Conventional 30-year fixed-rate mortgages improved nearly 20 basis points yesterday to 7.62%. However, with rates touching 8% earlier in the week and no relief in sight, it is no surprise that the housing market is slowing. All three counties in Central Oregon saw inventory increases at a time of year when active listings are generally in decline. Although with Jefferson County at eighty-eight, an increase of three, Crook at 148, up four, and Deschutes at 865, up nineteen, the rise was not dramatic. The year-over-year change for Jefferson County was two, and in Crook County, only one over this week last year. Deschutes County increased a robust nineteen listings, now at 865, but still considerably lower than last year's count of 908.
Rather than an increase in sellers, the absence of buyers drives the current trend. The year-to-date sales in Deschutes County illustrate this, with 3428 sales in 2022 compared to 2562 this year. For the first time since 2007-2009, it appears there will be fewer than 3,000 sales of single-family homes in Deschutes County. Even if the total sales break 3k, it will likely be well short of the 4128 total sales in 2022.
With sales declining as home affordability hits all-time lows, inventory growth will set the price trend as the year winds down and 2024 begins. On April 20, 2022, there were 333 single-family homes listed, an inventory low that Deschutes County will most likely not surpass this spring. There is a good chance the Fed will not raise rates for now, but "higher-longer" has sunk in for investors. With the Bond market in freefall and yields on the 10-year Treasury spiking, the markets are picking up where the Fed left off. Cash or well-qualified buyers are increasingly seeing anxious sellers ready to negotiate. The way the market is shaping up should soften prices further. If you still need to talk with your lender about seller credits towards a rate buydown, now is an excellent time to get familiar with this helpful strategy.
The year-to-date median sales price in Jefferson County decreased 20k (-5%) from last year, now at 375k. Crook County's decrease was 30k (-6.3%) to a median of 445k. In Deschutes County, the percentage decrease from last year to date was -4.6%, with the median sale price at 660k. Assuming prices will decline further as we close out the remainder of 2023 is reasonable.
As the housing market changes, opportunities appear in the outlying communities before the heart of Bend. For example, in La Pine, the price of single-family homes has decreased by 9.8% from last year, with manufactured homes on land decreasing by 5.1%. If La Pine is on your radar, watch the spread between single-family and manufactured home sale prices. The median manufactured home sale price in La Pine this year is 336k, with many of these properties on an acre or more. Interest rates may be a hurdle, but prices for manufactured homes should decline with so few buyers able to qualify for a loan.
Conversely, Bend single-family home sales above $2M are down 18.9% from last year, but the median sale price increased $7,500, basically flat.
Staying on top of whichever market segment you desire will reveal opportunities if the current headwinds continue. If you find these comparisons helpful, reach out and put me to work tracking a specific part of Central Oregon for you!