With the holidays behind us and halfway through the first whole week of business days of 2023, it is apparent that buyer demand in Deschutes County remains strong. Pending sales from the previous seven days were fifty-two, up from the twenty-nine sales over the New Year's interrupted week. During the same period, sales increased by nine to thirty-seven. Active inventory decreased to 573 from 612 last Wednesday. Remember, active inventory in 2022 reached the bottom in April and hit a low of 333 homes for sale in Deschutes County.
I have written extensively about the volume of homes for sale indicating price trends, still one of the best leading indicators. When and how quickly the inventory of actively listed properties builds will be a telling sign. In the years passed, between the bottom of the sub-prime lending housing crash and pre-pandemic, the volume of homes for sale typically began to rise in late January. With the volume of homes for sale still significantly lower than pre-pandemic, all the early indication shows sluggish growth of actively listed properties. The 30-year national average fixed-rate mortgage yesterday was 6.21%, as rates have moderated recently. While the Fed continues to telegraph raising rates to combat inflation, analysts believe the subsequent increase will be 25 basis points, half of the last increase and a third of most increases in 2022. If 25 basis points are the number, I expect mortgage interest rates to shrug that off and remain stable or rise slightly. However, a bearish view on inflation from Jerome Powell and a higher-than-expected increase could spike mortgage rates. The predictability of the Fed and forward guidance assumptions have everyone on their toes in this crazy economic cycle. Buyer demand may be lower than in the last couple of years, but higher mortgage interest rates keep sellers on the sidelines. No matter the reason, lower inventory helps keep home prices firm. This fact is illustrated by the median sale price in Deschutes County last week of 720k, up from 557k the previous week.
Central Oregon has a highly diverse pool of home types and styles, and there is more to the picture than just Deschutes County. For example, the inventory of homes for sale in Crook County increased last week by six to one-hundred-thirty. Jefferson County inventory increased by two to seventy-seven homes for sale. During the previous seven days, there were seven sales in Crook County and three in Jefferson County. For any buyers looking for a bargain, the outlying areas and smaller communities of Central Oregon could be an option. Remember that a change week-over-week is only a blip in the data, not a trend.
I would caution buyers and sellers to take the national media reporting on home sale activity with a grain of salt:
- Most of the data the mainstream media rely on is outdated and lags behind our current situation.
- Heavily populated areas have an entirely different dynamic than Central Oregon, and significant changes in places like Phoenix skew the national numbers.
- I'm sure most of you have heard of rising inventory and falling prices, but for those following my weekly reports, you know that is not the case locally.
I've recently witnessed a large discrepancy between the prices of comparable homes. A thorough analysis of the trends and our current inventory is the best way to calculate prices that reflect our market. I put my research and tracking of the market against anyone and would be happy to run an analysis for your specific needs.
Over the last several weeks, I've studied to become a principal broker and passed the exam last Wednesday. My goal is to provide my clients with the best possible service, and the principal broker designation is another step in that never-ending process. The title will keep my day-to-day activities the same but shows my continued commitment to the highest service I can provide. Please feel free to call me today if you have any real estate needs or questions.