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Day: March 21, 2012

Home prices fall in 2011, but some see hope

Of the Keizertimes

If you bought your Keizer home in 2004, some cold comfort: Your value today is still likely a little bit higher today than it was when you bought the home.

And the bad news? The median home price in Keizer fell by some 7.7 percent in 2011, after a drop of about 2.8 percent in 2010. Before that came a drop of nearly 14 percent from the market high in 2008.

Salem saw a median price drop of about 10.7 percent.

While the Salem area started its decline in 2008, home prices started dropping here in 2009, according to local real estate broker Melina Tomson. She compiles and analyzes statistics from Willamette Valley Multiple Listing Service.

Home sales were flat in 2011 in Keizer, hitting 272 after sales of 270 in 2010. The area sold 283 homes in 2009 and 310 in 2008, with a peak of 581 in 2003.

“My personal belief is that this is the new norm – people are finally accepting that and are ready to move on with their life,” said Debbi McCune of HomeStar Brokers.

The good news, she and other area brokers told the Keizertimes, is that they’re starting to see real spikes in interest and activity from buyers.

“Under $150,000 and $175,000, we’re getting multiple offers on those sometimes,” Tomson said. “… There’s still a lot of caution out there. But if buyers find something, they’re diving in, going ahead and buying.”

Hopefully, McCune said, this will translate into more movement in the higher-end market.

“I call it the trickle-ups: The first-time homebuyers, that market is moving … Everyone bumps up from there,” McCune said.

Amy McLeod of RE/MAX Equity Group said larger homes will continue to be a damper on the market so long as their owners can’t get the sale price they need to make going through the process worthwhile. The brokers had mixed feelings on the state of the financing market. McCune and Tomson point to record-low interest rates and said buyers without credit problems aren’t having huge difficulty finding financing. But McLeod points out many more buyers have credit problems than they used to, including many former homeowners who went through a short sale and foreclosures.

McCune noted many of her buyers at McNary Estates, for example, are older buyers who pay in cash.

Home inventory figures are moving in a positive direction: Home inventory in January 2012 was 9.3 months, while in January 2011 it was up to 15.9 months. A normal market is considered to have about six months worth of inventory.

But McLeod sees a potential mess ahead: Homes that saw the foreclosure process stopped due to title problems arising from allegedly fraudulent recording practices by some of the country’s largest home lenders. Oregon is one of more than 40 states that will be signing a settlement that could free up as many as 49 million pieces of property McLeod calls the shadow inventory.

That’s why McLeod thinks now – not sometime this year, but this season – is the time to sell.

“Inventories are as low as they’re going to get, it’s the spring buying season and interest rates are low,” McLeod said.

She doesn’t see a full recovery coming for as many as eight years due to shifting demographics. McLeod said the trend among Generation Y isn’t necessarily to jump into the race of ever-growing houses in the suburbs like baby boomers did.

“All those things combined – we have all these boomers with all this inventory of big houses, the delay in adulthood on the part of the Gen Y generation, and their desire for, really, a different product,” McLeod said.