10 A
SIUSLAW NEWS ❚ WEDNESDAY, NOVEMBER 29, 2017
Housing
from 9A
“I displaced a lot
of people this year”
“Houses here have finally start-
ed appreciating considerably,”
Nivilinszky said. “Owners are
going, ‘Huh, I can finally get my
money back and be done with it.’
That’s the attitude.”
The owners are recouping their
investment back in two ways, the
first being selling their properties
outright.
The homeowner who sank their
savings into a home in 2008 can
sell their homes at the current
higher prices, balancing their sav-
ings after years of paying interest
on mortgages.
The problem is, those homes
were being rented out to low-
wage workers.
“An owner contacts us and
says, ‘Hey, I’m selling my house.
Tell the renters to vacate the house
before it closes.’ So, we have to
give 60-day notices to those folks
to leave. In 60 days, we’re scram-
bling to find another property for
those folks to move into.”
This is why the properties
Nivilinszky manages don’t go up
on websites and the newspaper
when they become available for
rent. Nivilinszky is shuffling his
renters around.
“I’m trying to find a house for
someone who’s being told to
vacate their home because it’s
being sold,” he said. “It has dis-
placed a lot of people this year. A
lot.”
The vast majority of those
being evicted are families,
Nivilinszky said, the makeups of
which vary: Children, single par-
ents, married couples. Only a few
are retirees who are being dis-
placed, many of whom came from
out of town and are renting solely
to get their feet planted in the city
until they decide what home they
want to buy.
Because of all the selling,
rentals have dried up.
“I would say we have probably
20 to 25 percent less homes avail-
able in the rental market today
than in the last 18 months,”
Nivilinszky said. “And these are
single family homes, not build-
ings or anything. ... And there’s
nothing to replace them.”
But that’s not to say that busi-
ness isn’t booming in the housing
sector. Florence, along with the
rest of the world, is experiencing a
housing bubble.
“They’re getting into the
$250,000 range,” Rodet said.
“And they’re selling. I just had a
friend put their home up for sale
and the same day they had four
offers. They sold it with a 15-day
turnaround, paid with cash. There
was another person who sold in a
week. Unless something is so
overpriced that it sits on the mar-
ket for a while, homes are going
pretty damn quick.”
Because current homes are sell-
ing so rapidly, retirees are turning
to building their own homes.
“Everybody is busy,” Rodet
said about the current state of con-
struction. “You could be a lousy
contractor and still be busy. There
are a lot of new homes being
built.”
Retirees are able to afford
building homes because of anoth-
er aspect of the current housing
bubble.
“People are moving here from
out of state or out of town. We still
have good prices for real estate for
those who are coming in from
California. I don’t know when the
last time you visited California,
but I don’t know if you can find a
place for less than $650,000,”
Rodet said.
He said that a family member
recently purchased a home in
Costa Mesa that was built in the
1950s and hadn’t been upgraded
since.
“There was nothing new in
there, and they paid $625,000,”
Rodet said.
People flip their house in
California, take the cash, and buy
or build a home to their liking in
Florence.
Building is where Dan Lofy of
Lofy Construction comes in. He’s
been in the thick of building new
homes for out-of-towners, and the
homes he’s building are expen-
sive.
“In 2008, the standard figure to
build a home was about $135,000
to $155,000,” he said. The lowest
you can get now is around
$175,000, and that would be a ter-
rible house.”
One of the reasons the prices
are so high is because people are
looking for different styles.
“A lot of the older homes have
lower pitched roofs and they’re a
ranch style, while the newer
homes are more of a Tuscan
style,” Lofy said. “They have the
tall doors.”
Higher ceiling and taller doors
mean more material costs. And
materials are rapidly rising, even
beyond the prices at the highest
peaks of the 2000-era housing
bubble.
“Materials are going up,” Lofy
said. “When you have all these
disasters, the hurricanes and the
fires, that puts a big damper on
wood and materials. It’s supply
and demand. And they haven’t
even started rebuilding yet. So,
when they really start cranking up
and rebuilding those homes,
you’re going to see lumber go
crazy. It will get worse.”
Lofy has been in the business
for over 30 years and he’s seen
this happen before. Lumber isn’t
what worries him, though. It’s
plywood.
“I purchase lots of plywood,”
he said. “In 2006 sheets of ply-
wood were about $17 a sheet.
They had hurricanes and a month
later they were over $70. Right
now, they’re close to $30. I think
you’ll probably see $100 a sheet
at the peak. For a good-sized
house, you’ll need about 300
sheets of plywood. That’s
$30,000, just in sheet goods.”
And it’s not just the hurricanes.
The housing bubble began long
before the recent natural disasters,
and the increase in home produc-
tion had already put a burden on
material supply.
Lofy is also being saddled with
new federal regulations from the
Occupational Safety and Health
Administration (OSHA), which
increase labor costs.
“A few regulations that have
come out have had a big impact.
Right now, if you get a guy on a
roof, he has to be tied off with
safety gear. ... We have to put
stainless steel safety rings on the
roof. If anybody goes up on the
roof, they have to have something
to tie off to,” he said.
The safety rings weren’t the
expense for Lofy, as they are only
$70 dollars apiece. But installing
the rings, coupled with hooking
up to them on a daily basis, takes
time. Time increased labor, which
then increased price.
The higher prices seen now
for new homes is just the tip of
the iceberg.
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“It’s an apology letter”
As prices go up, the low-wage
workers have been priced out of
the market, a fact that isn’t lost on
Lofy.
“Even my daughter is having a
hard time,” he said. “They’re hav-
ing a hard time trying to save the
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do you make $1,250 up? You raise
the rents even more.”
And because there’s nowhere
else to go, the renters will pay it.
“I can tell you, when we send
out a rental increase, it is not a
standard, sterilized form. It’s an
apology letter. ‘I’m sorry, we just
got a call, this is what the owner
wants. We don’t initiate this. It’s
just being dictated to us.’ And
that’s the nature.”
It puts a stress on relationships
between homeowners and renters.
Nivilinszky said he ensures that
all homes under the Coastal
Property Management umbrella
are in pristine condition before
taking homes on as rental proper-
ties. Hundreds of photographs are
taken, and the owners and renters
must maintain those standards. If
a problem occurs with the house,
such as plumbing or electrical
malfunctions, most often the
owner must pay for it.
because of greed. Since the crash
of 2008, these homeowners have
been taking considerable financial
hits.
“Their rental income has been
flat for the last 8 years, but their
expenses have been going up
every year. So now they’re going,
‘Well, I need to capitalize on that
before it busts again.’ I get emails
from owners every day asking
why the rent hasn’t been raised.
And they’re dictating to me what
they want to do,” he said.
Nivilinszky said that anything
available for rent today is $100 or
$200 more expensive than what it
was nine months ago. He sees this
leading to a vicious cycle, particu-
larly when tenants move out
because of the high rent.
“It takes a year to 18 months to
recoup one month’s vacancy in a
rental,” he said. “If you’re raising
your rents to $1,250 a month and
they vacate, now you have a
month’s vacancy where the
owner’s not getting $1,250. How
money to put down to buy a
house. The percentage you have
to have to put down is really hard
for younger couples to come up
with.”
A couple without children, both
working 40 hours a week at the
minimum wage of $10.25 an hour,
will bring in approximately
$42,000 a year before taxes.
If the couple has no debt,
including car payments, medical
bills or student loans, and is able
to afford a down payment of
$10,000 with a 30-year fixed
mortgage, the couple can afford a
home worth $121,300, paying
$762 a month.
But these types of starter
homes are few and far between in
Florence. The average home price
in the city is $235,900, according
to realty site Zillow.com. At that
rate, the couple would have to put
a down payment of $45,000 to
purchase a home, and still have a
monthly payment of $1,269.
But at the minimum wage, the
couple is only bringing in $1,777
a month before taxes. And this
assumes that the couple can find
full time employment, which
many people are having difficulty
finding on the Oregon coast.
So, the workers have to rent.
However, the rentals that do
remain are seeing prices increase
dramatically.
This is the second way home-
owners are recouping their invest-
ments.
“People who are hanging onto
their properties are going, ‘Well if
you got nothing available, why
am I raising my rents $25 and
$50? I want $100. I want $150,’”
Nivilinszky said.
He pointed out that this isn’t
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