Momentum Returns to Salem’s Real Estate Market
After a period of uncertainty, Salem’s real estate market is beginning to show encouraging signs of activity across both commercial and residential sectors. The overall picture remains mixed, but confidence is starting to return as new legislation and economic clarity begin to take shape.
Election years often bring a slowdown in commercial transactions as investors and business owners wait to see how a new administration may influence fiscal policy. That pattern continued this year, extending into the summer months longer than usual. Now, with a better understanding of how H.R. 1, also known as the “One Big Beautiful Bill,” will affect real estate, momentum is starting to build heading into winter.
The legislation introduces tax incentives for business owners and investors, which should help stimulate commercial activity over the next few years. Despite ongoing concerns about international trade, we’re already seeing some positive indicators. Cap rates have dropped from 6.8% in 2024 to 6.1%, and leasing activity has strengthened, with average rents increasing from $14.04 to $16.78 per square foot.
While lending capacity remains limited, banks have become more competitive on rates, helping to move stalled deals forward. Predictions of widespread distressed sales have not materialized, as lenders continue to find creative ways to restructure debt and support existing clients. The best commercial opportunities right now are in infill multi-family projects and the conversion or rezoning of underused office buildings into more adaptable spaces.
On the residential side, activity has picked up following the first meaningful mortgage rate drop of 2025. Inventory is slowly improving, and buyers are re-engaging with the market. Homes that are priced accurately and presented well are still moving quickly, often attracting strong interest. For sellers, this means preparation and strategy are more important than ever. Strategic pricing, professional presentation, and simple cosmetic updates can make all the difference in helping a listing stand out.
For buyers, rates trending near 6% are creating a brief window of opportunity. If rates stabilize at this level, demand could tighten and competition may increase as we move into spring. Many economists believe that any future rate cuts are already built into current numbers, so the market may not see full stability until mid-2026.
Although uncertainty remains around trade, lending, and long-term interest rates, Salem’s market continues to show resilience. Commercial investors with creative vision and homeowners who take a thoughtful, strategic approach will be best positioned to succeed in the months ahead.
Whether you’re planning to buy, sell, or explore investment opportunities, now is the time to start strategizing! Reach out today, I can help you evaluate local market trends, identify opportunities, and create a plan that aligns with your goals.
