My New Blog

There are plenty of pundits out there ready to give you
their predictions of what to expect in this economy. But
since I have received so many requests for my view,
I will share it here. Take it with a grain of salt as
I make no claim to being a prognosticator.

RealtyTrac as of the July figures, shows we have had five
months of increasing foreclosures. This new run of
foreclosures come from several sources. Some from state
moratoriums that were lifted this year, option ARMs
resetting and, of course, job losses. Option ARMs are more
prevalent with expensive property, and greater numbers of
higher-priced homes that financed using these exotic tools
are now entering the foreclosure process. Unfortunately,
added to this are more prime borrowers with good credit
histories who could afford more expensive homes are now
falling behind, as job losses mount.

We have not yet seen the flood of commercial foreclosures
coming through the pipeline. You will probably see those
starting in the second quarter of next year. But they will
not affect us nearly as much as housing. 

Sure, there is going to be inflation, but right now it is
being held at bay by the flood of printed money and weak
demand. It may be a while as interest rates on Treasuries,
Certificates of Deposits and mortgages are predicted
to remain relatively low well into next year.

Real estate is a local market, so what happens in
one area is not necessarily what happens in another. There
are deals out there. Some areas are already seeing a slight
upturn in prices, but some areas could easily see another
10% drop. Remember, the lowest prices of a recession
typically occur at the time of peak foreclosures. We should
see those in the next two quarters.

Lane County has not seen nearly as large a volume of foreclosures as some other areas of the state or nation at large. This has helped stem the tide of property value losses for consumers but has also somewhat limited the local investment choices.  

So, when will we start coming out of this market. Nationally,
it will probably be next year about this time. In our area I think we are much closer to the bottom then it appears. It will not be
apparent until later when we are further into the upswing. As I often tell clients who are rate shopping "you didn't know you had the best price until you saw it in the rear view mirror"

Bottom line...get out there and make deals that make sense.
Make sure that cash flow covers expenses with a good
positive cash flow.