As you know if you read my post from last month, Salem was named one of the worst real estate markets in the country based on NAR real estate data. You can read how I feel about their data in that post. I won’t rehash it here. What I do want to talk about is the 2nd quarter data. The monthly reports always have some swing in them since the data group is so small. The more data we have the better quality the analysis I can do on those numbers in terms of trends. Salem is trending towards some sort of stabilization here.
As you all know home prices have dropped oodles this year. Yes, oodles is a statistically appropriate real estate term much like “needs a little TLC” means bulldoze the house. Quarter over quarter from 2010, the median home price shifted downward 12.6% from 2010. As I said in my rant post about the NAR before, this is entirely expected. You can’t prop up housing prices with the tax credit without consequences. The market has dropped 26% since the peak, and we are essentially at 2004 home prices. So what that means is if you bought your home in 2007 and put $30,000 of remodeling into it, you won’t get it back. Not even close.
So while that sounds like really horrible news, the good news is that inventory is currently at 10.7 months. So if nothing else was put on the market, everything would be sold in 10.7 months. Compare that with much of last year’s 15 month inventory and that is a definite improvement. 21% of homes that sold in the second quarter were foreclosures. Ugly, but I’ll take it compared to some parts of California and Arizona.
So the number of homes sold in the second quarter was down compared to last year, but it’s that whole tax credit thing messing with the data again. The 3rd quarter should show a big improvement from last year since all those summer buyers were shoved into the first two quarters. Home sales are down 7% year to date from 2010, which is pretty good considering we don’t have a $7500 incentive this year. The other positive aspect to the market we are seeing is fewer homes being listed for sale. The regular seller knows it is a tough market and the number of homes listed over last year dropped. This has really helped our inventory start to come down. This is a good thing, and I encourage sellers that are wanting a certain price in order to sell to stay off the market. While we are seeing some initial signs of stabilization, this is by no means a “let’s see if we get what we want” kind of market.