Some Stopped Their Foreclosed Home Search in Salem

Posted on May 29th, 2009

Sales of homes in Oregon’s capital city of Salem have declined in March by 33. 2 percent compared to March 2008, according to data from the Willamette Valley Multiple Listing Service, MDA Data Quick and the National Association of Realtors. Clearly, many prospective homebuyers have stopped their foreclosed home search in the city.

Home prices also declined by 10.8 percent in March, but real estate agents and housing officials can take comfort that foreclosed home search lists in the city did not push down home prices as steeply as in other cities.

Although Oregon’s housing market was hit with increased foreclosed home search lists in the first three months, Salem’s housing market was relatively protected from foreclosure effects because of government activities in the city, as it is Oregon’s capital and Marion County’s administrative seat.

Ray Burstedt, head of the economic development nonprofit SEDCOR, said Salem’s economy is diversified, with activities varying from agriculture to food manufacturing. He added that government employment has been relatively protected from the effects of increased foreclosed home search listings.

Nevertheless, Salem’s housing market has been affected by the deteriorating economy of its neighboring state of California. Don Meyer, head of the Salem Association of Realtors, said that previously many Californians were selling their houses and relocating to Salem because of the city’s good employment situation and affordable but high-quality retirement homes.

But after California was battered by overwhelming foreclosed home search listings, homeowners planning to move to Salem found it hard to sell their homes. This caused an increase in vacant retirement homes in Salem.

Also, many Oregonians who are potential homebuyers are not pursuing their home purchasing plans; they are holding off for further reductions in home prices. High-end homes, especially, have not been selling.

But recently, more affordable homes priced in the range of $200,000 are entering the Salem market and are being snapped up by buyers. This has given Burstedt some hope that home prices have finally bottomed out or nearing bottom levels despite a rise in foreclosure filings statewide.

In RealtyTrac’s foreclosure charts for the first three months of 2009, Oregon is tenth among U.S. states with the biggest foreclosure rates, a big jump from its 21st ranking in 2008. It had a total of 10,547 foreclosure filings, with 1,916 already added to foreclosed home search lists.