Popping bubble getting closer to Seattle

[redmondjp]

Read this very interesting article in the Sunday Times today:



It seems that new homebuilder Buena Vista Custom Homes had an auction (in Portland) for 29 new homes in east Bend, setting their reserve prices at a 46-48% DISCOUNT from the list prices, and NOT ONE HOUSE EVEN SOLD! Granted, having the auction in Portland meant that most of the registered buyers didn't even bother to show up. But e-gads, people, you mean to tell me that they knocked almost 50% off of their asking prices and STILL couldn't find any buyers? Dark clouds on the horizon, people.

Yes, sure, Bend is not Portland, or Seattle, but Bend is to Portland what Wenatchee is to Seattle (and the Wenatchee RE market has been one of the fastest-appreciating in the state lately). I'm sure that up until recently, people in Bend were repeating all of the same mantras universal to bubble markets, ie "it's different here, buy now or be priced out forever, CA Equity Locusts and wealthy retirees will keep prices up, we've got good weather, the mountains, close to skiing," etc etc. So if it can happen in Bend, well, it can also happen in Wenatchee (local mantra: 'we've got applets & cotlets'), and that's getting pretty close to home . . .

And also in the Sunday paper was our weekly installment of the "it's different here" article:



The usual "We've got Boeing, Microsoft, Weyerhaeuser" drivel . . . gack!

[CliveL]

As per the article, rest of the houses were snapped up quickly. But take a closer look at the prices they paid.

"The 2,209 people who swarmed into the Oregon Convention Center over two days snapped up almost all of the unsold homes the Lake Oswego-based builder put up for sale in Portland's suburbs."
....
"About 96 percent of the company's 141 homes that sold at the auction went for final bids below their reserve prices, which were set at Buena Vista's break-even level, Higgins said."

[deeplennon]

Bad reporting in the Times article by Drew DeSilver.

"Nationally, home prices peaked in mid-2006, and as of the third quarter were down 4.5 percent from a year earlier. Seattle was one of just five Case-Shiller markets that still showed a year-over-year gain: 7.8 percent as of September, tops in the nation. (Portland, another of the favored five, is up 4.5 percent.)"

Seattle was up only 4.69% in September, not 7.8%, and was second in growth, not first, behind Charlotte. His Portland number was also wrong, as they were up only 1.87%.

[TJ_98370]

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....."I think you can classify what we are seeing in the housing market as a crash," said Mark Zandi, chief economist at Moody's Economy.com. "Sales and home prices are in a free fall. The downturn is intensifying.".....
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[TJ_98370]

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