I could throw out some real estate cliches to start off my post, but I don’t want to send your eyes rolling to the back of your head. Really, it was the best February in the past three years for home sales in Salem Oregon. I promise I won’t spew out every other ad campaign created by the NAR meant to induce you into homeownership though. I’ll just give you the facts, and of course my opinions on them.
Most local agents will tell you that things have picked up early this year. I am no exception. It doesn’t mean that the market has returned to a normal, healthy reasonable place, but it does mean that we are starting to see some signs of the market righting itself. I don’t see buyers being priced out anytime soon. We have many years ahead to work our ways out of things, but we have some good signs that we might be at the bottom sometime later this year. We do appear to be in the low, but not at the low. A 13.5 month inventory of homes is still really high, so sellers need to be prepared for a long sale time on the market.
Why did buyers decide to dive in? All you have to do is look at the home prices and that becomes obvious. The average home sold was $172, 642 and median $160,000. Those low numbers are clearly fueled by one thing…distressed properties. In February 20% of closings in Salem were short sales and foreclosures. While not as bad as some areas in Florida and Arizona where 60-70% is more common, these low price properties are having a clear and direct impact on home sales. That isn’t going to change anytime soon. 17.6% of active listings in Salem Oregon are distressed properties which is a 3% jump from much of what it was last year. I would expect it to climb as those 2009-2010 properties hit the market this year. I can totally see distressed properties being 1/4 of our overall real estate market.
What does this mean for you, the consumer? Good things if you are a buyer. Not so good things if you are a seller. You all know the drill by now. We are in a buyer’s market.