Surprisingly for this time of year, the inventory of single-family homes for sale in Deschutes County dropped thirty-two, now at 823. That is sixty-four less than this week in 2022. Last year at this time, inventory was still climbing before peaking at 972 on August 10. Remember that less than 1000 homes listed in Deschutes County are historically low, a statistic that is easy to see graphically in the charts of my Market Trend Reports.
Single-family inventory in Crook County increased by six to 147, and Jefferson County saw an increase of two, now with seventy-six active listings. The median price of active listings was 595k and 455k, respectively. With several weeks of summer remaining, there is a chance for some spikes in the number of homes listed, and buyers actively looking should stay on top of the market if something great becomes available. While the days sold properties are listed has increased slightly, there is still little time to waste if you want to secure a contract on a newly listed home.
Another surprising number is the median price of active listings, now at 849k, the highest since I started tracking the data in April 2022. The median price of pending listings was down this week at 600k, but a significant eighty-eight homes are under contract. The median sale price of the sixty-three closings was 760k and averaged 867k.
Sales thus far in 2022 of 1596 reflect a -32.4% decline from 2022, while the median sold price of 642k is -7.2% less than 2022 year-to-date sales. Days on the market are up in 2023 to twenty-one from only five last year, and the median price reduction for sold properties is -5.4%, an increase from 2022's -3.3%.
I've mentioned previously that the data indicates an inversion from last year's number for the second half of 2023, and with inventory already declining, I expect that prediction will hold. However, with the 30-year fixed-rate national average mortgage rate yesterday at 7.09%, the cost of credit may take a bite out of prices. While inflation came in lower than expected at 3% for the latest CPI print, I still expect the Fed to raise the overnight rate in the upcoming July meeting by another 25 basis points in light of other strong economic indicators.
With housing affordability suffering from high mortgage rates and sticky prices, what will happen to home prices if the Fed pivots to lower rates? I don't expect that pivot to occur this selling season, but if low inventory persists and rates decrease, there is every reason to believe home prices will increase. How much rates might decrease after a Fed pivot is uncertain, but for those who can afford today's credit terms, prices may be appealing before another price surge occurs.
Comparing mortgage payments in different scenarios shows some of the potential for saving in a refinance compared to waiting for lower rates. Using today's rate of 7% for a 30-year fixed-rate mortgage on a 500k purchase price, with 20% down, $3100 of annual property tax, and $1000 of homeowners insurance would be ~$3000 per month. Using the same criteria with a 5% mortgage rate would decrease the payment to $2500 per month. Although, sticking with a 5% rate and increasing the purchase price to 600k brings the monthly payment to $2900. A 20% increase in the purchase price would be significant, but in a low inventory environment not unheard of. It is impossible to know when (or if) we will see rates at 5%, but a lower price today would equate to an annual savings of $6000 with a refinance at potentially lower rates. The selection of appropriate homes is a significant factor in these calculations since it is impossible to know what prices and the value of your dollar will bring in the future. But, using the data from the last decade in Central Oregon, betting on a refinance to lower rates has a better chance for success than hoping for a price collapse.
There is much more to purchasing a home than crunching numbers, and I regularly evaluate all aspects of home purchases. One of the important pieces of the puzzle I provide my clients is the research and information gathering for potential options. As a real estate professional and licensed Principal Broker in Oregon, I have access to the tools necessary to evaluate every aspect of listing or purchasing a home. My intimate knowledge of neighborhoods, trail networks, proximity to schools, and other important parts of helping you find the perfect spot are extensive. Whether you plan to buy this month or in the next several years, please don't hesitate to use me as a resource for valuable information about Central Oregon!