The most notable aspect of the luxury market today is the stubbornly high inventory as we get deeper into the last part of the 2025 season. All in all, the increased selection is excellent news for buyers, and in many ways helps sellers to see exactly how their home (and price) competes in the market. However, the trends today are in direct contrast to the last several years, when the seasonal decline in supply was already happening rapidly. Activity this week slowed relative to the past several weeks, and I speculate that the Fed's rate cuts have contributed to the decrease in buyer demand. That may sound counterintuitive, but whenever rates change, many buyers wait to see if they will drop further. In this case, similar to the last time the Fed lowered rates, mortgage rates rose from recent lows. Whether this becomes the new normal remains to be seen, but bond investors are increasingly concerned with inflation and what is perceived to be "too loose" monetary policy. In any event, the luxury markets show continued stable prices and record-setting transaction volume.
Volume of single-family homes listed in Deschutes County between $1 million and $1,999,999 decreased by only two this week, now at 367 listings. Thirteen pending sales are down from recent weeks, with the average list price of these properties at $1,278,146, and the average price reduction before securing a buyer at 8.93%. Fourteen closed transactions are in line with recent weeks at an average of $1,254,214, and the average price reduction is 12.46%. Notably, the average activity in this price tranche skews towards the lower end of the range.
Supply between $2 million and $2,999,999 increased by four to 98 this week. Two sales are pending: the first at $2,375,000 in Sunrise Village above the Deschutes River, and the second at $2,895,000 in Discovery West. One transaction closed on Hunnel Road at $2,080,000 after 319 days, and originally listed for $2.5 million.
Listings over $3 million in Deschutes County increased by one to forty-nine. One property is pending on Tamoli Road near the Tumalo State Park. This property, listed for 465 days at $9,750,000, sits on 40 acres and, by all measures, is a stunning location and home. Legacy properties at the top of our market take time to attract the right buyer, but demand for these locations remains strong. One home closed this week for $3,085,000 on Celilo Lane in Discovery West. The closed sale was an immediate sale with no days on the market and at full price.
Supply over $1 million in Crook County remains stable at sixty-five. One transaction is pending on Wooden Trestle Lane in Brasada Ranch for $1,399,999 with no closed transactions.
Deschutes County farm listings over $1 million remain stable at sixteen with no pending or closed transactions. Crook County farm listings remain unchanged at fourteen, with no pending or closed transactions.
Despite a consensus from the public that mortgage interest rates are restrictive, in actuality, the opposite is true. If the Fed holds with the message of two more rate decreases by the end of the year, I expect the overall economy and housing to become frothy once again. It will take time for the overall impact to take effect, but mortgage rates in the low to mid 5% range will change the dynamic of the past couple of years dramatically. Take that information however you'd like, but if my predictions hold, many buyers who have waited for rates to decrease might look back longingly at the market we are experiencing today.
