As mortgage rates rise, the threshold that keeps buyers on the sidelines in Central Oregon also rises in our supply-constrained market. When rates first began climbing, 6% was the breaking point for many buyers, with the inventory of single-family homes in Deschutes County peaking at 972 on August 10, 2022, before the seasonal decline into fall and winter. With rates breaking the 7% threshold last week, buyers seemed undeterred relative to this year's activity. Thankfully, rates dropped to start the week, with the 30-year fixed-rate national average at 6.95% yesterday afternoon. However, sales are still down year over year, and inventory is up, albeit slightly. This morning there are 686 single-family homes for sale in Deschutes County, compared to 617 on June 1, 2022. Sales over the previous week were seventy-one compared to ninety-one in 2022, and closings were forty-six, down from seventy-seven last year. On June 15, 2022, there were 705 single-family homes listed in Deschutes County, only nineteen more than today.
Equity markets showed mixed results with the recent "hair on fire" crisis of the debt ceiling negotiations passing the House of Representatives yesterday. Although, Wall Street will rapidly move on to bigger things, with talk of government default relegated to the dustbin and deficit spending secured for another two years. I assume that many active home buyers paid little attention to the machinations of Congress. Still, one less "crisis" in the headlines should calm markets and may even result in slightly lower mortgage rates, with the 10-year Treasury yield dropping somewhat on yesterday's debt ceiling news. All eyes will be on the Fed and the next Open Market Committee meeting in two weeks. With inflation still concerning the Fed, whether the June meeting results in a pause or another increase will set the tone for the remainder of the summer real estate season.
This morning, the median price of active listings of single-family homes in Deschutes County is 847k, averaging $1,162,901. The median of the seventy-one pending sales over the previous seven days is 765k, with the median sold price over the last week at 719k. The active and pending prices increased from this week in 2022, with the median sale price down only $11,000. Peak selling season may have something to do with the robust activity, but considering mortgage rates are over one-percent higher than this time last year, it is safe to say buyers are bullish on Central Oregon. However, nineteen of the forty-six sales the previous week were cash deals, an increase from recent weeks. Judging by our robust market, there is a strong chance home prices will stay firm through summer, possibly increasing.
There are twenty-four homes under 400k currently listed in Deschutes County, primarily in the south county, with seventy-one over $2M. The active listings and median price by city/county are as follows:
- Bend, 372, $1,082,325
- Redmond, 144, $$615,000
- La Pine, 86, $524,950
- Sisters, 50, $924,950
- Terrebonne, 28, $689,900
- Crook County, 123, $575,000
- Jefferson County, 67, $440,000
There are 285 residential lots listed in Deschutes County at a median of $349,900, 192 in Crook County at $146,250, and twenty-nine in Jefferson County at $153,000. Remember that many of the lots in each of the three Central Oregon Counties need a private well and septic system, which individually run approximately $30,000.
That is a lot of data illustrating one thing; Central Oregon homes sell at near-record prices. Recently I've read reports about sales prices down as much as 12% in cities like Seattle and San Francisco, a trend that has not occurred in Central Oregon. Many new Oregon residents come from populated west coast cities, driving our market. I've mentioned population increase projections for Deschutes County of 15k by 2025 and another 20k from 2025 to 2030. The deficit of homes for the new residents relocating to Oregon is not going away soon, and a price collapse has not materialized. If any signs of change in our market appear, you'll read about it here first, so stay tuned!
Click the link if you are interested in the population estimate reports.
I started writing these weekly reports four years ago and have not missed a Wednesday report since! My first report went out to eight readers, and today over one thousand, plus social media. You will not find a more comprehensive weekly analysis of the Central Oregon housing market anywhere. Whatever your view of the market or real estate needs, I am here to help with the knowledge you need to make the right decision for your needs.