Active listings in all three counties of Central Oregon declined this week as the seasonal reduction of available homes begins in earnest. In Deschutes County this morning, there are 860 listings, down thirty-one from last week. With the national average 30-year fixed-rate mortgage at 7.5%, it would be easy to assume that prices are plummeting, which has not been the case. There is little doubt that many sellers are open to offers, and I have touted this as a great time of year to purchase. While Fall in the mountains is a great time to be a buyer, the reductions sellers are willing to entertain are unique to each property and may not be as deep as some buyers hope.
Nationwide, inventory is increasing, indicating a softer future market and potentially lower prices this spring. For Central Oregon sellers, an early start to inclement Fall weather and a looming holiday season may have helped preserve prices for the remainder of 2023. Unfortunately, many buyers are seeing financing quotes of 8.25%, placing a damper on some of the recently reduced pricing. With the Fed still threatening another 25 basis point hike by year-end, I expect spring prices to be flat, at best.
Inventory and buyer demand will be the two most significant factors to watch this spring. On January 4, 2023, there were 612 single-family homes listed in Deschutes County, with the low two months later at 485. Inventory didn't breach the six-hundred mark again until May 10, and it took another month before we surpassed 700 listings. Many analysts have called out the high percentage of homeowners with rates locked in near 3% as the reason for so few listings, as the thought of selling a low mortgage rate to buy in again at more than double is so unpalatable. Will the higher rate environment this spring continue to keep sellers on the sideline?
Annual sales in Deschutes County typically fall between 3000-5000 per year. With Deschutes County's growth projected to continue for several years, there seems to be a steady stream of buyers stoking our market. Getting hung up on pricing in the short term can be an easy trap to fall into, but any home buyer six months ago saw far better conditions than today. Using a longer lens to view housing is the best approach, and there is no reason to be bearish on Central Oregon real estate. However, not every property price is accurate! I evaluate individual homes and the broader MLS regularly and have intimate knowledge of what homes are selling and which are not. Please do not hesitate to reach out if you have questions about a specific property.
While some properties are over-priced, many higher-end homes in today's market are increasingly challenging to evaluate. The limited availability in desirable neighborhoods leaves few options for new residents jumping on the premier homes. New sellers are optimistic and priced based on recent activity, and the market is constantly changing. The mix of properties available at any given moment changes the desirability of listed homes as buyers sort through the market. If you are questioning the price of a property, let me run a market analysis to help you determine if a lower offer is feasible.
The median days of actively listed single-family homes in Deschutes County this morning is sixty-five, pending days at thirty-one, and sold at eighteen. Days on the market are unquestionably higher than at the peak frenzy of late 2021 and the first half of 2022, but still a long way from stagnant. Buyers testing the market with low offers find that sellers are sticking relatively close to the asking price, with the median price change for sold properties this week at -6.3%. Double-digit percentage reductions are few and far between. With fewer homes available heading into winter, more marketable properties are sticking closer to the asking price.
Of course, I am happy to present the offer that makes sense for you, but I can also guide you as to where most homes will likely sell. Receiving a counter-offer is the goal, not getting rejected outright and then needing to guess the price a seller will accept. Arbitrarily deciding the price a particular home should sell for rarely works out for buyers. Until something changes further in the Central Oregon housing market, be prepared to pay close to the asking price in most cases. Double-digit percentage reductions have been infrequent.