With the housing market simmering considerably less than red-hot, inventory is relatively stable but fluctuating. Mortgage rates this morning are at 7.16%, but prices across all three counties of Central Oregon are up for active, pending, and closed sales compared to this week in 2023. With interest rates looking to stay higher for longer and a rate pivot looking increasingly slim for 2024, are we at an inflection point? While inventory hasn't yet reached the level of applying significant downward pressure to home prices, slow buyer demand could help tip the scale. Anecdotally, I have recently shown a property on the extreme edge of being overpriced, in my estimation. However, our market thrives on solid demand from qualified buyers, and it doesn't take many sales at current prices to set expectations for sellers. Whether appraisers agree with those valuations will unfold as the year progresses.
This morning in Deschutes County, inventory decreased five from last week, and there are now 546 single-family homes listed. Last year's week, there were 485 listings, a 12.6% reduction. The median price of active listings this morning is 739k, up slightly from 725k last year this week. Fifty-four homes are pending at a median of 700k, with forty-four closed at 664k. Pending sales of seventy-six this week last year at 630k and sixty-one closed sales at 600k show a striking increase in prices. Seeing how well prices hold up will be interesting as pivot dreams fade.
Crook County inventory increased by five to 115 single-family homes listed, still down five from this week last year. Five pending sales at a median of 485k and three closed sales at a median of $503,750 (average 496k) reflect fewer transactions and higher prices than last year. On this week in 2023 in Crook County, there were ten pending sales at a median of 432k and five closed transactions at 489k. With total inventory down from last year, firmer prices stand to reason.
In Jefferson County, inventory decreased by five to seventy-four at a median of $439,750. This week, there were eleven pending sales at a median of 380k, with two closed transactions at an average of 395k rounding out the weekly data. Inventory on this week last year was sixty-five, with the median price at 415k. In 2023, this week, there were seven pending sales at 315k and one closed sale at 330k. With the diversity of homes and properties in Jefferson County and relatively low sales volume, I wouldn't read too much into the price differences year over year. However, when considered in combination with the activity in Crook and Deschutes County, it is hard to dispute that prices are up.
I have not been shy about expressing my opinion that the crowd clamoring for and assuming significant rate pivots are delusional in our current economic reality. But, there is no question that narrative sunk in with a large percentage of the general public. My intuition tells me a lot of the highly aggressive pricing we see today came from sellers and agents, assuming that rates would decline by this point of the year and buyers would be flooding the market. There is no doubt that Central Oregon continues to grow, but it is unknown if the influx of buyers will accept higher prices in light of higher borrowing costs. Inventory may be up from last year, but anyone actively looking can attest that selection still feels limited. One higher-end home that has lingered on the market raised the list price by over 20%! Raising the list price in a market flooded with homes can get the house in front of people who may have set search price parameters higher, but I question how effective that will be in our small market, where there are only a handful of homes above $4M. The house is unique and beautiful in a one-of-a-kind location, so who knows?
I recommend pricing appropriately for sellers to secure a sale sooner rather than later. I do not anticipate selling conditions improving as the year progresses. Taking advantage of lower inventory and less competition is a "strike while the irons hot" scenario. Conversely, I do not anticipate a collapse in housing this season, but with so much going on in the world, it is uncertain what the landscape will be in nine months. Still, growth in Central Oregon will continue, and the forces driving people here from other locations are as strong as ever.