Bubblers and Ripples
Posted on March 10, 2008
Filed Under Portland, Selling Real Estate, Buying Real Estate, Real Estate, General |
USA Today has a story today re a connection between the decline in housing and the decline in electronics sales. As most things that show correlation without showing causation, it’s interesting but not much more. It does, however, dovetail nicely with a post I’ve considered writing to those numbered and universally nameless souls who’ve been predicting a Portland downturn for awhile now, and are gleeful that they’re finally right: Beware of that for which you wish; this affects everyone.
The following are estimates, but informed ones. It’s based on February, 2007 residential sales as compared to February, 2008, for just the Portland Metro Area. In Feb 2008 there was a decline of 706 units and $212 million. From those numbers:
In brokerage fees alone (@5%) you can deduct $10.6 million from the economy. Note that amount goes to brokerages, from which agents are paid, as well as the normal costs of doing business: support staff, equipment, leases, etc. Someone, somewhere, lost out on the sale of a new laser printer; and some facilitator and receptionist, somewhere, lost their jobs.
If last week’s numbers are correct, and owners average 48% equity in their homes, that means about $101.8 million won’t go to, mostly, new homes. Since that’s already figured in to the sales decline, more important is the amount taken out of the sale that doesn’t go to the down payment, perhaps to a plasma TV or home upgrades. Let’s say the average is 5% (I suspect it’s considerably more): that’s another $5.1 million.
Mortgage brokers - those that are left - for the most part don’t have the high commission products, so let’s assume 1% on average. If 75% is the average LTV, that comes to another $1.6 million.
Title and escrow companies: about $2.1 million.
Inspectors: $.3 million. Appraisers: $.4 million.
Note I haven’t calculated movers or contractors hired to complete inspection items. Even so, that’s $20.1 million that was in the Portland economy in February a year ago, but wasn’t there in 2008. One month.
That will buy a lot of cell phones…
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[…] Endeavor Properties Blog wrote an interesting post today onHere’s a quick excerpt photo credit: chris9486 USA Today has a story today re a connection between the decline in housing and the decline in electronics sales. As most things that show correlation without showing causation, it’s interesting but not much more. It does, however, dovetail nicely with a post I’ve considered writing to those numbered and universally nameless souls who’ve been predicting a Portland downturn for awhile now, and are gleeful that they’re finally right: Beware of that for which you wis […]
I love how you real estate people and the homedebtors try to blackmail the rest of us with your ominous threats about how the return to sane housing prices will be bad for all of us. Bullpucky.
Let it crash. Let it crash HARD. The dotcom bubble burst didn’t hurt everyone and this one won’t either. Well, no one except stupid people who bought overpriced dwellings and the real estate industry that reaped the benefits. A return to sane pricing is the very least of our problems. More pressing is the damage done by the lending practices of the financial industry. Propping up prices won’t alleviate that one bit.
You people have only yourselves to blame. Save the warnings. We’re past that.
[…] on this post, from the perfectly named Naysayer: I love how you real estate people and the homedebtors try to […]