Breaking with seasonal trends, every county in Central Oregon saw a week-over-week inventory increase. While mortgage rates softened a bit, they remain near three-year highs, dramatically increasing borrowing costs from just a few weeks ago. With the latest Consumer Price Index Report coming in at 0.335% versus an expected 0.2%, it is almost certain the Federal Reserve will raise the overnight federal funds rate at the October 27-28 meeting. However, with markets pricing in rate hikes, I don’t expect mortgage rates to move much on another rise in the overnight rate. As expected given this economic news, activity in our local housing market was subdued this week.
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Deschutes County single-family properties increased by 4 this week to 1,358, and 855 of these listings reduced their asking price by an average of 6.73%. An increase in supply is not typical for this time of year, but it is easily explained considering only forty-four pending sales, down 18 from last week. Twenty-eight of the pending sales reduced their asking price by an average of 8.17%. Fifty-eight closed transactions this week are down by 5 from last week, but these transactions were placed under contract before the recent rate increases. Twenty-nine of the closed sales reduced their asking price by an average of 7.49%, with the sold-to-original-list-price ratio at 95.02%.
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Inventory in Crook County increased by 3 this week to 267, with 152 active listings reducing their asking price by an average of 6.6%. Four pending sales this week are half of last week’s activity, with 3 of those transactions reducing their asking price before securing a contract by an average of 17.01%! Four closed transactions this week are one-third of last week’s total, with two of those properties reducing their asking price before securing a buyer by an average of 3.57%. This week's sold-to-original-list-price ratio was 94.75%.
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In Jefferson County, supply increased by one to 151 this week, with 85 of those properties reducing their asking price by an average of 7.25%. Pending sales rose to 5 this week, up 2, and 4 of those properties reduced their asking price by an average of 3.59% before securing a contract. One property closed this week in Culver at $379,950, 97.44% of the original list price.
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With winter looming and borrowing costs rising, sellers are getting creative by offering credits toward rate buydowns and negotiating on price. Motivated sellers may not be able to offset higher borrowing costs fully, but in many cases, they are getting close. Every buyer has a unique situation, but this fall is shaping up to be one of those rare opportunities to get a great deal on Central Oregon real estate. If you are not familiar with rate buydowns or haven’t considered an adjustable-rate mortgage, these products might be worth exploring. I would caution any buyer against assuming mortgage rates will decrease significantly anytime soon, especially given this week's hot CPI numbers. For investors, calculating the real interest rate is an important consideration before moving forward.
Market analysis is especially important right now, and exceedingly challenging as our market adjusts to the current economic climate. I produce these analyses several times a week, and I would be happy to run a report based on your specific needs. As quickly as the market is adjusting, you might be surprised by what you find!
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Reed Melton serves Bend and surrounding areas
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