Melina Tomson, M.S. Salem Oregon Real Estate Specialist

Salem Oregon real estate has trucked along at a steady pace for many years. Nothing spectacular worth talking about, just an average community. We did see things go crazy here (crazy in Salemite terms) in 2005 and 2006, but not like other parts of the country. I was looking at housing predictors ranking of 25 best and 25 worst forecasts for 2008 and noticed that Salem Oregon is right up there!

Salem was ranked #3 for expected appreciation. Salem appreciated at 3-5% last year (2007), depending on what figures you choose to look at. Portland, which is one hour North of Salem, ranked in the top 25 projected worst forecasts. Having sold some investment properties to clients up in the Portland area, I can say it was crazy. 16 investors bidding on a trashed out REO is crazy in Oregon terms.

While I agree that resale homes will hold their course, I do think that new construction (which currently has a 17 month inventory) will be facing a larger correction. Since these homes are over $350,000 at builder costs, even their sale at cost will still bring averages up. Salem also has the advantage of being one hour South of Portland. As Portland homes skyrocketed in price, North Salem and Keizer homes could not be built fast enough for commuters. Salem is still significantly less expensive than Portland and many who choose to relocate are not disturbed by the one hour commute time.

W are still in a buyer's market and probably will be for the year. Sellers still need to be realistic about pricing and agents still need to look at the comps closely. As they say, the greater the rise, the faster the fall.

Thankfully, Salem is falling gently.

"How much do you charge to sell and buy a house?" asked the gravely voice on the other end of the phone.

"Tell me a little bit about your needs." I replied.

The caller was a retired woman in her 70's and her husband in her 80's. The purchased a house at the end of 2005 with a teaser rate loan AKA the option arm loan. Needless to say, the ARM is adjusting in accordance with the contract. Her loan is being recapitalized at a rate of $1,000 per month. What little equity lies in the home will be eaten into in a matter of months.

"I've talked to 11 lenders so far. I love my house," she said. She was clearly upset.

"Let me run some quick calculations and see what type of mortgage you can afford," I replied. The home purchase they made was about double what they could really afford under a standard fixed rate loan. "You are going to have to sell or face foreclosure."

"Those lenders who do these loans should go to jail. I won't go into foreclosure, so there is nothing to do but sell."

I recently blogged about the coming Tsunamihere in Oregon for subprime woes that have affected the rest of the country. Oregon had been fairly conservative in its lending practices, so we weren't as hard hit as other parts of the county where it was very common.

In 2006, option arms and other forms of lending started to become more commonplace here. It is expected that Oregon will be at its fullest foreclosure potential here in the next 6 months with these nonconforming loans.

11 days into 2008

And so it begins...

There are a lot of dog owners in Salem Oregon, myself being one of them. I decided to write a brief blog for those other dog lovers out there, who might be relocating to Salem or are new and maybe not sure of what is out there.

Dogs are allowed in all Salem city parks as long as they are on a leash. Mutt Mutt dispensers are available in most parks for scooping poop in case you forget your own bag.

Currently there are two off leash dog areas here in Salem proper

Minto Brown Island park and Orchard Heights Park. There is some talk about having an area at Cascades Gateway Park, but not enough funds at this time.

While not located in Salem, Silverfalls State Park has an excellent off leash area for dogs as well. Be warned that dogs are not allowed on some of the trails, so if you plan to walk the waterfalls with your dogs, you will be disappointed.

Salem has many city parks. Use common decency when using the parks with your dogs, and remember to keep them on a leash unless you have voice command with them. Otherwise, enjoy some of the nice parks, that we have to offer!

I recently had a gentleman call me about two lots I have listed for sale for a client. There are some restrictions on the type of home that can be built. As the man was talking about what he wanted to build, I stated "that sounds like a Cape Cod style home." Unfortunately, he did not know what that was and so I started to try and describe the features to him.

Cape Cod styles homes were built by English Colonists who arrived in America in the late 1600's. They were modeled after homes in England, but had to be modified for the storms of New England. What emerged is what we refer to as Cape Cod.

Cape Cod Homes have the following features:

• A steep pitch roof (8-12) that has side gables. When you look at this roof, you think "I need to hire someone to blow my leaves off. I'm NOT getting on that." When that thought jumps into your head you are looking at an 8-12 slope roof.
• The homes are 1 to 1 ½ stories. When you walk into an upstairs that has lower, angled roofs that feels cozy, you might be in a cape cod.
• They originally had a large CENTRAL chimney for more effective heating, but revival homes tend to have the chimney on the end.
• They have symmetrical appearance to the exterior. Windows are evenly spaced. The door is in the center.
• They were originally made of clapboard siding or shingles.
• The windows have grids/multi-paned glass.
• They have shutters which were originally used to protect the glass during storms. In revival homes they are strictly decorative.
• Very basic with little ornamentation.

Salem is fortunate to have some of these examples here locally. They are especially stunning when homeowners have been able to preserve the original hardwood floors. You can't help but walk into one of these homes and feel like curling up with a good book.

For examples of the Cape Cod style, you can walk around the Bush Park neighborhood, Englewood, and Fairmount Hills for some wonderfully maintained homes.

I read Jon Zolsky's post about some of the NAR regulations and was surprised by some of the comments. Not because they were negative or rude, but because of how many MLS's require NAR membership.

According to the article 82% of you have no choice. While I knew that many MLS's required Realtor® membership, I can say I was truly stunned that the percentage was so high.

I am located in Salem, Oregon and subscribe to the Willamette Valley Multiple Listing Service. My MLS does not require Realtor membership in order to be a member of the MLS. I personally think this is the way it should be. The RMLS, which covers Portand, Oregon does (or at least you to when I belonged before). I have always elected (up until this year) to be a Realtor®, as have approximately 48% of my other MLS members. I have always felt that my local Salem Association of Realtors® and Oregon Association of Realtors® have done an outstanding job and have been proud to be a member of those organizations. NAR, well that's another story for me...The fact that I can't just join my local organizations is a sore point for me, but I digress...

I have read that for many who consider the two necessary together, the biggest issue is dispute resolution. "What happens if someone refused to pay a commission listed on the MLS to a non-Realtor?" Our MLS has extensive by-laws that include dispute resolution. If you want to use the MLS you are agreeing to follow the rules, the MLS code of ethics, and by-laws. Honestly, I can say, in my experience, whether someone is a Realtor® or not, makes no difference from a MLS perspective. I have no idea who is one and who isn't, without looking them up in my local SAR directory. Whether or not someone is a Realtor® has little to do with their ethics, in my opinion, because for most of you, it is a forced choice. In doing that, the Realtor® designation becomes meaningless. I believe that something can only have great value when we choose for it to have value.

For many Realtor® boards, our approach could be a cause for concern. In theory if all MLS's did what we did, and agents joined in the same percentage, then Realtor® membership would fall by 52%. That would greatly impact the lobbying dollars of the real estate industry. I can see NAR and other local associations not being excited about that prospect.

Having been a Realtor® by choice, I was always sold on the value offered by my local associations and felt they were a bargain. I am a firm believer that choices bring out the best. Having a range of real estate business models in our industry forces all of us to be service oriented not sales oriented. Having the choice to be a Realtor® forces our associations to run efficiently and offer the members excellent service. Realtor® associations would be forced to "sell" us on their services and show their value outside of the MLS access. The Willamette Valley is case in point, that it can be done.