The word for this month? Inventory. And lots of it. June’s numbers show housing inventory up 20 percent over June 2018 with 565 new listings in Salem. Active listings across the Willamette Valley is up 15 percent as well. Double digits! Churn is back.
A few things are driving the inventory increase. One, millennials have settled in and fewer are still looking for homes. Two, baby boomers are continuing to downsize and age out of their family homes. Three, interest rates are at recent lows and about to get lower. Four, it’s been ten years since the great recession, when many people had to default or short-sell homes they bought at historically high prices. Now, those purchases are gone from their credit history and they are able to return to the market with their full purchasing power, so they are ready to sell the “good enough” purchases they made when their credit was damaged.
What Do Buyers and Sellers Need to Know?
This increase in inventory is great news for buyers. More choice, less competition, fewer bidding wars, and less pressure to offer on the first thing you see. That may be enough for many homebuyers, but what about those who want to know if right now is not just a good time, but the best time to buy?
According to market analysts at Forbes, the market as a whole is set for a continued softening over the next two years. We’re not talking about a bubble or a crash, but a softening much like what we have been seeing. This prediction is based on a few key statistics. Housing starts are showing a building rate that seems to satisfy the rate of population growth, with builders expanding down market. Housing vacancy rates are in normal ranges, and home price appreciation is stalling, an encouragement for those people looking to buy a home. Home price appreciation is largely driven by interest rates, and since we know we’re about to see a decrease in rates, that will give appreciation a boost. Lastly, they look at disposable income, which should continue to grow given the tight labor market, which should eventually drive up wages.
What we can see here is that if you’re on the fence about selling, it’s best to stay put, or at the very least move up but hold your current home as an income property. Buyers can relax a little, knowing there’s more inventory than we have seen in the past few years, and conditions will most likely improve for buyers, so be prepared but be smart, and don’t settle. If you can’t find anything now, it’s very likely something better will come along in the next year or two.
Key Salem Housing Market Statistics
Here are a few other key stats from the Willamette Valley Multiple Listing Service housing report for June 2019:
Average Price for Single-Family Home Salem – $316, 274
Average Number of Days on the Market Salem – 73
Average Price for Single-Family Home Keizer - $320,543
Average Number of Days on the Market Willamette Valley– 81
Single-Family Homes Sold Willamette Valley – 1,042
Total Dollar Volume of Homes Sold in Willamette Valley -- $1,636,498,561
Months of Housing Inventory Available in Willamette Valley – 3.44
Total Pending Sales Willamette Valley – 1,716
Active Listings Willamette Valley – 3,155
Active Listings Salem – 573
Active Listings Keizer – 74