The Salem, OR market saw a drop in new home closings year-over-year in March, and the percentage drop, which was steeper than February 2016, gave signals that the market may be worsening. Closings slumped 42.1% from a year earlier to 22. This followed a 10.7% drop year-over-year in February.
A total of 321 new homes were sold during the 12 months that ended in March, down from 337 for the year that ended in February.
As a percentage of overall housing closings, new home closings accounted for 3.2%. This is down from the 7.3% of closings a year earlier. Closings of new and existing homes jumped year-over-year in March after also rising in February year-over-year.
Pricing and Mortgage Trends
The average per-unit price of newly sold homes increased year-over-year to $306,209 in March, up 15.6% from last year. This bump is an improvement over the 8.3% rise in February year-over-year.
Along with new home prices, there was an increase year-over-year in the average mortgage size on newly sold homes. The average mortgage size saw a 14.2% boost year-over-year to $268,547 in March. In February 2016, average mortgage size on newly sold homes saw a 7.9% gain year-over-year from a year earlier.
Other Market Trends
There was no change in the composition of the new home market with regard to the types of properties sold in March 2016. Single-family home closings have made up all of new home closings while attached unit closings have represented no part of closings.
There was a move in the average unit size of newly sold homes from 2,008 square feet in March 2015 to 2,014 square feet in March 2016. In February 2016, the average size of newly sold homes stayed level from the year earlier. The average size of newly sold homes moved from 2,220 square feet in February 2015 to 2,219 square feet in February 2016.
Foreclosures and real estate owned (REO) closings continued to rise in March from a year earlier and stayed a drag on the market. Foreclosures and REO closings, taken together, accounted for 29.0% of existing home closings, up from 23.9% a year earlier. The percentage of existing home closings involving foreclosures rose to 14.4% in March from 8.2% a year earlier and REO closings moved from 15.6% of existing home closings in March 2015 to 14.7% in March 2016.