Negative numbers often conjure up negative images for me.
-40 degrees…means you are freezing your hiney off in some insanely cold part of the country.
-$50 means you just bounced a check at the local grocery store.
You know sometimes a negative number is a good thing….
-10 pounds…there aren’t too many people in the country that wouldn’t sign up for that.
-11% drop in Salem Oregon foreclosure notices…give me more of that, pretty please. I’ll be nice…well, I’ll try anyway. No guarantees.
I don’t think it is a big secret that foreclosures have been pulling home prices downward. It isn’t a secret, right? I don’t want my special real estate agent card revoked because I gave out classified information here…BUT for the first time in 5 quarters, the number of notice of defaults dropped by 11%, at least according to the information I get from Fidelity National Title Company.
Now that number is still…oh, say…four times more than normal, but a drop now means that in a year from now we will see fewer of these properties hitting the market. With our drop in unemployment here in Salem from the 11’s to the 10’s, it is possible that this downward trend will continue.
Right now 12.2% of Salem Oregon listings on the WVMLS are designated as distressed properties (ie a short sale or foreclosure) and 11.1% of properties that sold in Salem last month were distressed properties. It will take several quarters to bring these numbers back to normal, but it is nice to think of the possibility that we might be past the worst of those foreclosure numbers. Unfortunately, one quarter doesn’t make a trend and we’ll have to see what happens in the next two quarters.





I chatted about the
The average home price dropped 8.6% year over year and the median barely shifted downward 2.3%. Average home prices are being pulled down by the foreclosures and short sales in the marketplace, but the fact that the median hasn’t shifted much means that there is activity at more than just the lower home price level. That part is good. You want activity in all the market sectors for a good healthy real estate market.
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 to watch numbers, in my opinion, will be the summer numbers after the tax credit ends.
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.
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 Stayton…
Honestly, better, but not good.
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.
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 number of homes listed going down, it just wasn’t enough.
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.
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.


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