My Weekly Central Oregon Real Estate Blog

As the year draws to a close, the closed transaction data begins to paint a picture of what the new year may have in store for the housing market. This week, I will focus on single-family homes on a county-by-county basis. In the coming weeks, I will dive deeper into the individual cities of Central Oregon to provide you with more specific information to illustrate the year-over-year changes. 

This morning in Deschutes County, there are 709 single-family listings, a drop of forty-one since last week. This week last year showed 745 active listings in Deschutes County, indicating that our supply-constrained market will continue. Available inventory will be a solid leading indicator for home prices as the 2024 market shapes up. Fifty-seven sales are pending, and forty-seven sold at a median sale price of $748,240. Year-to-date 2022, there were 3984 sales compared to 2993 this year. While 2023 sales volume reflects a -24.9 % decline, the median sale price has only dropped -2.64%. The median sale price has narrowed as the year progressed, with buyers seeing year-over-year median sale price declines in the high 5% range in the first half of 2023.

Interestingly, the housing market reacts more to abrupt changes than actual numbers, and as mortgage interest rates began to rise late last year, many buyers pulled back, and many sellers were motivated to make a sale. Looking back, I attribute this to the uncertainty of where the market could wind up and talk of a recession that would take a significant bite out of potential sale prices in 2023. Median prices across the county are only a snapshot of the market, and individual property pricing depends on many factors. However, early this year, most buyers would not have believed that prices in Deschutes County would only decrease -2.6% across the board. 

Jefferson County has eighty-one homes listed this morning, up one from last week. On this week last year, there were eighty listings, showing year-over-year stability. Zero properties were placed under contract last week, with five sales at a median of 605k. Year-to-date sales are 197, down from 299 in 2022, a drop of -34.1%. The median sale price dropped from 400k to 390k, -2.5%. While the price drop in Jefferson County is in line with Deschutes County, and the inventory is stable, the more considerable reduction in sales volume could be a sign of prices softening heading into 2024. The median price reduction has increased to -6.07% from -4.07% in 2022. Every property throughout Central Oregon has unique circumstances, but double-digit price reductions were more common in Jefferson County this year than in many other regions. The metric to watch that will drive future prices in Jefferson County will be sales volume compared to 2023. A further reduction from this year's lows will motivate sellers to take advantage of any offer, softening prices. Substantial sales volume would have the opposite effect. 

Crook County's inventory declined by five to 135 active listings this morning. This week last year, Crook County had 132 active listings. Sales year-to-date are 339, down 17.5% from 2022's 411, the smallest drop in sales volume in all three counties of Central Oregon. This year's median sale price is 449k, down from 465k last year. Crook County, minus the sales from Brasada Ranch, shows 310 sales in 2023 from 379 in 2022, a drop of 18.2%. The median sale price has remained remarkably stable, only dropping four thousand dollars to today's 440k, a reduction of .9%. Brasada Ranch sales declined by three, with twenty-nine so far this year. While the sales decline is marginal, the median sale price increased slightly to $1.3M, up 1.4%. The combination of desirability and low inventory in Crook County, including Brasada Ranch, are strong leading indicators of price stability heading into 2024.

Days on the market have increased, returning to more typical marketing times. Desirable homes continue to sell quickly, but opportunities are available for the homes lingering, especially during the off-season before the market picks up again this coming spring. 

Rising interest rates have a lag effect on the markets, and there is every reason to believe the rapid rate increases of the last year have yet to impact the market entirely. Wall Street, to date, has priced in future rate decreases, although lately, more bank CEOs are accepting that Jerome Powell means it when he said rates will remain higher for longer. Recent relief in mortgage interest rates is welcome news for buyers, but the question remains if this is a blip along the way or the beginning of a pivot. The talk of recession has changed direction so many times over the last few months that it is dizzying. Economic data shows reasons to be concerned, alongside much optimistic data. Some analysts feel we are balancing on a precipice, while others believe the market is ready to accelerate. Without significantly more inventory, lagging sales, and increased days on the market, home prices in Central Oregon are unlikely to change drastically. Unlike our local trends, the national housing market is experiencing more inventory and decreased prices. Admittedly, significant economic downfall can apply pressure to housing rapidly. I encourage buyers to take a long-term view of housing. Short-term fluctuations in home prices have had little impact over the long-term rise in home prices, and a quick look at the Case-Schiller Home Price Index illustrates this clearly. In addition to these weekly reports, now is a great time to keep an eye on the Central Oregon Market Trend Reports at www.EnjoyBendLife.com/Market-Trends/, and at the bottom of that page, you will find the Home Price Index, along with more helpful economic data. 

Stay tuned for a city-specific analysis of the Central Oregon Housing Market over the coming weeks!

Click here for the full report!

As expected with the holiday-shortened week, activity in the Central Oregon housing market slowed over the last seven days. In Deschutes County this morning, there are 750 active listings, down fourteen from last week. Pending sales were thirty-three, with seventeen closed transactions—the pending activity aligned with the previous year's week, with the sales exactly half. The median sale price for the week was 750k, nearly 100k higher than the year-to-date median sale price, with an average of 924k. Interest rates have softened a bit, sitting at 7.3% this morning.

Crook County inventory dropped four to 140, with two pending sales and five closed transactions. Two of the five sales were in Powell Butte and Brasada Ranch at $1.43M and $1.44M, respectively, leaving the average sale price of the three Prineville area homes at $469,897. 

Jefferson County inventory increased by two and is now at eighty active listings. Seven sales were pending, with one home sold for 410k. 

The seasonally lower inventory is striking in the small community of Sisters, where there are only forty-one active listings. Of the two homes placed under contract in Sisters last week, one listed for 625k north of the Aspen Lakes Golf Course, and the other near Black Butte Ranch listed for $1.395M. There were no closed transactions in Sisters last week. Year-to-date, Sisters has closed 162 homes at a median of 719k. So far this year, the least expensive home sold in Sisters went for $470,463, while the most expensive sold for $15M! Year-to-date, in 2022, there were 201 sales in Sisters at a median of 740k, with the most expensive sale at $6.8M. The City of Sisters has a wide range of property types and sizes, with several "trophy" home sites, genuinely remarkable properties, and more affordable homes near downtown. 

Heading down to La Pine, one of the fastest-growing communities in Central Oregon, there are seventy active listings today at a median of 550k. Four homes were pending last week at a median of 337k, with two sales. The sold properties closed at 450k and 525k. Last year, there were 259 sales in La Pine at this point of the year at a median of 465k, compared to 178 sales so far this year at a median of 425k. 

Another Central Oregon community seeing rapid growth is Redmond, home of the Eagle Crest Resort and the largest airport in the area. This morning shows 179 homes listed in Redmond at a median of 599k, with ten pending sales at a median price of 537k and two closed sales at 375k and 557k. Year-to-date, Redmond has closed 662 single-family homes at a median of 502k compared to 897 at this point last year at a median sale price of 535k. 

Central Oregon has many great communities with price points to suit almost any buyer. Each community has its unique feel and attraction, with a relatively short drive to virtually any city in the area. Whether you want to explore Lookout Mountain in the Ochoco Mountains near Prineville, the Metolius River outside Sisters, Smith Rock in Terrebonne, the Phil's Trail Network in Bend, the trails and amenities of the Sunriver Resort, or fishing the Fall River in La Pine, everything is readily available. While Mt. Bachelor might be waiting for one more winter storm to open the lifts, our mild temperatures of late mean mountain biking, hiking, and even golf are still happening all across the region. Even the heavier snows at Mt. Bachelor leave Bend and the surrounding communities relatively unscathed during many storms, and most people find our winter seasons relatively mild compared to many ski-focused communities in the West. Enjoy our extended fall while you can; there is sure to be more winter headed our way before long!

I am actively exploring Central Oregon year-round and know our communities and the housing market thoroughly. If you are considering making this part of the world home, please reach out anytime with any questions. I am always happy to share my knowledge of the area!

Click here for the full report.

4 Essential Tips for Purchasing an Older Home in Bend Oregon

When it comes to Bend OR real estate, you'll find a treasure trove of older, historic homes that exude charm and character. While the allure of owning a piece of history is undeniable, it's crucial to approach the purchase of an older home with a discerning eye. In this article, we'll explore four valuable tips to consider when buying an older home in Bend, Oregon.

Evaluate Electrical and Plumbing Systems

Older homes often boast architectural beauty, but they may also come with outdated electrical and plumbing systems. Rewiring and updating plumbing can be costly and extensive endeavors. Many older homes in Bend, Oregon still have their original knob-and-tube wiring and cast-iron pipes, which pose safety risks. Outdated electrical systems can lead to fire hazards, while corroded pipes may cause leaks and water pressure problems.

Before committing to the purchase, inquire about the condition of the electrical and plumbing systems. If the original systems are still in place, obtain a quote for their replacement. Additionally, ask the sellers if any updates have been made and verify if they meet current building codes.

Address Hazardous Materials

Some older homes in Bend, Oregon may harbor hazardous materials, including lead and asbestos. Lead-based paint was commonly used on both interior and exterior surfaces until 1978, and lead exposure can lead to health issues. Asbestos, on the other hand, was utilized in various building materials until the 1970s when its health risks became evident.

Before finalizing the purchase, investigate the presence of lead paint and asbestos in the home. Assess the costs associated with their removal and remediation, especially if items like popcorn ceilings contain asbestos.

Examine Foundation and Structural Integrity

The passage of time can take its toll on even the sturdiest of homes, leading to foundation and structural issues. In older Bend, Oregon homes, you might encounter signs such as doors and windows that jam, wall cracks, or cracked tiles, all of which could indicate foundation problems. During your inspection, pay close attention to these potential red flags.

If the inspector uncovers significant concerns or necessary repairs, you have options. You can negotiate a lower purchase price, request that the seller completes the necessary repairs, or reconsider your decision to buy the home. Keep in mind that the cost of repairs could exceed your initial budget.

Ensure Safety with Smoke Alarms and Carbon Monoxide Detectors

In Bend, Oregon, like in many other states, smoke alarms and carbon monoxide detectors are mandatory on every level of a home. Safety should always be a top priority. Test these devices to ensure they are functioning correctly, as they play a crucial role in safeguarding your family and property.

While buying an older home in Bend, Oregon might not be suitable for everyone, there's an undeniable charm and nostalgia associated with these historic dwellings. Whether you're drawn to a Victorian-style gem or simply appreciate the unique character of older homes, following these tips will help you make an informed decision and ensure your new abode stands the test of time.

Search for Older Homes in Bend Built Before 1960

Happy Thanksgiving Eve! I wish you and your loved ones a wonderful day, however you choose to celebrate. The weather tomorrow is forecast to be colder than the recent pleasantly warm weather, but sunny skies are on tap for your outdoor adventures. Friday, Mt. Bachelor opens for the season, adding one more activity to the list of possibilities. Most trail systems are still in prime condition for mountain biking, hiking, or running, so the options are endless! 

This week, there are twenty-eight fewer listings in Deschutes County, now at 764. Fifty-one homes were pending at a median of 670k, with another 48 sold at the same median price. Consistent with the data over the last several weeks, 53.4% of the active listings have reduced the asking price by a median of -4.6%. The median list price-original list price ratio for the sold properties is 93.17%, indicating that sellers have come down nearly seven percent since listing their homes before finding a buyer. After analyzing the data, it is apparent that most price reductions are coming down from overly optimistic pricing for this year, not a collapse. The year-to-date median sale price has remained consistent at 660k. With 2,916 sales this year and approximately fifty sales per week, total sales for the year will break three-thousand, although likely less than the 3,197 of 2010. Deschutes County's population has increased by 30.7% since 2010, putting 2023's low sales volume in perspective. You also may recall that 2010 was just past the low point of the last housing crash.

Crook County inventory dropped by two, now at 144 active single-family listings, and remains remarkably stable over the last several weeks. Five homes are pending in the county at a median price change of -13.34%, more in favor of buyers than at any time in the last few years. The Prineville Market Trend Report illustrates this clearly. However, zero sales over the previous seven days in Crook County is an even stronger indication that buyers are gaining leverage. If you strip out the high-end sales from Brasada Ranch, the data looks even more favorable for Crook County buyers. 

In Jefferson County, inventory declined by six, now at seventy-eight active listings. The weekly activity was robust, with six pending sales and four closings, especially considering only two pending transactions last week and zero closings. With such a diverse inventory of homes in the county, a median sale price of 687k is unsurprising, but the pending median price was less than half that at 315k. Conditions in Madras are nearing a balanced market, although still slightly favoring sellers. The Market Trend Report for Madras shows the trend clearly.

The Market Trend Reports on my website are a fantastic resource, especially when the market is transitioning based on market factors or during seasonal changes. I have links to all the Central Oregon Zip Codes on my website (accessed from the top navigation bar or at the menu icon in the upper right corner). Use this link for the conglomerated data in a single report for the entire city of Bend. Registering to receive Market Trend Reports opens the ability to search for any zip code or city in the country to access city-specific data using the search bar at the top of each report.

This morning, the national average for a 30-year fixed-rate mortgage is 7.33%, a significant drop from recent highs. Despite recent optimism, reading the narrative following the last Federal Reserve Open Market Committee meeting shows no sign of backing off the "higher, longer" narrative. However, the recent reprieve in interest rates and our seasonal slowdown have created buyer opportunities. As the inventory of available homes dwindles, our market is constantly sorted, with many homes that have lingered on the market suddenly looking strong in comparison. Most homes on the market for an extended time have also reduced the asking price. The combination creates activity as buyers "clean up" before year-end. With fewer new listings at this time of year and most highly marketable properties listed in the spring, buyers recognize that great deals are available today. Missing out could mean waiting for months before suitable inventory is back on the market. 

Buyers at this time of year generally have a little breathing room with offers. However, complacency could mean losing a desirable property. Especially with the recent drop in interest rates, staying in contact with your lender and being poised to make an offer is essential. Many sellers of higher-priced homes in our market require proof of funds or a pre-approval for showings. A screenshot of sufficient funds to close is all it takes for cash buyers, which generally isn't time-consuming. A pre-approval can take more time and resources if you finance your purchase. As the economy has tightened, so have the requirements lenders ask of buyers, which vary based on your financial situation. A salaried employee will have significantly less paperwork to gather than a self-employed entrepreneur or someone with several sources of income. No matter your situation, I have a team of local lenders I work with, and I can point you in the right direction. Of course, a pre-approval from a lender you already have a relationship with also works. Pre-approval is more than simply being prepared to make an offer; it sets the tone for a relationship with a seller. Everything we do from the moment I call to schedule a showing is evaluated by a seller and listing agent. Presenting you in the best light possible to secure a contract is one of many jobs I have in helping you find the perfect home!

Where interest rates and the housing market go from here is a mystery. But, I am always current on the Central Oregon data and broader financial markets. Please reach out if you are looking for specific data or want to discuss market trends. Everyone's situation is unique, and I am always interested in hearing your perspective.

Click here for the full report.

If you are a homeowner, you likely have home equity that can unlock the potential for new investments. Your current equity can be leveraged to fund your new real estate goals, like buying a second home. For those considering such a move, Central Oregon emerges as an enticing destination, offering a blend of natural beauty, recreational opportunities, and a burgeoning real estate market.

Whether you already live in the area, or you want to learn more about homes for sale in Central Oregon, we are here to help. Contact us any time to learn more about houses for sale in Bend or nearby communities, and keep reading to learn more about how to strategically leverage your home equity to invest in more real estate.

Understanding Home Equity

Home equity is the difference between the current market value of your home and the outstanding mortgage balance. Before leveraging it for a second home, it's essential to have a clear understanding of your home's current value and your existing mortgage.

We can help by assessing the current market value of your home if you already live in the area. Contact us any time to get a free market analysis of your property.

Financing Options

Once you know how much equity you likely have in your home, you can move on to learn more about how you can leverage it. Lenders typically consider the loan-to-value (LTV) ratio when assessing the risk of providing a home equity loan or line of credit. The LTV is calculated by dividing the total loan amount by the appraised value of the property. Generally, lenders prefer an LTV ratio of 80% or lower.

There are various financing options for leveraging home equity, including home equity loans, home equity lines of credit (HELOCs), and cash-out refinancing. Each option has its pros and cons, and the choice depends on individual financial goals and circumstances. We always recommend starting by talking with a lender about your options, and we can recommend some lenders we trust if you need a connection.

Considering Holistic Affordability

The affordability of your second home will depend on far more than just how much you invest initially. As you consider how to leverage your home equity, keep in mind that you may want some of the equity kept liquid as a way to fund renovations, furnishing, or even just to have an emergency fund on hand.

It's essential to calculate the affordability of a second home, factoring in the additional costs such as property taxes, insurance, maintenance, and potential fluctuations in interest rates. Understanding the financial commitment involved ensures a more realistic and sustainable investment. Central Oregon features a variety of great places to invest, with a wide range of price points and styles of homes so that we can help you find the second home that fits your ideal budget.

If your intention is to rent out the second home when not in use, consider the potential rental income as part of the holistic affordability of the property. Central Oregon's popularity as a tourist destination makes it a viable location for short-term rentals, providing an additional income stream that can offset costs. Even if you only do this temporarily, it can offset the investment and possibly even make it net profitable.

Ready to learn more about finding your second home in Central Oregon? Contact us any time.

Seasonal declines in inventory, slowing sales, and high mortgage interest rates have softened the Central Oregon housing market a bit this fall, creating some opportunities for buyers. Those opportunities are relative to the hot market of the last few years, although the recent positive news regarding inflation sent the stock market soaring, bond yields crashing, and pushed mortgage rates down. While the national average for a 30-year fixed-rate mortgage this morning is 7.4%, more good news from the Producer Price Index report today could help push rates down even more. The consensus from a financial industry on the edge of its seats waiting for a pivot is that the Fed will no longer need to consider rate hikes, and some optimistic analysts are predicting several rate decreases in 2024. One report I read estimated a 50 basis point drop in July! After three consecutive months of rising inflation, before yesterday's news, the question remains whether that was a blip on the way down or a pause before regaining steam. Either way, conditions today for home buyers are as good as they have been all year. 

If you believe the market is improving and rates will decrease significantly in 2024, buying at today's prices with a seller credit towards a rate buy-down would be a smart play. If mortgage rates drop rapidly, pent-up buyer demand will likely put upward pressure on home prices and increase competition. Currently, buyers are pulling back, and sellers are motivated. Combine those factors with the modest improvement in mortgage rates, and the cumulative impact is significant. Remember that a 2-1 mortgage interest rate buy-down would bring the first-year rate down 2% and the second-year rate down 1%. A refinance at the end of that term to a locked-in lower rate would prevent paying the total rate at year three through the loan term. Also, remember that the median sale price year-to-date is -3.6% for single-family homes in Deschutes County. If home prices, through the peak of the spike in mortgage rates, only decreased by 3.6%, what do you think prices will do if mortgage rates are near 6%? 

While homes in Central Oregon might be "on sale," just like the stores promoting Black Friday deals, selection is limited. This morning in Deschutes County, there are 792 single-family homes for sale, the lowest since June. Forty-three pending sales in Deschutes County this week is the fewest since January. The median pending sale price this week dropped considerably to 615k. Considering that the median sale price year-to-date is 660k, all indications show that conditions for buyers are the best they have been in nearly a year. I do not expect conditions to tighten over the next several weeks, as many buyers focus on Thanksgiving and the rest of the holiday season. Welcome to your "Central Oregon Black Friday Home Sale!"

Inventory in Crook County is up three units and down by the same number in Jefferson County. Two of the three pending sales in Crook County were in the Brasada Ranch Golf Resort at Powell Butte. With so few transactions in Prineville proper and an increasing inventory, the Prineville Black Friday Home Sale is even bigger than Deschutes County. If you have been waiting for an opportunity to purchase in Crook County, there is little doubt that conditions are leaning more in the buyer's favor than at any time in the last year.  

Regarding favorable buyer conditions, Jefferson County had zero sales this week for the first time since I started tracking the data in July of 2022, and likely much further back than that. There were two pending sales in the County at an average price reduction of 8.84%. The average pending sale price was just under 340k. Jefferson County is home to much of the north part of Crooked River Ranch, Metolius, Madras, and the desirable Yarrow subdivision on the east Madras foothills. If any of these areas, or the Three Rivers Recreation Area near Lake Billy Chinook, are on your radar, now would be a great time to revisit what is for sale. 

I encourage buyers to speak with a local lender about the recent rate changes, particularly the myriad rate buy-down options. If you decide to make an offer, I have extensive knowledge about structuring a contract to maximize the terms to help your situation. 

For sellers considering listing, my market analysis and price opinions are second to none, and I am happy to help you decide if now is the right time for you. Contrary to popular belief, the off-season is a great time to list a home for many reasons. However, correct pricing is imperative for a quick sale unless you want to use the winter to test the market at a higher price. Considering the near-peak pricing for many homes in Central Oregon, sellers will not leave much on the table to come down and reasonably price to entice buyers. 

Don't confuse my analysis with the tired trope in real estate: "It's a great time to buy AND a great time to sell!"  Without question, buyers face higher costs to become owners, and sellers often struggle to draw in buyers in the current economic environment. Real estate is local and relative to the recent past. We likely will not see a retreat to prices from several years ago, and the opportunities that present themselves are not always easy to see. But, if you view real estate with an extended timeframe, your chances of success are considerably higher. 

Click here for the full report.

Fall and winter are a great time to update your home in Bend. Whether you are planning to sell it in the Spring or Summer and want to increase your resale value before it hits the market, or you simply want to invest in your home to enjoy it more, these are some of the top projects homeowners can do to update their homes during the colder months.

Fireplace Upgrades

If your home in Bend has a fireplace, consider how you might update it. While an updated fireplace is not essential to successfully sell your home, if the aesthetic of it is obviously outdated it may cause some buyers to reconsider.

There are a variety of ways you can address an outdated fireplace facade, opting for something more timeless or a design that better blends with the rest of the home. If you plan to sell your home in Bend soon, consider reaching out to a local real estate expert like us to find out what buyers want to see and what will attract your ideal buyer in the area.

Kitchen and Bathroom Renovations

A kitchen or bathroom remodel is always a good choice when you are considering a renovation that will increase your resale value. Updated kitchens and bathrooms are a major selling point for buyers in Bend, and because of that have some of the best ROI of all home improvement projects.

These two projects can often be completed during the colder months because they will generally involve only interior work, so any weather changes should not impact the project timeline.

Even if you don't have the time or budget for an entire remodel, consider updating the kitchen or bathroom with smaller projects like these:

• Refinishing cabinets
• Updating faucets and cabinetry hardware
• New flooring
• Upgraded light fixtures

Home Organization

A home that is efficiently organized is more comfortable, and may be easier to sell in the future. Wintertime is a great season to consider adding custom, built-in home organization systems to your home.

Here are some popular ideas that can make your home in Bend more functional and beautiful:

• Built in bookshelves or cabinets
• Closet organization systems
• Custom pantry and kitchen cabinet organization
• Built-in workshop space in the garage or basement

Home Maintenance

While maintenance may not be considered a home improvement project, many homeowners need a reminder to keep their homes in good condition. Fall and winter are a great time to make sure your home is set up to last as long as possible and maintain its value as much as possible.

Some of the home maintenance projects you might tackle during the fall and winter in Bend include:

• Changing HVAC filters
• Checking doors and windows for gaps, and filling with weatherstripping where needed
• Upgrading attic insulation
• Keeping gutters clear
• Fireplace cleaning and repair
• Drain and refill the water heater

Considering Your Unique Home in Bend

If you plan to tackle some home improvement projects on your home this fall and winter, you may want to get the professional perspective of a local real estate expert who can tell you where your time and money will be best invested. Each home has unique features and needs, and each community has specific items that are commonly found on buyers' wish lists.

We can give you a free estimate of your home's value and a list of recommended projects to boost your resale value. If you want to know more about living in Bend or get ready to sell a house in Bend, contact us any time. We are here to help.

Now that it is getting darker earlier, it feels like winter, and the holiday season is just around the corner. As expected, sales volume has decreased, with the active inventory in Deschutes County dropping another twelve to 801 this morning. Crook County ticked up two units to 143, and Jefferson County was up two to eighty-seven. Crook and Jefferson County had three pending sales each this week, with Deschutes County at forty-four. While this volume is down slightly across the board from last week, it is near the levels for this week last year. Seeing Crook and Jefferson County's inventory hover near these levels might indicate the bottom for this year and will be something to keep an eye on heading into spring. 

In Jefferson County, the inventory low-point last year was at the end of May, with sixty-four active listings. The volume of active listings in smaller Jefferson County this year closely followed last year's trends, so nothing in today's data is very revealing. However, the median pending sale price for this week in Jefferson County was 425k, up from 345k last year. Year-to-date sales show 178 sold homes at a median of 377k compared to 290 sales at 400k year-to-date 2022. Considering the sales volume dropped 38.6%, it is interesting that the median sale price only decreased 5.75%.

Crook County didn't see the inventory low point until the end of April this year when it hit 107. This week's median pending sale price in Crook County is 375k, up from 362k in 2022. Year-to-date sales are 319, down from 387 in 2022, a 17.6% decrease. The median year-to-date comparison of 469k in 2022 and 445k this year is a 5.1% decrease. 

Deschutes County saw the inventory low in the third week of April this year at 333 active single-family listings. Unlike the smaller Crook and Jefferson County markets that maintain inventory better through the winter, Deschutes typically sees a steep drop in homes for sale, an increasing trend over the last few years. The pending sale price in Deschutes County this week was a whopping 725k, up from 599k this week in 2022. Sales year-to-date are 2811 compared to 3724 last year, down 24.5%. However, the median sale price is only down 3.6%, now at 660k thus far in 2023. 

The last time Deschutes County had fewer than 3000 sales of single-family homes in a year was between 2007-2009. Before that, sales were below three thousand from 1997 (the oldest data I can access) through 2002. For perspective on the low sales volume, in 2002, the population of Deschutes County was 122,794 compared to the 2022 population of 206,357, a 68% increase! There is no getting around the fact that sales have dropped substantially this year. 

I've read a dizzying number of contradictory articles about what housing prices will do in 2024. Saying there isn't consensus is a massive understatement. One real estate marketing company recently wrote a report telling buyers that home sales are not crashing and "all is well." Other industry pundits have pointed to the recent GDP numbers and CPI as proof that the economy is strong, inflation is under control, and the Fed will pivot to lower rates, bringing buyers to the market and putting massive upward pressure on home prices. Considering that the Bureau of Labor Statistics has adjusted eight out of eight of the last quarterly reports downward, it seems a stretch to be that optimistic. And, of course, there are the internet arguments about whether we are in a recession, entering a recession, navigating a soft-landing (mild recession), or a "no-landing, which would be no recession. There are no hard and fast rules about whether a recession brings down home prices so that part of the equation is likely less important. However, looking at the extremely low inventory levels in Deschutes County, there isn't any current data that indicates a steep drop in prices. The housing market this year has been remarkably balanced considering everything. 

The modest price drops in 2022 show that cash buyers may have benefitted from sitting on the sidelines. Assuming those cash buyers can find a suitable property without inventory. Despite the recent spike in mortgage interest rates, the 30-year fixed rate this morning is 7.46%, up approximately 30 basis points from this time last year. Not only are many sellers reducing asking prices, but many also include generous seller credits towards buyer closing costs like rate buy downs. Whether a seller includes a credit in the marketing of a home is irrelevant, as I have had no issues getting those terms accepted in an offer. A 2-1 buy down would bring rates down 2% in the first year and 1% in the second year of the mortgage. While interest rates may not drop back to historic lows in two years, there is every reason to expect a refinance to something close to 6% by the end of an introductory rate buy-down loan. Whether sellers are inclined to be as accommodating with prices and terms in the future is far less likely.

Over the last few years, a lot has happened, and Central Oregon's popularity is only increasing. The overall economy has some big questions, but the factors driving growth in this part of the state have not diminished. Anyone shocked by the price acceleration that started in the second half of 2020 and anticipated a price reversal has been seriously disappointed. Prices will likely fluctuate over the coming years, but it is increasingly unlikely that a crash in Central Oregon prices is on the horizon. If a crash is coming, the first indication would be a significant increase in inventory. Not only has inventory not increased, but I anticipate the low number of homes for sale to continue for several years.

TL:DR: What does it all mean? First, while prices are down slightly, today's data show no sign of home prices collapsing. For many buyers, the biggest hurdle is finding a suitable home in our low-inventory environment. If you qualify today, are looking to relocate or move within Central Oregon, and can find a property you love, now is a great time to negotiate! Many sellers are hungry to make a deal. As inventory declines further and the potential for rates to increase continues, we will likely see one of the year's better opportunities. However, fall and early winter are always great times to be a buyer.

Click here for the full report.

Central Oregon has seen major development in recent years thanks to rapid growth as more people realize what an amazing place this is to live. Thanks to this local growth, there are many new construction homes for sale in Bend that provide the opportunity to live in a brand new house while enjoying a charming and established community.

Buying a brand new home is exciting, offering the opportunity to customize your living space and enjoy modern amenities in a vibrant and scenic location. However, before finalizing the purchase of a new construction property, it is essential to ask the right questions that can help you make an informed decision.

We are always here to partner with you as you buy a new construction home in Bend, so contact us any time. Let's start with making sure you are ready to make a confident decision about your new build. From understanding the builder's reputation to exploring the neighborhood's amenities, here are several key questions to ask before buying a new construction home in Bend.

Builder Reputation

The builder you choose will make a major impact on your experience. Find out as much as you can about the builder you are considering with questions like these:

• What is the builder's track record in the local real estate market, and what are their previous projects in Bend? We can help you by letting you know what their reputation is among our clients and/or colleagues.
• Can the builder provide references or testimonials from previous clients who have purchased homes from them?
• What is the builder's experience in constructing homes that align with your desired specifications, design preferences, and quality standards?

Home Warranty and Post-Construction Support

Most new construction homes will come with some level of warranty. It is not uncommon for a problem with construction to be discovered shortly after moving in, and does not necessarily mean the builder did something wrong. There is an expected margin for error and this is what the warranty is there to cover.

For your peace of mind, ask these kinds of questions:

• What type of warranty does the builder provide for the new construction home, and what does it cover in terms of structural components, appliances, and systems?
• How does the builder handle post-construction support and address any potential issues or concerns that may arise after the purchase of the property?
• Are there any specific terms or conditions associated with the home warranty that you should be aware of before finalizing the purchase?

Customization and Upgrades

If the home you are buying is not an already complete spec home, you will likely be able to customize it to some degree. Find out what this will look like by asking:

• What customization options are available for the new construction home, and how can you personalize the design, layout, and interior finishes to suit your preferences?
• What are the costs associated with various upgrades and additional features that you may want to incorporate into the home during the construction process?
• Are there any limitations or restrictions on customization options that you should consider before making any final decisions?

Construction Timeline

The expected completion date and the construction process are not entirely predictable, but you can get better information by asking these kinds of questions:

• What is the estimated construction timeline for the new home, and when is the expected completion date for the property?
• How does the builder manage potential delays or unforeseen circumstances that may impact the construction schedule, and what measures are in place to ensure timely completion of the project?
• Can the builder provide regular updates and progress reports on the construction process to keep you informed and involved throughout the development stages?

Neighborhood Amenities and HOA

Most new construction homes in Central Oregon will be located in an HOA-managed community that features some level of amenities. To learn more, ask:

• What are the key amenities and community features available in the neighborhood, such as parks, recreational facilities, schools, and shopping centers?
• Are there any planned developments or future projects in the area that may affect the overall appeal and value of the new construction home?
• How does the location of the new construction home contribute to the overall lifestyle and convenience of residents in the neighborhood, and what are the local attractions and points of interest nearby?
• Is the new construction home part of a homeowners' association, and what are the specific rules, regulations, and fees associated with the HOA membership?
• What services and amenities does the HOA provide, and how does it contribute to the overall maintenance and management of the community's common areas and facilities?
• Are there any restrictions or guidelines set by the HOA that may impact your ability to customize or use the property according to your preferences and lifestyle?

Financial Considerations

There are some unique financial factors in buying a new construction home that you need to understand. Make sure you have the full picture by asking:

• What are the total costs associated with purchasing the new construction home, including the base price, upgrades, and closing costs, and how do these expenses fit within your overall budget and financial plan?
• Are there any incentives, discounts, or promotional offers available from the builder or the developer that can help reduce the overall cost of the property or provide additional financial benefits for the homebuyer?
• What are the financing options and mortgage rates available for the new construction home, and how do they compare to other lenders or financial institutions in the area?

Remember, we are always here to work with you and guide you through the complex building process. Ready to learn more or begin the search for your new build in Bend? Contact us any time.

This morning in Deschutes County, there are 813 single-family homes listed for sale, twenty-five fewer than last week and nine fewer than this week last year. In today's report, I will take some time to compare this week year-over-year and our sales to date year-over-year, as there are some interesting comparisons. As we approach the holiday season, sales will decline, and inventory, so today's data is very revealing in comparing the last two years.

For the week ending at the beginning of November 2022, there were 474 price drops at a median of -6.35% and a median list price of 688k. This week shows 450 price drops at a median reduction of -4.77% and a median list price of 775k. Sixty-nine pending sales this week last year and eighty-three sold homes at a median of 649k and 639k seemed like a slowdown from the pace of the first half of 2022. However, this week shows fifty pending and fifty-eight closed sales, forty-four fewer total transactions. The median pending sale price of 750k and closed price of 692k are significant increases over this week last year. 

One week isn't enough to show a trend, although the changes from last year are significant, especially considering the national average for 30-year fixed-rate mortgages is 7.88%, up from 7.2% this week last year. 

Through November 1, 2022, there were 3,670 sales in Deschutes County ,with 1,092 price reductions, which reflected 29.7% of sales. This year's total shows 2,755 sales and 1,125 reductions, 40.8% of total sales. The year-to-date median sale price is 660k, down from 685k in 2022, or -3.65%.

The large percentage of price reductions gives the impression of cooling prices. However, many asking prices this year anticipated another significant increase over 2022, which did not materialize. Today's reductions are not the deep discounts many assume, although nearly 41% of the sales taking a cut is enormous. Appropriate pricing is the key to making a sale in this economic environment. 

I do not anticipate large changes in the numbers above with the short, holiday-interrupted time remaining in 2023. The floor on prices this year was unquestionably set by fewer listings, not increased buyer demand. All indications point towards another winter of decreasing inventory, with the low point likely in March. How low inventory drops and how long it stays depressed will set the tone early for pricing in 2024. Remember that just a few years ago, there would have been twice as many homes listed for sale as in the recent past. The other factor will be mortgage interest rates, which are likely near peak for the coming months. That doesn't mean rates won't breach 8% again, so keeping in close contact with your lender is imperative in today's price-sensitive market. 

Lower inventory in Central Oregon will likely persist for the foreseeable future, making it more challenging to find the right property for your needs. When the right property comes along, price should be less of a consideration than suitability if making Oregon home is your goal. Waiting for significant price drops only opens the door for another buyer, and so far, those buyers haven't missed a beat. As inventory has tightened, many homes looked over in the past are getting snatched up. If new construction fits your needs, several options are available throughout Central Oregon, but the best options always move quickly.

Whatever your budget or timeframe, I am always available to help you sort out your options and help strategize. 

Click here for the full report.