Well June is over and you’d think that we’d have sun in Oregon by now, but it is seriously cool outside as I am writing this post. Typically I get to write my summer blogs outside soaking up my year’s worth of Vitamin D, but today…wearing polar fleece in my office. Since this is a real estate blog for the Salem Oregon area and not a weather blog I should probably get refocused and talk about real estate but I just wanted to complain for a moment and hope the locals commiserate with me. Our summer weather stinks this year.
Now that I have that complaint out of the way, onto real estate. The second quarter has ended so we have more data to work with to get a better feel for how things are trending. So how are things trending?
Salem Oregon Home Sales: Trending Up
Last year has consistently been the worst year for homes sold in Salem Oregon. Home sales have gone up since last year and I do expect in terms of homes sold that2009 will be the worst year for sales volume. The large peaks are due to the tax credits, but even without those, I still expect more homes to be sold this year over last year.
How about homes listed vs. sold?
How to read the graph? The closer the lines the less inventory. The farther apart means more inventory. As for this quarter, the listed vs. sold ratio is 48.9%. Compare that with 2005’s 76% and 2002’s 64% and you can see that while an improvement from last year, our home sales are still off. We still have too much inventory.
This is economics 101 at work. Too much inventory (ie lack of demand) means prices must go down to compensate. Home prices continue to go down and will probably continue that way for a bit here.
Home prices are averaging an 8-10% decline since last year and I would expect that pattern to continue through this year. With the Salem unemployment rate hovering in the 10% range and a real estate imbalance in inventory there is no choice but for basic economics to kick in and downward pressure remain on home prices.
I have been asked so many times “How is real estate doing?” My answer is still the same. It depends on what you are asking me. Are things improving? Yes. Do we have a healthy, good real estate market? Nope. Inching our way there, but we’ve got a ways to go.
P. S. Data was crunched from data provided by the WVMLS.