If you follow Central Oregon real estate, and this report in particular, you will see that different parts of the market have radically different market dynamics. If I were to report on Crook, Deschutes, Klamath, and Jefferson Counties as a monolithic market with combined statistics, it would smooth over the variances between the counties and paint a picture that is not reflective of what is happening in different communities. Imagine what is taking place with the national real estate reporting. The results are even more skewed when the statistics consider large metropolitan areas with smaller communities. I hear various opinions about where the real estate market is today based on national reporting that does not reflect Central Oregon.
While the year is still new, trends take time to develop, and generally speaking, what has happened recently is a good indicator of what the market will look like in a couple of months. For example, last September, when mortgage rates spiked, sales declined, and the median price reduction of pending sales increased. I encouraged buyers to engage the market as it was clear sellers were looking to negotiate and were not as firm on price. On December 14, 2022, I reported a median price reduction of pending sales of -10.53%. Weekly pending sales in Deschutes County hit lows of twenty-nine during short, holiday-interrupted weeks, considerably less than year end 2021. However, since mid-January, buyers have re-engaged the market, and a new trend is emerging.
In Deschutes County last week, there were sixty-four pending sales, the highest number since November. Median days on the market dropped to twenty-nine, the lowest since October. Price decreases declined to -4.98%, and the active inventory dropped to 510 single-family homes in the county. The trend developing today is strong buyer demand, and low inventory, two factors that keep prices firm. Considering that available homes for sale are likely to decrease from the already low number, the trend of firm prices will continue. You don't have to go too many years back to see that today's mortgage interest rates are in line with norms of the past, even if they are higher than the last few years' historically manipulated lows. Not to mention that lenders have many loan options, and seller credits towards interest buy-downs are increasingly common. Despite tightening affordability for many, newly listed properties are moving quickly, and the spring season looks like it will be similar to the last couple of years. However, correct pricing is vital, and overpriced properties are lingering on the market.
Even with sales at roughly 50% compared with this period at the start of 2022, without more inventory, there is no downward pressure on prices in Deschutes County. However, one area that has dropped prices more than average is new construction. There have been forty-seven sales of homes built in 2022 or later since the first of the year, with a median price reduction of -7.14%. As a point of reference, there were 76 sales of homes built in 2021 or later to start last year, at a median price of +2.04% ABOVE the asking price! While sellers generally keep raising prices until buyers retract, builders have the incentive to move inventory and are quicker to adjust to market conditions. Therefore, for those looking at newly built homes, now is an excellent time to be a buyer.
With how the housing market has developed over the last three years, monthly payment is the most significant factor to keep in mind. Focusing on prices and mortgage rates keeps many buyers on the sidelines at a time when conditions are relatively favorable. There have been very few times in history when housing prices have declined significantly, and homes are typically a haven in recessions. A glance at the Case-Schiller home price index at the bottom of my Market Trends page clearly shows the trajectory of home prices over time. No matter your opinion on the housing market's future, the tools you need to evaluate are available at EnjoyBendLife.com. I am ready to run a detailed personal analysis for your needs, so please reach out anytime!
Sidenote: Pronghorn Resort changed its name to Juniper Preserve. The URL on my website remains the same, but the labeling has changed to reflect the resort's new name. I have both names referred to on my website where it is possible.