Guest writer, Rebecca Darley
As the manager of a Wenatchee home inspection company I attend many local real estate events to stay informed of the latest industry news and developments. On May 19, 2011, the Wenatchee Valley Chamber of Commerce hosted a discussion panel called “2011 Real Estate Outlook.” This blog entry along with the other 4 entries will summarize the panel discussions of each speaker including a loan officer, appraiser, commercial real estate broker, builder and residential real estate broker.
- Speaker from Touchstone Appraisals, Cheri Farivar
- Speaker from Peoples Bank, Darel Ansley
- Speaker from Windermere NCW, Fritz Nichols
Randy Gold is the owner of Gold Construction and has 26 years of experience in the building industry. Gold Construction won two awards in 2002: the Building Industry Association of Washington (BIAW) Washington State Builder of the Year and Wenatchee Business Journal Reader’s Choice Award for Best Builder. He was the founding President of the local Home Builders Association (NCHBA) and the 2003 President of the BIAW, the largest trade association in Washington State. He moved to Wenatchee from San Diego in the early 1980’s.
Randy started his discussion with a look back to the building industry cycles of the preceding decades. In the 1970’s the interest rates averaged 10%. In the early 1980’s the interest rates escalated to an astonishing 19%. Randy commented that he was trying to build anything that he could “from fences to dog houses” to make ends meet. In the 1990’s he started building spec homes and was doing really well. As that decade ended the demand fell and he was stuck with 2 -3 spec homes on the market for two years. In 2000 he decided to focus on high-end custom homes and was feeling like he had figured out the industry when the bottom fell out in 2008. He says “this is longest downturn I’ve ever seen.” Everyone on the panel agreed that they’ve experienced slow and hard times in our real estate market but the fallout of 2008 is taking a long time to sort out.
Randy believes that bargain hunting, longer processing periods, low offers and desperate sellers accepting lowball offers are all factors contributing to the decrease in home values. He has already sold one spec home for less than it cost to build.
He predicts a huge epidemic will surface once the new construction demand returns. Many mills and plants closed and skilled workers found other jobs due to lack of demand in construction. Randy believes that building material costs will skyrocket and construction lag time will increase while a shortage in building materials and skilled workers will have to be figured out. He agreed with the other panelists that this is the best time to buy. New regulations and requirements from building codes will increase the cost of building as well. He believes that interest in remodeling will increase due to everyone’s equity being tied up in their home.