Housing slump continues in Lane County
Thursday, December 18, 2008 10:49 AM PST
EUGENE (AP) — House prices fell again in Lane County last month — and that’s a good thing, according to a University of Oregon economist.
‘‘If prices come down and are more reasonable and more in line with people’s incomes we are better off,’’ said Tim Duy, director of the university’s Oregon Economic Forum. The median price of a house in Lane County sat at $207,000 in November, a 7 percent drop compared with the same month last year, according to the Regional Multiple Listing Service.
The supply of available houses continued to climb. It would take 11.4 months to sell all the Lane County homes on the market in November.
‘‘The market is stalled,’’ said Tawfik Ahdab, an appraiser with the Pacific Valuation Group in Eugene.
Duy, meanwhile, sees a price problem right now. Lane County houses, like those in the rest of the Willamette Valley and Seattle area, are overpriced by 25 to 30 percent, according to a third quarter report by IHS Global Insight, a company that produces economic and financial analysis. Duy expects another 15 percent drop before the market stabilizes.
He said prices must fall because they’re too high in relationship with incomes.
‘‘The Northwest is like this one huge, obvious area of overvaluation in the country,’’ Duy told The Register-Guard newspaper. ‘‘Most of the country has adjusted to the housing bubble, but the Pacific Northwest has lagged in that adjustment.’’
Real estate brokers disagree.
‘‘We’ve still got good, good real estate going on,’’ said Lorena Teer, broker with Prudential Real Estate Professionals in Eugene. ‘‘And people can still get loans if they can qualify for one. I don’t see we’ve got an overpriced market.’’
Randal Whipple, broker with Prudential Real Estate Professionals, concurs, saying the bottom is either here or near. ‘‘We’re going to be writing a lot of real estate contracts in February and March.’’
Duy said the large swaths of $500,000 houses are the weakest part of the market. Builders completed them at a time of super-loose credit standards, including document-free loans. Since the credit crunch, banks have been more vigilant in making sure prospective borrowers have a decent shot at paying them back.
‘‘How many people in this community can afford a half-million-dollar home?’’ Duy asked.
