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Last year my crystal ball was off by 1.6%.  You’ll recall, I failed to eat my Wheaties and ended up erring on how much the market was going to correct for 2010.  For 2011, I guessed 5-7% with a possible 10% correction at most.   Well, Salem Oregon maxed out in 2011.  The average home price dropped 9.7% and the median shifted downward 10.7%.  It was a more volatile year than anticipated for home prices as they took a header during the first quarter, but remained at that value for the remainder of the year.

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 suprising similarlity.  $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.

You all think real estate is Beemers and golf outings during the day.  I know you do, but really real estate is more glamorous than that.  Seriously…so much more glam.  In fact, I am wearing my Vera Wang and Jimmy Choos as I type this.   I will share an only slightly embellished true story with you to demonstrate the sheer sophistication of being a real estate agent…

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.

I wrote before Thanksgiving that I think sometimes we forget that we should be thankful the other 364 days a year.   With this economy, the needs of our local citizens isn’t changing because the holiday season is over.   Our charities are still hurting and all of us are stretching our dollars in our budgets.  As such, I’ve decided to stick to my words and be thankful 365 days this year.  I’m going to share with you all and our local Salem area because I am thankful for everyone that has chosen to be my client or refer someone to me over the years.

So how does it work?  Each month I will give away gift certificates to a locally owned business.  Hopefully all of you have been there, but if you haven’t take the time to try and win the gift certificate.  Each week, on Fridays, I’ll have a “trivia” question to answer about the Salem area or a local citizen.  These will be posted on my Facebook business page, so answer on there.  The first person to answer will get 10 points and second 5 points.  Every time you get a friend to like my business page you will get 5 points (you have to let me know you brought them to my page).  Whomever has the most points at the end of the month will get a $100 gift certificate.   I will also donate $250 to the local charity of your choice that month.   Over the course of the year, we will have $1200 in gift certificate giveaways, and $3,000 donated to local charity.

Let’s talk charity for a minute, shall we?   I do have some restrictions on that….1) It has to serve our local area and 2) It can’t discriminate.  So if you say, hey Melina, I’m loving on the KKK and want my $250 to go to them, it isn’t happening.  I reserve the final say on the charity that receives the money, but really it isn’t that hard.  Just make sure they serve everyone including the gay and lesbian population, various religions, and no political “charities.”   Think Family Building Blocks, Liberty House, humane societies, homeless shelters, domestic violence programs, food banks, etc.  Times are hard and I want to make sure that people who need help aren’t being excluded.  Pretty simple, right?

So here’s how it works…

John Salemite answers the trivia question first three weeks in a row and earns 30 points.  He gets 4 friends to like my Facebook page and earns another 20 points for a total of 50 for the month.

Suzie Salemite answers the trivia question right behind John three weeks in a row for a total of 15 points but she gets 10 friends to like my Facebook page giving her 50 points there.  She has a total of 65 points and wins the gift certificate for the month.  She picks her charity and I give her the gift certificate and drop off a check to the charity.

We start again the next month.

So head over to the Tomson Burnham Facebook Page, like it, and on Friday January 6th, watch for the trivia question.  This month’s gift certificate will be $100 to La Capitale.  With Valentine’s Day coming up, this would be a perfect date night out.    If you haven’t been there, now is your chance to get there.

365 days of being thankful is on.