Salem Market Report

Phew.  Agents have been sweating the market filled with insane underwriters, oversupply, and distressed homeowners.  It hasn’t been easy for anyone.  The good news is that 2012 was better.  Not great mind you, as the economy is still struggling, but real estate agents working the Salem area finally took a collective breath and said “about time.”

Salem Oregon Average Home Prices

Home prices were still down in 2012 over 2011, but it was only a 1.3% drop.  The 3rd and 4th quarters saw an increase in activity that helped to pull home prices up and a nice burst in sales.

Assuming the economy continues at its slow pace with no big impacts from bond markets and such, home prices in Salem will likely increase by a couple of percent in 2013.

Salem Oregon homes sold in 2012

The number of homes sold really tells the story as this was the best sales year since 2007.

There was a 14.8% increase in home sales in 2012 over 2011.   That is a huge surge that was brought on by insanely low interest rates and a perception that home prices were pretty much at bottom.  Affordability for buyers was really good in 2012.

So while all seems good, inventory, as of this moment is still favoring buyers.  Salem had been hovering around 7 months in the 4th quarter.  With buyers backing out over the holidays and new listings coming up with the improved market, Salem right now has 10.24 months of inventory.  That is a solid buyers market.  I would expect that number to inch closer to neutral as we near the spring, but the improving numbers could cause many sellers to dive into the market.  We still have an oversupply of homes, but some neighborhoods and some market segments lack good supply.

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