The seasons in Central Oregon can change quickly, and this year seems to have transitioned to cooler temperatures definitively. The housing market inventory in Deschutes County has also started the annual seasonal decline, with 846 single-family homes for sale, down fourteen from last week and sixty-two from this week last year. As the discrepancy between homeowners' mortgage rates and current rates grows, I anticipate the dearth of active inventory to continue.
As expected, the median days of actively listed homes have increased to sixty-eight, with 444 price reductions. The unexpected aspect of today's market is the firm prices in the face of ever-increasing mortgage interest rates. There is no question that the low availability of houses has helped keep prices stable. However, with so many great loan programs, such as rate buydowns, most buyers are paying rates in the 6% range for the first year of their loans. Veterans also have access to rates in the 6% range, which in many cases could be more than two percent below the bare rate quoted today. In our "higher, longer" rate environment, 6% looks remarkably good.
On October 3, 2022, the national average for a 30-year fixed-rate mortgage was 6.89% and on its way to 7.20% in November before a steep drop to the low 6% range. Since late last year, rates have gradually increased to a peak yesterday of 7.72%. Whether the Fed raises rates again on November 1 depends on Jerome Powell and his crony's interpretation of economic data. Still, even another 25 basis point increase is less significant than the "higher, longer" narrative, keeping sellers on the sidelines.
December and early January are the slowest months of the year for transaction volume, with the lowest weekly volume last season at twenty-nine on November 30 and again on January 4, 2023. There was a seven-week stretch between late November and early January where sales volume stayed below fifty units per week, with the high for early 2023 established on February 22 at eighty-five weekly sales.
Active inventory is never static as homes sell and new listings hit the market daily. For buyers navigating this challenging market, it would be understandable to want to pull back during the slower winter months. But, some of the year's best opportunities occur during the shoulder seasons. There is no question this market has been challenging for buyers, and I strongly encourage those of you looking for a home to remain diligent over the next several months. Staying current on home prices and what is available will help you to identify opportunities and respond when there is less competition from buyers. Even if rates remain high, peak season is more frenetic for buyers than the off-season.
Over the last few years in Central Oregon, home buying has been more about identifying the right property than negotiating the best deal. If lower prices and willing sellers become the norm, you will read about it here first. My reports are hyper-local and specific to the communities of Central Oregon, unlike most national reporting that is an average of the entire country. Still, I read the national reports regularly to try and identify market changes that could impact Central Oregon. On that note, nationwide home inventory is increasing, which is in direct contrast to what is taking place locally. I've often pointed out winter weather's impact on our markets and the demographic shift to recreationally focused areas. Without significant inventory heading into winter or a reduction in the flow of new residents moving to our communities, it isn't easy to imagine a substantial shift in our market conditions, even with higher interest rates. However, I write these detailed reports weekly so you can stay on top of the Central Oregon housing market!
Understanding today's pricing is imperative to making a good decision whether buying or selling. A fine line exists for sellers to capture buyers' attention or set unrealistic expectations. Even with plenty of time, the initial impression is vital and produces the best results. It is better to price closer to a realistic sale price and hold firm than to expect a drawn-out negotiation. With some exceptions, today's tightening credit market is not conducive to fishing for a high price; demand has already increased prices to record levels. Although some locations in Central Oregon are uniquely attractive and require deep knowledge of our market to ensure you aren't leaving anything on the table. No matter your position, I provide deep, specific analysis of specific neighborhoods, active, pending, and sold comps, and a local's knowledge of Central Oregon for every market analysis. No matter what price you settle on as a seller or offer as a buyer, my reports will give you the information to know you are making an informed decision.
***I take the photos displayed at the top of these reports in my travels around Central Oregon to show off the natural beauty around us. It is easy to get hung up on the minutia of homes and properties, but the mountains, rivers, and wilderness make this part of the world special!