With mortgage interest rates over 7%, the inventory of single-family homes in Central Oregon has stabilized. If rates stay above 7%, I expect modest inventory growth, as higher rates slow the market. Hopes of a rate pivot in March have not only disappeared, but many are talking about a rate increase from the Fed in light of recent inflation numbers. As I mentioned last week, I do not expect a pivot in the first half of 2024, and I increasingly believe a pivot is unlikely for the entire year. An increase at the May or June Fed meetings would likely only be 25 basis points, but any increase likely pushes any hopes for a rate pivot into 2025.
Single-family homes for sale in Deschutes County increased by one to 551, up from last year's week when 514 homes were listed. At this time of year, I expect the inventory levels to bounce around before beginning the climb to a peak in late summer, but with tighter lending, the upward trend could start sooner. Pending sales in Deschutes County were fifty-five, with forty-two closed transactions. Closed transactions were up by six from last year's week, but pending sales were down thirty. The median days listed for pending and closed sales this week were only sixteen. With new listings hitting the market early in the year, it stands to reason that days on the market are low, but the numbers reflect new inventory that is attractive, priced competitively, or both.
In this market, it is imperative that sellers not overprice to attract a smaller pool of qualified buyers. Testing a higher price in these conditions could lead to an extended marketing time requiring price reductions to chase the market. As the housing market evolves, strategy is more important than just putting a sign in the ground.
Crook County inventory remains 110 listings, with nine pending sales and five closed transactions. The fewer new listings in Crook County means buyers are sifting through existing inventory, reflected in eighty-seven days on the market for the median pending sale and seventy-three days for the closed transactions this week.
Jefferson County inventory increased by one to seventy-nine, with two pending sales and one closed transaction this week. With so few new listings and transactions, the Jefferson County housing market is considerably less active than the rest of Central Oregon.
I have noticed a significant shift in real estate marketing lately, from "buy now, before prices increase!" to "rates are near historical averages, and it could be a long time before rates decline." I can only assume these campaigns operate under the belief that people are not paying attention to the message from one day to the next. Now might be a perfect time to buy or sell, but that is a personal decision. When rates were lower, and the market was frothy, buyers had to contend with multiple offers and rising prices. Now that rates are higher, there is less competition, and prices are more stable. Buying or selling a home is a big decision that should not be taken lightly. The best course of action encompasses a long-term approach and a mortgage you can afford today. Refinancing to a lower rate in the future could be an excellent way to save a bit on your monthly payment, but refinancing isn't always guaranteed.
Stay in contact with your lender, explore the myriad loan programs available, and evaluate the return of your investment in points paid towards a rate buy-down before making a decision. Some pre-paid interest is refundable and pro-rated if you sell, while others are sunk costs. It is easy to become hyper-focused on interest rates in today's volatile market, but that is only one small part of the equation.