Industry sign banking oregon claim now
the conference will now be recorded okay so now I'm gonna get going on this I'll start from current slide in hand here we get going so if you had a chance to attend the conference the webinar conference that they had yesterday I guess just a webinar Oh er put it on it was sponsored by Jenny Bakula was on there as well as Chu Coleman Dean Coleman is the oer chair left a really great guy I've known him for several years they had on their Lawrence Young he is the Nara chief economist yesterday they presented to the news media the stats for March and he was going from Lawrence Young was going from Oregon to Kentucky to different states doing his presentation with webinars just kind of like what he did with Oregon so the first set of slides I have here were produced by Lawrence Young and the obviously from the National Association of Realtors he is him the top chief economist there he's talking about here in this first slide about the annual GDP growth rate 2.9 percent in 2018 slowing in 2019 and it's gonna it's really ugly right now you know we're talking and anticipating that the GDP this year is going to be very very slow obviously if the pandemic is very difficult for businesses to make any sort of money probably with the exception of businesses such as zoom and go to meeting the tech stuff there's been a lot of explosion in that so even during a downturn there's opportunities always out there so the total jobs in org and pre-pandemic to march we were on a boom there's been tons of jobs in fact I think the unemployment rate in Oregon prior to the pandemic there was only four thousand people who are plot who are in the in the entire state who are unemployed looking for work so that's almost nothing and so pre-pandemic jobs in Oregon very very strong very strong the first time unemployment as you can see it hit this is across the nation right here this is national statistics we all heard that figure about how unemployment first-time claims up to seven million it's been pretty pretty awful the encouragement has been that first-time unemployment claims have dropped as far as people who have just lost their job or just getting out there and making the claims it was a big massive push obviously here mid-march end of March when when the government shut down all the businesses across the country I guess the non-essential businesses but definitely impacted a lot of people give this is national stats right here so in Oregon first time unemployment insurance failure files so in March three thousand then March 28th just less than fifty thousand scuse me and now over sixty thousand first time the beginning of April dropping a little bit because people aren't now losing new jobs people are not being laid off their only earlier so no it's it's bad out there it's very tough and obviously people feel for people who've lost their jobs but existing and new home sales were going phenomenally probably before the pre-pandemic now they were just really on a upward trend everything was going very very well we had a little slow off in 2018 2019 but then look at what was happening up until January everybody was really jumping in there and doing very very well home sales we all know this January and February we were breaking our records those were our best January and February ever doing extremely well weather qua created with us everything was strong we have buyers really jumping in all over the place so and people anxious to sell to any time anything hit the market a lot of multiple offers we know I mean January February that wasn't that long ago so again this is a statistics on a national basis you can see this is inventory of Homes for Sale this was the recession the Great Recession caused by the mortgage crisis obviously a lot of extra homes for sale at that point but we have had a shortage of homes we've all known that we've had a lack of inventory for quite some time now and again and the thought process here is what's happened with the Federal Reserve we know that during the recession the Great Recession monetary policy every the feds funds rate were like next to nothing they started gradually bringing back up and then with the pandemic hit they dropped them way down again so dropping of that means lots of liquidity out in the banking industry which means banks have money to loan there the government is doing everything they can to try to keep the economy going right now and again mortgage rates have historically been tied into the ten-year Treasury this is really fascinating to look at because this is mortgage rates and the 10-year Treasury right now again the GEMA market isn't working that is true jumbo markets are almost all gone because those are not backed by government those are private investors but again historically look at how the mortgage rate kind of parallels what the what the Treasury rate is again this is what was happening prior to the pandemic so you can see that rising home prices this is the rising home prices the Green Line so you can see that you know before the boom and then the bust our housing prices dropped and then this is the mortgage so you can see that mortgages the amount of money that's out in mortgages compared with the home prices has been pretty level so this line going up shows the equity that people have in their home versus what their mortgages so as home prices go up obviously more equity in the property and so even with the pandemic even with the pandemic people have still a lot of equity in their homes and the pandemic has not caused a reduction in home prices and we'll go more into that a little bit housing starts this is also historically the issues that were been dealing with before the crash of the housing market and Oh a code-nine we had lots and lots of housing starts builders were building with a lot of enthusiasm those of us who were in been during the time of the crash we remember seeing all kinds of homes that were in different stages of construction just abandoned as builders had no more money to build they just left those houses this was during the recession and coming out of the recession housing starts has not kept up with the demand this is significant supply and demand this is why housing prices keep going up there's not enough housing for the demand so we were back up here at a point again this is national statistics where things were starting to really get a little bit better for that but now we're having these issues so since 2019 housing starts on the national basis you can see it's been bumping up December January February March has been dropped I know that new permits pulled since the pandemic has hit has definitely dropped off now here's a really interesting slide that shows the differences between 2000 and 2019 we talked about housing affordability and these are these are still know what those figures actually have to deal with 122 versus 146 but you can see it's considered a better situation mortgage rates we all know that two thousand eight point one percent 2019 four percent 2020 we're talking three percent maybe even lower than that but the population from 2000 has grown tremendously from 282 million to three hundred twenty-nine million the population sixteen years and older has grown households have grown jobs have grown up through 2019 obviously but home sales new and existing are worse so even though population has grown households have grown there's less housing so this again deals with the fact that that's why prices keep going up and we don't have enough inventory for the demand so now according to the National Association what has the coronavirus impact then I find this stat this slide very very thought-provoking and very true based upon what I'm hearing from the brokers this is a survey a recently done survey to agents across the country the survey of prices during the pandemic what buyers are anticipating and what sellers are anticipating so in the case of sellers 72% of them have not lowered the price 16% yes but less than 5% 8% have have lowered it but five to fifteen percent one percent by 11 to 15 percent and 2 percent by more than 15 percent so sellers are basically sticking to the price but this is what buyers are thinking only 37% think they're not expecting the lower prices 16 percent think it's going to be by less than 5% they're going to see a price reduction of sellers but look this other step here 23 9 and 15 percent think that home prices are going to drop by at least 5% if not 15 percent the reality 72 percent versus what buyers think and I know we've received a few phone calls a few floor calls from people saying well I'm not just now in been since it's people are gonna be desperate and I'm now interested as a buyer to come out here and buy something that's at rock-bottom prices the reality is sellers are not dropping prices like that they're sticking to their guns and rightly so with lack of inventory a good broker will look at this look at what's happening and say yeah there are still demand out there and maybe if your house is not getting shown at all there's no interest you are overpriced but reality is homes that are well priced are still selling and foreclosed too close to asking price I'm curious to see as we move forward in 2020 what the data is going to show us for April May June going forward as to price reductions how much the difference differentiation is between asking price and selling price but reality is here you're gonna hear more from buyers who say I want to buy now because hey or I'm gonna offer much less because the seller obviously it's gonna be desperate because in pandemic that's not the case so here is again from n/a our stimulus help the stimulus is the idea is to replace the lost income quickly the SBA loan covering ad was in the payroll that would be if it's actually getting out here locally I don't know how many of the small businesses here have been having success you know the money that was offered out there dried up really quick overs grab quickly but now they've offered they've just come to an agreement so there's gonna be some more money in there also the unemployment insurance added six hundred dollars per week enhancement and then the direct deposit of 1200 per person I don't know if anybody locally has received that I haven't heard of anybody's received that 1200 per person oh now I just correction I heard someone someone that someone knows did get it there's also the mortgage delayed payments the forbearance the afford closure and eviction freeze for a few months and again the the added money from the federal government to back up mortgages corporate debt municipal bonds and everything so this is the hope of all that those trillions of dollars that have been thrown out there again federal justice it this is the thing that we have to think about in the future that's a big scary red line that least something to consider in the future obviously the government can't do this about that long they're just printing money and there's concerns in the future for inflation when you do things like that so in a our right tools we've talked about the fact that we are using the guidelines from Nara and Oh a our and our local Association Central Oregon to give us guidance on how to operate as realtors during this point during this difficult time also the telecommuting the TEL office meetings these are all ways that we can definitely keep our business running so the economic forecast from Lawrence Young of the National Association GDP growth 2019 was at two point three percent he's forecasting we're gonna be down 3% but 2021 back up 3% job gains in 2019 2.2 million forecasting negative 4 million but in 2021 plus 2 million home prices they were rising on a national rate of 4.8% obviously in Central Oregon higher than that forecasting 0 to 2 percent in 2020 so stable or maybe slight uptick but back in 2021 back to the 2 to 4% home sales level and 20 20 20 19 excuse me forecast he's all over the board here negative five to ten percent increase I think that would probably be based upon where in the country you are and in 2021 eight to 12 percent increase that's again Lauren's young National Association of Realtors I find his his he is he's a very methodical economist full of charts and graphs he knows his stuff through and through he knows all the little markets he was rattling off information about the Portland market he was rattling information about the Seattle market he knows all the different major markets around the country Knight has been doing this a long time and I think he's pretty spot-on traditionally so something to think about here so that was from Lawrence now I want to get to what's happening locally so I pulled up some statistics and I just wanted to look at what has happened with Ben premier is starting from March 15th to yesterday at 421 so I'm looking comparing 2019 to 2020 and I was really surprised so during the staying timeframe 2019 we had 29 new listings but this year we had 27 new listings the volume of those listings in 2019 was 16 million four hundred thousand in 2020 thirteen million five hundred thousand so down slightly as far as the value of the homes but still the number high almost the same candies during that same time frame in 2019 we have 15 pending deals that were written for a total value of 25 million seven hundred thousand twenty twenty forty five deals you of 21 million 300,000 very significant I am really surprised I had no idea until I actually looked at it because it seemed so slow in the office but I think a lot of that has to do with the fact that people have not been in so I'm used to every day having people come into the office come in talk with me about situations they've been calling me I mean yesterday it was like non-stop calling people and we had some people popping into the office to to use the copier and various things but we've had almost the same number of deals oh I need to revise that we had a new deal last night we're actually at 46 pending so almost the same the big difference from 2019 to 2020 was the closed we had during that same time in 20 1945 deals that closed for a value of 24 million during the same time we in 2020 we've had 25 deals closed for 16 million the difference here was right with the pandemic hit all of a sudden we had people who were close to closing lose their jobs or back out just getting scared so we had a number of people we we had a good number of deals we had at least 10 if not 15 deals either die or be delayed during the initial couple of weeks of the pandemic moving forward new deals that are being written they're being written with the understanding the pandemic is in place I don't anticipate this many deals dying unless somebody new loses a job or something happens we'll have deals die for the normal reasons of home inspection negotiation on repairs finding something in the preliminary time report but I don't anticipate up to 45 new deals that we've written that we're going to have that many not not perform or not close based upon the fact that this pandemic is now something that we're living with and we now know what we're doing with it so the next people that we had at this webinar was there were two economists from Portland both of them really understand Oregon and so this first slide talks about what has happening with Morgan's population and I find this very interesting we've had we have been a state that have definitely grown based upon people moving to the state the natural increase the light blue those are people look babies being born the net migration the dark blue is people moving to the state so you can see that we all know that the massive amount of people coming to Ben are not through new babies being born is from people relocating here from other parts of the country a lot of people of course from the Portland metro area the Seattle market the San Francisco market Southern California a lot of that and here is the cross where we are right now in 2020 again natural increase the staff they said fascinating last they said last year what was it 41 is it 41,000 yeah I think was 41,000 people who have we are our population of the state increased by forty one thousand of which thirty five thousand of these people were from migration to the state only six thousand wher
do babies interesting slide here this is unemployment claims in the state of Oregon as you can see we have had like almost next to nothing for unemployment and then March 14th and the big pop up fortunately the number of new claims is dropping that initial pop was there hopefully not too many more big booms like that hopefully over time all these people who've lost their jobs will get back hired ins this was also an interesting information here during March 8th the entire state of Oregon had a hundred and six people who worked the unemployment offices during the week of April 10th they had to bring in people we have 450 now 200 handle all the claims that were made I know it's been frustrating I've heard from people who have friends and and family members and people looking to have gotten claims made yet backlog obviously it was like a massive push at the unemployment office and it takes is taking some time for people to get through all those claims so I'm sure with the added staff they'll get through them the Oregon's weekly initial claims for unemployment insurance as of April 11th so this is pretty recent and you can see where the people were who made the claims the vast majority were in the accommodation and food services 10,000 47,000 people again people who work in the hotels people who work in the restaurants then second big trunk here health care and social assistance again all of our medical offices our doctors offices all the elective surgeries all those people who are not working right now because we're not taking those sort of calls people are not if you have to see the doctor right now if it's not a emergency you're probably seeing the doctor through a GoToMeeting or a zoom or something like that you're not seeing them physically but obviously the staffing at those offices aren't needed we don't need a section work in a doctor's office when there's no one who can come to that office retail trade that makes sense obviously all of our shops are closed Manufacturing yes there's been a closed closure of that construction absolutely there's potential slowdown in that administration support waste management remediation services these people are are suffering also arts entertainment recreation educational services people who work at schools the schools are not operating right now everyone's online there's less work for all these people real estate and rental and leasing so there are real estate off I don't know you guys saw the Inman headlines in which red fin laid off 40% of their workforce that's a lot so anyway this is what's happening in the state now here is the employed workforce versus the so you can see here what's happened here with the employed workforce this I believe is the unemployment rate and so here the unemployment rate during the recession was quite high obviously down to below 4% and now well there's another sight coming after that so these are all the people who are actually working and then this is the the unemployment rate this next slide took that last little section and this is just talking about Portland so you can see here this is the labor force in the blue line this is the the employed and then the green line is the unemployment rate and again this huge bump so the labor force people unemployed employed and then the unemployment rate huge seventy-three percent increase in the Portland metro labor force obviously this could be paralleling what a lot of states see right now - but this I think is among the most interesting slide here this is dealing with real estate in the petrel in the Portland area this is showing what's going on with pending listings pinning sales gives me pending sales listings and then the white line is canceled contracts cancel contracts this is paralleling what we're seeing here and then so pending sales up until March 8th going along rate and all of a sudden they dropped they dropped tremendously listings coming up dropped cancel contracts hugely increased just what I what I was saying about what's happened with been premiere but now the stings and pendings going back up and cancellations draw and I think that's what we're gonna continue to see so the sale ratio versus the average sales price again people are holding to their prices in the app this line here that the red line is the average sales price it continues to rise continues to rise and a percentage closed this is the absorption rate you know if you think about the absorption parched Georgian rate whatever people put on the market to sell semi in 2020 so far 77% of it sells so things get absorbed that's the absorption rate obviously during the recession of things that were put on the market only 35 percent of them sold in 2008 that was terrible the anticipation is whatever's put on the market is still going to sell and prices are Casteel know according to Lawrence Young staying flat or going up slightly this year so again building permits this is also again an issue we're dealing with the multifamily permit is the red the the line here is 2 percentage a multi-family and the blue line is single-family residential before we have the crash you're building a lot of single-family residential coming out we've been putting a lot more of our building permits into multifamily but this is one of the things the economists said we're not keeping up with the demand for single-family residential obviously there's some political aspects to this I know that cities are really pushing for more and more multifamily higher density wanting all that the thing is though there are still people who need and want single-family residential and permits give misses in the Portland area but again we're seeing it here throughout the state there's just not enough single-family residential homes being pulled with permits so here this economist his name is Noah he's talking about the recovery you're talking before about the v-shaped recovery last week this is his anticipation he's from the Oregon Office of Economic Analysis so here's the peak a severe recession drop which we're in right now oh sorry not too far so everything dropped back and now he's anticipating slow growth until health under is under control his anticipation is after restrictions are lifted we'll be back he was saying 60% that's his thought process and then depending upon pent-up demand and the amount of permanent damage and the policies that are adopted it may be a steeper uptick back to normal C or a longer again this is his his thought process he's talking it more as a gosh instead of the v-shape he's looking at this which may be true I we just don't know the top economists around the country are still anticipating more of a v-shaped recovery my personal thought is I think it's going to come between the two I think that if we practice keep have to keep on practicing our social distances distancing good habits maybe no longer shaking hands with anybody ever again until we actually have a vaccine for this it's not going to be back to a hundred percent to normal we're not going to have people going back to the sports arenas and all that sort of stuff until we actually have a vaccine so what is happening right now in the future so there's concern in the future that we're going to have inflation with so much money printed Lawrence Young predicts four to five percent rate in the future and which is why a lot of people will buy gold but also real estate real estate is a hedge against inflation real estate has been a great strong investment for most people also the idea of in migration is gonna be slower with recession and in Oregon like I was saying in 2019 they gain 41,000 in population with 35,000 others from immigration so if it's gonna be slower with recession fewer people moving here what's that going to do with our listings well is it going to decrease the amount of demand not really because there's fewer listings so even though we may have fewer people moving here the thought process of these economists is we have fewer people putting on homes on the market because they're not moving themselves they're staying put in fact one of a a deal that we had last week we had gotten it ratified the graph as if I represent the buyer in this case and then the seller of the property had an issue with their new purchase and so they decided hey we're not gonna move period we were still at a point where we were in some negotiations that the seller still had an out and so the seller did back out and took the house off the market altogether so they're gonna stay put we're gonna play see some of that the thought here also is when they were asking the economist about been specifically kind of came back and said well with this thought process about immigration then we'll have less move in maybe an excess and spec homes this guy is from Portland we all know that our villers have not been able to keep up with the demand but perhaps if there's fewer people moving here there'll be less demand for those spec homes I don't know also this having people work at home in the future perhaps more of that having a home with two office spaces or two dens in the home may become a new trend if we have families working more from home so we need people to have their own office spaces to be working from home if people are finding that is working for them and if their average commute everyday is an hour when one of people like to have that hour back in their life if they could be spending with their family or out recreative or doing other things so maybe there's gonna be more people working at home in the future big question here so what about the state budget and not just Oregon but the entire country state budget revenue has definitely fallen a lot based upon the fact that there's not as much tax revenue coming in I think of hotel taxes gas taxes all these sort of things that go to our state revenues income taxes if people aren't working there's going to be less revenue from income tax so what will happen with our state our state budget you know because the state's unlike the federal government which can print money states have to balance their budget so will there be federal help perhaps maybe the federal government will print more money to give to the states to help them balance their budgets can they balance their budgets with bonds yeah that's something that's something that people invest in our bonds how about shifting programs around so maybe save some of the state agencies have a surplus of funds right now and others don't maybe shifting some of those programs and staffing around for instance that that new increase of a three hundred people working in the unemployment offices they may have been shifted from other government offices to help out also think about forbearance versus foreclosure forbears again the delaying of the mortgage payments is the goal when people are missing their payments to foreclose on the property we all dealt with that during the recession when we we were dealing so much with REO properties with short sales people who are going through the foreclosure process banks don't want to foreclose we all know that they would much rather sell the property short in this case wouldn't they rather keep those mortgages going and just tack those payments onto the end of the loan or work out some other payment options so people can get caught up when they can't make their mortgage payments so that's some of the thoughts about what's happening in the future so going from there I didn't want to pull up a couple other things here this is the data we talked last time about what was happening in Bend so this is Redmond Terrebonne we were talking about how during March the amount of her sale versus sold how everything had that the pendings had really gone down a lot in march except that's vent Redmond and outlying areas are still having a massive amount of influx I don't know how April's going to impact them but right now Redmond the Pine Madras Prineville are all having good times they have not dropped off the way Bend had the number of properties for sale had dropped from March of 2019 with March of 2020 but sold look at that huge increase 46% of increase sales in March finding of 20% this is this is big Redmond is a very hot market very hot market the average price per square foot in Redmond it's it's gone up a lot over the year before I mean six percent increase days on market the days on market dropped considerably soldier for Incheon it's almost the same as far as the sole two asking price the transit in Redmond selling prices keep going up they're going up and again months of inventory the absorption rate one point eight months inventory so our outlying areas are super super strong when you take all of the sheets County and average it out we're still on an uptick even though certain sections have been had dropped off in March so when app what's going to happen in April I'm not sure I'm really not sure I just know from us here in Bend premier we are we are doing just great we're doing fine we have people still writing deals still making things happen and it's just a little different than it used to be the other thing I would HIGHLY encourage your clients if they were considering listing and waiting till we're through the epidemic the pandemic is gonna be with us for some time waiting till they feel more comfortable that I understand that but we still have buyers right now as I said last week I've talked with a number of brokers who say they have buyers ready to buy now they can't find anything so lack of inventory is still an issue we've been doing an awful lot of mana ports and as I share with my email we are selling stuff our listings are selling my email talked about some of our listings that have sold recently some of them that we've had on the market for some time some of them that just hit the market so with multiple offers I didn't talk about our buyers we have buyers right now who are also buying and again they can't find inventory so I would advise you guys if you have any opportunity to talk with clients about listing encourage them to listen now even if they're consuming just let them know what we're seeing let them know what the market is showing lack of inventory 1.8 months of inventory in Redmond 1.8 months of inventory in Bend as well that's the same same figure event that means homes that are priced accordingly to market again they have to appraise but they are selling so just be be aware of that out so with that in mind I would like to see here if anyone has any questions feel free to unmute yourself and and talk about things if you have something that you wanted to share with us also wanted to let you guys know how much positive feedback we've gotten from our restaurants of the week we need to get another restaurant going forward for this next week so some suggestions people have ideas of restaurants we're trying to support probably those restaurants that are really struggling right now I know I heard a lot of positives from Chomp Chomp miyagi ramen I I talked with him directly I haven't heard much personally from them but I have heard also the the encouragement that we're getting to these people it seems to be very very much appreciated so anyone have anything that they want to say feel free to unmute yourself and and talk anyone have a question of any sort anyone have a have or want here's another question here have a want for anybody Oh Oh Jules Jules yeah okay I like Jules they seem to be putting out a need for business I think Jules is a great idea and Elizabeth virtual staging company I have heard virtual staging companies I have gone to some presentations by them I think I may have some information from one of them at home I could probably try to find that for you and get it to you I couldn't do it today but I'll have to be tomorrow um yah cracka where the buyers are coming from right now my what I'm hearing from some of the brokers is they're local some of these people are local people they're moving around in the area anyone else people that you're working with are they local also I have a couple local buyers but the other buyers are spanked but they're quarantined out-of-state and everything on the fence waiting to see what's gonna happen yeah yeah I think that's kind of generally what's happeni
g I've hearing that from quite a few people people who are coming here to town who are flying here they're not flying obviously they're not flying right now that's gonna be something that's gonna be I don't know how they're gonna get the airlines back proper social distancing in an airplane I don't know I I was seeing someone on the news this morning they're talking about airplanes putting in plastic barriers between each seat I don't know with how that would work challenging thing here Oh Karen so you say college hunks is doing more estimates this week still people moving to MIT that's good to know I'd heard that in Washington State real estate is still considered a essential services but people who move people we're talking about moving companies are not so I don't know how that's working and yes Holly working with three local buyers right now that's what I'm hearing as well and impact on lack of jumbo loans Elizabeth what I'm telling brokers here that I'm seeing is when you're entering into contract and you're finding that there is a jumbo loan involved talk directly with that lender make sure that that loan is it's secured or if you have a buyer who's who's purchasing with a jumbo loan advise them to talk with their lender just to make sure that's true in one case we have a deal going on with a jumbo loan in which is backed by their by their best they're there they deal with a financial planner and is through that financial company so Aaron Byers from Arizona that's wonderful um Jane Eyres coming out of town Cuthbert coming in June good running first but they're gonna buy after that that's wonderful and good good are they driving up here Jane probably yes they are they're coming up from Walnut Creek okay awesome okay so people are coming the web at when the weather formed up just like normal in the springtime we start getting more business it happens so like I said 45 deals in this time frame almost the same as last year but if anybody wants that car wash it is raining outside right now okay oh okay so Rob Wells Fargo jumbo loan failed and the buyers switch to Banner Bank out of Eugene they've been great wonderful signing today closing tomorrow or Friday that's awesome now some of our lack of sales during that time happened they didn't the deals weren't killed what happens they were delayed cuz financing switched around like that so that's good to know banner bank out of Eugene is doing jumbo loans that's good to know very good news I'm just on a thoughts on that Banner Bank has always been my bank I'm I don't understand why we don't have a branch here seeing as they are Pacific Northwest but they've always been absolutely fantastic and they act like a local bank but obviously they're not so if anybody is having issues i I strongly suggest Banner Bank - oh that's good to know thank you very much guys that's excellent news how about haves or wants is anybody looking or a specific listing type of listing for a buyer or anything that we can talk about that might be coming up if not then what we'll go ahead and sign off and guys have a great great rest of your week and please keep these good good stories coming I love to keep sharing those that's wonderful thank you guys so much they talk to you soon bye
