Oregon Public Broadcasting

As the real estate market tries to find a bottom, a new reality is setting in -- similar properties will sell at different prices depending on how they're sold.

It's a bit like buying a toy. There's one price if you buy retail, another if you buy wholesale and a third price if the toy's smoke damaged and you pick it up at the dollar store. Kristian Foden-Vencil looks into whether Oregon real estate has hit bottom and why it’s difficult it is to know.

In a 1950's-style ranch home in Eugene, Kevin Kiscoan's kids play a video game.

Kristian Foden-Vencil / OPB

He used to work for 'Country Coach' -- dealing with customer complaints. But he was laid off last year and is now trying to sell his home.

Kevin Kiscoan: "Well, stress goes hand in hand with the situation."

He's got an offer of $170,000. But that’s $30,000 less than his mortgage, which makes the deal a short sale. So, now he's waiting to hear if the bank is willing to accept the loss.

Kevin Kiscoan: "It's tough to swallow being in that position and not knowing. So we're waiting."

If the short sale isn't accepted. Kiscoan and his family face foreclosure - a situation that will further sink his credit and new evidence suggests -- net even less for the home.

And Kiscoan is far from alone. 

Sales of existing homes in Oregon dropped 30 percent in May -- after the sunset of the $8,000 dollar tax credit for first time home buyers.

Prices are also down an average four percent from last year. But homes are still selling.

Desiree Moore: "We're standing in a home that was built in 1989. Approximately 1,300 square feet. It has a great room by way of the design, there's vinyl windows, vaulted ceilings, three bedrooms a bath and a half."

Desiree Moore is a real estate agent with ReMax in Eugene.

This house, which she just sold for $175,000, was originally bought four years ago for about $70,000 more. The owner lost his job and tried a short sale. But there were no takers and the home went into foreclosure.

Desiree Moore: "Just to give you an example of how chaotic this marketplace is, when we started negotiation with this, the price was $181,000. The banks were just not efficient enough to close the transaction in a timely manner. They had to have a price reduction. So we actually ended up buying it for less than what he started out with. And so the short answer to your question, is this a deal. I think it's a screaming deal."

A real estate agent who just helped you buy a house will probably always tell you it's a "screaming deal." But this property was appraised for more than the purchase price.

Finding the right price for a house is never easy -- and that's especially true in this unstable market. 

For example, the average price of a home in the U.S. this May was $260,000, according to 'Inside Mortgage Finance Publications.'

But if the home happened to be sold as a short sale, the price averaged 15 percent less.

If it was bank-owned or in foreclosure, it averaged 25 percent less.

And if that bank-owned home happened to be damaged in any way -- it was a staggering 45 percent below what might be regarded as the retail price.

Desiree Moore says that such differences mean that for the smart investor there are some great deals. But then she serves up a wide grin. 

Desiree Moore: "I promise you. By the time we complete this interview. The market would have had some shift in it."

Real estate experts say that prices nationwide seem to be leveling off.  But knowing whether Oregon has hit bottom is difficult.

For example, there’s still a glut of troubled properties. Thousands of Oregonians are in foreclosure and agents generally agree, those distressed homes will have to be sold before prices solidify.

Another big factor is unemployment. With the state unemployment rate stuck at 10.5 percent, there's going to be little pressure from wages to sustain prices -- let alone push them higher.

Lending is also an issue -- banks want higher down payments nowadays, and the loans they will make are generally smaller.

Barbara Thomas is a founder of the 'Lane County Home Savers' -- a group of real estate experts who help and advise people deal with foreclosure problems. 

Barbara Thomas: "I am still seeing that we are in a declining market here in Eugene and I think Oregon in general. I think we were later to get into the market decline. And I think we're going to be later coming out of it."

But she says, as markets in states like Nevada, California and Arizona begin to firm-up, Oregon will against start to see the in-migration it used to rely on for healthy home sales.

Barbara Thomas: "Prices are staring to go back up nationally. But not yet here. So, I'm going to say probably not too much change until 2011."

That's optimistic.

Other real estate agents predict a market that bumps along the bottom for three years. Some say five or even longer.

But there is cause for hope.

Remember Kevin Kiscoan, whose kids were playing video games while he's trying to organize a short sale.You might think he's through with real estate. But Kiscoan is working to get a brokers license and -- as soon as his credit is repaired -- he plans to start buying properties to rent them out.

Kevin Kiscoan: "I'm absolutely going to buy again. As a broker. I have a 10-year plan that I want to buy a property and have rentals and that will sustain me for the rest of my life."

Now that's optimism.

But many of the factors that drove prices up in Oregon are still true. For example, it's still a nice place to live and it’s still cheaper to live here than some other West Coast cities.