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

Today I saw a countdown for the home buyer tax credit to end:  50 days left to get under contract.  That count down has been so apparent this past month as the Salem Oregon real estate market started early.  Typically I tell clients that the market starts to heat up in April, but agents were running amok this month as things got busy much earlier than usual.

Sellers are out trying to get their home sold for the tax credit and buyers are out trying to get the tax credits.  So…where does all this frantic activity leave the Salem real estate market for February?

The average home price dropped 6.9% and the median 2.9% from February 2009.  Honestly, I think that is pretty good.  If the Salem market could stay around 5-6% drop this year, I think that would be a solid sign for the market.  The current inventory has spiked up to 19.4 months in Salem.  Normally, I would be very concerned about that spike, but inventory always rises over winter as there are fewer home buyers out. Obviously this is a huge jump, but it is not unexpected since sellers are trying to make sure their home is on the market for buyers looking to claim the tax credit.  This inventory number will continue to drop over the spring.  I just think we have an unusually high number due to this dynamic.

Sales are up 8.8% from February last year.   I would expect March and April to show increased sales volume as well.  The big numbers, in my opinion, will be the summer numbers after the tax credit ends.

It appears for the first time in several months, that the real estate market will forge ahead with the tax credit and be allowed to start sorting itself out, unassisted…well sort of anyway.

All in all considering the high unemployment rate here, these numbers look pretty good.

Last summer when we went to Bend for our summer vacation, true to form about 30 minutes into the car ride we got the yell from the back seat “How much longer?”  Every few miles we got the notorious question. I think it is a genetically programed question into the brain of every child to ask their parents every few minutes “Are we there yet?”  I know, you’re thinking what do my Saturday night ramblings have anything to do with real estate…Just bear with me here while I spin my thoughts…

Everyone wants to know if we have hit bottom. I think my poor crystal ball has been clasped so many times in my sweaty palms as I started into its depths in order to answer that question for every home owner and home buyer that asks. What my crystal ball says to me seems to be directly proportional to how much coffee I have had that morning though so I’m not sure if the crystal ball is really talking to me, or I should have gotten one less shot of espresso in my mocha that day…but back to real estate.

So what this graph shows is the year over year (ie Aug 08 vs. Aug 09) median price difference.  In this case a price drop.  It is my opinion that the median home prices didn’t drop as much in the 3rd and early 4th quarter as much due to the tax credit.  Buyers jumped in the market in much greater numbers than usual and caused the prices to remain higher than normal. With less buyers in the market, the prices plunged in December and January.  Now these are Salem Oregon specific real estate numbers.  The median home price plunged 21.9% Jan 2010 over Jan 2009.  This was inevitable to make up for the lack of correction earlier. I really don’t think the market is going off a cliff right now.

While it appears that the prices are declining rapidly, the flip side of this is the sales volume.  That big peak was of course the expected end of the tax credit.  Sales were up 6.25% this January over January 2009 and for the past 6 months each month had more sales than the previous year.  So that is a good trend.  Buyers are out.  The sales volume is still low, but positive is a good direction to go.    Not surprisingly, the percentage of sold homes that are distressed properties (meaning short sales or foreclosures) has been slowly creeping up.  I have no doubt that this will continue to creep up all year.  I’m hoping it tops out at about 25% but we’ll just have to see what happens as the year progresses.

So, what is the point of all of my rambling…well this is a very long answer to those of you that ask me “are we there yet? Is Salem Oregon at bottom?”  My answer to you is the same answer I give to my kids in the car…”we’ll be there in a little bit.”

P.S.  Data was crunched from the WVMLS.

Last one year end market report.    Whew…I need a break from data and I’m sure my regular readers are getting tired of data too!’

So let’s talk Stayton real estate.

Stayton has been struggling for a while and that hasn’t changed.  The inventory is currently at 36 months, which is high even for our normal slow months.  I wish I had better stats to share with you for Stayon, but I don’t.  If you want cheery news you’ll have to go to Aumsville.

So Stayton…

The average home priced dropped 11.9% to $192, 156 and the median shifted upwards 2.2% to $189,900.  I think the median shifted up as there were some more expensive foreclosures that hit the Stayton market, pulling the median up.   I don’t think that the Stayton real estate market is close to recovering or bottom for that matter.

I think it is still in a world of hurt over there.

I think this becomes more apparent when we look at the number of homes listed vs. the number of homes sold.  What is supply and demand looking like in Stayton?

Honestly, better, but not good.

The larger the gap between the red and blue lines, the worse the inventory and hence, supply and demand, are.

You can see we have clearly come off the peak, but things aren’t in any great shape.  From 2008, the number of homes sold dropped 10.9%.  Now that was offset a bit by a drop (28.2%) in the number of homes listed but supply and demand still aren’t working well together in Stayton.

So what does that mean for 2010?

Stayton home prices will have to continue to come down to correct the supply and demand imbalance.  Like Silverton, I would not be surprised at all, and in fact would expect to see, home prices drop another 10% in this area.  Inventory just isn’t getting eaten up fast enough to keep home prices stabilized.  Sorry Stayton home sellers.  I wish the trends were looking better for your area.

I feel off the data geek bandwagon here for a few days as I actually had to work…yes I really do negotiate offers and show houses on occasion.

So let’s talk Aumsville.

Aumsville ended the year at an average home price of $206,542  and a median home price of $209,500.  That average home price was a 1.5% INCREASE (I’m writing it in all caps, because it is the first time I get to write it) over 2008. The median, however, is down 5.2%.  The cause of this is due to the newer JDC subdivision in Aumsville, Highberger Meadows.  Several homes sold there, which are generally more expensive than Aumsville homes typically are.  The median which is the number where 50% are higher and 50% are lower is a bit more accurate for smaller towns since it swings less due to a high priced home selling.

Not that it means bad things for the Aumsville real estate market.

In fact I think good things, relatively speaking, are in store for Aumsville for 2010.  The same number of homes sold in 2009 as 2008.  Nice and flat.  What I really liked was the nice drop in homes listed.  A 30% drop in fact.  This nice drop has brought supply and demand much closer together.  Aumsville supply and demand has traditionally been very close and I think it still needs a bit of tweaking, but not bad.

I am interested to see how real estate does in Aumsville after the completion of the Home Depot distribution center.  With it’s easy access to the Mill Creek Industrial Park,  and the Cascade School District (generally speaking) getting better marks than East Salem schools, it will be interesting to see if the Sanyo Plant and Home Depot center keep Aumsville real estate going in the right direction. I’m kind of thinking it will.

P.S.  Data used in this report was calculated from information provided by the WVMLS.

Monmouth ended the year at an average home price of $180,887  and a median home price of $181,500    Monmouth home prices are about 11% higher than Independence and I think it shows in their year end numbers.    Monmouth has an 8.6 month inventory which is higher than Independence.

The average and median home prices did drop 12.7%  and 13.6% respectively from 2008 but it wasn’t enough.

Couple the drop in home prices with a 10% decrease in homes listed AND a 27.4% decrease in homes sold over 2008, and what you get is an ongoing supply and demand problem.  Last year homes listed versus homes sold was 55.4% in Monmouth and this year it was 45.2%.  Despite the number of homes listed going down, it just wasn’t enough.

Monmouth had been a fairly stable real estate market and while inventory is up, I don’t expect anything drastic for this small real estate market for 2010.  I would expect some ongoing price declines and Monmouth may correct another 5% or so, but it has one of the lowest rates of distressed properties on the market, 7.6%, in the Salem metro area.  Since employment in Monmouth is driven by the university, I wouldn’t expect to see a huge increase in foreclosures in this town.

P.S.  Data used in this report was calculated from information provided by the WVMLS.

What happens when you have low home prices, coupled with low interest rates?  Low inventory.  That is the situation occurring in Independence Oregon’s real estate market right now.  The inventory is at a nice healthy 4.5 months, which is nice to see.  The reason?  Low home prices.

The average and median home prices in Independence have always been almost exactly the same.  Independence ended the year at an average home price of $162, 874 and a median home price of $162, 000.    Compare that with some of the other metro towns and you can see that Independence is more affordable than some of the other Salem cities.

The average and median home prices did drop 7.4% from 2008 making Independence very affordable.

Couple the drop in home prices with a 12% decrease in homes listed AND a 16% increase in homes sold over 2008, and what you get is a supply and demand imbalance…corrected.  At least for now.  Right now, the data is indicating a nice healthy, normal, real estate market.  Now remember normal doesn’t mean a sellers market or a buyer’s market.  It means “let’s be reasonable” market.  Both sides need to put their sharkish “blood in the water” ways aside for a while.

So Independence ended the year on a good note.  There may be some ongoing mild price declines here, depending on unemployment woes, but I’m not anticipating any drastic changes to the Independence real estate market right now.  I would expect it to stay relatively flat in the 2010 year.   ‘

P.S.  Data used in this report was calculated from information provided by the WVMLS.

Dallas Oregon, like Silverton, has a 13 month inventory of homes right now.  Also like Silverton, this city has made good gains in cutting that inventory down. Not that 13 months is great by any means, but at least it’s coming down.

Dallas Oregon had a similar problem that Silverton had and that was the overbuilding that occurred.  Now the homes built in Dallas were much more moderately priced than the Silverton homes which is why I think their real estate market is just a tad healthier than Silverton’s…not that that is saying a lot.

In 2009, the listed vs. sold percentage was 50.8%.  This was a nice improvement over 2008’s 37.7% but still off from the early part of the decades 65%.  Going in the right direction…yes, but things still have a ways to go. I don’t think this is a surprise to anyone that reads a newspaper or watches the news.  Real estate is just going to take a bit to recover, like the economy.  It was nice to see fewer listings hitting the market this year than last year in Dallas.  While 14% less homes were listed in 2009 over 2008, that number really needs to get down another 15-20% to correct the supply and demand problem.    So either home sales need to come up or the number of homes listed has to come down.  Personally I don’t see home sales going up a whole lot more next year so the correction will need to come on the supply end. In other words don’t list your house if you don’t have to sell.

Not surprisingly with the supply and demand problem in Dallas, homes are taking longer to sell.  Homes spent 11% more days on the market in 2009 over 2008. I really don’t have anything insightful to say about this so I’ll just move on…

Okay so what happened to home prices in Dallas Oregon?

Obviously they went down.  It will be an earth shattering moment when I get to say that home prices went up.  So the average home price dropped 8.7% to $191,874 from 2008, and the median shifted downward 4.1% to $185,000.  I have to say I’m surprised that the drop wasn’t greater, but I think there is still a bit of denial on the state of the real estate market in Dallas.  Based on the supply and demand problem, large inventory, lending difficulties, and oh yes…our ongoing unemployment rate, I would expect Dallas home prices to correct another 5 maybe 10% over 2010.

P.S.  Statistics used in this post were calculated from the WVMLS.

The Silverton Oregon real estate market has been one of the unhealthier real estate markets in the Salem metro area for a while now.  While this is still the case, it has made some steps towards improvement and correcting.  It still has a ways to go, but at least the trend is pointing in the right direction.

The biggest issue with the Silverton market has been the complete disconnect between supply and demand.   In the early part of the decade about 65% of homes listed sold.  2008 was a dismal year in Silverton as only 29.7% of homes listed sold.  2009 started the year with insane inventory in Silverton and the fact that inventory is at 13 months right now, is a great step for this small market.

In 2009, the listed vs. sold was 44%.  This was a huge improvement over 2008, which just stunk.  No nice words for that year in the Silverton real estate market.

17.4% fewer houses were listed in 2009 over 2008 which was sorely needed.  Supply and demand is still out of whack in Silverton, but at least it is moving in the right direction.

You don’t have to know anything about statistics to see that home prices have come down in Silverton Oregon.  In fact the average home price dropped 9.6% in 2009 over 2008 down to $224,180.  The median home priced dropped 13.27% to $202,000.   The median home price is almost back at 2005 levels right now.

I  know “blah, blah, dropped, blah, blah, bad” is what some of you are thinking, so here’s my opinion on the near future of the Silverton Oregon real estate market…

Still going down.

In fact I would not be surprised at all if it corrects another 10% in 2010.  While I am only calling 5% for Salem and Keizer, I really think that Silverton has much farther to go.   Supply and demand is still out of whack in this small town, unemployment and foreclosures are rising, lending is getting more difficult, and inventory is just too high.  Unfortunately for folks living in Silverton home prices just have to come down more to get in the ballpark for more home buyers.   I would really encourage folks living in Silverton to not “try” the real estate market there.  If you don’t have to sell and want to wait for “top dollar” this is not the market to do so, unless you have something extra special about your property.  Either you are in the market, or not.    With the average days on the market jumping 30% from 2008 to 173 days (5.7 months), selling a home in Silverton is starting to become a marathon.  You gotta have the stamina to sell it out there.

P.S.  Statistics used in this post were calculated from the WVMLS.

Keizer Oregon has been one of the more stable real estate  markets in our Salem metro area, relatively speaking mind you.  I had talked before about how Keizer home prices had kind of flattened out, vs. the slow corrections that occurred in the Salem market, and then just kind of plunged early in 2009.  So what did the real estate year look like in Keizer Oregon?

Keizer Oregon Average Home prices

As of the end of 2009, the average home price in Keizer Oregon had dropped 12.8% from the previous year.   The median dropped 14%.  An average single family home in Keizer was $202,544 at the end of 2009 and the average median was $185,000.    The graph clearly shows the trend that we have experienced in Keizer for the past few years.  Prices are dropping.

Keizer Oregon Days on the market

Many sellers get focused on the days on the market.  For 2009, that average was 132.  That’s 4.4 months.  For those of you upset that your real estate agent didn’t bring in a buyer in the first two weeks, you have to realize that the average house is taking 4 months to close.  Home sellers have to be one of the best deals in town if they want to sell in less time.  It is just the way it is. Buyers want a good house at a great price.  That dynamic hasn’t changed.

Keizer Oregon real estate market.  What does the future hold?

You would all like to know wouldn’t you?  So would I, but alas my dog was acting weird all night and kept me up.  In my sleepy stupor, I dropped my crystal ball, watched it roll across the floor and hit the wall, shattering into a bazillion pieces.  I was reaching for my coffee and the time so my reaction time was just too slow… As such, all you will get is my best guess with a bunch of qualifiers…

This year 283 homes sold in Keizer Oregon vs. 2008’s 310.  That’s an 8.7% drop in home sales.  This is not unexpected.  With our high unemployment rate it’s not like buyers will dive in full force if they think they are going to lose their job.  We will need some economic stability before buyers regain confidence, I think.  Now normally I would be more worried about the drop in home sales, but unlike last year where 42% of homes listed sold, in 2009 50.4% of homes listed sold.  While home sales were less, thankfully Keizer residents that don’t have to sell are staying off the market.    This allowed Keizer to end the year with a respectable 7.6 months of inventory.

So what do I think?

I think Keizer will be like Salem in 2010.  I do think that home prices will continue to decline, but maybe 5% like I am expecting from Salem…barring any significant increases in unemployment rate (disclaimer here).    I would expect most of the downward pressure on that median and average home price to come from the higher end homes.   For home sellers, you will have to be at the top of your game.  Your home has to look good and be priced well.  Wishful thinking, in this real estate market, isn’t going to help you out too much.  Get focused. Get staged. Get priced right. Get sold.  It’s that simple…well sort of anyway.

It’s that time.  The next couple of weeks of post will be tons of market data summarizing up the year in real estate in Salem Oregon.   After looking at the data from the end of 2008, I called a 5-10% price correction for the Salem Oregon real estate market for 2009.   Here’s where things are at.

Listed vs. sold homes.

I really like this particular graphic because it tells you the direction that inventory is headed.  You can see that the inventory gap was already starting in 2006 and peaked in 2007 when there were just too many expensive homes and not enough buyers.  The good news is that the gap has narrowed.  The flattening of homes sold (the blue line) means buyers are feeling comfortable entering our local real estate market and buying homes. Don’t expect a jump up in those numbers any time soon with the unemployment woes of Oregon, but the fact that the number of homes listed and sold is getting closer together means inventory is going in the right direction, which is down.  This is a good thing for the real estate market.

Salem Oregon Days on the Market (DOM)

This statistic is really important to some people so I’ll give it to you.  The average for Salem Oregon for 2009 was 138.  This is an increase from last year by 10.8%.  This is not a surprise.  Lending has been difficult and with the rule changes closings went from a typical 30 days to sometimes 60 days.   Higher end homes are also taking a much longer time to sell which is pulling this number higher as well.

Overall, I don’t think is a particular concern in terms of the local market, but sellers just need to be prepared for a longer time frame in getting their homes sold.

Salem Oregon Home Prices

Okay, was my 5-10% price correction prediction correct?  The average home price dropped 9.1% and the median home price dropped 9%.   It was on the high end of my expectation, but I took lessons from Nostradamus and wrote in an ambiguous way so I can always claim that I was right.  That’s what I tell myself anyway…

So yes, home prices dropped in 2009 over 2008.  I would expect home prices to drop maybe another 5% in 2010 unless something happens where our unemployment rate increases dramatically.  If unemployment does rise, more foreclosures would hit the market and cause further depression of prices.   All appearances point to a stabilizing of the Salem Oregon real estate market and a possible bottom, but I really do want to see the market stand on its own without the tax credit before saying the market is done correcting. I’d also like to see what happens with the vote on measure 67 since that will impact small business owners and jobs.

What to expect for Salem Oregon real estate in 2010?

My personal opinion is that the market will remain kind of stagnant and slow for Salem Oregon.  Home sellers will need to stage their homes and get them in good condition.  Good online photos will be essential and sellers need to take care of home maintenance.  The market will continue to be difficult, but not impossible.

P.S.  All data used in this market report was crunched from the WVMLS.