Last week, I read several articles proclaiming either a housing bust or highlighting growing July inventory and a slowdown in the real estate market. Those reports indicate the problem in following mainstream media for real estate news; they are not up to date. Considering that we have almost completed the month of August, quoting July numbers is tripping over something that is behind you. While real estate is local, and some markets may be experiencing growing inventory, our inventory dropped again this week to 928 single-family homes actively listed in Deschutes County, down twenty-six from last week. The days a home takes to sell have increased to a median of fifty-four, and there were 496 price changes amongst the active inventory. However, we also saw the highest pending sales since May 4 at one-hundred-three, with sixty-nine sales. Keep in mind that sales will increase over the coming weeks based on the increase in pending sales. With a reduction of new listings hitting the market, inventory will decrease from now until the winter holidays, putting upward pressure on pricing. Not every home is overpriced and deserving of a price change, and as inventory declines, sellers are holding firm and, in many cases, being rewarded with prices near asking.
Mortgage News Daily reports the national average for a 30-year fixed-rate mortgage at 5.73%, an increase of .31% from last week. Unfortunately for those buyers hoping to see a steep drop in home prices, prices have remained firm, and interest rates have risen. There is no indication that prices will decline in Deschutes County for the remainder of 2022, and 2023 is setting up to be another low inventory environment. On February 16, 2022, I reported 201 actively listed homes in Deschutes County; on April 20, 2022, there were 333 actively listed homes. Those numbers indicate how rapidly the volume of listings decreased over the winter and how long it takes for the number of homes for sale to build up in today's economic climate. With higher mortgage rates, higher rents, and higher home prices, home-sellers have very few incentives to list their properties for bargain rates, especially considering the low rates many have on their current mortgage and substantial equity.
Last week I mentioned that real estate trends lag the current economic conditions, and how the market is shaping up today is consistent with that assertion. For example, if corporate earnings decline, layoffs exponentially increase, and workers cannot find jobs, home values may decrease. Further, if mortgage rates continue to climb and inflation remains entrenched, economic conditions for many buyers may deteriorate. There needs to be a glut of inventory before home prices decrease, and the long-term trends show the opposite of a surplus. Many buyers today focus on the housing collapse of 2008 while ignoring the long-term trend of rising prices. While the Case-Schiller Home Price Index may look inflated today, the consistent trend shows increasing home prices. Home purchases are often long-term investments and a higher quality of life for many people relocating to Central Oregon. Is an attempt at gaming the market preventing you from getting on with your life?