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

When most people think of Oregon they think of gloom. It rains all the time...

Beside the fact that it really doesn't rain all of the time, there are benefits to rain. When I moved to Oregon about 18 years ago now, one of the hardest adjustments was the fact that it could be sunny and raining, then sunny and raining all during an 8 hour day. I felt like I was constantly taking coats on and off trying to figure out what to wear outside. I have been surprised many a time leaving my house with my sunglasses and forgetting my rain coat, only to be hit with rain two hours later...

I was interviewed by a local news station, KATU, the other day about the chicken ban here in Salem Oregon. As I was waiting for the news crew, I was reminded about great things that happen when sun and rain combine.

This was taken with my iphone. I was wishing I had brought my digital SLR with me for this one...

I have seen so many double rainbows here in Oregon. Rain is not all bad!

Remember if you are looking to relocate to Salem Oregon, that rain keeps us green and gives us the occasional double rainbow!

It was announced yesterday that Silver Falls Bank failed. The FDIC closed the bank and Citizens Bank out of Corvallis is purchasing the bank. Those branches will reopen on Monday as usual except they will be Citizens Banks.

We here in Oregon had spent 2007 and 2008 somewhat insulated from the disasters befalling some other states. With the failure of a Beaverton bank last week, this current failure reminds us that we are affected as well. As I watched the events unfold across the country, I could see that our market was going to head for some difficult times ahead. While real estate is local, what happens across the country trickles down here.

Potential buyers unable to sell their homes across the country were unable to purchase here. Potential buyers that took a loss on a home in another state were unable to buy here as lending standards tightened and they didn't have enough of a down payment yet. Potential buyers that took a hit on their homes in other states, were shaken by those events and wanting to sit out for right now. Whether we like it or not...our real estate markets are intertwined.

Some agents reassured sellers that "home prices are fine." We are insulated...it won't happen here. Take off the rose colored glasses. Don't panic, but accept that Oregonians are heading into a difficult 2009. Stay informed so you can make wise real estate choices for yourself.

Clearly...it happens here too.

If you have an account at Silver Falls Bank you can go to the FDIC website for more information about how this might impact you.

RealtyTrac comes out with national foreclosure data every month, and according to their latest report, Oregon ranked #5 for foreclosure rate with a 1 in every 357 homes being served with a foreclosure notice.

What does this mean for Salem Oregon home buyers and sellers? Foreclosures are definitely running hotter in general. Foreclosure notices in January were down 20% from December of 2008, but are up 14% from January 2008.

Now, foreclosures have always been a small part of our Salem Oregon real estate market (1/2-1%), but that is changing. There are currently 1729 active/pending listings on the WVMLS for Salem Oregon. 106, or 6.1%, of them are designated as short sales or foreclosures. That percentage is still very small compared to other parts of the country, but that has doubled since December of 2008.

There are some million dollar properties on this list as well as total dumps (that is a technical real estate term by the way...) The face of foreclosure has changed, and the woes that started in other parts of the country, are seeping into Oregon.

Buyers need to understand that MOST homes are not short sales or foreclosures, but normal real estate transactions. Sellers need to be aware of this growing trend here, and be extra competitive. While real estate is local, if relocators can't sell their homes across the country, they can't buy here. 2009 is shaping up to be a challenging year here in the Salem Metro area.

If you want to receive the foreclosure or short sale listings as they hit the MLS, or the weekly foreclosure lists for Marion county...email me at melina@tomsonburnham.com

I don't serve the Lebanon Oregon area, but that county does lie next to Marion county. I wanted to get the word out about well contamination that has been occurring in that area.

The chemicals tetrachloroethylene (PCE) and trichloroethylele (TCE) are in the groundwater in some parts of Lebanon. This is not an issue for people that use city water.

So...if you are looking to move into Lebanon Oregon and plan to purchase a home that has a well, you need to check the well for these chemical solvents.

Oregon law requires that wells be tested for nitrates and coliform during a real estate transaction, but it can test "clean" for these and still have the chemicals in it.

So...buyers if you have any questions about PCE or TCE, you can call the DEQ at 1-800-844-8467 X 7349 for more information.

I finally understand.

I always wondered how the NAR forecasts were so much more optimistic than other ones. I think I understand why now...

As I was drinking my green tea this morning and crunching data, I felt my head roll back in my eyes as the gobs of numbers started to blend together. Did I just run data on duplexes or houses? Lots or bare land?

As my head lolled to the side, I realized that the data looked better that way.

I like the charts better upside down...

According to my upside down chart, we are experiencing a nice steady rise in the average and median home prices.

Now I was afraid that I was going to have to tell you that the average home price dropped in 2008 over 2007, BUT I don't. I just need to turn the graph upside down.

See? Life is better this way.

For those of you that need the actual real data...okay, fine I'll share it with you, but you can always turn the chart upside down if you are feeling bad about real estate here in Salem.

Where did we end up?

Despite my need to turn my charts upside down...not too bad actually. The average sales price ended at $217,824 and the median sales price ended the year at $198,850. The average was down 5% from last years, and the median declined only 2% from last year.

You can see on the chart that we were still peaking in prices in 2007 when many other parts of the country were showed declines for 2007.What can I say...we tend to lag behind the rest of the country in the real estate world.

Well, how long were homes staying on the market? I know this is a burning question that consumes your soul wondering about this piece of data. Well, I don't think it is a big surprise to say that days on the market increased. Homes were on the market 18% longer this year than last year. While that might sound like a lot, the DOM still only averaged 4 months. In the world of real estate that is still pretty good.

Everyone has their favorite statistic that they like to use. I like to look at how many homes were listed in a year vs. how many were sold. To me, this helps to show future trending that will occur with pricing and where our market is headed.

So where is our market headed?

As you can see the number of homes sold compared to the number of homes listed in a year has an increasing gap. This gap has been widening due to the lack of affordability of housing. What we have as the end result is a glut of inventory.

Essentially the closer the lines are together the less inventory, hence a seller's market. The farther the lines are away from each other, the greater the inventory and a buyer's market.

Buyer demand for overpriced housing has been declining for two years as prices escalated. Buyer's stepped out of the marketplace as homes continued to become more and more unaffordable. The fact that home prices only corrected slightly, while homes sales plunged tells me that our prices are still too high for buyers. Our supply and demand curve has not stabilized. The average and median home prices are going to have to correct more in order to get buyers back into the market. A 5-10% correction should make homes more affordable and bring more stability to the real estate market. We will continue to see a buyer's market here in Salem. It does not appear to be trending towards neutrality at this point.

If you don't like the sounds of that, just turn the charts upside down. Everything is rosy...

For other 2008 Salem Oregon Market Reports:

• Acreage
• Lots
• Bare Land
• Duplexes