Yesterday, Central Oregon received another dose of winter weather, indicating a great start to building an early snowpack. With daytime temperatures mostly above 30 degrees, the roads in Bend and Highway 97 weren't bad, with slush or wet pavement making up most of the day. Although, most of last week was mild, which may have contributed to robust activity in the housing market. Fourteen more houses were pending last week compared to the previous week at sixty-nine, while thirty-one more homes sold for a total of eighty-three. The median pending sale price was 649k, and the median sale price was 639k, increasing over the previous week. Inventory across the country is rising, but in Deschutes County, the most significant drop in homes listed this year occurred, with current active listings of single-family homes at 822 compared with last Wednesday's 877. With the 30-year fixed-rate mortgage at 7.09%, an increase in pending and sold properties is bucking the national trends. As I have mentioned over the last few months, the inventory of homes listed for sale will be the best indicator of where home prices are heading.
Contrary to much nationwide reporting on the housing market, Deschutes County prices remain firm despite higher mortgage interest rates. Still, more than half the actively listed homes have reduced the price by a median of -6.35%. Even with the price reductions, home prices are up over last year. On April 20, 2022, there were 333 single-family homes for sale in Deschutes County. If the volume of homes for sale decreases that much this spring, expect Central Oregon home prices to buck the nationwide trends and stay firm. Although, with interest rates likely to climb further, there could still be a price correction that hasn't been readily apparent to date.
Recently, I've read several reports that state inflation has peaked, deflation is on the horizon, and to expect declining rents. But, for those focused on Deschutes County, our local dynamics may differ regarding rents. For example, rent increases in Oregon cap on a percentage plus CPI, and the rate for 2023 is a whopping 14.6%. Contrast the maximum rent increase in Oregon with recent reports from Zillow and Redfin of rents declining by 5%, and it is easy to predict a different reality locally. In addition, since the rent cap law began in 2019, many landlords have increased annual rent by the cap amount, which was between 9-10% over the last couple of years. This reality should be a call to action for both renters and investors! Many renters face future rents that approach or exceed a mortgage, making homeownership wise despite rising interest rates. For investors, any fears of capped rent increases should be relieved knowing that the rate of increase is well above CPI, or property taxes which are limited to 3% increases per year. Potential home buyers taking action today can lock in a rate that might very well be lower than rates during 2023 and, at some indeterminate point in the future, refinance when rates decrease. Interest rate decreases down the road are almost inevitable, while a decline in home prices, considering our limited availability of homes and strong buyer demand, is no guarantee. If analysts touting our strong economy and employment numbers are correct, home prices could increase. Stating that we are in uncharted territory is the understatement of 2022!
I strongly encourage anyone reading this report to take advantage of the tools available on EnjoyBendLife.com and contact me with any specific property questions. Home prices are impacted differently at the various price points, and not every neighborhood is experiencing increases. Consequently, it always pays to analyze the market segment that pertains to you. Data is your friend in today's market!