Prices fall in Eugene, Ore., but not enough to aid home sales
— -- Housing prices are sliding in Eugene — but not enough to boost sales.
"Even though prices are relatively cheap by some West Coast standards, relative to incomes here, they are actually somewhat expensive," says Tim Duy, director of the Oregon Economic Forum at the University of Oregon.
Compared with the most-overvalued housing markets nationwide, Eugene ranked 10th in IHS Global Insight's report for the third quarter of 2008. "Instead of bursting, we have had a slow leak," says Lorena Teer, president of the Eugene Association of Realtors, of home values.
Even so, Eugene, the county seat of Lane County, has a foreclosure rate well below the national average. In Lane County, one in every 865 homes was in foreclosure in November, compared with one in 488 nationally, according to RealtyTrac.
In its favor, the city has had a smart growth plan that prevents too much construction, Teer says. Tracts of land were not available to speculative building.
When the housing market became a little overheated, it happened much later than elsewhere in the nation, Duy says.
Eugene's market is still working off the price increase as it faces other challenges, including rising unemployment.
"We are suffering from the same economic downturn as most regions of the country, with some of our key industries in decline or, in some cases, they have closed entirely," Duy says.
For example, Hynix Semiconductor closed its Eugene factory last summer, eliminating about 1,400 jobs.
Home buyers have hunkered down: "They are saying that they are waiting until the market hits bottom," Teer says.
Fewer investors are buying homes because it is more difficult to get a conventional mortgage, she says. And many families who want to move to Eugene from states like California are waiting to sell their homes there before moving.
Eugene still offers many advantages to home buyers, says Jim Barnhart, a real estate agent. It is home to the University of Oregon, and it's close to the ocean and mountains.
