Inventory of active single-family homes for sale in Deschutes County dropped by one in the previous week to 821, down one from the week before. Week to week, we are witnessing a gradual slowdown in sales and prices, although the changes are drastic compared to last year. For example, in 2021, during the Wednesday to Wednesday of the first week of November, there were 121 sold single-family homes at a median sale price of 635k, with 37.2% of the sold properties reducing the price to secure a sale. During 2022, there were 47 sold homes at a median of 570k, with 55% of those listings reducing taking a price cut to make the sale. Undoubtedly, a 30-year fixed-rate mortgage interest national average of 7.21% has significantly impacted buyers, along with overall costs increasing across the board. In addition, a healthy dose of winter weather may also influence buyers' purchase decisions.
Last week, the median price change of the closed properties was -8.01% or $52,500 on the median sale price of $570,210. Coincidentally, that is the lowest median sale price since 2020, with all indicators pointing towards lower prices in the future. Lower prices are good news for buyers today despite higher mortgage interest rates. For buyers looking to purchase in the spring of 2023, the sales volume and sale price decrease are bearish for the coming year, although there is a strong chance mortgage interest rates will be higher than they are today. There is much talk about mortgage markets pricing in rate increases in advance of Fed overnight rate hikes, and relatively stable rates over the last several weeks may be indicative of that idea. Although, with inflation stubbornly high and a notably hawkish press conference with Jerome Powell after the previous FOMC meeting, don't be surprised if markets are caught off guard by future Fed policy.
A long-term focus when purchasing real estate is the best approach, and a home you plan to own for several years that you can afford today should remain a consideration. However, for anyone with doubts about future income or a shorter duration of expected ownership, waiting to see where the economy and housing end up is a solid plan. For cash buyers, there is little doubt that you are in a strong position today and into the future. Any investors considering a purchase have a rental increase cap of 14.6% for 2023 to offset any concerns, with rentals still far fewer than applicants.
As always, I can help, no matter your needs or concerns! I am intimately familiar with the Central Oregon real estate market and have tools you can use whether you plan to buy before year-end or well into the future.