Notice of Defaults DOWN in January 2011

I have found that foreclosureradar.com is a good site for tracking foreclosures and statistics about foreclosures.  A lot of what I have read shows that the amount of foreclosures in 2011 will be similar or outpace 2010.  Last year, over 1,000,000 homes were taken back nationally by the banks in the foreclosure process.  This year the prediction is that 1,200,000! That sure sums up how tough the economy has been.

To start off 2011 in Jackson County, Oregon there were 154 default notices filed.  That is 45% fewer than were filed in January 2010.

Default notice filings are part of the non-judicial foreclosure process in Oregon and is required for the lender to file this notice at the County to start the process of foreclosing on a home.

Does that mean things are getting better?  Not necessarily.  The banks have a lot to consider.  Whether they’re holding back because of the “robofiling” issues at the end of the year (some of the major banks halted foreclosures due to paperwork issues) or because they are not ready to write down losses on some of the properties in this difficult time.  It is hard to know exactly.

That said, the numbers were down in January.  And we’ll keep our fingers crossed to see if this continues to be a trend or a temporary dip in the numbers and let you know as soon as we do. Stay Tuned!

February 2011 Vacancy Rates — Under 3% In Ashland!

The southern Oregon residential rental market continues to hold steady with vacancy rates under 5%.  Here at CPM we manage approximately 2,100 units and our vacancy was 4.79% for the month of February 2011.

Ashland led the way with a vacancy under 3%.  A few factors contribute to this.  Ashland’s home values are higher thus making it harder to purchase a home there.  Along with this, Southern Oregon University has record enrollment this year so that can’t hurt having more students looking for housing.

Don’t Let Grandma Get Auctioned Off!

Sounds pretty terrible doesn’t it? But in our business this has happened. Just when I think I have heard or seen it all.

Here at CPM, we manage self storage units in our Commercial Division.  If someone doesn’t pay rent on their storage space on the 11th day we will overlock (Lock it down ourselves)  the unit and ask them to come to the office for access.  Simultaneously we make a phone call and send a letter to the contact we have for the storage unit.  A second notice goes out on the 31st day.  If we still have not heard from anyone we begin the foreclosure process.  We vigorously try to contact the tenant in hopes something can be worked out before an auction takes place. 

Unfortunately, not everyone responds and they just let the items in their unit go to foreclosure and then auctioned off.  When conducting an auction, we have found some interesting things.  Mostly, people leave garbage, empty boxes, maybe a few pieces of furniture.  However, we ran across one storage unit where an urn with Grandma’s remains were left in the unit and were auctioned off.  Fortunately, in this case, the person who purchased the items returned Grandma.

Can you imagine how grandma would have felt if she had known that you were going to let her get auctioned off!  Don’t let that happen.  If you have a storage unit and decide that you are not going to pay or can’t pay for it, call the manager to work something out or at least to go get your stuff!  Don’t let grandma get auctioned off to someone else, there’s really no reason!

Do You Live In One Of The Top 5 Worst Real Estate Markets In The Country? I Do!

Is your real estate market one of the five worst in the Country?  Mine Is!!! This isn’t necessarily a bad thing though…

How could that be you ask? If you are an investor, prices are getting back in line with proper real estate fundamentals.  Due to a lack of new construction, more stringent lending policies, and continued foreclosures, the residential rental market is performing well.  In the southern Oregon market, residential rentals have been averaging 4 to 5 percent vacancy the past six months.  These numbers represent a healthy rental market.  January 2011, our vacancy rate at CPM was 5.08%.  We manage approximately 2,200 units.

Does that mean that you want where you live to be one of the five worst markets according to Home Predictor.  Probably not, but it does represent an opportunity. That’s the part I like — finding the possibilities in a somewhat difficult situation.  Now that I know the fact for some reason its easier to adjust and look for the silver lining. The top five worst markets are as follows:

1)         Bend, OR
2)         Las Vegas, NV
3)         Atlantic City, NJ
4)         Miami, FL
5)         Medford, OR

All of these markets saw great appreciation in the good times and now are being hit the hardest.  In Medford, Oregon (Jackson County) existing home sales have declined 43.3% over a five year period (median sales price).  Rents have remained somewhat static, so if you have cash or can get financing, now is a good time to buy. You can’t go anywhere but up!

When Do You Change Your Business Name?

This past November we made a big step at our company, we changed our name. Our corporate offices are located in southern Oregon, a small to midsize town called Medford. We have satellite offices in the neighboring towns of Ashland and Grants Pass. For over 35 years our company had been called Commercial Property Management Inc. often refered to as CPM.  We had  a very distinct visual brand yet our name was misleading.

For years I spent an enormous amount of time explaining that we did much more than commercial property management. In fact, as the old adage states, I wish I had a nickel for every time I had to explain our services. This challenge became even more evident in the past few years as the recession overcame us and it was clear that we needed to clarify to the community that we were indeed a full service real estate firm. We basically could handle anything including property management, residential rentals, commercial leasing and sales, mini storage management, manufactured home parks, homeowners associations and recently we  included receivership services to our portfolio. Our name did not reflect this. So we grabbed the proverbial bull by the horns and changed our name to CPM Real Estate Services, Inc. We felt that the new name reflects our past and embraces the future.

If any of you have ever changed the name of your company you know what’s involved. All paperwork, marketing materials, websites, digital files, applications, business cards, letterhead and even the labels we use for mailing. It takes courage to make this type of adjustment and I am pleased that we have a great team that together we achieved the goal.

We’re still making some shifts – updating and tweaking – but overall, I would say it was a great success! The lesson learned – your name and brand must align with what you do. Consumer confusion is one a disadvantage in any market place.

Medical Marijuana Update For Property Owners

In property management, there is always something new. As they say, it’s the nature of the beast. In Oregon, the voters passed the Medical Marijuana Act in 1998 authorizing the use of medical marijuana, and exempting such use from criminal liability under state law.  How to handle this law as a housing provider has been murky at best.

Last year I performed an inspection on a town home where we took over management.  During the inspection I noticed 24 six foot tall marijuana plants in the second bedroom (kind of hard not to notice that).  The tenant had medical marijuana cards for himself, his wife and two others he was growing for.  Although we did not have to allow him to grow for others, I couldn’t do anything about the growing he was doing for himself and his wife (he was within the law in this case).  I couldn’t charge an additional deposit and I had to allow them to smoke inside the unit because they can’t smoke it in public according to the law.  This is because it would be discrimination due to their disability and in Oregon BOLI could investigate a complaint of discrimination on this basis, even in housing.

So, what do you do?  Fortunately, last April the Oregon Supreme Court decided in the case of Emerald Steel Fabricators v Bureau of Labor and Industries that an employer can terminate an employee who used (outside of work) medical marijuana, even though they followed all the rules for using medical marijuana.  So what did that mean for housing though?  On November 4th, 2010, BOLI released a policy statement that they would no longer investigate employment OR housing claims of discrimination pertaining to the use of medical marijuana. This is the first “good news”  for property owners. 

And the second is that as of right now, a landlord in Oregon doesn’t have to rent to someone who is a medical marijuana patient.  You certainly can if you choose to, but you do not have to.  So it looks like more due diligence from Property Managers like myself to find out if our property owners do or don’t want to rent to medical marijuana card holders in the future. We’ll be keeping a close eye on this issue for our state but if you live in another state I would like to hear how you are dealing with this issue.

Why I’m Writing This Blog…

People refer to me as an expert in Property Management, maybe it’s because of how long I‘ve been in the business (100 million years) or maybe it’s because I have that official certification of “CPM” after my name, or just maybe it’s because we have the largest property management company in southern Oregon….but the one thing I know is that there isn’t a week that goes by that I don’t learn something new. I wanted to start this blog to share with you the lessons learned in hopes that someone else will find value in these lessons. Another reason for the blog is to provide a place where I can chronologically keep track of those lessons. Maybe it’s just because my therapist says writing things down – keeps me sane!

One thing I know is that Property Management is often a thankless business. Tenants think you are the enemy, and the owners think all you want to do is spend their money…kind of a no-win scenario. But being an eternal optimist – I am bent on learning and teaching people about this business…so here we go….Property Management Expert Dave is going to share with you his expertise..good, not so good and just different. I hope you will share your experiences with me as well.