Local Realtors struggle through tough economy

Published 4:00 pm Wednesday, March 9, 2011

The good news is that the 31 local real estate agents helped close twice as many residential home sales this January over last year. The bad news is the total went from one to two for the month, according to the statewide Regional Multiple Listing Service RMLS report.

Slow sales are not unique to the past two months and have been consistent for several years, according to the report. There are 120 residential properties for sale in the county and those have been listed for an average of 362 days. At last Decembers sales rate, a property owner might expect to list a property for 54.3 months before attracting a buyer, according to the RMLS report.

The average days on the market for what sold was 182 days, local broker Michele Baird wrote in her 2010 market summary.

Real estate agents in Wallowa County are suffering from the continuing national recession with stagnant sales and property values falling by as much as 20 percent since 2007, according to the RMLS report.

On a positive note, overall Realtor sales in the county increased by 19 percent in 2010, to 80 total sales, up from 63 properties sold the year before. Residential home sales accounted for 52 of the total 80 transactions last year.

In addition to a stagnant sales rate, the RMLS report showed that 32 property listings in the county have been withdrawn, canceled or expired in the past month-and-a-half and that approximately 100 listings have been taken off the market in the past three months. 

Local real estate broker Lee Daggett thinks many sellers may have pulled their listings to avoid the stigma of having unsold properties linger on the market for extended periods.

There are still properties/homes going into foreclosure and many homeowners are distressed with their mortgages, Baird reported, we dont have the high level of foreclosure, short sales and distressed sales here as some markets have, but what is here does affect other property values.

At the beginning of March, there were 28 homes in the county in some stage of the lender foreclosure process, according to the RMLS report.

With the high foreclosure rate, banks are now having Realtors perform Occupancy Verification Checks to see if anyone is living in houses that are nearing foreclosure status. There are about 60 homes undergoing the occupancy checks, according to Daggett.

He thinks one of the keys to restoring a strong local market is lower asking prices. Weve been in denial about the recession, but the tsunami has washed over Wallowa County, he said.

Price is everything in this market and to inspire a buyer to be motivated to take action often takes pricing a property below the competition to create some kind of activity, Baird stated in her report.

Realtors have more than 300 properties for sale in the local market, and among that inventory, only nine sales are pending. Of those nine, only about 40 percent will typically make it all the way to closing, Daggett explained.

Realtors helped close 52 home sales last year and 35 of those were homes were on less than one acre and sold for an average $120,418, or 6 percent below asking price.

Fifteen residential sales were on small acreages, and three of those sold for more than $400,000. Two of those were sold far below market value. These were luxury homes at fire-sale prices, Daggett stated.

The RMLS report shows that individual sellers are remaining reluctant to lower asking prices, but the recent sale of a foreclosed property shows a willingness by the lending bank to accept considerably less than assessed value. One property was assessed on the county tax roles at $143,000. The bank first listed the property for $96,900, and after it continue to go unsold, the bank finally accepted an offer of $70,500, according to Daggett.

Many buyers are moving slowly or may be in a wait-and-see mode as many are hesitant to move on a property thinking values may continue downward, Baird stated.

Realtor-listed sales for vacant land and small acreages in the county were nearly nonexistent in 2010, with only four closed sales. The four parcels were 20, 17.4, 16 and 5 acres and went for an average of $130,071 after sitting on the market for an average of 433 days, according to the summary report.

Daggett said he first noticed less foot-traffic in his Enterprise real estate office in August 2008. Since that time, the slow pace has continued and property values in the county have fallen by 17 to 20 percent, while the real estate inventory has grown to an unbalanced level, according to Daggett. An optimum balance among the 31 Realtors operating locally is about 250 listings, he said. At the beginning of March, there were 319 properties listed for sale countywide.

Local Realtors have seen a marked decrease in interested buyers from Central Oregon and the latest reports are that 1 of 118 homeowners in the Bend area find themselves in foreclosure. Markets outside the area must improve for ours to improve, and especially in central Oregon, Daggett believes.

Historically, Wallowa County is typically six to nine months behind other area market trends, so if other areas start to pick up in sales we can expect it to happen here, just a bit further down the road, Baird stated.

Instead of interested buyers, local real estate agents are seeing an increased demand for rentals. Realtor-involved rental properties have seen a 3- to 5-percent vacancy rate during the past two years despite higher than average rent charges. High demand and increasing utility costs have pushed rental prices higher than in surrounding areas. Additionally, almost one-quarter of renters in the county receive some form of rental assistance, according to the RMLS report.