days by December of 2006.  The inventory of homes on the market for sale also increased from 2.3 months in 2005 to an average of 3.3 months in 2006.  This means that if no new homes hit the market it would take this number of months to exhaust the existing supply of homes for sale. 

Have An Awesome Week!

Good Monday Morning!

The white stuff just keeps hanging around!  It's been many years since we have had snow on the ground for this length of time in the Eugene and Springfield area.

The Real Estate market here remains level.  There really has been little change for the past few weeks with the total number of homes on the market and the average number of days it currently takes homes to sell.  Compared to many other parts of the country the Real Estate market here looks very good.  Don't look for any huge changes over the next few weeks.  For home sellers there is a good window of opportunity to sell from now through April.  Typically, we will see the number of homes for sale increase significantly as Spring nears.  This could make for a much more competitive market and softer sales prices this year.

Have An Awesome Week!

Save Money on Heating Costs

From Deborah Fowles,
Your Guide to Financial Planning.
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Reduce Heating Costs With These Money Saving Tips
If you live in a region that is cold in the winter, heating costs take a big bite out of your monthly budget for 25 - 50% of the year. Due to the rapidly escalating costs of home heating oil, propane, and kerosene, you may be paying twice as much to heat your house as you did just a few years ago. You can cut your heating costs significantly by following these money-saving tips.

Do an energy audit of your house, identifying areas where heated air is leaking out. Check around doors, windows, fireplaces, and other areas that may feel drafty. Use caulk, weather stripping, door sweeps, plastic, and other appropriate means to close off these leaks. If your house is poorly insulated, adding additional insulation will pay for itself in reduced heating costs.

Minimize your use of ventilation fans such as bathroom fans and kitchen hood fans in winter. A bathroom fan can suck all the heated air out of the average house in little more than an hour. Over the course of the winter, ventilation fans can increase your heating costs by a surprising amount.

Don't heat areas of your house you don't use regularly, such as guest rooms. Close heating vents or turn back thermostats in those areas and close the doors for a painless reduction in heating costs.

Turn down the heat and use space heaters to heat the room you spend time in.

Keep your furnace, heat pump, or other heating equipment in top operating condition. Dirty filters reduce the efficiency of your furnace or heat pump. Poorly tuned units are inefficient and use more fuel. An annual maintenance agreement is well worth the money to ensure that your equipment is properly maintained and will last as long as possible.

Don't turn your thermostat up above the desired temperature. It won't heat up any more quickly and will make your furnace work harder. Also, while it makes sense to turn the heat back when you're sleeping or not at home, turning it down too low can actually cost you more because the contents of the house have to be re-heated in addition to the air. 68 to 70 degrees while you're home and awake, and 60 to 65% while you're asleep or not at home are reasonable temperatures.

Consider a programmable thermostat to raise and lower the temperature at pre-set times.

Check the temperature setting on your hot water heater. If you have a dishwasher, your water should be heated to 120%. Otherwise, it can be somewhat lower.

If your water heater is in an unheated space like an unfinished basement, wrap it in an insulation blanket available at hardware stores to prevent heat loss.

Wash clothes in cold water whenever possible.

It's tempting to stand under a hot shower on a cold morning for as long as possible, but cutting your shower time in half can save up to 33% on your hot water heating costs.

In winter, open the blinds and curtains on the sunny side of the house (the south-facing side) when the sun is shining and close them as soon as the sun goes down to retain the solar heat. Close curtains on the shady side of the house (north-facing side). If you don't have curtains, consider installing some. Curtains made from heavy fabric with lots of folds (fullness) can prevent cold air from seeping in and warm air from seeping out, which reduces your heating costs

Checking your furnace can lower operating costs, protect your family against fire hazards and carbon monoxide poisoning and prevent your furnace from quitting at an inopportune time – such as in the middle of a dark and snowy night.

Furnace Maintenance Checklist 

Follow these steps to help your heating system operate safely and efficiently all season long.

Turn off the electricity to the furnace. A clean filter means more efficient operation. If you haven't regularly cleaned or replaced the filter or filters, do it now and check it throughout the heating season. If you have a central air conditioning system that operates with the furnace blower, count on replacing the filter more often.
Next, remove dust from the blower blades and motor body. Oil the motor and check the fan belt by lightly pressing it. If it doesn’t give about an inch, adjust it until it does. If it shows wear, replace it. To maximize efficiency, seal the filter opening with duct tape and make sure the blower cabinet door closes firmly.
Vacuum the grills and gently clean the thermostat monthly. At least once a year, remove all of the heating system's grills, including the cold air returns, and remove any obstruction from the ducts. Check ductwork for improper connections and tape the seams with duct tape if necessary.
Perform a draft hood test for combustion air. If the furnace doesn't get enough fresh air, combustion gases, including carbon monoxide, can spill out of the draft hood and into the house rather than being drawn up into the chimney. Here is how to test for combustion air:
Close all exterior and bedroom doors. Also close all of the windows and the dampers on any fireplaces or wood stoves.
Open the interior door to the basement or furnace room. Then open any interior doors standing between the furnace and the exhaust fans for the kitchen, bathrooms, clothes dryer and other vented appliances such as the water heater.
Turn on the furnace. Wait for a few minutes for the draft to stabilize, then hold a smoking kitchen match or incense stick two inches from the draft hood opening. If the smoke draws into the draft hood, the furnace is venting properly. If it blows away from the hood, combustion gases are spilling into the house and you need to call a professional heating contractor immediately. Until the contractor fixes the problem, leave a furnace room window slightly open.

D.R. Horton home sales slide as market slows
Portland Business Journal - 1:36 PM PST Tuesday
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D.R. Horton Inc., the largest homebuilder in the nation, announced lower-than-expected first-quarter home sales Tuesday.

The Arlington, Texas-based company, which has major housing projects in Albany, Bend, Eugene and Portland, reported first-quarter sales of $2.3 billion, dramatically lower than the $3.2 billion a year earlier. Analysts estimated sales of more than $2.7 billion, even with the slumping market.

 
The company's cancellation rate -- when would-be homebuyers back out of a contract -- declined to 33 percent from 40 percent in the fourth quarter, but still much higher than in recent years.

"We continue to experience higher-than-normal cancellation rates and an increased use of sales incentives in many of our markets," company chairman Donald R. Horton said in a news release.

D.R. Horton (NYSE: DHI) has canceled or delayed plans for some subdivisions nationwide.

D.R. Horton accounted for almost one of every eight homes sold during the first half of the year in the six-county region, the largest market share in at least a decade. The first-half figure was the most recent available.

The company will release its first-quarter earnings on Jan. 23, before the market opens.

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Forecast: Steady sales to boost home prices in '07
Builders will cut construction to offset inventory surplus
Wednesday, January 10, 2007

Inman News

 
After bottoming out in the fourth quarter of 2006, existing-home sales are forecast to gradually rise through 2007 and into 2008, while new-home sales should turnaround by summer, bringing modest price increases, according to the latest forecast by the National Association of Realtors.

David Lereah, NAR's chief economist, said annual totals for existing-home sales will be fairly comparable between 2006 and 2007. "We have to keep in mind that we were still in boom conditions during the first quarter of 2006 with a high sales volume and double-digit price appreciation," he said. "We are starting 2007 from a relatively low point, so even with a gradual improvement in sales it'll be pretty much of a wash in terms of annual totals. The good news is that the steady improvement in sales will support price appreciation moving forward."

Existing-home sales for 2006 are expected to come in at 6.5 million, the third highest on record, with a total of 6.42 million seen in 2007. New-home sales in 2006 should tally 1.06 million, the fourth highest on record, with 957,000 projected this year.

The national median existing-home price for all of 2006 is expected to rise 1.1 percent to $222,100, and then gain 1.5 percent this year to $225,300. The median new-home price, after rising only 0.3 percent to $241,600 in 2006, is projected to grow 3 percent in 2007 to $248,900.

Total housing starts for 2006 are likely to be 1.81 million units, with 1.51 million forecast in 2007, which would be the lowest level in a decade. Builders are pulling back on new construction to support prices of remaining inventory.

The 30-year fixed-rate mortgage will probably rise to 6.7 percent by the fourth quarter of 2007. Last week, Freddie Mac reported the 30-year fixed rate at 6.18 percent -- far below earlier consensus forecasts. "The current interest-rate environment and housing inventory levels present a window of opportunity for potential buyers," Lereah said.

"With all the wild projections by academics, Wall Street analysts and others in the media, it appears that much of the housing sector is experiencing a soft landing," Lereah said. "Despite the doomsayers, household wealth will not evaporate and the economy will not go into a recession. If you're in it for the long haul, housing is a sound investment."

The unemployment rate is likely to average 4.8 percent this year, following a rate of 4.6 percent in 2006, according to NAR. Inflation, as measured by the Consumer Price Index, is expected to be 2.2 percent 2007, down from 3.2 percent last year, while growth in the U.S. gross domestic product is seen at 2.5 percent in 2007, compared with 3.3 percent last year. Inflation-adjusted disposable personal income should grow 3.4 percent this year, following a rise of 2.7 percent in 2006, the survey found.

‘Build It, Just Not Here'
by Lew Sichelman

The majority of Americans prefer to keep land undeveloped. But they're not necessarily as altruistic as you might think.

Although nearly three out of four who participated in a recent survey said they oppose new development in their communities, they are more likely to be concerned about their own pocketbooks than the environment or even simply keeping things the way they are.

The survey by the Saint Consulting Group, a firm which specializes in land-use politics, found that twice as many Americans actively oppose development as support it.

Why? More than a third said they wanted to protect property values, while just 11 percent desired to protect the environment. Almost 29 percent said they wanted to preserve the character of their communities.

This is the second year for the survey, called the Saint Index by the Hingham, Mass.-based company. And it has started to "yield trends," says Patrick Fox, the international company's Boston-based president. The telephone survey of 1,000 randomly selected participants was taken last fall.

One trend is the importance voters place on a political candidate's position regarding new development and growth. More than nine out of ten say it is a key issue when they decide on who to vote for, and Fox says that "this forceful statistic corroborates last year's Saint Index, which yielded the same number."

Three out of four respondents gave local elected officials no better than a "C" when rating their performance with regard to development. And 66 percent indicated local government does a "fair-to-poor" job on planning and zoning issues. That's up from 61 percent in the first study.

Cynicism over the approval process also is growing. Last year, 70 percent said the relationship between local officials and developers make the permitting process unfair. This year, 75 percent said it is inequitable

"Development has become a clear political issue," Fox said.

According to the survey, though, "NIMBYism" is alive and well in America. NIMBY stands for "Not in My Backyard," and it is a popular rallying cry among developers who argue that anti-development factions want it both ways -- not here but over there.

"The very projects (people) oppose would probably be all right someplace else," Fox says.

The most dreaded forms of development are landfills, quarries and power plants, all of which drew a 75 percent of greater "no, not here" response.

Wal-Mart was opposed by 68 percent of those polled, up from 63 percent a year ago -- even though most said they enjoyed the "big-box" experience. Casinos were opposed by 67 percent.

Single-family housing is the most widely acceptable form of housing. Only 6 percent of those polled were against it. Apartments were opposed by 34 percent, down from 48 percent last year.

Grocery stores are more acceptable than office buildings and large shopping centers, though resistance to all of these forms of commercial development was less in this year's survey.

Published: January 10, 2007