Market Conditions in Salem>Question Details

Lango Leer, Renter in Salem, MA

The price of homes has been dropping in the last 10 years in Salem. Is this a indication of a good time to buy, or is the area in decline?

Asked by Lango Leer, Salem, MA Sun Apr 1, 2012

Looking to possibly purchase first home and like the Salem area, but the downward slope over the last 5 and 10 years for average house price in the area has me worried about it from an investment standpoint.

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8
Jaffo Nerr’s answer
We're heading toward a house price collapse the likes of which has never been seen in this country. Think 1980s pricing. Clue: prevailing wages have been stagnant since the 1970s; boomers are getting rid of their brooding boxes; and a massive backlog of pre-REO is starting to move at the same time that a lot of notes are heading to resets. Rational investors will be walking, cashing-up and buying at the courthouse stairs. Perfect storm. Salem was hit hard by Realtor®/mortgage-broker driven gentrification and will fall back to rational pricing harder and faster than places that were left alone. Count on it. Brokers all have the same story: all real estate is underpriced and will 10x in 15 minutes and your kids will grow up in the back of a car unless you buy now.
1 vote Thank Flag Link Mon Jun 18, 2012
Jaffo, You have no idea of what you are talking about when it comes to the real estate market in Salem Massachusetts (and probably not the rest of the country for that matter). What makes you a "Real Estate Pro"?
Flag Mon Jun 18, 2012
Salem as a community is definitely not in decline. Is it a good time to buy? Generally, yes. For you? I couldn't answer that in good conscience without knowing more about your situation and goals.
I wouldn't put much stock in the chicken-little-sky-is-falling philosophy. It sells books maybe, and people who constantly predict disaster stumble uncontrollably onto the truth once in a while (like a broken clock) but it's no philosophy to guide your decisions.
0 votes Thank Flag Link Fri Jan 11, 2013
take note the prices are on the rise and with the election over with intereste rates will soon follow.. BUY NOW
0 votes Thank Flag Link Wed Dec 5, 2012
Buy now or forever hold your peace. Seriously with rates these low don't miss out!
0 votes Thank Flag Link Wed Apr 4, 2012
I have to agree with Jim.. prices went through the roof 2004 and 2005 and then things started to get shakey in 2006 and the fall out continues. Although they have declined we are suddenly seeing an upswing in prices possibly due to lesser inventory or maybe people are finally getting off the fence. As a Realtor for 25 years I can tell you there has never been a better time to buy. I know, you may be thinking this is just broker talk but it is the truth. The combination of such affordable pricing and crazy low interest rates makes this the best buyers market ever. Don't keep waiting as you will awaken some morning to find you have missed your golden opportunity. I wish I needed another home but I love the one I have. Find yourself a Realtor and go buy a home, NOW!
0 votes Thank Flag Link Mon Apr 2, 2012
Housing is still overpriced and unaffordable. If interest rates rise, house prices will crater, as they should.
Flag Mon Apr 16, 2012
Actually, home prices have decline in Salem during the last 6 years, and rose in the 10+ years before that. If you purchased a home in 2002, most likely it has gained a small amount of equity. If you look at the stock market and the real estate market from 2000 to 2012, real estate was a better investment.

With that said, being a great investment shouldn't be your #1 priority when buying a home in which you are going to live in. There are many other other economic, lifestyle and emotional reasons for buying a home. Only you can decide if home ownership is right (or not right) for you. http://witchcityhomes.blogspot.com/2011/07/why-do-people-act…

What I can tell you is that with the current prices of real estate and the low mortgage rates, home affordability is the best it has been in over 20 years.
0 votes Thank Flag Link Mon Apr 2, 2012
The entire country has been in depreciation of homes for approx 7 years. Salem peaked in late 2005 with a peak in median price of about 353k with a median price of 270k today. Representing a 24% drop in house prices.

While many indicators show 2012 the year of the housing market stabilizing there are never any guarantees.

While considering purchasing a home their are many reasons outside of financial for purchasing a home. A home purchase should never be strictly financial. When considering a purchase you should be buying for the long haul where market fluctuations are not necessarily troublesome. While this market correction has been particularly heavy, so was the price run up particularly aggressive. market corrections are and will continue to be part of the buying cycle. While the late 80 early 90 correction was not quite as devastating people who bout in that market and have held on to their houses still have seen a tremendous appreciation in their house price.

Whatever your decision.... buy for the long haul and do not worry about the short term price fluctuations.
0 votes Thank Flag Link Mon Apr 2, 2012
Depends on your reason for buying - to live in and enjoy or as an investment?

Investments are always a good time to buy, but you must know that the income will support the debt, expenses, reserve and provide a cash flow.

Homes rise and fall based on many factors, also salem has some very nice areas and others that are not as nice. Best to have an agent in the market that can guide you properly.
0 votes Thank Flag Link Mon Apr 2, 2012
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