Hopefully, everyone had a relaxing Christmas weekend! I wish you and your family a happy and prosperous New Year!
Some real estate activity in the last week is noteworthy between eggnog, family dinners, and football games. First, the inventory of single-family homes for sale in Deschutes County dropped to 669, down twenty-five from the previous week. Second, the median days on the market for actively listed homes increased to ninety-one, up five from last week. While the inventory might follow the previous year's trends, the number of days a home is on the market before acquiring a buyer is up significantly. As we head into 2023, days on the market will be a telling indicator of buyer demand. Twenty-one homes closed last week, less than half of the previous week, which isn't surprising due to the short holiday week. Many listing contracts have year-end expiration dates, and I expect another drop in inventory by next week. Still, home prices of re-sale homes (not new construction) have stayed firm.
The sales of new construction listed with the year built as 2022-2023 tell a different story. Two hundred seventy-eight newly or under-construction homes are available between Crook, Deschutes, and Jefferson Counties, with corresponding median price reductions of -5.98%, -4.86%, and -4.93%. Admittedly, those price reductions are less than the active inventory of re-sale homes listed, but some digging reveals a different story. For starters, there were only seven pending new-construction sales last week and nine sold homes. One of those sales was in Jefferson County (Madras) and went for 309k, 10k above the asking price. The price increase was most likely related to an add-on by the buyer rather than a bidding war. Six new-construction sales were in Deschutes County at a median of 605k and 8.56% below the asking price. Finally, in Crook County, two homes sold in the MLS showed prices equal to the list price. However, those sales were 16.47% below the original list price. The avid readers of this report may recall that a new-construction home in Madras sold a couple of weeks ago for 23.44% below the asking price, so the recent Hayden Homes sales in Crook County are not a price reduction anomaly. New home builders are especially willing to make deals as we head into 2023, something to keep in mind as you evaluate your options.
The national average for 30-year, fixed-rate conventional mortgages increased to 6.5% yesterday. The next Federal Reserve, Open Market Committee meeting is at the end of January, and I am still looking for a particular insight into what Jerome Powell has in mind. However, based on the hawkish tone of Fed board members and Powell himself, it is reasonable to assume they will not hesitate to raise rates further if the data show persistent inflation.
The Case-Schiller House Price Index indicates four consecutive months of home price decreases and declines in all of the cities the index tracks on a month-to-month basis. Although, the index also reported an annual gain of 9.2%. For any Substack readers, check out the CalculatedRisk Newsletter for a regular report on the national numbers and some key cities. Central Oregon real estate operates under different conditions than major cities or heavily populated areas, so my hyper-local weekly reports are more on point than the national reporting. However, the national trends have an impact and eventually may reflect in our local data.
Real estate as an investment works best with a long-term focus. The best indication that the time is right to buy is when you are ready, can afford the payments, and like what is available. Refinancing is always an option in the future should rates decline. There is little doubt that the higher interest rates of late have created pent-up buyer demand, and a significant drop in rates is likely to cause a surge in demand and prices. The housing market is always a balancing act. I can help by providing up-to-the-minute data and a deep knowledge of the available inventory. Whatever your needs, don't hesitate to get in touch with me anytime you need assistance!