Get Real Estate Blog: Salem Oregon Home Trends and Relocation Information

Recently the Statesman Journal and Salem-News.com spread the word that foreclosures in Salem Oregon had increased.  They used CoreLogic as their source of data and they are reporting an increase for Salem.  I disagree with their presentation of the data and here is why…

Interpreting the foreclosure data

First of all CoreLogic and I look at different things.  First,  they have their foreclosure rate calculation. This is a calculation based on the number of mortgages involved in the foreclosure process at any given point in time. Think about their data this way.  In January,  10 loans get served with a notice of default.  5 works things out with the bank, 5 don’t.  Those 5 homes are slated for auction in April.  April comes and 2 of the 5 delay their auction to do a short sale.  The other 3 go to auction and 10 more people get served with a notice of default.  So CoreLogic says that there are 12 homes (the 2 short sales plus the 10 new properties)  in their foreclosure rate in April which is a 20% increase over January.  It isn’t that 20% more homes got served with defaults, it is just that there are 20% more homes in the system.   CoreLogic’s “foreclosure rate” isn’t a foreclosure rate the way more lay people think about it.  There wasn’t an increase in the number of homes that went into foreclosure in Salem Oregon.  There was an increase of the number of homes in the system.  Essentially, CoreLogic’s foreclosure rate is really a shadow inventory rate.

The other difference in our data is that my data is Salem Oregon proper.  I don’t include Keizer, Gervais, Turner, etc in my calculations.  Just Salem.  They include a wider birth of zip codes in their data, where I pull by address and not zip code.  In fact,  the CoreLogic data showed a 16.4% increase in the foreclosure rate for the zip of 97307, which is the zip for PO boxes.  What I don’t know is if they have any doubling up of their data with two addresses (the physical address and the PO address).   Apparently,  people with PO boxes in 97307 are late on their mortgage payments lately.

Salem Oregon foreclosures

While I do think shadow inventory is important because at some point it will hit the market, I also care about how many physical properties are being served with default notices.  At some point we have to sell a real house and my data is showing that the number of properties being served with defaults in Salem Oregon  has in fact decreased for the second quarter in a row….by 14.3%.

So what does my data vs. CoreLogic mean for the Salem Oregon real estate market?  Pretty easy interpretation, I think.  Short term…not so hot.  That shadow inventory being tracked by CoreLogic will hit our real estate market at some point and continue to keep prices down and inventories up.  Long term…we are going in the right direction and we are starting to decrease the amount of properties feeding into the shadow inventory black hole.

If you want to see the homes for sale in Salem Oregon that are in foreclosure, just click the link, then contact me for a showing.

Data provided in this post was calculated from information received from Fidelity National Title Company.

Negative numbers often conjure up negative images for me.

-40 degrees…means you are freezing your hiney off in some insanely cold part of the country.

-$50 means you just bounced a check at the local grocery store.

You know sometimes a negative number is a good thing….

-10 pounds…there aren’t too many people in the country that wouldn’t sign up for that.

-11% drop in Salem Oregon foreclosure notices…give me more of that, pretty please.  I’ll be nice…well, I’ll try anyway.  No guarantees.

I don’t think it is a big secret that foreclosures have been pulling home prices downward.  It isn’t a secret, right?  I don’t want my special real estate agent card revoked because I gave out classified information here…BUT for the first time in 5 quarters, the number of notice of defaults dropped by 11%, at least according to the information I get from Fidelity National Title Company.

Now that number is still…oh,  say…four times more than normal, but a drop now means that in a year from now we will see fewer of these properties hitting the market.   With our drop in unemployment here in Salem from the 11’s to the 10’s, it is possible that this downward trend will continue.

Right now 12.2% of Salem Oregon  listings on the WVMLS are designated as distressed properties (ie a short sale or foreclosure) and 11.1% of properties that sold in Salem last month were distressed properties.  It will take several quarters to bring these numbers back to normal, but it is nice to think of the possibility that we might be past the worst of those foreclosure numbers.  Unfortunately, one quarter doesn’t make a trend and we’ll have to see what happens in the next two quarters.

We’ll have to see how the rest of the small towns faire, but Dallas only experienced a 50% jump in foreclosures notices from 2008-2009.  It’s pretty sad when a 50% increase is good…Now I think part of that is that some of the builders out there were much smaller builders and went into default in 2008 because they couldn’t hold out as long as some of the larger Salem builders could, but I also think that homes there are just more affordable for most people.

Dallas Oregon Foreclosure Rates

This chart shows notice of defaults that were served in Dallas Oregon in 2009, according to Fidelity National Title Co.

In Dallas Oregon, there were 140 notice of defaults served in  2009 compared with the 94 served in 2008.   

How did that translate into the real estate world in Dallas Oregon this year?

Of the homes (regular single family and acreage properties) listed in 2009 according to the WVMLS,  35 were listed as short sales or bank owned homes.  That is 8.1% of listings.  This is one of the lower percentages of distressed properties in the area, and unlike Silverton which had a huge bump in Notice of Defaults served, Dallas’ jump is more proportional with the increase in foreclosure notices.

The future of distressed properties in Dallas Oregon?

Right now distressed properties make up 7.4% of the Dallas Oregon real estate market.  Like all of the metro cities, I would expect this number to rise due to the ongoing unemployment problems in Oregon. Unlike some of the other metro cities where I think the higher end houses will push home prices down, I think just the ongoing supply and demand problems here due to the excessive building (even moderately priced homes) will continue to pull prices down here.

If you are interested in foreclosures or short sales and want to start watching the foreclosure market, just email me to get on the list.

With the kind of ugly nature of the Silverton Oregon real estate market for 2008 and 2009, its not surprising that foreclosures are up a lot here.

Silverton Oregon Foreclosure Rates

This chart shows notice of defaults that were served in Silverton Oregon in 2009, according to Fidelity National Title Co.

In Silverton Oregon, there were 110 notice of defaults served in  2009 compared with the 51 served in 2008.  This 115% increase is one of the worst in the Salem Metro market, barely coming in less than Salem’s 119% increase.  Yuck.

How did that translate into the real estate world in Silverton Oregon this year?

Of the homes (regular single family and acreage properties) listed in 2009 according to the WVMLS,  34 were listed as distressed properties (ie short sale OR foreclosure).  That is 10.8% of listings which is lower than both Salem and Keizer which are over 11%.

The future of distressed properties in Silverton Oregon in my opinion?

Right now distressed properties make up 9.5% of the Silverton Oregon real estate market.  Of potential concern is the large number of default notices, yet the number of active listings isn’t showing as being distressed.  This is potentially concerning because of the large increase in notice of defaults: there should be a corresponding large increase in short sales on the market.  If home sellers have some equity to sell and be able to clear title, then this is a good thing for sellers because they won’t have the foreclosure or short sale ding on their credit.  If home sellers are just not putting their homes on the market, then that is a whole other concern.  Short sales seem to depress real estate values less than foreclosures do since they tend to sell at less of a discount than foreclosures do.  If these homes don’t hit the market as short sales, but rather foreclosures, then home prices will absolutely continue to drop in Silverton.  A 10% drop in real estate values in 2010 in Silverton Oregon is a very real possibility with the current market dynamics.

If you are interested in foreclosures or short sales and want to start watching the foreclosure market, just email me to get on the list.

I was kinda hoping that some of the smaller towns surrounding Salem Oregon would come out a bit more…well…unscathed, but that is not going to be the case.  Unfortunately foreclosure notices are equal opportunity.

Keizer Oregon Foreclosure Rates

This chart shows notice of defaults that were served in Keizer Oregon in 2009, according to Fidelity National Title Co.

In Keizer Oregon, there were 238 notice of defaults served in  2009 compared with the 131 served in 2008.   While not as ugly as the Salem Oregon numbers, foreclosure notices in Keizer Oregon increased 81.7%.

How did that translate into the real estate world in Keizer Oregon this year?

Of the homes (regular single family and acreage properties) listed in 2009 according to the WVMLS,  43 were listed as short sales.  That is 7.5% of listings (same as Salem).  20 homes were listed as foreclosed properties (ie REO’s), which is 3.6% (just a tad higher than Salem).  So the total percentage of listings this past year in distress was 11.1%.   Of the short sales listed 40% were successfully closed by the end of the year. Of the REO’s listed, 70% were successfully closed. So some of that distressed property market was able to be taken off the market by buyers.

The future of distressed properties in Keizer Oregon?

Right now distressed properties make up 13.7% of the Keizer Oregon real estate market.  It’s a bit higher than the Salem Oregon market.  Unemployment and layoffs are equal opportunity these days and class less.  As I am expecting for Salem, I would expect these numbers to rise for Keizer as well.

If you are interested in foreclosures or short sales and want to start watching the foreclosure market, just email me to get on the list.

I would love to stop talking about foreclosures,  personally.  It would mean that Salemites are no longer under financial duress, but unfortunately with our current employment problems this will probably be an issue for a while.

Salem Oregon Foreclosure Rates

I don’t think you need to be a Salem Oregon real estate agent to know that foreclosures have gone up in our area.  Most of my buyers in 2009 purchased a foreclosed property.  This chart shows notice of defaults that were served in Salem Oregon in 2009, according to Fidelity National Title Co.    They started climbing in the second quarter and have continued to climb since then.

In Salem Oregon, there were 763 notice of defaults served last year and 1673 filed this year.  The math is seriously ugly on this one…119% more notice of defaults this year over last year.

How did that translate into the real estate world in Salem Oregon this year?

Of the homes (regular single family and acreage properties) listed in 2009 according to the WVMLS, 309 were listed as short sales.  That is 7.5% of listings.  136 homes were listed as foreclosed properties (ie REO’s), which is 3.3%.  So the total percentage of listings this past year in distress was 10.8%.  Considering our high unemployment rate I think this is excellent.  For those of you contemplating a short sale, right now 32.3% of short sales that were listed have closed.

The future of distressed properties in Salem Oregon?

Right now distressed properties make up 11.6% of the Salem Oregon real estate market.  Honestly, I would expect this number to go higher this year.  The notice of defaults really didn’t hit until the end of this year and I would expect many families to run out of savings as finding work is very difficult.

If you want to follow foreclosures and short sales as they hit the real estate market just sign up with me to watch the market.

It was well known in the real estate world that banks didn’t like to take deed-in-lieu of foreclosure from sellers in trouble. Any seller that has tried to negotiate one of these in the past two years has gone up against a brick wall.

It is well known in the real estate world that there are a lot of foreclosure. Any moderately active real estate agent here in Salem Oregon has done deals with Fannie Mae and Freddie Mac. Fannie Mae, in an effort to control the flow of its foreclosures, recently announced that they will do a Deed for Lease program.

How Deed for Lease works is that if you are a seller in trouble who doesn’t qualify for a loan modification, they will consider renting the house to you for up to one year after you deed it over to them. The fact is that Fannie can’t sell and process the houses fast enough. This way, the house is at least occupied for a while and maintained. Part of the problem for banks is the damage that is occurring to unoccupied property. Personally, I think this is one of the smarter moves that lenders have made…which isn’t saying a whole lot, let me tell you.

So…for those of you that have a Fannie Mae held loan, and you are facing foreclosure here in the Salem Oregon area. See about the Deed for Lease program. It might be the right choice for you, if you don’t feel that a short sale is what you want to do.

As the third quarter has come to an end, we can get a better look at a lot of our local  real estate data.  I’ll write some posts about our small cities in the next two weeks, but wanted to focus this post on Salem Oregon again, specifically looking at the foreclosure data.

The rise in foreclosures has been obvious to any local real estate agent. What used to be a rare blip in our market is a daily event. It is hard to do a home search these days and not see some sort of foreclosure or short sale pop up.  So where are things at, as of the 3rd quarter?

Well red is this year and blue is last year.  There was an odd dip in the 3rd quarter last year due to the moratorium on foreclosures so the data is a bit skewed.  I looked at year to date data instead and there was a 121% increase in notice of defaults served in 2009 year to date over 2008. The 3rd quarter spike we have is to do our fellow Oregonians struggling due to layoffs and pay cuts.

Today the unemployment rate announced at 11.5%.  I’m not sure what Salem’s  rate is, but hopefully we saw a corresponding dip here.  I still think we have a long way to go, and we will know more looking at the next two quarters after the home credit is gone.  The numbers were an improvement this month, but it’s hard to know how much of that was unnecessarily inflated.

As for foreclosures…the numbers are still high and at this point increasing. I do think that if employment stabilizes then these rates will come down.  For the most part, I expect these to be unemployment related and not funky loan related.

With unemployment still high many Salem Oregon area homeowners are in a dire predicament these days. The letter that comes in the mail stating their home is headed for foreclosure is not happy news.   In the 2009 Oregon Legislature, a bill was passed…Senate Bill 628 for the curious. This bill requires lenders to meet with borrowers facing a foreclosure and see whether or not they qualify for a loan modification. It doesn’t guarantee a loan modification because sometimes people just can’t stay in their homes.

When the notice of default comes in the mail, along with it will be information about loan modification.  As of yesterday, if the borrow requests a meeting, either in person or on the phone, the lender MUST meet with the borrower OR show that they evaluated the borrower for a loan modification and the buyer didn’t qualify.  They need to do this process before foreclosing on a home.

According to the State of Oregon:

Oregonians who are seriously behind on their mortgage payments should watch their mail for the new foreclosure notice. Once they receive the notice, they should immediately take the following steps:

1. Call their lender to set up a meeting to discuss a loan modification.
2. Fill out the loan modification request form provided in the notice.
3. Call 1-800-SAFENET and ask to be referred to a nonprofit foreclosure counselor. The coun­selor can help homeowners request a loan modification.

Homeowners should act fast – they have 30 days from the date of the foreclosure notice to request a loan modification.

Read that part in bold.  If you are a homeowner in trouble this is not a means to stall your foreclosure.  You can’t request a loan modification the day before auction.  This law is meant to hold lenders more accountable and be responsive to the many homeowners that have requested help with no response in sight.

So, if you are one of the many weary Salem Oregon area home owners that are facing a short sale or foreclosure… call the Department of Consumer and Business Services at 503-947-7854 or call 1-800-SAFENET to be referred to a foreclosure counselor.

It was recently reported that the unemployment rate drop we had in July bumped back up in August to 12.2%.  I think most people realize that our economy has many woes and it won’t be an easy or fast recovery.  It has been talked about ad nauseum in pretty much any real estate forum that the state of the real estate market is due to non-conventional financing.  For the most part, Salem Oregon area home buyers tended to choose fairly conventional forms of financing so we haven’t had the big surge of funky financing defaults that say California had.

The biggest threat to the Salem Oregon area real estate market isn’t an option arm that is correcting, but rather unemployment.  I was talking with a reporter for the Keizer Times this morning and I’ll share the same stats I shared with him, with you.

Salem Oregon has had a 110% increase in notice of defaults in 2009.  From Jan-Aug of 2008 488 NOD’s were served in Salem Oregon. For that same time frame in 2009 1025 were served.  In August, in Salem alone, 240 NOD’s were served.  At the beginning of the year people started to get laid off their jobs.  It takes about 3-6 months of getting behind in mortgage payments before the bank issues the NOD.  Our Salem Oregon area real estate market faces ongoing problems as these unemployment foreclosures make their way through the system.

How about some of the other cities? (Jan-Aug 2008 vs. Jan-Aug 2009)

Aumsville Oregon has had an 86% increase in notice of defaults

Jefferson Oregon has had a 79% increase in notice of defaults.

Keizer Oregon has had an 81% increase in notice of defaults.

Silverton Oregon has had a 144% increase in notice of defaults.

Stayton Oregon has had a 94% increase in notice of defaults.

Turner Oregon has had a 36% increase in notice of defaults.

Now before you all think that the world is coming to an end and start to panic.  Don’t panic.  The Salem metro area real estate market is in for a long slow haul, but it doesn’t mean real estate is cratering here.  Please don’t call me to buy a house for $10,000.  I won’t be able to find one for you…not even close.  I have helped many buyers this year get great deals on homes.  But please remember…despite these bad numbers Salem Oregon is not Detriot.

If you are thinking about diving into the local real estate market give me a call or email and we can get you starting to watch the market.

P.S. Foreclosure information was calculated from data received from Fidelity National Title Company.