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It might be appropriate to call this past decade the "Decade of Excess" rather than the Great Recession. I've written many posts on this topic and recently read another blogger's comments about where all our prosperity has actually gone. You can read it here. We can look in hindsight and say it should have happened, will happen and, of course we all know now, it did happen. Our housing bubble burst.
In all the years I've been selling real estate, never had I seen the buying frenzy that occurred during the height of our bubble. People were buying everything and anything and also paying everything and anything for the houses they wanted. I remember writing an offer for a particular client at our housing peak that was actually 5 separate offers bidding up the price in increments to make sure she would get the house. At one point I indicated to her that the house still had to appraise and perhaps she was over-paying, as she would have continued to bid higher. There were 3 other buyers with offers submitted at the same time. Her offer(s) prevailed and she got the house, but it seemed at the time there was no stopping the escalation of the selling price. She was only one of many others who did the same thing.
We all got caught up in it. If you overcharged on your credit cards, if you bought stuff you couldn't afford, if you continued to refinance your house during the period of low interest rates and withdrew equity, if you obtained one of those crazy loans to purchase, if you bought at the peak, etc. you were a part of it. We all at some point were a part of it in the last decade.
In October 2008, I wrote I felt our housing bubble started with deregulation, when it got easier for buyers to get loans, and not when interest rates fell. Recently, I read an article where Bernanke said exactly the same thing. There's also a new book out that says it.
From HousingPredictor.com [/caption]
One of the blogs I read on a regular basis is the HousingPredictor.com. They have their predictions for 2010 as to what Oregon's real estate market will look like in the coming year. They feel our real estate market hasn't bottomed as yet. I was looking over some of my past posts and economists all thought we'd hit bottom in PDX the summer of 2009. They were wrong.
HousingPredictor.com mirrors my other comments that our surplus of inventory needs to get sold before our market improves and the unemployment rate needs to drop. Further because of those high numbers and too many foreclosures here in Oregon, they feel our prices will continue to drop by 10.4% into the third quarter of 2010. NAR (National Association of Realtors®) just issued a new report on 2010 on housing and here's a video from Robert Shiller of the S&P/Case-Shiller Report with his housing forecast for 2010 (courtesy of OregonLive).
Did you know that housing prices dropped 92% from 1928-1934? Along came a government program that sparked a housing boom and home construction sponsored by the National Housing Act (later known as FHA). Houses cost $4800 with a $960 down payment and payments were $27.62/month yet it was still out of reach for most buyers during the Depression era. The government put people to work so that the economy would recover.
We need the excesses to clear out. We frankly needed the bubble to burst so that housing would once again be the good investment for the long-term it always has been. Our 2009 and December RMLS™ stats should be out today or tomorrow. I've been gathering data and will write several posts soon about the past decade and the state of our Portland real estate market.
 ALL ABOUT.....Portland.Oregon.Real Estate, is licensed under a Creative Commons Attribution-Noncommercial-No Derivative  Works 3.0 Unported License. © Copyright 2008-2010 Betty Jung. All Rights Reserved. Use of this article, photos and images without permission is a violation of federal copyright laws. Based on a Blog at WordPress.
(For more local and national real estate information, go to www.bettyjung.com).  Portland
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