I finally understand. 

I always wondered how the NAR forecasts were so much more optimistic than other ones.  I think I understand why now...

As I was drinking my green tea this morning and crunching data, I felt my head roll back in my eyes as the gobs of numbers started to blend together.  Did I just run data on duplexes or houses?  Lots or bare land? 

As my head lolled to the side, I realized that the data looked better that way. 

I like the charts better upside down...

According to my upside down chart, we are experiencing a nice steady rise in the average and median home prices. 

Now I was afraid that I was going to have to tell you that the average home price dropped in 2008 over 2007, BUT  I don't. I just need to turn the graph upside down. 

See?  Life is better this way.

For those of you that need the actual real data...okay, fine I'll share it with you, but you can always turn the chart upside down if you are feeling bad about real estate here in Salem.

 Where did we end up?

Despite my need to turn my charts upside down...not too bad actually. The average sales price ended at $217,824 and the median sales price ended the year at $198,850. The average was down 5% from last years, and the median declined only 2% from last year.

You can see on the chart that we were still peaking in prices in 2007 when many other parts of the country were showed declines for 2007.What can I say...we tend to lag behind the rest of the country in the real estate world.

Well, how long were homes staying on the market? I know this is a burning question that consumes your soul wondering about this piece of data.  Well, I don't think it is a big surprise to say that days on the market increased. Homes were on the market 18% longer this year than last year. While that might sound like a lot, the DOM still only averaged 4 months. In the world of real estate that is still pretty good.

Everyone has their favorite statistic that they like to use. I like to look at how many homes were listed in a year vs. how many were sold. To me, this helps to show future trending that will occur with pricing and where our market is headed.

 So where is our market headed?

As you can see the number of homes sold compared to the number of homes listed in a year has an increasing gap. This gap has been widening due to the lack of affordability of housing. What we have as the end result is a glut of inventory.

Essentially the closer the lines are together the less inventory, hence a seller's market. The farther the lines are away from each other, the greater the inventory and a buyer's market.

Buyer demand for overpriced housing has been declining for two years as prices escalated. Buyer's stepped out of the marketplace as homes continued to become more and more unaffordable. The fact that home prices only corrected slightly, while homes sales plunged tells me that our prices are still too high for buyers. Our supply and demand curve has not stabilized. The average and median home prices are going to have to correct more in order to get buyers back into the market. A 5-10% correction should make homes more affordable and bring more stability to the real estate market. We will continue to see a buyer's market here in Salem. It does not appear to be trending towards neutrality at this point.

If you don't like the sounds of that, just turn the charts upside down.  Everything is rosy...

For other 2008 Salem Oregon Market Reports:

• Acreage
• Lots
• Bare Land
• Duplexes