Today I saw a countdown for the home buyer tax credit to end:  50 days left to get under contract.  That count down has been so apparent this past month as the Salem Oregon real estate market started early.  Typically I tell clients that the market starts to heat up in April, but agents were running amok this month as things got busy much earlier than usual.

Sellers are out trying to get their home sold for the tax credit and buyers are out trying to get the tax credits.  So…where does all this frantic activity leave the Salem real estate market for February?

The average home price dropped 6.9% and the median 2.9% from February 2009.  Honestly, I think that is pretty good.  If the Salem market could stay around 5-6% drop this year, I think that would be a solid sign for the market.  The current inventory has spiked up to 19.4 months in Salem.  Normally, I would be very concerned about that spike, but inventory always rises over winter as there are fewer home buyers out. Obviously this is a huge jump, but it is not unexpected since sellers are trying to make sure their home is on the market for buyers looking to claim the tax credit.  This inventory number will continue to drop over the spring.  I just think we have an unusually high number due to this dynamic.

Sales are up 8.8% from February last year.   I would expect March and April to show increased sales volume as well.  The big numbers, in my opinion, will be the summer numbers after the tax credit ends.

It appears for the first time in several months, that the real estate market will forge ahead without the tax credit and be allowed to start sorting itself out, unassisted…well sort of anyway.

All in all considering the high unemployment rate here, these numbers look pretty good.

Data was crunched from the WVMLS.

Paul Slaybaugh, an excellent Scottsdale Arizona real estate agent, wrote a great blog post today.  I wanted to comment on it because I have talked about this issue so many times in the past few years.

In the world of real estate there seems to be this polarization occurring, agents like myself and John Kirk, that take due diligence for our clients very seriously and those that step out of the transaction as much as possible.  I guess I figure that if I don’t have an opinions, advice or knowledge to share with you, I’m kind of worthless.  Why hire me, if all I have to offer a client is knowledge of how to open a door and announce “here’s the kitchen!”   I really think most consumers can figure out that the counters are Formica.  What I am being paid for is to learn and study the things that Salem Oregon area home buyers and sellers just don’t have the time to learn.

In Paul’s post he wrote ” No businessman walks around looking for a financial colonic, but the very real potential for having his inner sanctum legally hollowed out exists in each and every transaction he undertakes.  As such, it has become customary for many to simply ward off as much exposure as possible by abstaining from any form of guidance that can later be labeled  malfeasance or conflict of interest.  Heaven knows, if the contractor you recommend for repairs screws the electrical pooch, any rabid attorney worth his salt will gleefully encourage the client to pursue the deep pocketed brokerage (and agent by proxy) as well as the contractor for damages.  Why put yourself on the line by recommending a home inspector when the potential for blow-back on a balky A/C unit can put you directly in the cross hairs?  For that matter, why even bother to attend the inspection if the due diligence can be misconstrued for interference?”

Paul is quite colorful in his writing and an incredible blogger, by the way.  Don’t tell him I said so or it’ll make his ego grow even larger   What I do agree with is this…real estate transactions by nature can be difficult and risky.  There is risk in every transaction, and some agents have chosen to “lessen” that risk by recommending three lenders, recommending three home inspectors, not attending home inspections, etc.  I don’t think people hire me to step out of the transaction; they hire me to step into it and become intensely involved in the details of it. With that…comes risk.  Risk that a contractor I recommend does something wrong; risk that a home inspector I use misses something; and risk that I miss something in my due diligence. I have had contractors I recommend do a horrible job for my clients.  I scratch them off my list; I learn;  and I move on.

But here’s the deal.  Life is filled with risk and I cannot control everything, as hard as I try sometimes.   I also firmly believe in the intelligence of the consumer.  You all know when I am being honest and acting in your best interest.  You all know I can’t see inside walls so there might be something lurking there in your house.  You all know that there is risk in everything we do, even driving to the grocery store.  All you ask, is that I study, learn, and share my knowledge with you so that YOU can make the best choice for you.   The last thing you want from me is to abstain from participating in your real estate transaction because you might sue me.

I, like Paul, think that the best defense to preventing a lawsuit, is to have a good offense.  I don’t hide behind the fear of a lawsuit as an excuse to not step into a transaction; to not ask the questions that need to be asked for your benefit.  If I get sued, I get sued.  I am a firm believer in the golden rule and run my business with that in mind.  I can go to bed every night knowing I did my best for my clients that day.   I prefer to insert myself into the transaction offer my opinions and make recommendations because in the end,  it’s how I would want to be treated, if I was you.

“I’d like a house on a 1/2 an acre,” says the buyer on the phone. I have had this conversation with several people that want to relocate out to this area.   I often find myself explaining that in Oregon, all cities are required to have an urban growth boundary per state law. I seem to be talking about it a lot these days so might as well blog about it…

Urban growth boundaries define Oregon cities. Anyone who has relocated here from another part of the country know that our cities are compact and sometimes people feel claustrophobic here. Having a neighbor “towering” over their house is a big deal to many home buyers and there is a lot of arborvitae here in Oregon yards as people try to create more privacy.

What is an urban growth boundary?
In 1973 the Oregon legislature passed legislation that all Oregon cities will have an urban growth boundary. The boundary is a line created locally that defines where the growth will occur in a city. Once the line is drawn, development needs to occur in the boundary and not out of it.

What is the point?
In short it is an effort to prevent sprawl. Anyone who has been to Chicago or LA knows what sprawl looks like. The point of the UGB is to control where the growth occurs. This helps to preserve farmland, watersheds, and makes city services more compact.

What are the consequences?
With anything there are positive and negative consequences for anything. Here, we have small lots. I am constantly telling people that a 1/2 acre lot with a new construction home is a long shot. For people moving to Salem Oregon, this can be a big surprise and often people feel constrained here. Developers put as many homes as possible on the smallest lot possible since development is limited. In the boom, this was a problem as land prices skyrocketed out here. Now…we have around a 25 year inventory of lots. Plenty of home lots to go around.

A positive aspect is that areas that are starting to get run down tend to get revitalized faster as investors go in and starting fixing those areas. Since they are limited about where development can occur, areas tend to get redeveloped faster…I think anyway. One of the things that was glaring to me when I came out to Oregon 20 years ago was that the cities had bad areas, but nothing like the cities I had seen in Illinois. It seemed like in Illinois that developers would just buy some new farmland and create new rather than recycling the older parts of cities.

So, for those of you considering moving to the Salem Oregon area, keep in mind that we have UGB’s here that impact the size of our lots.  So if you want 1/2 acre, 1/4 acre…just know that large lots are typically with older homes out here.  If it’s any consolation, I think you’ll find that you are spending too much time hanging out at Silverfalls State Park or heading to the coast to worry about who is going to mow that large lot.

This post has nothing to do with real estate…well only indirectly.  A local colleague (ie a real estate agent with another company), Charles Price has a really wonderful food blog called Taste of Oregon.

In fact it is so good it was selected as one of the blogs in Saveur for best regional food blog.  The public gets to vote so you all head over there and vote for his incredible food blog.  I’m hoping if I drive enough votes to his blog that he’ll make me dinner.  You all thought I was posting this because I was nice, but really, I have ulterior motives.  Please vote for a local Salemite here.   (You do have to register to vote.)

Okay…some of you know that I have been in the process of bringing a real estate agent into my firm.  Today I was down at the Real Estate Agency with John Kirk, making it official.  John is a Principal Broker like myself so that my company can still serve buyers and sellers without dealing with issues of disclosed limited agency.

John and I did a transaction together almost two years ago now for a great house for my clients in the Richmond Neighborhood.    So I just wanted you all to know that there will be another agent blogging on here probably in the next couple of months.  Poor John is going to jump into the blogging fold so you all be nice to him…especially my favorite grammar police commenter, Recent Buyer.

John went to graduate school, and if there are any other Whitman Alums, he’s one of you.  If you are looking for a laid back real estate agent with a highly professional attitude, then John Kirk is who you are looking for.    Laid back and professional really do go together.

John is an avid brewer…that’s right, this guy brews beer and teaches classes on how to brew beer.  He loves his motorcycle and I would expect to see some posts from him on great rides in the area as well as a few on the local micro-brew scene and maybe…if you are really nice and use him as your agent, he might treat you to some of the stout, Guinness type beer he is brewing in time for St. Paddy’s day.

But, I think you’d have to call him (503-871-3300) pretty soon…St. Paddy’s day is just around the corner.

I like it when people that read my blog send me things.  I was alerted to this study by one of my current clients and thought I would share it with you.

What study you ask?  Well the folks at Gallup-Healthways created a Well-Being Index.  They interviewed a bazillion, okay not really a bazillion but 350,000+ Americans, during 2009.   You would think interviewing that many people would end the recession right there.  Talk about some serious work to get that done!  Anyway… back on track…In the survey they asked them about their jobs, finances, physical health, emotional state and communities.

Now you’d think with our high unemployment rate here in Oregon that we would bomb this survey on well-being.  I fully expected us to be at the bottom of the pack…but I was surprised.  Salem, OR (this is the whole metro area by the way), was ranked 48.  162 metros were part of the survey.  Pretty cool.  Apparently people are feeling content living here.  Boulder, CO was #1 and the Huntington-Ashland metro was ranked the last in this survey.  As a state, Oregon ranked 36th, which isn’t a huge surprise with our large unemployment numbers.  It’s hard to have positive emotional health when you are worried about losing your job.

I recently was talking with someone about their relocation to Salem Oregon. “It’s a slow city” was what I said trying to explain Salem.  I think there is something to be said for not being in the rat race of larger cities on a daily basis.  So maybe slower equals a bit more content?  It is an interesting study so head over and check it out.

I know you really want to know what state ranked #1 for well-being…Hawaii snagged that honor.

Last summer when we went to Bend for our summer vacation, true to form about 30 minutes into the car ride we got the yell from the back seat “How much longer?”  Every few miles we got the notorious question. I think it is a genetically programed question into the brain of every child to ask their parents every few minutes “Are we there yet?”  I know, you’re thinking what do my Saturday night ramblings have anything to do with real estate…Just bear with me here while I spin my thoughts…

Everyone wants to know if we have hit bottom. I think my poor crystal ball has been clasped so many times in my sweaty palms as I started into its depths in order to answer that question for every home owner and home buyer that asks. What my crystal ball says to me seems to be directly proportional to how much coffee I have had that morning though so I’m not sure if the crystal ball is really talking to me, or I should have gotten one less shot of espresso in my mocha that day…but back to real estate.

So what this graph shows is the year over year (ie Aug 08 vs. Aug 09) median price difference.  In this case a price drop.  It is my opinion that the median home prices didn’t drop as much in the 3rd and early 4th quarter as much due to the tax credit.  Buyers jumped in the market in much greater numbers than usual and caused the prices to remain higher than normal. With less buyers in the market, the prices plunged in December and January.  Now these are Salem Oregon specific real estate numbers.  The median home price plunged 21.9% Jan 2010 over Jan 2009.  This was inevitable to make up for the lack of correction earlier. I really don’t think the market is going off a cliff right now.

While it appears that the prices are declining rapidly, the flip side of this is the sales volume.  That big peak was of course the expected end of the tax credit.  Sales were up 6.25% this January over January 2009 and for the past 6 months each month had more sales than the previous year.  So that is a good trend.  Buyers are out.  The sales volume is still low, but positive is a good direction to go.    Not surprisingly, the percentage of sold homes that are distressed properties (meaning short sales or foreclosures) has been slowly creeping up.  I have no doubt that this will continue to creep up all year.  I’m hoping it tops out at about 25% but we’ll just have to see what happens as the year progresses.

So, what is the point of all of my rambling…well this is a very long answer to those of you that ask me “are we there yet? Is Salem Oregon at bottom?”  My answer to you is the same answer I give to my kids in the car…”we’ll be there in a little bit.”

P.S.  Data was crunched from the WVMLS.

Whew…I’ve been so busy in the past couple of weeks that my blog has been neglected.  With the tax credit ending soon, buyers are out earlier than usual this year searching for deals… and so are the scammers.  I reported before about the Craiglist scam that hit Salem Oregon regarding rental properties.  True to form and just like the seasonal flu, the scammers are back out in full force for real estate season.

I received a call yesterday from someone wanting to confirm if my listing was for sale or for rent because it was advertised for rent on Craigslist.  Trying to scam some money out of folks here is what the scam said.

Thanks for
your email, I personally own the house, we want our property to be well  taken good care of, and they are some rules and regulation in which i  do give out to tenant willing to rent my house, so please don’t  disrespect my order ,but if you are still capable of renting my house  the rules and regulation goes this way. You must keep my house clean  including the surrounding, you must know the way in which you use the  stove so as to avoid fire outbreak,you must not disturb the neighbor.  We decided to rent out the property due to our transfer to (West  Africa) on a Missionary Work because, in a church here named World  Mission Center, so we are renting it out since we need someone to take good care of the property on my absent.

Have this in mind you must know the kind of person that i am,but nevertheless i am giving you this rules because of what corresponded between me and my last tenant. the keys and documents are with us here in West Africa… so i will need to ship them to you before you can occupy the house but you can drive by the house anytime to take a look.

You might notice a for sale sign, We plan on selling the home before our departure, but after our mission we decided to rent it out so that we can still have the property upon arrival.

2 br | 2 ba

Square Footage:1,218 sqf

House Type: Single Family Home

Pets are welcome!!!

Rent: $600

Deposit: $450

Location:760 Liberty St SE, Salem OR.

So for folks looking to move to Salem Oregon, please be careful of Craigslist scams.  I strongly suggest that if you are planning to rent google the address and see if the house if for sale. If so contact the listing agent directly to find out if it really is for rent.

Move on over Starbucks…local coffee houses is where it’s at.  Salem is fortunate to have some really good local coffee houses, all with a slightly different atmosphere.  I think it is important to have different places to go depending on what you are looking for.  My favorite top local coffee houses, in no particular order are…

French Press. A newcomer to the Salem Oregon scene, this coffee house just happens to have some awesome crepes to go along with your drinks.  The smoothies are good and Tomson kid tested and approved  (which is saying something from my picky eaters).  With an elegant Eiffel Tower theme, this place is typically busy.  Just a fair warning the Kona is wonderful BUT strong.  For those of you like myself that aren’t regular coffee drinkers…go easy on this blend.  I was hyped up after drinking just one cup of this. I normally talk fast, but I felt like I was talking in super speed after drinking this coffee.  Seriously it made me hyper.

Ike Box-The Ike Box is also on the coffee house scene.  I LOVE the interior of this building.  The owners did a great job of preserving the architecture of the original building and for that I thank them.  Not everything old needs to be torn down and “updated.”  The Ike Box supports the owners non-profit program called Issac’s Room.  At-risk teens are welcome to come and just hang out here. They have rooms for them to come and just have a safe place to be, to learn skills and gain confidence.  I just love the idea of supporting a local business owner that has good coffee (they tend to make it sweet so keep that in mind when you order), great atmosphere, AND tries to help some of our troubled kids at the same time.  If you haven’t been here.  Go.

Blue Pepper-The Blue Pepper is a coffee house and gallery so there is art all along the walls that is for sale.  We have some excellent local artists so there is a lot to look at.  There is a conference room at the back for business meetings or get togethers.  They have Wi-Fi as well or you can hop on one of their computers at the coffee house for a fee.  Grab some coffee and surf the net.  Edit:  I wrote this post before the Blue Pepper lost its lease.  I don’t know if they are going to reopen at a new location or not, yet.  I’ll update this post if they move to a new location.

Coffee House Café-This is Salem’s laid back coffee house.  For those of you that want a really casual down to earth atmosphere, this is your coffee house.  It  has Wi-Fi, and if you are looking for a place to hang out with friends in a down to earth atmosphere this is the place for you.  I can’t help but feel that there are serious philosophical discussions occurring over coffee at this place.  They also have vegetarian food.  The owners are generous and have support our local charities.  I worked on a couple of auctions and they graciously donated to them.    I always appreciate our local business’s supporting our local community needs.

The Governor’s Cup-This coffee house is easy to miss because there is just a tiny sign to let you know it is there.  This is probably one of Salem’s older coffee houses and the interior kind of reflects that.  I guess I think that is part of it’s charm.  They roast their own coffee there and you will smell like coffee if you happen to go there while they are roasting.  Not necessarily a bad thing if you like the smell of coffee.  Be warned that if you sit down at this coffee house you are expected to order something.  One of the big complaints by the Willamette students that frequent this coffee shop is that they will be asked to leave if they don’t order anything.  If you want to hang out, that is what the library is for.  If you want to hang out at a local business, please support them and order something.

Cascade Baking Company-okay technically this really isn’t a coffee house, per se, but you really need to go in there and get some coffee and one of their incredibly delicious fresh baked goods.   We don’t have a lot of local bakeries, and many of our local shops buy their baked goods from CBC.  The hardest part is deciding what to get.  So if you want a good cup of coffee AND a yummy breakfast treat…this is your place.

So if you are looking to move to Salem Oregon and want to know…where do I go to get some coffee, consider checking out these LOCAL places to get some good coffee.  Each of our local coffee houses has something to offer everyone.    Whether you are a hippie, intellectual, tech geek, college kid, yuppie…we have a coffee house here that will work for you.

A few years ago I went to a house owned by a single man here in Salem Oregon.  He was contemplating putting his home on the market.  “What do I need to do to get the house ready?” he asked.  “Bulldoze it?” was what I really wanted to say, but with all my mental might I held my tongue (which is no small feat) and instead said “It looks like you tackled some remodeling work yourself. ” (I use the word “remodel” very loosely here)

See, like many homeowners, he decided to embark on a remodel project.  Possessed with the pioneering spirit that made Oregon…well Oregon, he boldly went where no homeowner should go: neon paint.  Unfortunately how to miter a corner correctly, how to cut tile, and how to pick paint that isn’t oh say…the color of alien slime…wasn’t one of his skills.  Why they even make paint that color is beyond me, but I think they make it to sucker people into having to buy more paint since it looks so bad once it is done.   Unfortunately,  he was oblivious to the devious plot of the paint company and actually thought it looked good.

As I looked at the botched jobs it was difficult to put a damper on his pioneering spirit, but the fact is his remodel work stunk.  Back then we didn’t have local home stager, Margaret Oscillia around to do my dirty work for me and tell people their homes need work.  It was just me and my brain doing my best to summon all the polite words I could.    He was so proud of his improvements and I felt bad telling him that his improvements actually cost him money because it wasn’t done well.   Yes some remodels will actually cause the house to lose value.

Now, I have seen many excellent home owner remodels done.  I have had some clients that understand that laying out tile takes more thought than…I’ll start in this corner.  If you are a first time home buyer and thinking of diving into a remodel project consider a few things:

• Do you have the time to LEARN how to do the task properly? There are many great videos online that demonstrate how to do some projects.  Home depot offers some classes for some things as well.  Learn before you dive in. This one step will save you thousands in lost resale value.  Seriously, I really don’t want to write on my MLS listing “new counters poorly installed by home owner…just look past that and the poorly installed trim,  pretty please with sugar on top.”

• Do you have patience? The fact is that as you are learning you will mess up tile cuts, crown moulding, and baseboard cuts.  Plan on making mistakes.  The pros had to make mistakes to learn too.  Often times people get tired of the project taking too long and they just “hurry up and  finish”  which really means “Let’s leave this project for a future homeowner to deal with.  They won’t mind.”

• Do you have the money? If you are tight on a budget, wait a bit to get more money.  Projects tend to cost more than you expect because…well…you mess up and need to rebuy materials. Plan for this.  I can’t tell you how many times a buyer has walked in a house and said “Well they cheaped out on that, didn’t they?”  Make sure the quality of your materials are consistent throughout the project.

• Can a contractor do it cheaper? Sometimes people get so caught up in the DIY mode that they forget that those tools to do that task properly cost money. Now locally you can rent many tools at Capital Rental but really there is nothing worse than a $400 saw collecting dust in the garage for all the “DIY” work you planned to tackle.  A table saw really can’t double as a coffee table….well unless you are super crafty or something…

So as  the economy has gotten difficult an many homeowners taking pay cuts, I encourage you all to consider future resale when you tackle home repair and remodels.   To DIY or DDIY?  Be honest about your skills and motivation…you may want to join the ranks of the DDIYer’s…Don’t Do It Yourselfers and save yourself some money in the long run at sale time.