I'd keep your eye out for a deal on land through the winter. If the right deal comes along and you can afford to pick something up and hold it until 09 to start building, do it! But make sure you get what you want, at a price that makes sense in this market. They're are some great deals out there on land in this market. Many builders are trying to unload their inventory of bare land.

Your best scenerio is to buy before everyone knows that we've hit bottom, and sell after everyone know. Buy Low, Sell High!

Sat May 3 2008, 08:57

Spec lending is tough now with tighter credit markets and sales activity that may be slow. However, consider that most builders sell specs themselves without broker representation and that appraiser's (who lenders rely upon) use multiple listing data to estimate value upon THEREFORE missing builder sales data...long story short...have a local title company run sales for you that might supplement an appraiser's and bankers decision to loan on your spec collateral. I strongly encourage a presold marketing endeavor so your LTV is less and your warm/fuzzy is actually warm/fuzzy.

Regards,
Chris@HouseNow.com
State Certified Residential Appraiser
541-284-2511
*Not Yet in Bend Because their MLS is LAME on IDX data fields.

www.HouseNow.com
Search Real Estate
Single Family - Multiple Family - Bare Land

Tue Mar 18 2008, 22:23

You hit the nail on the head. We just don't have a wage base high enough at the present time, really, we never did. It is almost all outside money, with the caveat that folks who cashed in over the past ten to fifteen years and who owned their homes for a while are part of that group now, in terms of having equity to move into another house (if, that is, they don't have a second sucking that equity up, which is thr trouble right now with a lot of our short sales- they have negative equity from multiple loans). I agree with you about '09, however I feel it may be early '09. I've always called for a three year, post-boom bust cycle. Here's how I see it. Late '06 was the "Wait, what the hell is happening?" 1st year portion. '07 was the "Wow. Things sure are bad, hope they come back soon" year. My hope is that '08 is the capitulation year, the "OH S&*T, let's dump the price and get out " year. I think the short sale boom is evidence of that, as are the foreclosure signs going up, and the complete and total lack of bids at the auctions. Your timeline might even work better, as this seemed to start in late '06, meaning late '09 might be the real deal. The theory is that busts take three years to work themselves out, providing the rest of the economy holds its own . . . . that we'll have to wait and see. The theory also holds that Realtors will fall out first (halfway there), then Construction/ Contracting folks will run out of work and move elsewhere- happening right now. One of my shorts is an excavator who has seen his business completely disappear, and is taking jobs in California and Nevada until we can get his houses sold, then he's not sure what he'll do. He says that the large firms are underbidding jobs locally just to keep their crews working, putting independent guys out of business. Just an anecdote, but telling, I think. And yes, I do tend to be blunt, sorry for the dramatics, just an emotional kind of guy, and boy, am I tired of seeing the little guy get hurt here. As for the wage disparity, your guess is as good as mine how that works out.

Thu Mar 13 2008, 14:19

Hey Thom, so tell me how you really feel ;) I think Bend will recover eventually. Late '09 is my guess? I do agree with you that there are too many builders that have already lost their shorts. I am not quite sure why anyone would still be building any new homes right now. We do need the jobs here to sustain the locals so they can afford to buy, as it is the only people buying it seems are transplants. Your thoughts?

Thu Mar 13 2008, 13:58

NO NO NO!!!!! It is NOT the time to build for resale. The reason we are having such a tough time over here is that we are SOOOO Overbuilt. It's simply supply and demand. Way, way, way too much supply. Everybody and his uncle thought he could make a killing over here building, but too many folks had the same idea. Homes are not selling, and yet the big developers are STILL building. They will lose their shorts (some already are)- don't you lose yours! There is a new 200+ development going in off Butler Market (Mirada), with homes from 189k, well below everything else now. And, the Brookswood area is real trouble, development after development of empty homes. Take a drive through River Rim, or Rennaisance Ridge, or Copper Canyon, or any of the newer developments there, and count the number of empty, long term empty, homes. There are oodles and oodles of empty homes out there, and they will get gone, but not until the building stops. This is our biggest problem right now, and though I would love to sell you some bare land, I would feel guilty for doing so if your purpose was to build for profit, as such an outcome in a market where homes are now sitting for an average of 8-10 months on the market (higher in some brackets, for instance, in Redmond the new absorption numbers show a 4-500k house taking 41 months to sell!). Having said all that, I would also recommend that, if you DO get the urge to do so, the best market here is Sisters, with Bend next, but I would avoid all others until this settles as far as spec building is concerned. Redmond, Prineville, Sunriver and LaPine have all fallen off the proiverbial cliff in the last couple of months. Bend went down first, and appears to be levelling off first, but the developers are killing the recovery for the moment. I have the sales numbers on the Statistics page of my website- ThomGardner.com if you want to take a look. January's are there, and I will upload Feb's in a few days. It is not pretty, and I can tell you that Feb's look substantially worse.

Wed Mar 12 2008, 16:19