July Monthly Market Real Estate Update

July 11, 2024

The markets are showing different storylines as we head into the Summer months.  This time of year should be our busiest, however it is not performing as expected.  All Real Estate is local.  Here is a snapshot of our current local market and the trends to pay attention to.  As always there is quite a bit of information to unpack.

Current Active Listings (All Types)	2826	Up 4% from last month & up 20% from this time last year
Current Pending Listings	1090	Down 7% from last month & down 10% from this time last year
Sold Listings Last Month	761	Down 5% from last month & down 16% from this time last year
New Listings Last Month	1112	Down 19% from last month & down 12% from this time last year
Months of Inventory	4.21	Up 6% from last month & up 29% from this time last year
% List to Sold Ratio	98.60%	Down .2% from last month & down .8% from this time last year
Absorption Rate *Based on current active listings vs sold listings for the past month	27%*	Down 7% from last month & down 34% from this time last year
Average Sales Price in All Categories	$475,000	Up 1% from last month & up 6% from this time last year
Median Residential Sales Price Average Residential Sales Price **Based on Willamette Valley Multiple Listing Statistics	$452,000** $501,541**	Up .4 % from last month & up 3% from this time last year. Up 1.3% from last month & up 3% from this time last year
Average Owner Occupied Interest Rates ***Based on Freddiemac.com Statistics of 30 year fixed mortgage	6.95%***	Down .6% from last month & up 2% from this time last year
Consumer Price Index (CPI) **** All items-FED’s Goal is 2%	3.0%****	Down 9% from last month & down 6% from this time last year

+Some numbers are rounded

In the Mid Willamette Valley, our primary MLS is reporting that our average sales price broke $500,000 for the first time.  It begs the question of how many people can afford properties at half a million dollars, especially when interest rates have increased more than 27% over the last two years?  We have traditionally highlighted the average sales price because we often see how the median can be overly skewed with outrageous sales on the high end, as well as the low end, to manipulate the median sales price; which is the middle figure within the range.  However, we also recognize that the average price continues to increase in an inflationary period because the more fortunate buyers are still purchasing homes and many of them are on the upper price end.  This will encourage both the median and average sales prices to increase when the lower income earners are not purchasing homes like they used to.  We will publish both the average as well as the median prices moving forward.

The CPI report shows that inflation is cooling down. After a level report from last month, the most recent numbers are showing a decrease to 3% rise in costs of all items in June.  This information is encouraging the FED to decrease rates in the next few months so it will be interesting to see what they do.  Remember, their goal is 2% so if they start cutting too soon, then it could encourage the economy to continue to grow at higher than desired level causing continued strain on American families.  The FED is not supposed to be political, but with this being an election year, they are capable of anything.  That 2% goal is a running average goal.  Some argue that the FED would need to see rates below 2% for some time in order to justify cutting rates because the average YOY would continue to be higher than 2% if they cut too soon.  As the jobs market is cooling and unemployment is rising, most economists do not see this economy as a healthy one.  We are trending in the wrong direction.

Everyone’s perception is their reality.  If you listen to many news outlets and catch the headlines for the economic news you would think that our economy and financial outlook is very positive.  People are continuing to purchase what they desire even though consumer prices are up over 20% in many categories due to inflation.  We are seeing the housing market continue to be resilient overall with the rising costs of living, however we are starting to see some cracks.  The inventory is now rising to a level that is considered in the range of a flat, buyer/seller market at over 4 months.  Our area is typically a flat market between 5 and 6 months.  In fact even though the stats show that pricing continues to elevate, it feels as though the market may not be as healthy as it portrays.  As we noted, fortunate individuals are taking advantage of the market which is evident by the record number of fully cash sales we have seen.  Investors are also taking advantage of higher interest rates, which has pushed some of their ‘homeowner’ competition out of the market.  

Location is still the most important factor in Real Estate.  Some areas within our Salem and Keizer neighborhoods are not doing as well as the overall market.  This graph shows the changes since 2020 in average sales prices based on areas.  The map to the right shows references to these areas based on the MLS.  Southeast and West Salem areas saw corrections in 2023, but are rebounding this year.  East of Lancaster, as in area 30, has seen quite a few new construction properties bringing up values in that sector.  South Salem might be showing a correction this year, but we’ll see how the rest of the year turns out for them.  Keizer has shown consistent growth whereas Central and Suburban SE Salem are showing signs of declining prices this year.  Most of the rural county properties are showing fairly flat or small gains overall in the past couple of years.  

*Outside of these areas within the MLS are not figured into the total average price published earlier.

In addition to these areas it is interesting to see what other smaller communities are offering for pricing.  These prices also include rural areas outside the city’s limits, but within their respective communities.  Some areas show very high prices due to acreage and farm properties.  We are experiencing an increasing number of higher end properties sold in the outlying communities of South East Salem within the last 6 months.  We still have 6 months to go so figures can change dramatically, and some of these figures can be a little misleading without the proper context. 

Our industry stats show that only approximately 24% of our 3400 agents in our area sell enough properties to be considered career minded professionals at the basic level.  There are many agents who do not sell any homes, or only sell one or two a year.  Experience matters.  We believe that in order to advise and guide people in one of the most expensive decisions in their lives, agents need to have extensive experience & qualifications.  Our goal is to increase the integrity, experience and professionalism in our company.  We strive to bring the most value to our clients in addition to being well trained in marketing & negotiations to bring the best experience to you.  If you know of anyone that could use our services, please let us know.