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Home prices have continued to decline in Keizer, just like Salem.  The question is whether or not I was accurate in my predictions from last year.  I have an ego to maintain, you know.  Last year I predicted a 5% decline in home prices and a flat line in home sales.  So how did I fare?

Well like Salem I underestimated the decline a bit.  The median shifted downward by 7.7, so I missed it by 2.7%.    The average home price declined by 9.2% which isn’t surprising as fewer high end homes are selling to keep the average up.  With smaller data figures like this, the median is a better way to look at the data.   So off by a bit, but pretty close.

How did I do on home sales?  Oh…so close.  Check out this lovely graph.  2 more sales in 2011 over 2010.  It doesn’t get much better than that for flat lining.   Keizer home sales have been stalled at these levels for three years, and quite frankly it will probably be like this again in 2012.

So what do all my lovely charts mean to you?  The good news is that banks are still having trouble foreclosing on MERS involved properties so the inventory is at 9.7 months which is decent for these economic times.  This means not great conditions for sellers but better. Multiple offers are happening on occasion, not the norm by any means, but they are happening.  Less competition is good for our regular sellers.

This stagnation for buyers means that sellers are still feeling the pain a bit and many have accepted current market conditions.  Buyers are having better choices in the regular real estate market without having to delve into the distressed property market which means good things for buyer paid closing costs and needed repairs.

So my predictions for next year?.  Honestly, the exact same thing. I think the market will continue to decline another 5% of so and home sales will remain flat lined.  There just aren’t enough buyers that qualify for financing to have any kind of big pop in home buying.

Phew…my ego is still intact.   I know you were all deeply worried about that part.

Data in these charts was crunched from data collected from the WVMLS for single family non-acreage properties.

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.

August saw a bit of a jump up in home prices from last August.  I certainly wouldn’t say that home prices are appreciating in Keizer but last year was the end of the tax credit and July and August were dismal months in real estate.  Home prices really couldn’t get worse than after the tax credit ended.  With a current average of $175,297 and a median of $156,000, Keizer is fairly close to Salem median home prices.  

The 90 day absorption rate is 29.67 which means the current inventory of homes in Keizer is 7.3 months.  A bit better than Salem’s 9 months and just like Salem, Keizer is in a bit of a sweet spot for regular sellers as 50% of foreclosures have been pulled off the market temporarily.  In August 16% of homes sold in Keizer were foreclosures or short sales.  17% of active listings are designated as foreclosures or short sales right now.  Home sales were the best in three years in August, just like Salem’s numbers.  It wasn’t hard to beat last year so that doesn’t really count.  Overall good market numbers for Keizer.  If we didn’t have those stopped foreclosures looming ahead of us, I’d say Keizer is looking pretty darn sweet for real estate, but these numbers will probably get uglier in about 6-12 months, assuming the MERS foreclosure issues get resolved.