The 2022 Salem Oregon Real Estate Market Report
The real estate market shifted in 2022. Like all market shifts in the past and future ones to come, buyers don’t want to be the ones buying at the top of the market before it shifts downward while sellers want to sell their home at the peak and capture as much equity as possible. These opposing goals can create frustration for buyers and sellers as they sometimes disagree on what is a reasonable offer in a shifting market.
Some buyers try and get ahead of the downward curve and write a low offer after low offer, as sellers don’t agree with their offer. Some sellers use comparable sales from the peak, never adjusting to the market conditions, as buyers don’t agree with their pricing. You can hear buyers and sellers blaming each other for being out of touch with market conditions.
Successfully navigating the market shift requires:
- Learning about and asking questions about local data trends
- knowing that real estate markets vary greatly across the country
- Accepting that real estate is cyclical and will go up again and then down again in the future.
- Make your own decisions about when is the right time to buy or sell for you.
The Shift: Inventory
5-6 months of inventory is considered a neutral market that doesn’t favor buyers or sellers. Inventory has to go up by about 545% to get to normal. The last neutral market was in 2015, and sellers have long had an advantage in negotiations.
Inventory has gone up in Salem-Keizer by 272.6% since December 2021. That number out of context makes it seem like the market is headed for a deep dive. Even with a 272.6% increase, Salem is still in a seller’s market with 2.4 months of inventory at the end of 2022. Inventory has been so low, that even when it goes up so drastically, that isn’t enough to pull the market into a normal or buyer’s market.
The Shift: Multiple Offers
According to the Burns US Housing Analysis and Forecast, about 40% of home buyers have been pulled out of the market with the increase in interest rates. With so many buyers no longer qualifying for a monthly payment to support a home purchase, buyers have leverage in negotiations for the first time in years. In 2022, 40% of home sales were over the listing price in the 1st quarter, and by the 4th quarter, it was 22%.
In 2021, during the height of the frenzy, 61% of homes sold over the asking price, 16% were at list price, and 23% were negotiated under list price.
The shift: Days on the Market
Days on the market is a real estate statistic that often lacks context. It is a problematic statistic in that it is impacted by delays that aren’t related to a shift in the market. Local weather events such as ice storms, wildfires, when in the build process a new construction home is listed for sale, and lender delays, can greatly impact the days on the market, but they might have little to no impact on the price of the property. Looking at the days on the market trends without knowing if there were other impacts might cause a faulty interpretation of the data. For 2022, the days on the market were up 29.1% from December 2022 over December 2021.