Regarding real estate, my predictive powers extend no more than several weeks or, at best, a season. However, I stay on top of the data and trends weekly, which gives me an excellent view of where we are today, although that data can be a poor future predictor as markets change quickly. I bring this up in response to numerous articles published at ever-increasing rates predicting a housing crash and personal conversations I've had along the same lines. Having been a real estate agent from 2004-2010 in Sun Valley, Idaho, I completely understand the hesitancy regarding today's economic conditions and have the scars to prove it! So, before I pontificate on the economy, here are the numbers from this week's single-family homes listed and sold in Deschutes County. This morning there are 954 active listings, a drop of eighteen from last week and the first week of declines since I started a spreadsheet tracking these numbers on April 20, 2022, when the active listings were 333. The median days on the market for active listings is forty-nine, with a median price of $747,000. A whopping 508 homes have reduced the asking price by -5.3%. Pending sales were the highest since June 29 at ninety-six, one shy of the June number. That is thirty-one more pending than last week and fifteen higher than the next biggest week since June. From this point until the winter holiday season begins, I anticipate a steady reduction in the active inventory. Reduced inventory may be a catalyst to increase buyer activity, as waiting makes for fewer opportunities. Sold properties last week were down to fifty-nine because of fewer pending properties in previous weeks. The median price of the sold homes was $661,500 with twenty-one price reductions, a median of -5.26%.
How does all that data stack up against the broader economy and predictions of a housing market collapse? The real estate indications of a declining market are increased inventory, increased days on the market, and a reduction in sales price. However, while we may have price drops in actively listed homes, those drops have been modest, and overall prices remain steady. Moreover, none of the other current indicators indicate a declining market. Remember, real estate is a lagging indicator of a recession or economic decline, not a predictor. The current rates for a 30-year fixed-rate mortgage are 5.29%, inflation is at 8.5% (that does not mean we had 0% inflation!), and gas is over $5 per gallon. There is little doubt that these factors negatively impact a segment of the home-buying public. But, as anyone tracking sales in Deschutes County knows, many of today's buyers can look past these financial obstacles and pay what it takes to purchase a home. Although, if corporate earnings decline to the point of lay-offs and the previously employed are not able to find replacement jobs at equal pay, all of those factors could combine to create a significant impact on home prices. With so much gain in home equity in the last couple of years, many homeowners with mortgages below 3%, and rising rents, it seems unlikely that owners will feel compelled to sell at bargain prices. So if you are waiting for a housing collapse, it is unlikely to happen in the next few months.
As I have mentioned many times over the past several weeks, all indications show a stable housing market in Deschutes County for the remainder of 2022. However, if conditions worsen for sellers, expect fewer listings as homeowners wait it out. Spring 2023 may tell a different story, but that relies entirely on the economy. Pick your favorite "expert" if you are a gambler, or use the tools on EnjoyBendLife.com to track the current market with Market Trends, Market Reports, or by reading this email weekly. My weekly updated Market Trends are a fantastic way to find out what is currently happening in the active market. I strongly encourage you to make them a regular read if you are a buyer or seller in Central Oregon.