Salem Oregon real estate has trucked along at a steady pace for many years. Nothing spectacular worth talking about, just an average community. We did see things go crazy here (crazy in Salemite terms) in 2005 and 2006, but not like other parts of the country. I was looking at housing predictors ranking of 25 best and 25 worst forecasts for 2008 and noticed that Salem Oregon is right up there!
Salem was ranked #3 for expected appreciation. Salem appreciated at 3-5% last year (2007), depending on what figures you choose to look at. Portland, which is one hour North of Salem Oregon, ranked in the top 25 projected worst forecasts. Having sold some investment properties to clients up in the Portland area, I can say it was crazy. 16 investors bidding on a trashed out REO is crazy in Oregon terms.
While I agree that resale homes will hold their course, I do think that new construction (which currently has a 17 month inventory) will be facing a larger correction. Since these homes are over $350,000, even their sale at builder costs will still bring averages up. Salem also has the advantage of being one hour South of Portland. As Portland homes skyrocketed in price, North Salem and Keizer homes could not be built fast enough for commuters. Salem is still significantly less expensive than Portland and many who choose to relocate are not disturbed by the one hour commute time.
W are still in a buyer’s market and probably will be for the year. Sellers still need to be realistic about pricing and agents still need to look at the comps closely. As they say, the greater the rise, the faster the fall.
Thankfully, Salem Oregon is falling gently.