The tax credit is over, except for our military personnel that have been overseas, so we are on unsupported territory from here on out in the world of real estate. I’m totally fine with that. I say let’s start creeping our way out of this mess. We really won’t have a gauge on what is happening, specifically in the Salem Oregon market, for a few months yet. The fact is that some first-timers really wanted the tax credit so we will have a bump in home sales for April through June. I would expect a drop-off and then some sense of what things will look like come August and September.
So where is the market? same ol’ same ol’…home prices are down and home sales are up. It’s funny how that whole supply and demand thing works. So the average home price was down just 2.3% from the same time last year. I had talked before that the rate of descent of home prices has slowed. This trend is continuing…make no mistake home prices are still declining, but we are in a much slower decline than before. That indicates that we are nearing the bottom of the market. If all goes according to my crystal ball that will happen at the end of this year at the earliest, but more likely next year sometime. Really the deciding factor will be the employment rate which is directly impacting our foreclosure rate here.
Earlier in the year inventory surged, and I told you all not to panic. All that was happening was that sellers were getting their homes on the market early to take advantage of the buyers for the tax credit. As expected, inventory is coming down. Right now it is 11.9 months which is better than the 18 that it was at earlier. This number should head back into the 8-month range as transactions close in the next 60 days.
As expected home sales surged for April in Salem Oregon by 43%. Y’all know this isn’t going to last…right? As long as we are all being honest and know that the surge isn’t a natural market surge, then we are fine. The surge, of course, is due to the requirement that homebuyers be under contract by April 30th for the tax credit.
So where will things go from here? Well at least for the next two months the numbers will most likely be up. After that, I would expect a drop since the market was coerced into improvement earlier than normal. Then…the real healing begins.
P.S. All data was crunched from the WVMLS.