After a steep drop in mortgage interest rates last week, rates increased again, with this morning's national average for a 30-year fixed-rate mortgage at 5.3%. Rates are still .2% lower than last week, and a local lender reported rates in Central Oregon on Friday of 4.66%, evidence that shopping local pays! Inventory of single-family homes in the county increased by thirteen to 970, while sales increased by twenty-four to eighty-eight. Pending sales dipped slightly to seventy-four, making minimal overall changes from the previous week. Considering the heat Central Oregon has experienced and it being peak summer vacation season, the sales volume and activity are substantial. Last week, the average sold price to list ratio was 97.5%, with a median price reduction of 4.86%. However, 50.4% of the active inventory took a price cut by a median of -5.19%. On June 15, 45% of the actively listed properties had lowered the asking price; today, that number increased to 50.4%. Anecdotally, many agents are experiencing fewer buyers in the market compared to 2021. Still, the buyers engaged in the market are putting homes under contract, as the sales volume shows. Ever-increasing prices have backed off from last summer, and many sellers are adjusting their asking prices quickly to align with current market conditions. With the dog days of summers here, many sellers are motivated to secure a sale before fall, making life a bit easier on buyers.
Comparing sales from April 1, 2021, to August 3, 2021, against the same period this year shows some interesting developments. In 2021 for the period, there were 2059 sales, while this year, there have been 1590 sales, a significant decrease. In addition, the median days on the market for those sales decreased by one to five this year, and the median sale price dropped from 699k to 600k. The percentage of price reductions increased from 16.5% to 23.3%; evidence that peak pricing is behind us. The decline in the median sale price is most likely a result of buyers in lower price points having more favorable conditions rather than an overall decrease in home values. An illustration of that assertion is the April 1 through August 3 comparison of last year and this year of sales above $1M. In 2021 during this stretch, there were 316 sales at a median sale price of $1.35M, five days on the market, and 54 price changes at -5.97%. This year, sales over $1M increased to 358, median sales price and days on the market were unchanged, and there were 55 price changes at a median of 6.27%. In 2021 17.1% of the sold homes in this price range reduced the asking price before securing a sale, compared with 15.4% in 2022.
There is much speculation about where the economy and home prices are heading. Although, there are pre-indicators that show the direction the home market is trending. While inventory is rising, the pace has slowed considerably, and without a glut of homes for sale, it is unlikely prices will see a steep decline. The days a home sits on the market also need to increase significantly to facilitate a price drop, and to date, buyers have continued to step up and purchase homes. In 2019 from April 1 through August 3, there were 1,781 total sales in Deschutes County, and for the period in 2020, 1,777. While almost two hundred fewer sales this year is significant, the bifurcation in our market is apparent when you consider sales in the higher price points. From April 1-August 3, 2019, there were ninety-four sales above $1M, 121 in 2020, 316 in 2021, and 358 this year. Higher price point buyers are continuing to purchase in Central Oregon!
For those of you waiting for a decline in prices, it is more likely that waiting to see what happens in 2023 is the only solution. Regardless, the fact remains that winter weather condenses property sales towards the summer and fall months, and 2022 continues to produce buyers that, to date, have prevented a steep drop in home prices.