It was recently reported that the unemployment rate drop we had in July bumped back up in August to 12.2%. I think most people realize that our economy has many woes and it won’t be an easy or fast recovery. It has been talked about ad nauseum in pretty much any real estate forum that the state of the real estate market is due to non-conventional financing. For the most part, Salem Oregon area home buyers tended to choose fairly conventional forms of financing so we haven’t had the big surge of funky financing defaults that say California had.
The biggest threat to the Salem Oregon area real estate market isn’t an option arm that is correcting, but rather unemployment. I was talking with a reporter for the Keizer Times this morning and I’ll share the same stats I shared with him, with you.
Salem Oregon has had a 110% increase in notice of defaults in 2009. From Jan-Aug of 2008 488 NOD’s were served in Salem Oregon. For that same time frame in 2009 1025 were served. In August, in Salem alone, 240 NOD’s were served. At the beginning of the year people started to get laid off their jobs. It takes about 3-6 months of getting behind in mortgage payments before the bank issues the NOD. Our Salem Oregon area real estate market faces ongoing problems as these unemployment foreclosures make their way through the system.
How about some of the other cities? (Jan-Aug 2008 vs. Jan-Aug 2009)
Aumsville Oregon has had an 86% increase in notice of defaults
Jefferson Oregon has had a 79% increase in notice of defaults.
Keizer Oregon has had an 81% increase in notice of defaults.
Silverton Oregon has had a 144% increase in notice of defaults.
Stayton Oregon has had a 94% increase in notice of defaults.
Turner Oregon has had a 36% increase in notice of defaults.
Now before you all think that the world is coming to an end and start to panic. Don’t panic. The Salem metro area real estate market is in for a long slow haul, but it doesn’t mean real estate is cratering here. Please don’t call me to buy a house for $10,000. I won’t be able to find one for you…not even close. I have helped many buyers this year get great deals on homes. But please remember…despite these bad numbers Salem Oregon is not Detroit.
If you are thinking about diving into the local real estate market give me a call or email and we can get you starting to watch the market.
P.S. Foreclosure information was calculated from data received from Fidelity National Title Company.