House Hunting Trip (Portland, Eugene, Lyons: real estate market, foreclosure, rentals)

[sarahkate_m]

Would you consider making an offer on a house that is in default of it's loan? Would a house with a bit of deferred maintance be deal breaker for you?

[sarahkate_m]

The Best Western Motels by the U of O have a pet friendly policy & are not too expensive. There's Deb's Restaurant for your dining just a door or two away. I stayed there for about a week while I was house hunting.

[LonePine]

Now a Eugene home owner, I'd like to applaud those of you who take seriously the responsibility of helping others make quality decisions on issues where local Eugene knowledge can be the difference between an informed decision and bad mistake. I'll remember your willingness to help and try to repay the debt, in kind, as my local knowledge grows.

[annimaver]

congratulations on being a eugene homeowner! my husband and i (from out of the area) were looking for a place all weekend. some good ones out there, but nothing tugged too strongly. the helpful info from the good people on this forum has been indispensable, and i too would like to offer a note of thanks, and also hope to repay in kind when someday we can call eugene home!

anni m

[Mr Eugenified]

Originally Posted by annimaver

congratulations on being a eugene homeowner! my husband and i (from out of the area) were looking for a place all weekend. some good ones out there, but nothing tugged too strongly. the helpful info from the good people on this forum has been indispensable, and i too would like to offer a note of thanks, and also hope to repay in kind when someday we can call eugene home!

anni m

Feel free to ask any Eugene real estate questions. I am fairly familiar with south Eugene after having completed my own search not so long ago. And, no, I am not a real estate agent.

[annimaver]

we have found a nice agent, but your posts about the various neighborhoods really helped prior to visiting the city. now that we have a good grasp on the neighborhoods we want to focus on (being of the "old hippy genre" the whiteaker area really appeals to us, as does downtown), i'm sure before long some place of our dreams will present itself. we're currently sitting on the shores of coos bay (charleston) on a beautiful clear, warm and only slightly breezy day! it's only a piece of land that we have here, but incredible that it's all ours!!

so, thanks very much. if i have questions i'll be sure to post them. i already asked about ukulele gatherings in eugene, and did find while in town that there's a thriving community of uke players there-- hooray!

anni m

[Olduvai2020]

I am house-shopping in Eugene too right now. My impression is that local RE prices are likely to fall considrably from current levels.

First, Eugene is not in the same place in the real estate collapse cycle as the rest of the country. Locally, residential real estate prices peaked in the 2nd-3rd quarter of 2007, or a year later than the national peak.

Second, Eugene housing prices peaked at a higher level than the median price nationally. This is important, because historically Eugene single-family home prices have been lower than the national price until around 2006. If we were to revert back to the trendline today, the prices would fall by over 20%.

Third, the prices in Eugene did not fall as much since the peak as nation-wide prices. Nation-wide, prices are off by 32% from their peak in 2006, while Eugene prices are off by only 15%. Since local real estate prices have grown by more than the national average during the bubble years, it stands to reason that they will fall at least as much as they have nationally if not more. So again, we talking a roughly 20% downward adjustment here.

Then, there is an issue of housing affordability. The Department of Housing and Urban Development considers housing affordable if the median price does not exceed the median household income by a factor of three. In Eugene, the ratio stands at about four right now (possibly more if you figure in falling incomes).

This basically means that the prices have to decline by about 25% in order for an average family to be able to afford a house in Eugene. I think one can make a compelling argument that there will be no sustainable recovery in housing until the average family with good credit can afford to buy a place to live with at least a 20% downpayment and a monthly mortgage, insurance and property tax payment that is comparable to a monthly rent for a similar house. Right now, it is much cheaper to rent than to own in Eugene. There are a lot of houses for rent out there, and many of them are owned by people who can’t sell them.

Finally, there is the macroeconomic picture. I think it is fair to say that Oregon in general and Eugene in particular have not fared well in this recession. The real unemployment rate in Eugene (called U6 in BLS parlance) is about 18%. I suspect that most of these 18% of Eugenians will not be buying houses any time soon, and in fact stand a risk of losing the houses they have now to foreclosure if the economy does not pick up.

The foreclosures are another big unknown here. In every housing slump on record, foreclosures had peaked before the prices bottomed out, and there is little reason to think that things will be different this time around. In the first half of 2009, foreclosures in Lane County doubled from the same period last year. Whether the government efforts at loan modification will have any impact here remains to be seen. Too many people are too far under water to be helped by loan modifications. Government studies show that the vast majority of people with loan modifications end up defaulting anyway.

Another macroeconomic trend is population. Historically, the population of Eugene grew by about 1% per year. Last year, the growth slowed to about 0.6%. It is reasonable to expect that if the local unemployment rate remains higher than the national average for an extended period of time, population growth locally will slow even further or turn negative. This will have an impact on the housing market by reducing the demand for houses and increasing the supply, thus putting further downward pressure on prices.

Last month, IHS Global Insight released their quarterly home valuation report. Eugene was listed as #6 most overpriced market in the country. I tend to agree... prices have a long way to fall here.

[CCCVDUR]

Originally Posted by LonePine

Well, I made my trip to Eugene and was not surprised by things being pretty much as depicted in these Threads.
I found it to be charming and much less pretentious than Boulder, in so many ways, driven primarily by the fundamental difference of the two economies. Boulder is a regional economy, fed by major Federal Labs, Denver's whole economy and to a lesser degree, the University. Eugene seems more a self sustaining economy with the University(s) being major contributors. Where Boulder is mostly a high tech. bedroom community, Eugene is a self contained economic unit that fosters more a sense of real community, where everyone, regardless of differences, is dependent upon each other, to some degree (truncated)

Although I've only driven through Eugene, and might move there someday, I am very pleased to hear these observations. I visited Boulder and found the town to be pretentious, with too much traffic, and very little charm. It's not an art community of people who get to know their neighbors, which is what I was hoping for. Is Eugene this way?

As for a sense of community, if Eugene has one, then it's the ONLY college town of less than 150,000 persons that I've visited or lived in ... i.e. there's no sense of community whatsoever in Flagstaff, AZ (52K); Sedona (10K), AZ; Boulder, CO (100K); Santa Fe, NM (60K); and Albuquerque, NM (500,000), and Las Vegas, NV (500K+).

Growing up in suburban Seattle, finding a sense of community is probably #1 most important attribute I'm looking for, as Washington and Oregon are among the top 5 Open to Experience states. In fact, from talking to dozens of folks, it seems that it's best just to never venture beyond an Open to Experience state, if you're born and raised in one (WA,OR,CA,NY,DC,etc.)! Wall Street Journal:
The United States of Mind - WSJ.com

Further thoughts?

[CCCVDUR]

Originally Posted by movingtomaryland

I grew up in Wyoming and spent lots of time in Ft. Collins and Boulder while in college. Eugene is very much like Ft. Collins. I think you will really like it here. We moved here 20 years ago and have loved it! ......We currently are renting an apt at Crescent Village...Eugene's newest "Urban Village" (Crescent Village) and love it. It's reasonably close to downtown and other areas...and also has it's own restaurants, wine bar and spa. Good luck. We hope you'll be as happy in Eugene as we have been!

I went through Fort Collins when visiting to Boulder. There was a huge difference, in terms of the attitudes of the drivers and layout of the town. Boulder drivers were rude, driving over the speed limit, and always honking their horns.

However, in what ways do you think Ft. Collins is similar to Eugene?

As for Infilling and downtown condos, I don't think it's a good idea, as Smart Growth has caused the housing crisis in the first place. There is plenty of room in the Willamette Valley for everyone to have 1 acre and their own vegetable gardens. As a huge gardener, that's what I want someday. And, that's the only way of growing food sustainably, using permaculture methods, without having to truck food using Foreign Oil from countries that hate us and attacked us on 9-11.

What are my prospects of buying 5 acres within 10 miles of Eugene for less than $100,000? Probably none. So, I could move to Durango where I can get 40 acres for $40,000, because as of last June when I talked to Jack Llewellyn, the La Plata County Executive Planner, the City and County had not yet agreed on an UGB (Urban Growth Boundary, a fundamental of Al Gore's and Barack Obama's not so "smart growth." Once an UGB is in place, housing, rent, food, and property skyrocket, and eventually crash. Housing bubbles are not over, any further UGB's imposed in rural areas will be disasters for the working people.

[Olduvai2020]

Originally Posted by Tom Lane

As for Infilling and downtown condos, I don't think it's a good idea, as Smart Growth has caused the housing crisis in the first place. There is plenty of room in the Willamette Valley for everyone to have 1 acre and their own vegetable gardens.

Your ideas seem to be totally detached from the reality on the ground. If everybody in the Willamette valley lived on one-acre plots in detached single-family houses, we would need to build a new transportation system from scratch, and the amount of fossil fuels needed to construct and operate such system would be truly staggering. State and local governments in Oregon do not have enough money to maintain the transportation system we already have in place here, never mind building a new one.

The kind of development patterns you are advocating have already ruined millions of acres of best farmland in this country, as well as a great number of ecosystems from coast to coast. I sure hope your ideas will never get traction here in Oregon!

If you are a serious gardener and want a few acres of land, there are homes in the $200-350K range in places around Eugene like Veneta, Lorane, Cottage Grove etc. that would allow for that kind of lifestyle. No need to ruin the countryside for the rest of us, thank you very much.