As we approach peak season, the inventory of single-family homes in all three counties of Central Oregon increased this week. Deschutes County added 45 new listings, Crook County added 7, and Jefferson County's inventory grew by 3. With more options for buyers, pending sales are solid, and the market activity is palatable. While the Federal Reserve may have left rates untouched, reiterating the intention of holding rates higher for longer, Jerome Powell couldn't resist sneaking in some dovish tones in the form of decreased monthly bond sales from its balance sheet from $60B/month to $25B/month, a 58% reduction. The reduction of quantitative tightening from decreased bond roll-off is, in essence, quantitative easing, and Wall Street responded with increases in the stock market and bond yields dropping. This morning, the national average for a 30-year fixed-rate mortgage is 7.19%, with the 10-year Treasury at 4.489%. The defacto quantitative easing orchestrated by the Fed and the Treasury Department essentially waves the white flag on inflation. How much mortgage rates decline remains to be seen, but mortgage rates dipping below 7% will undoubtedly spur activity in the housing market.
This week, pending sales in Deschutes County were sixty-eight, with the median days on the market at eighteen. The median pending sale price was $664,500, and the average was 808k, decreasing from the previous week. Sold homes show a significant decrease at 52, compared to 103 last week, with thirteen median days on the market and a median sale price of $714,500, just $500 less than last week. The median price per square foot of closed sales was $364. While I track price per square foot weekly, I rarely refer to these numbers as the wide variety of homes sold each week changes the number dramatically from house to house. The price per square foot is considerably more meaningful for condos in the same complex, townhomes, or new-construction subdivisions. However, it still isn't my preferred method for evaluating properties.
Eight pending sales in Crook County reflect a significant decline from the previous week's seventeen and median days on the market of 111. However, three of the eight pending sales were in the Powell Butte area and at higher price points, increasing the median pending sale price significantly from last week to 674k. Closed sales remained strong, with ten this week, and the median sale price was a significant increase over last week at 640k.
Jefferson County's pending sales increased to eight this week from three last week, with only ten median days on the market and a median pending sale price of 385k. Five properties closed in the county this week, with a median price of 425k and 100 days on the market. The median price reduction for pending sales was -8.21% and -6.94% for the closed properties, but only two homes in each category reduced the price. Two of the five sales in Jefferson County accepted offers above the asking price. Trends are the most critical metric in smaller Jefferson County compared to median price changes because of the smaller data pool. This week, a sold property closed at 21.7% above the asking price, making the median price reduction of all sales a misleading number.
The increased inventory gives buyers more options, and sales remain strong relative to lending costs. With the median sale price reduction in Deschutes County at a paltry 3.19% and in Crook County at 2.27%, sellers are getting very near the asking price. The low days on the market for sold properties indicate strong buyer demand.
The most marketable properties hit the market in late spring, leading up to peak season, and knowledgeable buyers are jumping on those opportunities. If inventory continues to build, there is a chance for some great opportunities this fall for properties that missed a buyer over the summer. However, what happens with mortgage rates will have a significant impact. Most buyers in Central Oregon over the last few years will tell you the biggest challenge was finding the right property, not price. The influx of sellers today is creating many good options, and to date, mortgage rates have been operating in a relatively narrow margin consistent with the last several months. I expect continued strength in the Central Oregon housing market through summer.