Salem 2015 Condo Market Review

Sales of condos in Salem in 2015 jumped 22% while the median price gained 9%, although both sales and the median price remain below their 2005 peak levels. The median condo sold for 18% above its Assessed Value in 2015.

Median Price
First the half-yearly numbers. The 2015 median price was 4% below that the 2005 peak.

There are always seasonal fluctuations from quarter to quarter. In the last 5 years the highest price for the year has been recorded twice each in Q1 and Q3 and once in Q4, but never in Q2.

Sales
Sales in 2015 saw a sharp jump, especially in the second half of the year, and were the best since the peak of 2005.

ASR*
The ASR is the ratio of Assessed Value to Sales Price (see below for a fuller explanation). In 2015 the median sale took place at an ASR of 84.6%, meaning that it sold for 18% (100/84.6 – 1) above Assessed Value.

Comment
It seems like an appropriate reflection of the change in Salem that September saw the visit 0f a cruise ship, just before the last of the stacks of the old Power Plant came down. These acts followed the opening of the new train station garage late in 2014, and all help contribute to the development of Salem as an exciting and dynamic city which continues to attract new residents.

* One way I measure prices is by the ratio (ASR) of Assessed Value (AV) to Sales Price (SP). The ASR is the AV divided by the SP: if the SP is rising (prices going up), the ASR will fall.
Properties selling above their AV will have an ASR below 100%. What this means is that in a period of rising prices the ASR is likely to be falling. So what we, as homeowners, want is an ASR below 100% and falling.
Remember that AVs are a lagging indicator: the tax bills that have just been sent out for FY2016 are based on actual sales in 2014. Thus the 2015 sales data, reported in this review, will be the basis for FY2017 assessments.

If you – or somebody you know – are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 617.834.8205 or Andrew.Oliver@SothebysRealty.com.

Read How should I choose the broker to sell my home?

Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated

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