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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.

The average and median home prices have been hovering in the $150,000-$160,000 range for most of this year and August was no exception.   With sales of more expensive homes incredibly lackluster with no change in the foreseeable future, this is going to be where home prices will continue to stay. The nice thing about August 2011 is that it was the best year in three years for home sales beating 08-10, nicely.  With interest rates insanely low and more affordable home prices many buyers decided it was close enough to the bottom to enter into the market.

The 90 absorption rate in Salem is 145.67, which means that we currently have 9.24 months of inventory in Salem.  This steady drop is due to the lack of MERS foreclosures hitting our markets.  21% of MLS listings sold in August were distressed properties, and we’ve had our first decrease in active distressed properties with 18% of active listings being foreclosures or short sales.  We are in a “sweet spot” for sellers right now where the inventory has dropped (still not normal,  mind you) and interest rates are low.  This is a temporary situation that will last maybe 6-12 months until those MERS foreclosures start chugging through the judicial foreclosure process here in Oregon.

If you are thinking of selling your home, this spring may be your best shot for the next few years.  We are in a temporary sweet spot for regular sellers.   If you want help getting your home ready for sale just contact us and we will be happy to help.

Last year, at the end of June 30, the tax credit ended.   July was the first independent month that the real estate world had last year and the statistics were dismal.  It isn’t suprising, then, that we sold more homes this July that last July. It was kind of hard not to.    That said, it still wasn’t a stellar month.  Real estate is still quite slow and will be for a while.

Inventory in Salem Oregon is at 10.35 months currently.  Still a healthy ways away from the coveted 5-6 months of inventory we all desire, but still better than the one year plus inventories present for all of last year.  131 homes sold in July compared to the exceptionally dismal 102 that were sold in July 2010.  It was an ugly summer last year.

Foreclosures and short sales made up 21.3% of sold homes in July and has been inching up slowly over the past year.  I would anticipate that 25% of sales will be distressed properties by the end of the year.

Home prices took a tumble at the start of this year and the median was at $147,000 for July with a median of $152,000 year to date.  It has been hovering around $150,000 for most of this year as that seems to be the number that works for buyers.  Buyers in the starter home price range are finding that the good properties are getting scooped up fairly quickly and what is left isn’t exactly what they want.