I noticed house prices dropping in Corvallis, what is the reason for it and is it expected to continue?

Asked by Ms, Reno, NV Sun Jun 15, 2008

I noticed house prices dropping in Corvallis while searching for a house this past week. The majority of flyers we picked up on the houses all showed 'price reduced'. Does anyone know the reason for it overall (beyond people overvaluing their houses to begin with) and is it expected to continue this trend (if so, for how long is that anticipated)?

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Dava Behrens, Agent, Corvallis, OR
Mon Jun 16, 2008
Seeing price changes and adjustments to list price is not necessarily a "price drop" in the market. That really depends on where the prices started and what you are comparing. Some properties are sitting, some are not. On occasion, we still see multiple offers for some properties. Different price tiers are experiencing different results, which can throw off “median” and “average” sales prices. The number of sales are down significantly 2008 over 2007, which can also have an effect on “median” and “average” sales prices. In a market as small as ours, a few low or high priced properties can change the average pretty easily.

You might choose to study the market for the type of home you are seeking and in the price range you are searching for rather than look at a broad picture. As to the second half of your question… a lot of what drives our market is supply and demand. Interest rates are still very low – at 6.0-6.5 percent the range is some of the best cost of money we’ve ever seen. The economy here is relatively good. Money for buyers is available (they just need to do what they always did before, qualify for the loan). We have not had an explosion of subdivisions—yes, we’ve had growth, but not uncontrolled as in other markets. We also had high rates of appreciation, but not out of control. nor do we see a huge number of short sales and foreclosures as Corvallis didn’t experience the high numbers of sub-prime loans found in other areas. We are a desirable destination for everyone from young families to retirees.

Recent reports indicate that there is some relief in the hardest hit markets. When those markets absorb the excess inventory and come into balance it will help to loosen up the rest of the country. Most real estate professionals in Corvallis do not expect a prolonged correction in our market. As long as interest rates remain reasonable and employment is relatively stable, the Corvallis housing market will continue to be stable and/or improve. So, no significant reduction in prices is expected.
Web Reference:  http://www.soldbydava.com
1 vote
Lana Lavenba…, Agent, Grants Pass, OR
Mon Jun 16, 2008
Thank you for the question. The properties not only in Corvallis but many areas around all the states have dropped in value due to the short sales and foreclosures going on through out the country. When prices were higher in the past few years there were many loans made with an adjustable interest rate- as those rates increase, the buyers income did not increase, therefore making it more difficult for them to keep up with the payments. Many have tried to refinance those homes, but with prices down, they owe more than they can get for the home, making our market go in a downward trend. Many people are seeing that those properties are being purchased, therefore changing our market values. As to how long the trend will continue? No one knows...we do not have a crystal ball, but some prices in areas have begun to stablize, which will help other markets begin to stablize. Real estate is like any other investment. If you look back to the 80's you will see the same thing happened. Just prior - prices had risen, then dropped with many foreclosures...that is what happened to the savings and loan offices...they ended up dieing out over that situation...it took a few years for the market to come back - but as you have seen in the last few years it did get high again and at this point has taken a downward trend...in time it will be going back up again...as a buyer - you have to decide when the bottom is for you. Because when it starts going up again, you wont be able to say - this is the bottom...it will have already passed you by. Thanks again! Lana - Broker
1 vote
Janedoe, , Corvallis, OR
Sun Mar 8, 2009
The largest employer in town besides OSU is HP is downsizing. No one knows when it will shut its doors completely. Those high paying jobs will all disappear.... Who knows how it will affect Corvallis' real estate and it’s cute downtown.
0 votes
Dirk Knudsen…, Agent, Hillsboro, OR
Mon Jun 16, 2008
Dear Ms..

Lana gave you a great answer. What I will add is that this is a great time to buy. Prices are very low now. While we may see some additional decreases I would anticipate things will get better and in 5 years I believe as do many economists that we will be back at a plus 30% from where we are now.

Corvallis is a great town. It has been a tight market in the past and those days will return as there are not that many new projects going in there. Your biggest risk is interest rates. A 1% increase in interest rates will cost you $100,000 dollars on the price of a home. Therefore I would say shop hard, make a good buy for this market, move in and get your homeownership going. Stay 5 years and the tax and investment benefits will outweigh the other issues.

Don't worry. Jump in and buy!

Good luck!


Dirk Knudsen
#1 Rated Re\Max team in Oregon
Re\Max Hall of Fame
Web Reference:  http://www.nwhomcenter.com
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