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| 11/18/2008 3:49:00 PM | Email this article • Print this article
Comment on this article | Housing market hopeful but slow
By NANCY BUTTERFIELD
Observer correspondent
PENINSULA - In this period of economic disaster, news from the real estate world - in the large cities at least - is dismal. A recent article in the Oregonian newspaper said it's the worst time in more than 10 years to sell a home.
On the Pennsula, the news isn't great, either. Words like "weak," "terrible" and "slow" have been used to describe business. But all the brokers and agents tend to be optimistic and say the downturn will go up, it's always been this way, it's a waiting game.
But that doesn't offer immediate help for people trying to make a living selling homes and land.
Jamie Lucier, an assistant broker at Pacific Realty, said she's been selling "It'll get better again, but right now with the economic crisis it's not happening. The
economy in our area is so bad with no jobs,
people with families just don't move here"
Jamie Lucier
Asst. broker, Pacific Realty |
real estate for more than 20 years and described the market as "terrible." She said on the Multiple Listing Service there are more than 300 homes and more than 300 pieces of bare land listed in the county and only 20 pending sales on homes and six on land.
"It'll get better again," Lucier said. "but right now with the economy and the mortgage crisis, it's not happening. The economy in our area is so bad with no jobs, people with families just don't move here. This is a resort and retirement area. When times are tough, people won't spend thousands of dollars on a vacation home. We're holding on and waiting to see what happens. Prices are starting to come down. I think with time it will eventually straighten around."
Election-year troughJust about everyone contacted in a random sampling of real estate professionals said election years are notoriously bad for the business. They also agreed that the lower gas prices will make a difference to the market eventually, assuming they stay low. And, most were optimistic that the market would recover.
"I think it'll get better," Lucier said. "Prices will get back to normal, but not right away. Meanwhile, we're just hanging on."
Ted Magnuson, an associate agent with Long Beach Realty, said the market on the Peninsula is slow "but not completely dead. It's just very slow. With the market down, this is a good time to be looking."
The downside of that is that banks aren't cutting loose with loan money unless a buyer has 20 percent down and excellent credit. "It's hard to shake money loose," Magnuson said. And, he agreed that election years are slow. "Now that the election's over, I think there's some optimism. It's just another piece of the puzzle that's resulted in a slow market. It would be slow at the best of times during an election year. But with everything else, the wars, the sub-prime mess, this year the country was hit with everything." He said the last big slowdown was in 1996, also an election year.
"We're not dead," Magnuson said. "It's just as slow as I've ever seen it."
Carolyn Levno, owner/broker at ReMax Excellence in Long Beach said the market was "weak," but she was optimistic. "Real estate is always a good investment," she said. "I have a lot of confidence.
People are still looking and
buying. This
happens in real estate"
Cheri Diehl
Co-owner, Discovery Coast Real Estate |
"Unlike stocks, it doesn't go away. It's a positive thing to invest in. We're seeing more people and it's starting to pick up a little. Title companies are getting busier."
Levno, who's been in the business for 20 years, said she believes that no matter who won the election now that it's over it "creates a stability we haven't had for a few months. And, work on the stimulus and economic package will help. People are looking for a good deal. They're being realistic but conservative. It'll come back. It always has. It's about a five-year cycle but this time it's been way worse because of the tightening of lending."
Some pricy salesThe newest kid on the block in the business is Cheri and Charlie Diehl's Discovery Coast Real Estate. Although Cheri Diehl has been in the business for 13 years with Dennis Oman Realty, the couple opened their own office Oct. 1. Besides dealing with general MLS home and land listings, she's the listing agent for the Coastal Ridge development next to Discovery Heights in Ilwaco.
Of 14 of the high-end town homes built at Coastal Ridge so far, 10 have sold, most last year, Cheri Diehl said. And, people are looking she said. "For the time of year, we've had quite a few people, some just looking, some serious buyers who want to be on the mailing list."
Starting a new business during an economic downturn can be risky, but Cheri said "we weren't making any money anyway, business has been slow. We thought this would be a good time to start a business so we'll have more time to do all the things we need to do. There's a lot involved. We didn't know how bad it would get this year." She said in October there were only eight residential sales in south Pacific County. Last year in October, there were 20 sales.
But the market appears to be picking up. Diehl said she has had seven sales this month, but, she added, some might not close until December or January. Prices on homes sold last month ranged from nearly $100,000 to $480,000. In November, so far, prices have ranged from $128,000 to $306,000.
"I have a lot of confidence," she said. "People are still looking and buying. This happens in real estate. We're feeling it more this time because of the 'bubble' in 2005 and 2006 when we did so well. We've all just been holding our breath till the election was over. Election years are always a bad time."
And, because of the economic crisis in the country, people looking to purchase a home will face more hurdles getting a loan than in times past. "There is loan money out there," Merry Scharfe, a real estate loan representative with The Bank of the Pacific, said. "It's a little more difficult to get. The debt-to-income rule is at 45 percent now, which which means the percentage of a house payment to income and all other debts can't be above 45 percent." Scharfe said also that a potential borrower's credit has to be good. She said The Bank of the Pacific also will do U.S. Department of Agriculture loans with 100 percent financing because Pacific County is a designated rural area. "It's the only true 100-percent financing out there now," she said.
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