With the end of the year comes the frantic number crunching by the real estate industry to see where we ended up in comparison to years past. I will be spending the next couple of weeks going city by city and giving detailed market reports for areas. If you have a question that you want answered or some data run, ask the broker, and I will add it into a report.
This post will be looking at Salem Oregon Real Estate Single Family Homes (non-acreage) Sales.
Where did we end up?
Not too bad actually.
The average sales price ended at $217,824 and the median sales price ended the year at $198,850. The average was down 5% from last years, and the median declined only 2% from last year.
You can see on the chart that we were still peaking in prices in 2007 when many other parts of the country were showed declines for 2007.
How long were homes staying on the market?
Well, I don’t think it is a big surprise to say that days on the market increased. Homes were on the market 18% longer this year than last year. While that might sound like a lot, the DOM still only averaged 4 months. In the world of real estate that is still pretty good.
Everyone has their favorite statistic that they like to use. I like to look at how many homes were listed in a year vs. how many were sold. To me, this helps to show future trending that will occur with pricing and where our market is headed.
So where is our market headed?
As you can see the number of homes sold compared to the number of homes listed in a year has an increasing gap. This gap has been widening due to the lack of affordability of housing. What we have as the end result is a glut of inventory. Essentially the closer the lines are together the less inventory, hence a seller’s market. The farther the lines are away from each other, the greater the inventory and a buyer’s market.
Buyer demand for overpriced housing has been declining for two years as prices escalated. Buyer’s stepped out of the marketplace as homes continued to become more and more unaffordable. The fact that home prices only corrected slightly, while homes sales plunged tells me that our prices are still too high for buyers. Our supply and demand curve has not stabilized. The average and median home prices are going to have to correct more in order to get buyers back into the market. A 5-10% correction should make homes more affordable and bring more stability to the real estate market.
We will continue to see a buyer’s market here in Salem. It does not appear to be trending towards neutrality at this point.
For other 2008 Salem Oregon Market Reports