I track several statistics weekly in the Central Oregon MLS and keep them in a spreadsheet for future reference. I don't share two of those statistics regularly because they are of little value weekly, but they help establish trends, such as the sold-to-list ratio and the sold-to-original-list ratio. The sold-to percentages show how much sellers adjust the asking price before accepting an offer. When homes are in pending sale status, the price shown will be the list price when the seller accepts the offer. After closing, I can see the negotiated price, which may be higher or lower than the list price. Median and average price change percentages are another indication of adjustments made by sellers before an offer is accepted. In a flat or slowing market, these percentages increase as sellers start higher than the market will bear and need to adjust downward to attract buyers. In many cases, the negotiated price will also be lower than the list price, creating a compounding reduction from a seller's original expectations of a sale price.
As prices have increased, especially in the face of higher mortgage interest rates, I am having more conversations with buyers about asking prices that feel very high. Sellers all have reasons (sometimes emotional) why their home is worth a particular price, but buyers also have a list of reasons why they believe a house is overpriced. In a competitive market with low inventory, many buyers expect more of a reduction than is realistic. With enough time lingering on the market, some sellers eventually get the hint and lower the price. In other situations, competing homes sell, and the homes left begin to look better. Also, only some potential buyers are engaged in the market simultaneously, and newly engaged buyers sometimes jump on properties other buyers decide to pass on. Ultimately, a home will sell for what a willing, capable buyer and seller agree to, and many sellers are unwilling to budge on price. Even properties priced aggressively sometimes find willing buyers if they are unique and stand out. When you see the statistics this week, you'll understand why I took the time to explain these metrics.
This morning, there are 654 single-family homes for sale in Deschutes County, 31 more than last week. The median list price is $764,900, and the average is $1,129,801, consistent with prices since late last year. The median price change was -3.74%, and the average was -4.59%. I started tracking the median price change percentages two years ago, and the first time the number dropped below 4% occurred in January 2024. A healthy seventy-one homes were placed under contract this week with a median of thirteen days listed, 735k, and an average of 913k. The median price change of pending sales was -2.86%, with the average considerably higher at -6.05%. That means more than half the pending sales this week had price reductions LESS THAN -2.86%. Forty-four homes sold this week in Deschutes County at a median of twenty-one days on the market, 756k median, and an average price of 949k. The median price reduction was -2.92%, and the average was -1.51%. As a point of reference, on the week ending January 25, 2023, the median price reduction for sold homes in Deschutes County was -11.14%. Prices are higher, and sellers are getting closer to their asking price than ever in the "pandemic era" housing market.
One hundred fourteen homes are listed in Crook County this morning, up three from last week, at a median price of 599k and an average of 919k. The median price reduction is -3.85%, and the average reduction is -6.24%—eight homes are pending sales in Crook County at a median of 701k and an average of 829k. Sellers were more amenable to price drops, with the median reduction at -8% and the average at -9.51%. Of the eight pending sales, the median days listed were only fifteen. Six homes closed at a median of 400k and an average of 394k. The median days on the market for the sold properties were forty-six, and the median and average price reductions were 3.67% and 3.69%.
Jefferson County's inventory dropped one this week to seventy-four, with a median of 438k and an average of 547k. The median and average price reduction for active listings is -4.39% and -4.5%. Four homes were pending sales, with a median of 374k, an average of 459k, and only twenty-eight days on the market. The median and average price reduction for the pending sales was -1.3%. Five homes sold at a median of 450k and an average of 458k, with 120 median days listed. The median and average reduction for closed sales was -6.34%.
The smaller Crook and Jefferson County data pool makes the trends more subject to large swings. Properly evaluating prices and trends in the less populated parts of Central Oregon requires local knowledge and precise evaluation of specific properties, both of which I have and use daily.
Despite rising inflation, transportation issues in the Panama and Suez Canal, Baltimore Harbor, and increasing fuel prices, the Fed is telegraphing a likely rate decrease at the June meeting. With banks under increasing pressure from high-interest rates, the reverse repo market drawing down, and a book of bonds at low rates refinanced against higher rates, Jerome Powell is in a rock and a hard place. While a likely 25 basis point rate pivot in June won't change the lending landscape in housing much, it might slow bank failures, even if a pivot in light of current trends will be the equivalent of waiving a white flag against rising inflation. Powell has leaned on his favorite word to describe hotter-than-expected January and February inflation: transitory. There have even been some murmurings of raising target inflation to 3%, but what is a casual 50% increase in the target amongst friends?
What does it all mean? Nobody knows in the long-term, other than rapidly debasing our currency. To say we are in uncharted territory would be an understatement. In the short-term, home sales have increased over the last year, prices are firm, and sellers are getting closer to the asking price than at any time in recent memory. Earlier this year, I predicted mortgage interest rates to be 6.675% in September, and with today's 30-year fixed-rate conventional mortgage averaging 6.91%, I may have been correct. To be clear, I was being cheeky with my prediction, and guessing future mortgage rates is a fool's game. However, in this case, it may be prescient. The game is relatively easy for sellers: set your price and wait for feedback. For buyers, especially with unique properties that fit your needs, offering very close to the asking price may be necessary to secure a sale. While coming in far below the asking price may be tempting, sellers are balking at low offers and holding firm this year. Waiting for a seller to lower the price keeps the door open for other buyers, and those buyers have been stepping up.
I regularly show and tour homes and drive the neighborhoods around Central Oregon. If you have questions about a specific community, price, or a particular feature, do not hesitate to contact me for answers.