The first quarter came to an end a couple of weeks ago which means we have a bit more data to work with regarding home sales.  I know some of you are armed with tax return checks and wondering if it might be time to dive into the real estate market.  So here’s my opinion…

See my pretty lines?  The closer they are together the better the market is doing in terms of supply and demand.  We call that number inventory.  If they are closer it means that the volume of houses entering the market is closer to the demand of the market.  As you can see the first quarter of this year was pretty much on par with last year.  This is nice to see as we are seeing a decrease in inventory.   This is important for a healthy, normal market. We aren’t there yet, but at least things are starting to bottom out.

The reason buyers are coming out, of course, is the ongoing home price declines. We are at the point for many people where buying a home is equivalent to renting a house.  Renting a house for $1,000-$1100 a month?  We can get you a house for that now.  Low interest rates coupled with huge declines in home prices has made this happen.  Buyers are starting to figure this out and are coming out to consider buying.   The rate of home price decline has slowed down, but the decline is still happening.

A buyer prospect recently asked me what I thought of the current market.  I said if 2009 was a 1, because I’m telling you that year stunk in real estate, then we are at a 3.  We are clawing our way out of the hole, but we are still in it.

PR disasters.  From wardrobe malfunctions to trapped passengers on the runway to CEO’s on private jets while asking for bailouts, there have been some mistakes of epic proportions.  You can put NAR’s campaign in that league as far as I’m concerned.  You can’t tell people go out and buy with integrity, as people are losing their homes left and right.  Negative consequences stink.  The consequences to the NAR were minimal because the real consequences were to the membership, the REALTORS®.   There was a poll on a forum recently that simply asked “who is more to blame for the meltdown…REALTORS® or Appraisers.”  No mention of Wall Street and their credit default swaps.  No mention of banks having quotas for loans.  No mention of the Community Reinvestment Act.  No mention of those AAA ratings.

REALTORS® have a serious PR problem.   Why bring this up now?  Beside the obvious fact that I like to ask and answer my own questions, the fact is that in many areas it is starting to be a good time to buy, finally. Propaganda is meeting reality, five years later, but nonetheless they are colliding.  All my regular readers know I am a data geek, and I have been running the quarterly numbers for the Salem area which I will post in the next few days.   The problem is that real estate agents can’t say this and be believed.   That campaign that NAR ran in 2007, they should be running it now.  The problem is they spouted off at the mouth early and completely discredited every  real estate agent across the country with one fell swoop.  It’s what everyone wants in their trade organization: to have the rug pulled out from underneath you, right?

What triggered this post was a flurry of status updates by real estate agents coming across my Facebook wall for the past month.  I cringed every time an agent wrote “it’s a good time to buy” on their wall, not because it isn’t true, but because it reminds me AND more importantly consumers of that horrendous NAR video that came out.  It reminds them that the trade organization representing the industry wasn’t honest.   I encourage all real estate agents, whether you are a member of NAR or not, to steer clear of that phrase.  Agents need to re-establish trust and credibility with consumers after being lead astray.

The fact is that the market is showing indications of stabilization.  So my fellow agents, here is your chance to re-brand.  Use it wisely.

“We are really excited to see what happens with the development,” said Mayor Anna Peterson.  ”I’ve always felt that Turner outclassed Salem with Enchanted Forest.  Now, we can really stand out and compete against Turner.  It’s a dream come true.”

Developer FantaMagic is well known for creating unique developments and Salem is truly fortunate that they chose our mid-sized city for their latest project.  Complete with homes on the river, a natural forest, lakes and ponds, this development is sure to be something truly special.

I was invited to tour this new development, Salemithia, and you guessed it…listings are exclusive through Tomson Burnham.  What can I say?  We rock.    I was duly impressed with the unique, twisting design for the bridge and asked about the inspiration for the design.

“Let’s face it. Portland has straight bridges and we don’t want to be like Portland.  They’re weird, “said the developer. “My curly cue design keeps Salemites in an endless adventure as they cross the river.  Plus it gives the trolls more time to grab your leg.  Let’s face it, this gen Y group?  Slackers.  All of ‘em.  So the inspiration?  Just making it easier to feed the trolls.”

After engaging in Dances with Trolls across the bridge, Salem residents are greeted by the sweet warm smell of Dioxins.  ”Nothing screams new development, like a little chemical contamination,” said real estate broker Melina Tomson.  ”This is a one of a kind opportunity for planned community living here in Salem.  We have some incredible options for home plans.  I expect that the Gingerbread plan will be really popular, but we all have the Red Riding Hood, The Repunzel, and the H&G plan.  I expect the H&G will be popular with gourmet cooks. It has a killer oven. ”

The Bridge to Salemithia plans are below.

View April Fools Map in a larger map

 
If you want more information on this new and amazing development, contact Melina Tomson. I’ll even buy you some peanut brittle. ;-D

I’ve been thinking a lot lately about what makes a real estate agent good.  Now, I do realize that the concept of good is very subjective, but I think that there are probably some similarities in people who are generally considered good at their profession.  I’m contemplating bringing another agent into my company, and so was thinking about my definition of good.  I’ve been mulling over characteristics and have a nice list going for myself, but I always like to make sure I’m covering my bases.   I asked other local industry peers, that I respect, their thoughts.  I was a bit disappointed when I received some responses like having legible paperwork and knows how to read a calendar.  Basics are givens and what sets the standard for the worst agent, not the standard for the best agent.

As I’ve been going through this thought process, I was randomly selected to do a survey for our real estate agency.    Not one to shy away from giving my opinion, I made sure I had a full cup of coffee and forged ahead with the 45 minute survey.  Not that any of you care about the distinction, but I am a principal broker in Oregon. What that means is that I have been an agent for at least three years, took a class, and, now, passed a test. I didn’t have to pass one.  I’d like to think it is because I am so incredibly amazing all on my own, but it really is because they didn’t offer it in 2007.  It also means that I’m eligible to supervise and train rookie agents or agents without enough experience to mold them into amazing or not so amazing agents.  So this survey was asking me, as a principal broker, what skills and knowledge were important for when you first get licensed.  What should someone that is entrusted with training new agents be expected to know on day 1 of being a supervisor.

There were some excellent questions on material facts such as zoning, asbestos, floodplains, etc.  There were excellent questions on titles and deeds, escrow and financing, and contracts and licensing.  Then there weren’t excellent questions.  I literally did a double take when I saw the how important are “addition, subtraction, multiplication and division” question.  That was followed by questions about decimals and percentages.   Surely, they must have put a quintuple shot of espresso in my coffee this morning causing severe hallucinations, I thought.  No one would ask these kinds of questions for a job that entails helping people buy and sell things that cost six figures.  Right?  More math questions followed.    I was flabbergasted.  Math is a given.   That’s like saying “How critical is it that you get dressed for work?”   Unless you are the receptionist for the nudist colony clubhouse, it’s pretty important in these rainy parts.  There is absolutely no profession where they should be asking, on a survey, whether or not you can add 20+15 is an important skill.

Images of real estate conversations floated in my head.

Client: “I’d like to do a 3.5% down loan program.  What are my options?”

Agent: “You know those little circle with the line in the middle thing-a-ma-bobs really confuse me after numbers.  I never was trained on those in real estate school, so never mind that.  You can buy this house though.  Cheap. Cheap. Cheap. Look, it even has a kitchen and a bathroom.”

Client: ” Well my interest rate would be 3.75.  Can you help me figure out my payment? ”

Agent: “Whoa there.  Don’t get all fancy on me with those dots.  Everyone knows they go at the end of a sentence. Why are you using them in-between numbers?”

Client: I’m thinking about adding a 20×20 addition to the house for a master suite.  How does that impact the value?

Agent:  Ah…who needs an addition like that.  All those x’s and o’s make me want to give hugs and kisses for some reason.”

I love the idea that the REA (real estate agency) is interested in finding out what are the most critical things brokers and principal brokers should know when they first hit the streets, live with their license.  They care about improving the process, which is really important.  The unfortunate implication with asking questions like these is that it is okay to not have basic math skills and be a real estate agent.    Considering this job is filled with math calculations on a daily basis, I find this disturbing.

As I continue to refine my ideas of what makes a great agent great, you can rest assured that being able to read, write, and do math aren’t on the list.  Just like I don’t think about whether or not someone can put their clothes on the right way.   These are givens.  Rest assured that agents that work at my brokerage can add, subtract, multiply, and divide.  Forget the old school way of calculating things with fingers and toes or the HP calculator that had all those functions that looked cool but no one knew what they really meant.  You can rest assured that my agents are high tech:  we have an app for that.

Ah…the tie-down question.  A tie-down question is a pressure technique used to make people answer a question with a yes that would make them sound stupid if they said no.  What business would say no to wanting more business?   Unfortunately for solicitors, I am seriously snarky.

“No, I’m not looking to increase my business. If I do, I won’t have time left to drink margaritas,” I replied.

Silence.  Yeah.  I bet that response isn’t in your “how to deal with objections” script file.  Poor guy.  Hopefully, he’ll put my number on the “Don’t call the crazy lady” list.

I have no idea why, but I hate scripts. I don’t care how much someone practices them, they aren’t genuine and I can spot them a mile away.  I dislike fake conversations, and I don’t have fake conversations with my clients or prospects.  You get real me all the time, sometimes that comes with some sass.   That can be good or bad depending on your tolerance for sarcasm.

In the past few weeks, mentions of scripts, squeeze pages (techniques to get you to fill out a form online), and online bombardment of Craigslist have come at me from all directions.  As agents struggle for business in this difficult market, they are engaging in tactics that temporarily left real estate during the boom years.  The return of the script.  Let’s face it.  People don’t like conflict and saying no. It is why pressure tactics and tie-down questions work so well.  They count on people’s dislike of being rude.  Me?  I’m more than willing to have fun with it.

So where is my incessant rambling leading?    Nowhere.  Just straight rambling today.  No slick one liners meant to lure you into hiring me.  No pressure tactics.  No spammy emails.  I just wanted to say that when you fill out one of my contact forms or call me, you will get a real conversation.  Fair warning…just be prepared for some snark.

Edina Realty, in a bold move, pulled all their listings from syndicators in 2011.  Tired of dealing with Zillow, Trulia and Realtor.com they said, forget it, and walked away from those real estate sites.  Recently a San Diego brokerage followed suit and did a video about their reasoning.  I started to write a comment on YouTube, but realized that what I had to say was an entire post.

The reasoning behind pulling their listings was that it was a disservice to buyers and sellers due to the inaccuracy of the data displayed, the fact that leads are generated and sold away from the listing agent, and copyright concerns.  I just wanted to say to brokerages that do this that consumers don’t care about our politics.  The concerns mentioned in the video are our internal politics to hash out and deal with without bringing consumers into it.  I’ve yet to see a doctor do a YouTube video about why they won’t accept a certain insurance carrier, or a attorney explain the inner workings of the BAR on video.  The reason they don’t is because they know that people (ie consumers that pay money for our services) are completely uninterested in our internal dysfunction.  The real estate industry functions like a bunch of addicts except we are addicted to our MLS data.  It’s the crack of our industry.

So let’s look at the arguments presented in the video.  Trulia and Zillow are slow to update feeds and have erroneous data on them. This is true.  I find they both take anywhere from 1-5 days to update the feed and changes to the MLS data sent to them.  The cool thing about both of those sites is that we agents can go in and manually correct something.  Wow…imagine that.  Managing the data and double checking it to make sure it is accurate.  Isn’t that part of our job?  Oh, wait…that means I might have to put one more task on my to do list after a price change or something.    That’s right…we want easy.    Really, it isn’t the Zillows and Trulias that are the data error problem, it is the other sites like HotPads, etc, that don’t update as often. I have been contacted about homes that sold and closed months prior but those sites don’t update their feeds.   The good news for consumers about those sites is that they are so small you probably aren’t aware of them.

Consumers should care about getting accurate data from these sites because you don’t want to waste your time either. But ssshh, you should expect that from MLS data too.  I had a listing that closed in December that wasn’t marked under contract by the listing agent for about three weeks, and it wasn’t marked as sold until about 2 weeks after close of escrow.  If we as an industry are holding our MLS data as the pinnacle of accurate data, we are a hypocritical industry indeed.   Let’s get over ourselves on this one shall we?  Our MLS data isn’t the end all be all of accuracy either.

The second main concern, but the true agenda,  is the selling of leads away from the listing agent.   What Trulia, Zillow, and Realtor.com all do is sell zip codes.  The way this works is that an agent can buy into a zipcode and if a consumer requests information from that zipcode it gets sent to one of the paying agents.  Listing agents don’t like this because they are being bypassed by people that pay.  Listing agents often have a buyer agents that work as part of their team and these leads (that means you the consumer, btw) are getting sent away from their team to another agent.  This is money away from the brokerage and potentially to a competitor.  You can see why we real estate agents aren’t fond of this system.   This is a blatant power grab as the more complete listings you have, the more consumers you can draw to your site.  Real estate brokerages are in it for profit so this is fine, but let’s not pretend that this isn’t what it is about.

In fairness to the biggie syndicators,  consumers do indeed have contact information for the listing agent but it is often waaaaaaay at the bottom of the page or in the fine print.  They want you to click on one of the buyer agents since they are paying for your information.   Consumers that read can find what they are looking for.

Real estate agents can always say no to buying zipcodes, and if agents feel so pressured to cave in and pay for a service they don’t believe in, why in the world would I want a person like that negotiating on my behalf for a hundred thousand dollar transaction.  Seriously?  Pressure?  If agents feel like their arms are twisted then they lack a backbone. I wouldn’t choose to hire an agent without one.  I mean if an agent can’t handle the Zillow rep that calls and says “hey do you want a zipcode to increase your business” how in the world are they going to handle the collections rep they have to deal with on a short sale.  Is this really the message we want to send out to consumers?  Apparently, the brokerages that have left syndication feel they have to protect agents from themselves.  That isn’t saying a whole lot about our confidence in our agents ability to handle pressure well.

The final concern in the argument to pull information was copyright.  I laughed, truly, when this was mentioned. Yes, legally the information on the MLS is copyrighted.  Do consumers care?  No.  Let me reiterate that.  Consumers don’t care.  As someone that has initiated a copyright infringement suit against another party, talking about MLS data in terms of copyright is the biggest mistake I have ever heard.   Here’s the thing…when I write a blog post, I am doing that for profit for myself (yeah, big surprise right).  When someone writes a novel, movie, music it is for profit for themselves.  When we enter information in the MLS, take pictures, video etc, we are paid to provide a marketing service to someone else.  We are functioning in a work for hire mode.  This is a totally different thing.  Sellers pay us for our marketing expertise.   We are generating that information for them, on their behalf, as part of our service.  It is in our seller’s best interest to have that accurate marketing be in as many places as possible.    To claim copyright issues on this is just lame.   I can’t imagine very many consumers sitting at home thinking, yes…MLS data is just like writing a novel.  This has to be one of the worst PR moves I have seen.   It sounds arrogant in my opinion.     There is legal and then there is reality.  They don’t coverge well here.

The problem with being vocal about business decisions like this, is that it is too transparent.  Yes, there is such a thing.  Really I don’t want to see pictures of my neighbor, in the shower, online.  Too. Much. Information.  We are standing here naked in front of consumers and it ain’t pretty.  Sort of like watching a 500 pound man walking on the beach in a speedo.  Some things, you just don’t want to know.

No other industry complains more publicly about itself than the real estate industry.   Consumers want one thing:  good service and advice from professionals.  The rest? Consumers don’t give a rat’s ass about it.   Now…if you’ll excuse me, George awaits.

If you want to watch the video that triggered this post you can watch it here.  I’d love your opinion on it.

 

• The average mortgage on a home served with a foreclosure notice in Salem Oregon in 2011 was $182,593.
• The dollar amount of mortgages that went into foreclosure in 2011, just here in Salem, was a staggering $160,316,665.  Yes…$160 million for those of you that have comma woes.
• The top 5 neighborhoods served with notices of default were Jan Ree with 31, Englewood with 14, Highland with 13, Wilark Park West with 13, and Creekside Estates with 10.

Phew…now I feel better having unloaded that information from my brain.  The good news is that you can’t get that useless information anywhere else so remember it because there will be a quiz later.

Now, you may look at this lovely graph and see the downward trend that every newspaper is writing about. It’s true foreclosures are technically down 39.7% from 2010 in Salem.  I should be doing the hokey pokey over this but let’s face it, I’d look really idiotic doing that dance since I’m older than 7.5.  I’m more of a chicken dance kind of gal anyway, especially if I have a Gligamesh or Seven Brides brew in my hand…

But I digress, as usual.

We ended the year with 922 foreclosure notices filed on Salem homes.  Some of you may remember my insanely gorgeous charts from earlier in the year where I extrapolated the data for those pesky MERS properties.  Still have those homes just  hanging out there with nowhere to go. Now, Wells Fargo has most definitely forged ahead with judicial foreclosures and Chase appears to be going that route for MERS here locally.   All banks are still foreclosing on non-MERS properties after taking a brief reprieve in the third quarter.  As such, our foreclosure notices were down significantly this year.    It is likely that foreclosures would have declined this year anyway, but not by this much.  This is an artificial drop.  I disagree with the hype in the press that the market is improving. It’s just more of the same…vexation.

I can hear my Scottsdale real estate nemesis right now.  Step away from the thesaurus, Tomson.

A special thanks to Fidelity National Title for supplying me with loads of data for me to crunch and nurturing my inner data geek.  I feel better already. Okay, the Torii Mor wine was probably a bigger factor in feeling better, but I’m NOT doing the Macarena.  Not happening people.

Well like Salem I underestimated the decline a bit.  The median shifted downward by 7.7, so I missed it by 2.7%.    The average home price declined by 9.2% which isn’t surprising as fewer high end homes are selling to keep the average up.  With smaller data figures like this, the median is a better way to look at the data.   So off by a bit, but pretty close.

How did I do on home sales?  Oh…so close.  Check out this lovely graph.  2 more sales in 2011 over 2010.  It doesn’t get much better than that for flat lining.   Keizer home sales have been stalled at these levels for three years, and quite frankly it will probably be like this again in 2012.

So what do all my lovely charts mean to you?  The good news is that banks are still having trouble foreclosing on MERS involved properties so the inventory is at 9.7 months which is decent for these economic times.  This means not great conditions for sellers but better. Multiple offers are happening on occasion, not the norm by any means, but they are happening.  Less competition is good for our regular sellers.

This stagnation for buyers means that sellers are still feeling the pain a bit and many have accepted current market conditions.  Buyers are having better choices in the regular real estate market without having to delve into the distressed property market which means good things for buyer paid closing costs and needed repairs.

So my predictions for next year?.  Honestly, the exact same thing. I think the market will continue to decline another 5% of so and home sales will remain flat lined.  There just aren’t enough buyers that qualify for financing to have any kind of big pop in home buying.

Phew…my ego is still intact.   I know you were all deeply worried about that part.

Data in these charts was crunched from data collected from the WVMLS for single family non-acreage properties.

The average home price in Salem ended at $166,976 and the median was $151, 700.  Compare that with the average and median home prices for say…2004 and you’ll see a surprising similarity.  $164,199 and $148,400.  Yep.  The bubble never happened.   For those of you that purchase in 03-04 who think you have made a profit?  Probably not.  If you are looking to sell in 2012, you might be told you will break even.
The good news is that with these more affordable homes and incredible interest rates, buyers have been out.  I’d say they have been out en force, but there aren’t enough buyers to call it a mad rush or anything.  Many agents I know had very busy falls, and I’m hearing from my agent friends, which is true for myself also, that January is busier than usual.    In 2011, 57% of sellers were successful in getting their listing sold.  Not great but better than the 40% of last year.  There were home sales for $30,000 in Salem Oregon in 2011.  Mind you, not livable homes at that price, but investors are out in force with trashed out foreclosures getting multiple offers.
I’ve noticed the flippers have started to dip a tiny toe in the water, but most investors are doing buy and hold.  The nice drop in inventory that we see by fewer listings is pretty much caused by the MERS debacle that lenders have created, causing problems with their ability to foreclose on homes here in Oregon.  The foreclosure numbers, which had artifically dropped in Oregon will be picking back up in 2012 as lenders that can actually produce notes go the judicial foreclosure route.  So what does this mean for our 2012 market?
I haven’t had my Wheaties today but I did have green tea and a protein bar for breakfast…that counts, right?  Ithink we will drop maybe another 5%.  We could take another 10% hit if the lenders can get their MERS problem dealt with and dump their inventory on the market. That would really hurt so here’s hoping they don’t do that.  If the lenders continue at their current pace in placing inventory on the market, I would expect home prices to decline another 5% this year.  Unemployment is stagnant but stable at current levels.  Inventory is down to around 10 months in Salem and has been at that level for around 6 months. Interest rates are insanely low and buyers are responding.   These factors will allow inventory to be steadily absorbed over the coming year, assuming the banks don’t do anything asinine like dump a ton of homes on the market at once.

To get your very own trashed out foreclosure list sent to your email just sign up.  You too can smell like a beast after viewing one of these gems.   Stinky homes not your thing?  Consider just looking at regular homes for sale.

Data used in this analysis was crunched from the WVMLS, single family homes under non-acreage properties.

It was a cold, clear day in Salem, Oregon.  I sashayed down the stairs in my typical taffeta real estate attire ready to sell houses that day.  I popped down the top of my dark red convertible because as you know all real estate agents have one in the rainy Pacific Northwest.  The wind and rain droplets whipping at my hair left me undeterred even as  the “drowned rat look” overtook me.  The 80′s were on my side and Aqua-net was in my glove compartment.  I was armed and ready for good big hair.      Whizzing around the corner turns in the south Salem hills while jamming to iTunes, I was deeply aware that I looked cool.

I pulled up to the house, not even slightly frazzled at being 15 minutes late.  My clients know that being “fashionably late” is what its all about.  I located the key box on the garage door, daintily pulled out my supra iPhone to open it, and voila…the lovely sound of a key box opening.

While working on my hair flip, I felt a mystic force at play as it pulled the black case holding the key right out of my hands and heard the sound of metal bouncing off cement.  Gasp! The sound was as horrible as a Justin Bieber Christmas song.  I watched in slow motion horror as the key did a perfect swan dive (easily a 10 by the judges)  into a deep dark abyss.  That really didn’t just happen, did it?  Don’t make me get on my hands and knees and ruin my Vera Wang or worse…break a nail!  I squatted down and swatted away the leaves in the crack thinking it probably did a nice soft landing on the leaves.  Couldn’t see the key.  Probably need to take my Versace shades off, I thought.

Must. Maintain. My. Elegance.  There were only words of Glee entering my head at this point and I almost broke out in song.  I casually cleared away the leaves trying to find where the key had landed.   As I don’t subscribe to the Boy Scouts motto of be prepared as that is for lesser agents, I wasn’t prepared.  What’s up with the Boy Scouts making me feel guilty at a time like this?  I vowed never to buy any more of that really good chocolate covered popcorn from them, no matter how cute or nice they look.  Someone had to pay for this force of evil that had me looking like a frantic Lindsey Lohan digging for crystal.  No way I was calling the listing agent to grovel and tell them I dropped a key in a crack black hole leading to Middle Earth.  Glamorous agents don’t do that.

Little did I realize that my buyer clients were a walking Ace Hardware.  I was handed Leathermans complete with needle nose pliers to grab the key. The key was too far down and the pliers too big.   Two more tools later, I still didn’t have it.    Thwarted.     I had to suck it up and walk miles, you know the “I walked 10 miles in the arctic blizzard to go to school when I was a kid” kind of miles,  in my stiletto Jimmy Choos to a neighbors house to see if they had a hook I could borrow.  I sheepishly knocked on the door as I said “I’m a really cool and amazingly glamorous real estate agent.  Forget everything else I’m about to tell you after that, okay?”  Armed with a long camping stake and cursing the days of my youth where I failed to win at Operation,  I was able to snag the key after several attempts and pull it out.  My Precious.

With key firmly grasped in my palm, we walked into the house.  The highly unpleasant scent greeted us and despite my best efforts to convince them that a house with a kitchen was a good buy, they wanted to leave.   30 minutes digging out the key.  5 minutes touring the house.  1 minute spraying my hair with Aqua-net.

I truly lead the glamorous life.