Evidence is mounting that we are quite close to the bottom of the real estate market.  We are beginning to see this “bottom” mentioned on a national level and, most importantly, we have some indications at our local market level.

National data indicates that the economy is ever-so-slowly expanding according to NAR’s economists.  There is frustration on many fronts with the lackluster pace, but the clouds of uncertainty are thinning out.

Here in Hood River our market has continued at a slow but steady pace.  The sale pendings to active listings ratio continues in the 16%-17% range.  As  mentioned before, our Hood River average and median residential sales prices continue to be among the highest in the state even as we have experienced this market correction.

We continue to see overall declines in closed sales but the percentage difference as compared to 2010 is getting smaller and smaller.  This suggests that we are nearing the elusive bottom.  It had appeared that we were approaching bottom earlier in the year only to experience continued small but significant declines.  The declines have remained below 10% and now they are closer to below 5%.

Another, very significant factor,  is the extremely low 30-year mortgage rates.  One must first qualify – which is a challenge in this lending climate -  but a 4% (or less) fixed-rate 30 year mortgage is a lot easier on the family budget than one based on 5% which is what has been projected for the end of 2012.  It may also be a hedge against any small continued decline.

Something to think about.

Wednesday, October 26th, was an historic day for the Columbia River Gorge.  After almost 100 years, the White Salmon River once again flowed into the Columbia River.

I took a photo of the White Salmon Bridge the day before the event and another photo two days after the event.

White Salmon River & Bridge 10/25/2011

White Salmon River & Bridge 10/28/2011

There is not a big visual difference at the confluence of the two rivers to the naked eye.  I took my photos from The Hook across the river in Hood River.

However, in the link provided below, you can actually see the White Salmon swell into the Columbia on that historic day and, from the air, you can see the accumulated silt flow into the Columbia.

The dam itself was cordoned off to the public and only a few special guests were invited to view the breaching up close and personal.

Watch the Columbia Riverkeeper video which includes both the initial explosion, the rivers meeting once again and aerial views.

It will be interesting to see where the silt deposits collect.  There are some swirling currents around that area and some of the silt could swoop back onto The Sandbar -  the Hood River Delta area created from a debris torrent off of Mt Hood about 5 years ago.  I’m no expert.  I just enjoy going to our Hood River Waterfront and I’ve enjoyed sailing and kayaking the area for several years and have observed the patterns and currents.

There’s a wonderful energy in the air and soon the salmon can return up the White Salmon River.

The small bounce in market activity has continued into October.  It can’t be described as robust but it’s definitely happening and we can sense the energy.  The current pending to active listings ratio for the Hood River area is hovering around 16% – a higher number than the beginning of the year.

The greatest concentration of sales year-to-date has been in homes below $350,000 accounting for approximately 75% of the closed sales for Hood River County.  Activity in the higher ranges has remained sluggish.  Homes  selling for above $550,000 comprise less than 10% of the total residential sales.

It’s interesting to note that even as we experience a market correction,  our home sale prices have remained higher in Hood River, including it’s Westside and Eastside areas, than most areas around Oregon.  This speaks well for our location and surely many who have purchased homes recently have recognized the value.

Since most sales for Hood River County occur in the City of Hood River and its Westside, I like to use those numbers for a market snapshot. Year-to-date, the average sales price is $311,654 and the median sales price is $274,000.  These numbers represent declines over the same period in 2010 of 3.6% and 6.4% respectively and are not large swings in price.  This is the bouncing along the bottom that we have been experiencing and will no doubt continue to experience for some time.

There seems to be a cloud of uncertainty hanging in the air and consumers, businesses, banks and government have been in a deleveraging mode – a “process of saving more and reducing debt” according to Lawrence Yun, NAR’s Chief Economist.  He’s optimistic that these conditions will ease and that nationally prices have reached bottom.

If you are a buyer in this market, conditions are probably as good as they will ever get.  You will have some hurdles to get over if you need financing, but once past that,  the rates are phenomenal and the value is outstanding.

Good news to report here.   We are experiencing an uptick in the sale pendings to active listings ratio.  As of this writing the ratio is approximately 16%.  This is the highest it has been for some time.

Market activity is at a good level now and may well continue into next month.  Our Hood River real estate prices in general have held fairly well throughout this correction period.

Most of the residential sales activity in Hood River County occurs in the City of Hood River and Westside.  Using those combined numbers, we can see that the average sales price year-to-date for 2011 is $309,922 compared to $325,535 for the same period in 2010.  This represents a decline of 4.8%.*

Comparing the median sales prices for those two areas, there has been a 5% decline from $295,000 in 2010 to $279,950 year-to-date in 2011.  While these still represent declining prices, they have not been very volatile and represent a somewhat stable market.*

We have been very fortunate!

*Regional Multiple Listing Service

The combined effects of the debt-ceiling debacle in Washington, the decision by S&P to downgrade the US credit rating and the Fed’s somewhat sobering announcement about their interest rates will serve to keep uncertainty with us for some time to come.  It’s interesting to note that foreign bond investors are still buying US bonds and mortgage rates, which are tied to US Treasuries,  have not increased as a result of the downgrade.  In fact, they are at record lows and have been for some time.

Most buyers have not been motivated by the historically low mortgage rates.  Rather, they continue to be in “wait and see” mode to see if prices will go lower or things will change with the economy.  We are beginning to see some positive economic indicators nationally.  Recent reports show some new jobs creation and a decrease in new unemployment figures indicating that more jobs are being created than lost.  Many feel we are trending toward slow growth.  Retail sales reported an uptick which is positive as well.

Another factor at play both locally and nationally is the more complicated loan process.  Lenders have become very picky and the appraisal process – often resulting in low appraisals – has been a challenge in closing transactions.

Lawrence Yun, the NAR’s Chief Economist summed up the national climate quite well which also applies to our local market:

Even if rates were to rise because of the downgrade, this fact is less important in light of the current overly-stringent underwriting standards and the general lack of consumer confidence about the economy.  A 30-year fixed rate rising from 4.3% to 4.6% will not change the housing game that much, but a return to normal underwriting standards and a boost to consumer confidence will be the true game changer.

Our local real estate market has ambled along at a slow and steady pace for most of 2011 and is likely to continue on this path for the remainder of the year.  No big trend changes are anticipated.  Our Hood River prices have held fairly well but are still declining slightly keeping this a soft bottom-of-the-market period.  The sale pending ratio, a forward-looking indicator for closed sales, has remained in the 12% – 14% range.  This doesn’t represent a great deal of activity but we are seeing some market action.

I like to combine the two most active areas in Hood River to get a snapshot of the market. The average/median prices are a little higher for these areas. Year-to-date 2011, 69 closed residential sales out of the total 86 closed residential sales for Hood River County occurred in these two areas.  The average sales price was $314,569 compared to $324,532 for the same period in 2010. That is a decrease of approximately 3%.  The median price was $286,000 versus $294,000 in 2010.  That’s a decline of about 2.7%. This is the small but consistent decline noted above.

All in all,  not too bad.  It will be an interesting 3rd Quarter in Hood River real estate.

The first half of 2011 got off to a slow start which picked up somewhat during May and June. Still, the number of residential sales for 2011 is fewer than for 2010. The average and median prices have fluctuated within a relatively small range indicating a fairly stabilized market but a small erosion in prices continues.

These times are full of uncertainty which spills over to our real estate market. Buyers continue to look but often adopt a wait-and-see mode. Today’s buyers know comparable homes in their price range that are for sale or have recently sold and they are determined to get the lowest possible price.

Some folks have been able to capitalize on the situation by selling at a lower price and recouping that in their new purchase price along with a lower interest rate on their new mortgage. Banks and appraisals are also contributing to this atmosphere by making the buying process more complicated.

Because most of the activity occurs in the City of Hood River and Westside, I like to use them for a quick overview of our market. For the first half of 2011 there were 50 residential sales compared to 71 sales for 2010. The average sales price for this period was $308,721 compared to $317,739 for 2010. This represents a decrease of approx 2.8%.

The median price for this same period was $279,950 which represents an approximate 3.5% decline over the median price of $290,000 for the same period a year earlier. 

I’ve included a chart here to compare the median price changes by Quarters for these combined areas.

We have fantastic wildflowers around the Gorge.  This being a very strange weather year, we didn’t get out to hike and look at them as much as usual.

We took an easy hike the other day just east of Mosier.  The trail starts at the Memaloose Overlook.  It meanders back from the river and so is ideal for protection on a windy day.  It’s a lovely country hike.

We were pleased to find wildflowers still blooming.  They can really run the gamut on color.  Not sure that this video captures it, but it’s a wonderful play of color of  the blue-violet bluebonnets, yellow balsam root and red paintbrush against the green background.

Oh, one thing to keep in mind.  Snakes.  Stomp the ground as you hike so that you scare them away and wear hiking boots.  I almost stepped on one – NOT a rattlesnake – and it just quickly disappeared.  I had thought about the possibility, so it wasn’t that bad……really!

The good news is that the sale pendings, a forward-looking indicator, have increased during this past month.  Currently the ratio for pendings to active listings is approx 18.5% for the two most active areas of Hood River County.  This is an increase over my last posting and a positive sign, but it is still not robust.

The other news is that the continued uncertainty in our economy, coupled with buyers who are determined to buy at the lowest possible price, is causing an erosion in sales prices.  Many buyers already know the current comparable active and sold listings.  They are looking for value and concerned that prices may go lower (which is part of the national conversation).  They do step up, however, when they perceive that value. 

Both the tough appraisal situation and current restrictive lending climate are also contributing to the situation.

This climate forces motivated sellers to either reduce prices to get buyers’ attention or negotiate with them if an offer has been made.  Deals are coming together and, hence, the increase in sale pendings.

We can get a snapshot of this market by looking at the residential sales for the two most active areas in Hood River:  the City of Hood River and it’s Westside.  Combined, these areas account for over 2/3rds of all sales in Hood River County.  Keep in mind that these are really small numbers for statistical analysis.

Year-to-date there have been 41 closed sales in these two combined areas which is about 37% fewer sales than for the same period in 2010.  The average sale price of $315,700 is 2.8% lower than the average for the same period in 2010 which was $324,732.  The median price of $284,900 for the same period in 2011 represents a decline of 7.4% when compared with $307,500 for 2010.  You may recall that we were experiencing a bounce from the tax-credits at approx this time last year.

All indications have been pointing to a market that is bumping along the bottom and stabilizing.  Recently we seem to be in a falling period.  That’s the bumping part:  periods of small increases followed by small decreases.  Relatively speaking, our  average and median prices have held fairly well compared to other metro areas.

There’s tons of doom and gloom articles out there but so far our local market has held its own during these uncertain times and will hopefully continue to do so.

(RMLS Regional Multiple Listing Service – source of data).

Market activity has continued to slowly increase and has put the current pendings to active listings ratio at 15%.  This steady increase is a positive sign for our Hood River real estate market.

The market still remains slow compared to earlier years with fewer total closed sales, but we appear to be stabilizing  with a small tilt downward in sales price . 

While the Hood River Area has been spared the large numbers of foreclosures that have affected others, we are experiencing some effects. For Hood River County from January through April 30th, 2011,  approx 25% of the closed residential sales have been bank-owned properties.  These properties tend to sell quickly, at lower price points  and show up more quickly in the solds numbers.

Using the six-month period from November 2010 through April 2011, we see that the average sales price for closed residential sales in Hood River County was $306,242 which shows little change when compared to the same period a year earlier. That average sales price was $307,082 for the period November 2009 through April 2011.

The median sales price of $262,600 for the same period,  November 2010 through April 2011,  indicates a decline of approx 4.5% over the same period a year earlier.  For that period, November 2009 through April 2010, the median sales price was $275,000.

We have already had some higher priced homes close this year which is a very good indicator.  The Buyers are definitely out there looking  – still a little skeptical that we have bottomed out.  We have seen some all-cash buyers step up this year as they recognize the opportunities and take advantage of the market.  Hood River continues to hold its own in this market because folks continue to choose the unique quality of life of our area.

(Source of data – Regional Multiple Listing Service).

Friends and community members celebrated Earth Day by meeting at the Hood River Waterfront Park and weeding the various planting areas.  It’s amazing at how quickly these plants have grown.  Of course, they’re native plants, so that helped!  Check it out:  

What an amazing community this is! Here’s a link for more info on the park:  Waterfront Park.