My Weekly Central Oregon Real Estate Blog

Yesterday's Consumer Price Index report was a bucket of cold water for those clamoring for a rate pivot from the Federal Reserve. Most financial writers are comparing year-over-year inflation, but when viewed month over month and annualized over three and six months, the trends are rising, not decreasing, especially in the Core Inflation numbers the Fed looks at most closely. Yesterday's report removes any lingering hope for a March pivot and likely pushes any chance of a Fed decrease into June at the earliest. While it may only be the second week of February, the recent CPI report locks in the market for the first half 2024. Mortgage interest rates are not directly tied to the Fed overnight rate, and weekly volatility will likely continue. This morning, the 30-year national average for fixed-rate conventional financing is 7.13%.

Deschutes County single-family home inventory decreased by eight to 550, up twenty-eight from last year's week. In many cases, higher mortgage rates equate to more listings, and it will be interesting to see if available homes for sale increase now that the current rates are all but assured for the first half of the year. So far, buyer demand has remained steady, with sixty-eight pending sales this week and forty-four closed transactions. 

Crook County homes for sale increased by three to 107, with strong pending sales of eleven and six closed transactions. Last year's week, Crook County had 131 active listings, so constrained supply is still a significant factor for the county. 

Jefferson County inventory dropped five to seventy-eight. On last year's week, an inventory of seventy-one is very much in line with today's available homes. Jefferson County activity is remarkably stable year-over-year, with every indication that will continue. 

Recently, I've read several reports of rising inventory, rising prices, or both. However, in most cases, the writers do not specify where the numbers come from or what they are measuring. Some include every home in the country, others exclude condos, and some focus on geographic regions. The largest, most stable data pool for Central Oregon is Deschutes County single-family homes, the basis for my reports. Crook and Jefferson County information is vital for anyone considering those counties, but the active, pending, and closed data for those areas fluctuates tremendously from week to week. However, for those of you that followed my breakdown of how each community in Central Oregon performed in 2023 compared to 2022, it was clear sales were down ~25%, while prices were down ~5%. Low inventory overcame reduced transaction volume to keep prices firm. 2024 is shaping up to be a carbon copy of 2023.

As I have mentioned ad nauseam in my reports, any downward pressure on home prices in Central Oregon will be preceded by rising inventory and lingering days on the market. Whether buyers, sellers, and market analysts stay laser-focused on a someday pivot or accept today's reality remains to be seen. Prices may not be heavily discounted, but they are also not rising aggressively. Looking through the pending and closed transactions, many buyers have negotiated some attractive deals. If you plan to make Central Oregon home for the foreseeable future, exploring today's options will likely reveal some very nice homes. Hopefully, the inventory will continue to gain steam as we head into spring and summer.

I am always available if you have any questions, and EnjoyBendLife.com has all the information you need for individual listings or market trends at your fingertips!

Click here for the full report.

Am I the only one that can't believe the first week of February is over? As the new year chugs along, the housing market shows signs of what is in store for the first half of the season. Most analysts and real estate insiders have assumed that the Federal Reserve will lower the overnight rate banks charge other banks. And, in turn, mortgage rates will fall. Some even believe multiple rate decreases are in store for the year. The pivot speculation all hinges on Jerome Powell's statement in early December about the Fed starting to talk about when a rate pivot might happen. I've read several publications that have phrased it as the "Fed's December pivot," which is interesting considering the Fed did not lower rates in December nor at last week's meeting. Powell said the likelihood of the Fed being confident in the data by the March meeting to justify a rate decrease is extremely unlikely. If that holds, that pushes the earliest chance for a decline to the April 30-May 1st meeting. Even if the Fed drops rates at the end of April, anything more than 25 basis points is overly optimistic. This morning, the 30-year national average for a fixed-rate conventional mortgage is 6.96%. So much for the pivot scenario!

Generally speaking, lower rates keep prices firm or rising, as well as low inventory. In Deschutes County this morning, half that equation is in play, with 558 single-family listings, down eight from last week. This week last year, there were 510 active listings, indicating that higher rates are helping to increase available inventory, although not enough to drop prices. Prices this week for the fifty-four pending sales and thirty-eight closed transactions are similar to last year, at an average of $728,124 and $881,175, respectively. Pending sales this week are down ten from last year's week, while closed transactions are up twelve. 

While sales volume is consistent with this time of year, the strong buyer demand is not as readily apparent in the data. The median pending days on the market in Deschutes County were forty-nine last week and thirty-eight for closed transactions. However, looking at the mix of properties buyers have taken action on shows several homes under contract that have lingered for some time. As our inventory remains low and buyers are motivated to secure a property and move on with their lives, many choose to take action with not necessarily the most desirable properties. New sellers are optimistic about the coming peak selling season as the inventory is continuously sorted and filtered with sales and new listings. Without inventory growth, the season looks very similar to our recent past, with more buyers than sellers and firm, if not increasing prices. 

Crook County saw a modest increase of five listings, with 107 single-family homes for sale. Five pending sales and seven closed transactions rounded out the week at an average of $399,178 and $513,785, respectively. Still, inventory is down twenty-six from this point last year. 

With the large majority of the real estate industry convinced that a rate decrease is the solution, along with a propensity to brush off any indication that they might not get their wish, it is unlikely much will change in the first half of the year. I expect Wall Street and most analysts to continue looking forward to a pivot in Fed policy while accepting the data about a strong economy at face value. If the Fed holds rates at the April meeting, many analysts will use that as evidence that a pivot must be in store soon, and if the Fed lowers rates by 25 basis points, they will rejoice that the pivot is here. Once rates finally decline, you can be sure the message will be to buy now before prices increase further. To be sure, prices have done just that over the last few years, with the housing unaffordability index at all-time highs. BTFD!

In Jefferson County this week, like Crook County, inventory increased modestly, now at eighty-three single-family house listings. Two homes are pending, with one sale. Prices this year are in line with last year's week, although volume last year was double with four pending sales and two closed transactions, which is negligible considering the typical modest transaction volume for the county. This week last year in Jefferson County, only sixty-eight single-family homes were listed.

There are two critical factors to consider when evaluating Central Oregon real estate. First, how long is your timeframe? Whether that is the time before you purchase or how long you plan to be in your Central Oregon home, these are essential questions to answer. If you can afford today's payment, eventually, rates will soften, and a refinance will make sense. Candidly, I don't expect that to happen in 2024, and I don't see 3% mortgage rates anytime soon. But rates below 6% are likely in the next couple of years. Don't let higher rates today discourage you from moving to Central Oregon if the timing is right. I encourage you to keep close contact with your lender, as rates are highly volatile. Second, when the right home comes up, take action! Especially with today's limited inventory, finding the right home can be tricky. Many properties have more than one buyer circling, and waiting can mean the difference between securing a great property and starting the process over again. 

Lastly, for home prices to decrease, inventory needs to increase. Our supply-constrained market shows no signs of a large influx of homes for sale. The longer it takes for inventory to stop the seasonal decline, the more frantic the peak buying season. If you choose to wait for more options in the market, make sure your financing is in order, and your lender has what is needed to produce a pre-approval letter at a moment's notice. When buyer competition is intense, you will not have the luxury of taking your time with an offer, and you can be sure other buyers will be ready to take immediate action on a home that suits their needs. The market factors are becoming old news for anyone who has been looking for a while, as this year is shaping up to be very similar to last.

If you are interested in how 2023 shaped up compared to 2022, my report last week detailed the last of the Central Oregon communities on my list to review and links to all the previous year-end reviews. In a nutshell, sales were down roughly 25%, and prices were down about 5%. My year-end reports show the precise community numbers for those focused on a specific part of Central Oregon. 

Click here for the full report.

Today, I wrap up my year-end reports focusing on Madras and Terrebonne sales in 2023. I looked at the Sisters year-over-year comparisons just before the end of last year in my December 13 report. Followed by Redmond on December 20, La Pine on December 27, Prineville and Brasada Ranch on January 3, Bend on January 10, Sunriver and Three Rivers South on January 17, and Caldera Springs and Crosswater last week. You can find all these reports at www.EnjoyBendLife.com/blog/ for reference and comparison.

Inventory of single-family homes in Deschutes County declined again this week, now at 566, down twelve from last week. Fifty-eight pending sales at a median of $634,900 occurred in the past seven days, with thirty-three closed transactions at a median of 700k. This week last year, inventory showed 521 active listings with fifty-seven pending sales and 40 closed transactions at a median of $598,418. The median price reduction last year was 9.88% compared to 5.48% this year. Usually, lower inventory would equate to higher prices. However, last year, rising interest rates at the Federal Reserve brought a lot of uncertainty to the housing market, and many sellers were sitting back. Buyers were making lower offers that, in many cases, were accepted, dropping the median price somewhat. With 8.67% more listings this year, prices are up 16.97%! I do not expect prices to rise to double digits for 2024, but at this point in the year, buyer demand feels more substantial than last year, even though transaction volume is similar. Available inventory will impact price trends the most, but it seems highly unlikely we will see a spike large enough to temper prices in the first half of the year. 

Crook County inventory declined to 102 single-family listings at a median of 599k, down one from last week. Eight pending sales at a median of 382k, with four closed transactions at a median of 441k, is similar to last year's week. However, unlike Deschutes County, Crook County inventory on this week last year was up 30.3% at 133. With even lower inventory and steady demand, I expect Crook County pricing to remain firm. Although looking at the lower-priced properties in Prineville, many have reached a ceiling on price and are not breaking past the 400k threshold. This morning, nineteen properties in Crook County for sale are less than 400k, nearly 20% of the market.

Again this week, Jefferson County inventory is remarkably stable, with seventy-seven single-family homes listed, just one more than last week. Two homes are pending at an average of $326,500, with two sold at an average of $449,500. 

The city of Madras, located in Jefferson County, sits at the northern portion of Central Oregon, the gateway to Lake Billy Chinook, and only an hour twenty-three-minute drive to Mt. Hood or an hour fifteen to Mt. Bachelor. This morning, fifty-one single-family homes are listed in Madras at a median of 419k, with one pending sale (318k) and one closed transaction (289k) for the week. In 2023, 129 closed single-family homes sold, down from 196 in 2022, a decrease of 34.2%. The median sale was 360k, a drop of 6.1%. 

Terrebonne, the spectacular Smith Rock State Park home, is located on the northern edge of Deschutes County, only eight minutes driving time from Redmond. This morning, there are twenty-five active listings in Terrebonne at a median of 590k, with two pending sales (546k) and one closed transaction in Crooked River Ranch at 610k. Not surprisingly, Terrebonne sales in 2023 were down 27.7%, with 73 closed transactions. However, unlike most of Central Oregon, the median sale price of 620k reflects a 5.98% increase, with the $675,247 average a 9.7% increase over 2022. Much of Terrebonne has sweeping views of the Cascade Mountain Range and is near thriving Redmond, although with a more laid-back vibe. It is no wonder demand remains high for Terrebonne. 

In Deschutes County, the most populous county in Central Oregon with nearly 210,000 residents, 40% of the active listings reflect a price reduction. In an average market, closer to 30% would be typical, and just a few weeks ago, nearly half of all sellers had reduced their asking price. While price reductions may indicate a softening market, in Central Oregon, price reductions indicate sellers starting high because of strong buyer demand. After some time listed, and with feedback from showings, sellers adjust their price to find a buyer. Only looking at price reductions or raw data can be misleading. Anyone who has lost out on a home to another more motivated buyer knows that desirable homes find buyers and do not linger. So far, 2024 shows no sign of abatement in demand or pricing. Without exception, anyone who purchased five years ago has tremendous equity in their home. What do you think things will look like five years from today? 

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In today's report, I will break down the Caldera Springs and Crosswater subdivisions in the Three Rivers South/Sunriver area. But first, the three county report for Central Oregon.

This morning in Deschutes County, there are 578 single-family homes listed, ten less than last week. On this week last year, there were 553 listings, so we are slightly ahead as the new year unfolds. Forty-three homes are pending at a median of 639k, with 40 sold at $551,890. This week last year, there were forty-seven pending and thirty-four sold homes, close to this year's numbers. The median numbers were 625k for pending sales this week in 2023 and 560k for sold properties, a negligible change for the small number of sales to date. However, only looking at single-family sales year-to-date, in 2024, there have been 139 sales compared to 118 last year. I attribute the increased activity to the lower mortgage interest rates last month that seemed to bring some buyers off the sidelines. Unfortunately, the low rates didn't last long, with rates this morning at 6.92%. As talk of recession heats up again and the odds of a rate pivot from the Fed decrease, it seems that conditions are tightening, not loosening. Several factors, not least of which is the turmoil in the Red Sea, are colluding to put upward pressure on inflation, making the rate pivot Wall Street expected in March increasingly unlikely. With so much volatility driving the markets, anything can happen quickly. While our inventory to start 2024 is still historically low, the slight increase over 2023 is something to watch as we get deeper into the new year.

This morning, Crook County has 103 active single-family listings, with nine pending sales at a median of $439,660 and four closed transactions at a median of $402,142. One of the pending sales was a property in Powell Butte listed at $2.9M, and backing that out from the pending sales drops Crook County's pending average to $440,382 from $713,673. The limited inventory in Crook County covers a wide range of property types and price points that are not shown when looking at median or average numbers. This week last year in Crook County, there were 129 active listings, five pending and two sales. While the difference in pending and sold activity is slight, the increase in activity combined with a more than 20% decrease in inventory is sure to put upward pressure on prices. Throughout Central Oregon, inventory is the key to the market.

Jefferson County inventory declined three to seventy-six this week, up two from this week last year. Four homes are pending at an average of $392,225, with zero sales. This week last year, there were three sales in Jefferson County at a median of 365k and no sales. With so little data, there isn't much insight into the price, but the low level of homes listed and consistency compared to last year indicate similar conditions in 2024 to last year. 

Last week, I excluded the golf course communities of Caldera Springs and Crosswater from my year-end report on Three Rivers South and Sunriver because of the differences in property types and price points. Let's take a look at how those communities stack up.

This morning in Caldera Springs, nine homes are listed at a median of $2,595,000, with no pending or closed transactions. There are also nine vacant lots listed at a median of 479k. In 2022, there were thirty-seven sales in Caldera Springs at a median of $1,900,00, and the most expensive sale at $3.3M. In 2023, there were twenty-five sales at a median of $1,469,000, with the most expensive sale at $3.5M. While a 32.4% reduction in sales seems significant, Caldera Springs is still building out, and available inventory impacts these numbers. Caldera Springs also rolled out a new phase of the subdivision, selling twenty-seven lots in 2023 at a median of 519k and another ninety lots in 2022 at a median of 455k. With so much new construction and a limited number of existing homes listed, local knowledge and in-depth analysis are required to evaluate Caldera Springs properly. Resort zoning for the subdivision allows short-term rentals throughout, with some properties required to be available in the vacation rental pool for forty-eight weeks per year, further complicating the price analysis. Whether you want to build in Caldera Springs, purchase an existing home, or invest in a vacation rental, this fantastic community deserves consideration. With limited availability throughout Sunriver and Three Rivers South, Caldera Springs, without question, has the largest selection of newer high-end properties available. If close access to Mt. Bachelor or the Deschutes River is appealing, this part of Deschutes County is unique and increasingly sought after.

Lastly, in Crosswater this morning, one home is listed for sale at $2,225,000, active on the market for sixteen days. 2022 saw reasonable activity in the community, with three single-family home sales at an average of $2,620,691 and three townhomes sold at an average of $995,225. In 2023, one home in Crosswater sold at $1,775,000. Many avid golfers hold the Crosswater Golf Course in high regard, and the course is only open to owners and guests, making it the most exclusive golfing in southern Deschutes County. Bordered on the West by the Big and Little Deschutes Rivers, Crosswater has some of the most stunning properties in the area. With so few sales and strong buyer demand, I encourage you to act quickly if something in the community becomes available. 

My knowledge of Central Oregon is vast, and I am local to the Three Rivers South community. If Caldera Springs, Crosswater, Sunriver, or any of the neighborhoods that make up southern Deschutes County appeal to you, I would be happy to share my knowledge of the area. Please reach out with any questions. 

Click here for the full report.

Today, I have year-end reports for Sunriver and Three Rivers South and the tri-county Central Oregon weekly reports. Most people know that Sunriver Resort stands independently between Bend and La Pine, but fewer know that Three Rivers South is considered a Bend zip code. Interestingly, Sunriver and Three Rivers South share zip code 97707, with one using the city of Sunriver and the other Bend 97707. Caldera Springs and Crosswater, two golf course communities considered Sunriver neighborhoods, have Bend 97707 addresses. Since this is all confusing enough, I am leaving the year-end report of Crosswater and Caldera Springs out of the equation today. The Price points in Caldera Springs and Crosswater are considerably higher than most of Three Rivers South, and those communities deserve a separate report to account for the differences. I have local knowledge of Sunriver, Three Rivers South, and Sunriver, so please let me know if you need help learning about this diverse part of Deschutes County.

First, Deschutes County single-family home inventory declined to 588 listings this morning, down eleven from last week. However, this week last year, there were 552 listings, indicating that the sale-to-listing ratio may be improving slightly. Inventory will be an essential metric to follow in the coming weeks and is a solid leading indicator for pricing as we head into summer. The median active list price is $736,450, and eighty-nine days on the market. Last week shows fifty-four sales at a median of $689,500 and thirty-two days, with thirty-five sales at a median of $655500 and eighteen days. While inventory might be up slightly from last year's point, the days on the market for the pending and sold homes indicate strong buyer demand relative to what is listed.

Second, in Crook County, 105 single-family homes are listed at a median of 599k and ninety-eight days on the market, representing a decline of three from last week. Crook County's active listings have remained steady for some time, indicating a bottom for the supply-constrained market. During 2023, Crook County saw peak inventory at 157 and the bottom at 107, so unlike Deschutes County, Crook is still experiencing historically low availability. Seven homes are pending at a median of 400k and seventy-seven days listed, with five sales at 519k and 139 days listed. 

Third, Jefferson County also shows stability in the active listings at seventy-nine this morning, up one from last week. One home is pending at $531,439 and listed for 192 days, with two sales averaging 511,615 and thirty-six days on the market. In 2023, the low point for inventory in Jefferson County was sixty-four, with the high point at ninety.

Starting with the Sunriver Weekly report, fifty-six properties are active at a median of 577k and eighty-nine days on the market. Two sales are pending at a median of 825k (675k and 975k), averaging two days on the market. Two properties in Sunriver sold at a median price of 880k (585k and $1,175,000) and nine days on the market. The remarkably short days on the market for this week's pending and sold properties in Sunriver indicate strong buyer demand when good properties hit the market.

In 2023, 158 properties sold in Sunriver at a median of $765,50. Sales were down 26.2% from 2022's 214 sales, while the median sale price declined 5.5%. However, the average sale price of $760,542 was a modest .19% increase. Remember that these are only homes "inside the fence" of Sunriver Resort, not including Caldera Springs or Crosswater.

Lastly, Three Rivers South shows thirty-four active listings this morning at a median of 675k and sixty-two days on the market. Two homes are pending at an average of 930k (310k and $1,550,000) and forty-three days on the market—one manufactured home with a lot sold for 230k after fifty-five days listed.

In 2023, there were 131 sales of single-family homes in Three Rivers South (TRS) at a median of 630k and an average of $704,272. Sales were down 13.8% from 2022's 152, and the median sale price reflects a modest .48% increase. However, the average sale price shows a decrease of 8.2% from 2022. 

Unlike Sunriver, Caldera Springs, or Crosswater, TRS has manufactured homes available. Twenty manufactured homes sold in TRS in 2023, down from twenty-five in 2022. The median sale price of 365k was a 14.9% decrease from 2022, with the average sale price of $378,645, an 11.9% decrease. Mortgage interest rates are significantly impacting this market segment, with the price increases of the last few years appearing to have peaked. While some of the manufactured homes available in TRS are pretty nice, many require repair, making financing challenging. With buildable lots in TRS in short supply and the area in high demand, some of these properties are sold primarily for the lot. Not every manufactured home will succumb to demolition, but I suspect many manufactured home buyers in TRS have plans for future renovations and upgrades. 

For the casual observer, the Sunriver and Three Rivers South reports can be challenging to decipher with so many vaguely geographically delineated areas. But, on www.EnjoyBendLife.com, you will find separate searches, descriptions, and market reports for each neighborhood. Please do not hesitate to ask questions about this incredible part of Central Oregon!

Click here for the full report.

Only ten days into 2024, activity has already begun to pick up in the housing market. Between all the speculation that the Fed will lower rates, Janet Yellen declaring a "soft landing" with no recession in sight, and with limited inventory, the year looks like it is shaping up to be interesting. While I am sure Yellen has an agenda with her messaging, I encourage you to look back at her track record before hanging your hat on her proclamation. However, the hype is making its way to housing.

In addition to my weekly breakdown of Deschutes, Crook, and Jefferson County housing activity, I will cover a 2023 year-in-review for Bend today. As the largest city in Central Oregon with a little over 100,000 residents, Bend makes up the majority of sales in Central Oregon. But first, let's take a look at last week's activity.

Crook County has 108 active listings this morning, up four from last week. There were nine pending sales at a median of 399k, an average of $464,077, and eighty-three days listed. The days listed for pending sales are ten less than the active listings. One home sold after 260 days on the market at 88,24% of the original list price. The sold property was on the north end of Juniper Canyon and sold for $525,000. Even though inventory in Crook County increased slightly this week, there are so few properties for sale that sellers are finding buyers for homes that have lingered on the market. This trend applies across Central Oregon.

Jefferson County saw an increase of five listings this week, now at Seventy-eight. However, the three pending and three closed sales were on the market for eleven and twenty-one days, respectively. The median pending sale was $399,000, and the closed sales were $445,861. 

Deschutes County inventory decreased again this week and is now down to 599. With the major holidays behind us, pending sales picked up to fifty-six at a median of $641,400 and an average of $768,308. Forty homes closed last week at a median of $689,000 and an average of $812,655. Active listing's median days on the market are eighty-nine, pending is fifty-six, and sold is forty-four. As a recap, Deschutes County single-family home sales in 2023 were down 23.5%, with the median sale price of $665,000, a 2.2% drop from 2022. The average sale price was $812,278, a 1.7% drop from 2022. Inventory on this week last year was twenty-six fewer than this year, but prices this week are up considerably. The median pending sale price for this week in 2023 was $567,400, with the average at 720k.

For those of you who have followed my 2023 year in review for the different cities in Central Oregon, the Bend numbers won't be surprising. The trends of fewer sales and slightly lower prices for the year-over-year comparison continue in Bend. 

In Bend in 2023, there were 1930 single-family sales, a 22.9% decline from the 2502 sales in 2022. The median sale price decreased by 15k to $750,000, a 1.96% decline. The average sale price dropped 1.6% to $914,922. 

Condo and townhome sales in Bend declined 17.2%, with 197 closed transactions, down from 238 in 2022. However, the median sale price increased by 4.28% to $585,000, while the average of $695,559 declined by $93 or 0.013%. With condos and townhomes only making up 10% of the sales in Bend, this market segment is in short supply, keeping prices firm. Many condo buyers are looking for turnkey properties suitable for rentals and requiring less maintenance than a single-family home. I expect market forces to keep activity strong. 

Ninety-four manufactured homes on land sold in Bend in 2023, down from 117 sales in 2022. The median sale price was $422,500, a 2.87% drop from 2022. The average sale price was slightly lower at $422,148, reflecting a 7.06% drop from the 2022 average. Consistent with the rest of Bend, sales declined 19.6%.

One thousand eight hundred forty-seven single-family homes in Bend sold below $2M at a median price of $729,000 and an average of $835,862. The price declines were 2.14% for the median and 1.6% for the average. While Bend home prices were stable from the peaks of 2022, the data shows that most Bend sales are happening well below $1M. Sales below $2M reflect a 22.8% decline from 2022.

Eighty-three homes in Bend sold over $2M in 2023, a 23.1% decline from 2022. The median sale in this price bracket was $2,395,000, a 3.52% decline, and the average sale was $2,674,239, a drop of 1.2%. Limited inventory is the most significant limiting factor to sales above $2M. Many buyers in this price point have specific needs that are difficult to find in Bend. As 2024 unfolds, I expect our supply-constrained market to continue, challenging the higher price points. When a home fits your needs, waiting has proven to be a mistake with so much buyer demand. Once a great property sells, knowing when another suitable home will hit the market and at what price is difficult. 

Across all property types in Bend, there were 2,244 sales in 2023, a decline of 22.3% from 2022's lofty 2,889 sales. The average sale was $867,107, with a median of $720,000. Declines were 1.8% and 1.37%, respectively. Total sales across all property types in Deschutes County were 3758 at a median of $629,900 and an average of $758,548. The median days of closed transactions in Deschutes County was twenty-two, with Bend coming in slightly lower at nineteen. It is easy to see that throughout Deschutes County, sales happen quickly, even with a slowdown in sales volume. Bend prices and buyer demand surpass the county by a fair margin, and that trend will continue.

On the southern end of Deschutes County, I still have Sunriver and Three Rivers South year-end reviews coming. Expect Terrebonne and Madras reports soon on the north and into Jefferson County. Each region of Central Oregon has its characteristics. Still, the overall trends in 2023 were the same: fewer sales and slightly lower prices. Some analysts have predicted a nationwide increase in homes for sale in 2024. However, here in Central Oregon, inventory remains low, and Deschutes County inventory is in decline. A lot will happen over the next several months, with the beginning of this year looking like a carbon copy of last year with low inventory, firm prices, and higher interest rates. 

This morning, the national average for a 30-year fixed-rate mortgage is 6.8%. Yesterday, I read a prediction that mortgage interest rates will be 6.6% by year-end. That is a far cry from the pivot the industry is pushing. Staying in contact with your lender and recognizing the right home for you are vital in this environment. 

Much research and my local knowledge go into helping my clients find their perfect fit. I am always happy to go above and beyond to help you make the right decision. Don't hesitate to contact me with any questions about housing in Central Oregon!

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Welcome to 2024! Now that we are officially in the new year, the two most significant impacts on our housing market will be buyer demand and inventory levels, which drove the last few years of rising prices. 

In addition to my weekly breakdown of Deschutes, Crook, and Jefferson County, I will dive deeply into Prineville and Brasada Ranch today. Over the last three weeks, I highlighted Sisters, Redmond, and La Pine, and in the following weeks, I still have Madras, Bend, Sunriver, Terrebonne, and Three Rivers South on my list. 

Did prices rise in 2023? Let's first look at Deschutes County single-family homes in 2023 compared to 2022.

In 2022, 4,128 single-family homes sold in Deschutes County at a median of 680k and nine median days on the market. The average days on the market were twenty-eight, which is a better metric for evaluating the super-charged year of sales. As hot as sales were in 2022, each year since 2015 had more sales. With interest rates rising steeply at the end of 2022, I look at the year more as the start of the slowdown than a hot year. While sales may have slowed, 2022 produced peak pricing for Deschutes County. In 2023, Deschutes County had 3,150 sales at a median of 665k, with the median days on the market at twenty-two and forty-eight average days listed. That is a 23.7% drop in sales volume and a 2.2% price drop. 2023 sales volume was the lowest since 2010, when sales were 3,197, and the median sale price was 176k. In 2010, Central Oregon was still in the throes of the housing crash, with increased inventory and weak buyer demand. 

This morning in Deschutes County, there are 607 single-family homes listed, down fifty-four from last week. The median list price is $749,900 at eighty-five median days on the market. Thirty-three homes are pending at a median of 599k and thirty-six days on the market. Thirty-one homes sold in Deschutes County at a median of 700k and sixty-five days on the market. Volume for the last week of the year was typical for the holiday-fractured week and slightly exceeded this week in 2022. Many listing contracts expire at year-end, and the significant drop in homes listed is typical at the start of the year. Many sellers hold off on listing until the peak selling season approaches, and I expect inventory to continue to decline due to fewer listings combined with sales. The low point in 2023 was 485 listings on March 1. 

Jefferson County inventory declined to seventy-three this morning, down seven from last week. One home is pending in Crooked River Ranch at 649k and thirty days listed. No homes closed in the last week.

Before we evaluate Prineville, let's look at Crook County for the week and compare 2022 and 2023.

Crook County has 104 listings, a drop of twelve from last week, at a median of $564,450, and ninety-seven days on the market. There are three pending sales at a median of 307k and forty-four days listed, with two closed transactions at a median of 330k and sixty-four days on the market. 

In 2022, there were 431 sales in Crook County at a median of 455k and twenty-one days on the market. In 2023, there were 357 sales at a median of $449,015 and forty-nine days listed. The 17.2% drop in sales volume is considerable, but the 1.3% price drop is negligible. 

While Crook County and Prineville are inseparable, Brasada Ranch skews the numbers skyward. This morning, eighty-two single-family homes are listed in Prineville at a median of $471,400 and ninety days listed, compared with Brasada Ranch's seven listings at $1,490,000 and 127 days on the market. Three homes are pending in Prineville (the same homes reflected in the Crook County numbers above), with no pending or closed sales in Brasada Ranch last week. 

In 2022, Prineville had 365 sales at a median of 435k and twenty-one days on the market. In 2023, sales dropped to 296, but the median sale price was only down two dollars fifty cents! Under normal circumstances, an 18.9% drop in sales volume would equate to lower prices, but with so few homes for sale, that has not occurred. 

Brasada Ranch closed thirty-three homes in 2022 and thirty-two in 2023, and the median dropped from $1.3M to $1,182,500. Looking at the sold properties, the mix was more modest in 2023, with fewer large trophy homes sold. Comparing apples-to-apples in Brasada Ranch, the pricing in 2023 was consistent with 2022.

In the first half of 2023, prices were down in Deschutes County by nearly 6%, but as the year progressed, the gap narrowed to our year-end drop of 2.2%. As illustrated above, some neighborhoods and cities in Central Oregon fared even better with the year-over-year comparisons. As the new year unfolds, Deschutes County inventory is down five from this week in 2022, indicating another year of tight inventory. Whether we begin building inventory, drop further, and when we reach the low point will be good leading indicators for what is in store. Granted, a big shakeup in the overall economy could derail the current trends, just like the sudden rise in interest rates in late 2022 stalled our record-breaking pandemic-fueled market. However, just like our El Niño winter makes the chances of catching up on snowfall increasingly unlikely, today's low inventory makes the chances of an over-supply of homes for sale a long shot.

Stay tuned next week for another deep dive into the Central Oregon Housing market!

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First, I hope you had a great Christmas with family and friends! It is hard to believe the year will be over in a matter of hours!

Second, in addition to my usual breakdown of the Deschutes, Crook, and Jefferson Counties activity, I will provide year-to-date data on the City of La Pine. Let's get to it!

This morning in Deschutes County, there are 661 active listings for single-family homes at a median of 750k and eighty-six days on the market. Nearly half of those listings (323) have had a price change at a median of -4.55%. This week last year, there were 668 listings. The county recorded thirty sales in our holiday-shortened week at a median of 640k and fifty-one days on the market. The median price reduction for the pending sales sits at a paltry -3.89%. Twenty-seven homes in Deschutes County are pending at a median of 665k, with forty-three median days listed and thirteen price reductions at a median of -10.59%.

As you can see from the days on market numbers, new listings are either more attractive, priced better, or a combination of both factors. Also, many higher-end homes listed take longer to find a buyer, dragging the day's listed number up for the active inventory. At year-end, Deschutes County numbers are remarkably similar to the end of 2022.

In Crook County, there are 116 single-family homes listed, down from last year when there were 125 listings this week. The median list price is 597k, with sixty-five price reductions since listing at a median of -5.03%. The median days of active listings is 104, one more than the pending days listed of 103. Four homes are under contract at a median of 505k and a median price reduction of -3.8%. Four homes closed at a median of 375k, with all four taking a price cut before selling of a median -5.05%. This week last year shows five pending and three sales, so Crook County is performing slightly better than last year. However, with the shorter work week and light activity, I would not read too much into this weekly data. Interestingly, when I removed the six active listings in Crook County over $2M from the list, the median list price dropped to 525k. I will dive deeply into Crook County, Prineville, and the popular Brasada Ranch golf community in the coming weeks.

Jefferson County inventory has been stable at eighty listings for the past three weeks, with this morning's median price at 472k and eighty-one days on the market. The county had one pending sale at 345k at a price reduction of -5.48% and six sold homes at a median of $327,500 to round out the week. Of the sold homes, three took offers at a median of -11.43% below the asking price, indicative of the deals sellers are entertaining in the outlying areas of Central Oregon. This week last year, Jefferson County inventory was eighty-one, with three pending properties and two sales. Jefferson County and Madras breakdowns for 2023 will be coming shortly.

Lastly, in La Pine, sixty-nine single-family homes are listed at a median of 539k, with 100 days on the market. One sale was recorded this week at 215k and only four days on the market, with the list price at 225k. One home is pending in the Ponderosa Pines neighborhood, listed at 475k. However, this home was on the market for 510 days and started at 599k! A combination of a slowing market in La Pine and an aggressive price account for the considerable reduction and significant days listed. In today's housing market, buyers can access tremendous information and immediately recognize value or over-priced properties. While some sellers are okay with waiting for the right buyer, it is best to price right directly in most cases.

Thirty-three manufactured homes, including land, are listed in La Pine at a median of 342k and a short thirty-nine days on the market. Not all of these homes qualify for financing, requiring a cash sale in some cases. Although, for the homes that qualify for FHA, VA, or Conventional financing, there are some great opportunities. 

In 2022, year-to-date, La Pine sold 267 single-family homes at a median of 465k and thirty-four days on the market. So far in 2023, there have been 186 sales at a median of $422,400 and forty-seven days on the market. Those numbers reflect a 30.3% reduction in sales volume and a 9.16% median price drop. La Pine heated up tremendously in the wild 2022 selling season, but sales and prices are softening as the market continues a stable return to something resembling normalcy. 

Sales of manufactured homes, including land in 2022 in La Pine, were 138 at a median of $356,500 and twenty-eight days on the market. Year-to-date 2023 shows 105 sales at a median of 342k and days on the market of thirty-nine. That's a 23.9% reduction in sales and a 4.07% reduction in price. Whether manufactured or stick-built, the floor for move-in-ready homes in Central Oregon remains stubbornly close to 400k. In most cases, the lower-priced homes in our market see more modest price reductions than many higher-priced homes shooting for the moon. 

Available inventory is the best predictor of future pricing as we wind down the year and begin anew in 2024. My year-end reports for the communities of Central Oregon will continue until I have covered the region. They are a great resource to show where the market stands relative to 2022, comparative inventory, and where we might be heading. Stay tuned for more reliable data straight from the Central Oregon MLS!

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With only a handful of days remaining in 2023 and the holidays in full swing, the 2024 housing market begins today. A key metric to watch heading into the new year will be available inventory, so let's dive in!

This week, I will break down the past year in Redmond, but first, a look at the Central Oregon County data.

In Deschutes County this morning, there are 688 single-family homes for sale, down two from last week and six from this week in 2022. Thirty-six homes are pending at a median of $657,498, with thirty-four sales at a median of 691k. Sales and pending sales were down from last year's week of thirty-seven and forty-five. The inventory levels are a valid comparison, but sales and pending sales during the holidays are subject to so many variables that I wouldn't read too much into the reduced activity. 

Crook County has 120 active listings, down one from last year's week and eight from the previous week. The median list price this week is just shy of 600k. Removing the nine listings in Brasada Ranch drops the median list price in Crook County to 515k. County-wide, seven pending sales, at a median of $525,555, and four closed transactions, at a median of $699,250, made for a solid week of activity. One sale and two of the pending sales were in Brasada Ranch, which has shown robust activity throughout the year. 

Jefferson County inventory remains at 80, the same as last week and one less than this week last year. There were two pending sales in the county at a median of $374,450 and five closed transactions at a median of $401,424 to round out the week's housing activity. 

This morning in Redmond, there are 169 active single-family listings at a median asking price of $599,900 and seventy-nine days on the market. In the last week, nine homes in Redmond went under contract at a median of $499,900 and fifty-one days listed. Three homes closed in Redmond this week at a median of $532,400 and ninety-six days on the market. There were 932 year-to-date 2022 sales in Redmond at a median of $532,750 and only ten median days listed. This year, as of this morning, Redmond has had 684 sales at a median of $502,250 and twenty-four days listed. Sales in 2023 are down 26.6% from 2022, with the median home price down 5.7%. Redmond is a rapidly growing community, reflected by new subdivisions and plenty of new construction, with sixty-five of the 169 single-family listings constructed in 2022 or later! With a charming downtown and a more laid-back vibe than Bend, Redmond appeals to many people looking to put down roots in Central Oregon.

On December 19, 2022, the national average for a thirty-year fixed-rate mortgage was 6.31%, compared to this morning's rate of 6.64%. Last year, uncertainty about the housing market ruled the day, as well as how high mortgage rates would go. On October 16, 2023, rates peaked for the year at 7.94%, a high not seen since May 2000 when rates were 8.43%. The rate peak in May 2000 preceded a twenty-year decline in rates that set the stage for the 2008 housing crash and finally bottomed out at 2.69% in December 2020. The Dot Com crash in the early 2000s, overseen by Fed Chairmen Alan Greenspan followed by Ben Bernanke, brought on an era of cheap credit that has inflated home prices ever since. Today, historic home unaffordability is a home price problem far more than an interest rate problem. 

Whether it was Ben Bernanke in 2008 telling Congress that there was "no recession in sight," Janet Yellen commenting that quantitative tightening would be "like watching paint dry," or current Fed Chairman Jerome Powell spinning on his heels to proclaim the Fed is considering rate pivots in 2024, the one clear thing is the Fed seems to be the last to recognize a coming recession. Wall Street seemed immune to Powell's forward guidance about "higher-longer," always looking towards the pivot. Yet, the champagne corks started popping based on his recent statement about a pivot, Powell's remarks akin to a hostage statement. In the days following Powell's rapid change of heart, several Fed Governors took to the press to walk back the doveish comments. Still, the mainstream media and many in the real estate industry have reacted as if a pivot has already happened, proclaiming a new landscape for the 2024 housing market. 

First, today's lower rates are a boon to buyers and something to take advantage of if you are actively looking. Many lenders suggest rate locks, and there is an unquestionable opportunity to secure a loan at a considerably better rate than just a few weeks ago. Combine an interest rate buydown with today's lower rates for loans well below the bare rate.  

Second, if you are going to listen to Powell's talk of a pivot, you also need to listen to the rest of his statement. Cherry-picking what you want to hear is not a sound strategy. Powell and his Governor's batting clean-up reiterated that data indicating inflation consistently heading towards the target needed to precede a pivot. Much of the inflation comparisons written about in financial reports and presented by the mainstream media have used year-over-year comparisons, while month-over-month inflation has risen. The Fed relies heavily on Core Inflation numbers, which back out volatile food and energy costs, while the media has been touting lower energy costs as a sign of lower inflation.

Unfortunately, you can't have your cake and eat it, too. Also, unfortunately, the recent turmoil in the Red Sea will likely cause inflation for the costs of goods shipped and energy. Putting all the massaging of numbers by the Bureau of Labor Statistics aside, the year-over-year inflation comparisons in the coming months will likely look far less encouraging. You might recall that Jerome Powell touted the increase in bond prices, doing some of the heavy lifting for the Fed, in essence, tightening monetary policy. The positive impact has diminished since bond prices have fallen, making the pivot Powell so cavalierly mentioned less likely anytime soon. However, a pivot based on political motives remains a possibility. But the Fed isn't political! In a few short days, it will be an election year, and the pressure by an incumbent administration on the Fed has been equally applied by both sides of the aisle, one of the biggest wild cards of the coming year.

Home purchases should have a long-term focus, especially in a market like we are experiencing today. Lower rates today are great, and this time of year creates fantastic opportunities relative to peak season pricing. In the long term, Central Oregon is a tremendous investment. Currently, nationwide inventory is up, while Central Oregon inventory is down, a strong indication of buyer demand for our region. I am not bearish on Central Oregon but a realist regarding the financial realities. Be cautious moving forward. A pivot in rates and monetary policy will likely bring home prices up. Whether you want to call that appreciation or a bubble is up to you. However, Jerome Powell claims that appropriate economic indicators are essential before a pivot, and to date, those indicators have not materialized. 

Next week, I will highlight another city in Central Oregon as I continue my year-end reporting on the Central Oregon housing market. Who knows? I may get into the weeds on the repo, reverse repo, and commercial real estate markets to reveal more of the issues I see percolating beneath the standard reporting. 

Merry Christmas! I am working through the holiday, so feel free to reach out if you need anything.

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In this week's report, I will detail the Sisters market, showing the differences year-over-year. But first, a brief overview of the three counties of Central Oregon.

This morning in Deschutes County, the inventory of available homes for sale dropped below seven hundred for the first time since the first week of June, and it is now at 690. This morning's inventory is down thirty-one from this week last year. Fifty-four homes were placed under contract at a median price of $665,650, with another thirty-nine sold at a median price of $759,900. The median days on the market for active listings is seventy-six, forty-six for the pending sales, and twenty-two for the sold properties. Activity always picks up as the year winds down, although the recent drop in mortgage interest rates seems to have spurred some action. Many properties on the market for some time are getting snapped up as they compete better with the smaller pool of available listings. Seasonal declines in inventory and the filtering dynamic happen in any market. However, with our supply-constrained conditions, the filtering process is amplified. 

Available inventory at this time of year, along with sales prices, is a leading indicator of the spring housing market. Last year, the inventory low point was in early March. With homes for sale trending below last year, it will be telling to see when inventory reaches the bottom in 2024. The meager inventory has moderated the impacts of higher interest rates as buyers have very few options, keeping prices firm. At least for the first half of 2024, I do not expect mortgage interest rates to change much. Many overly optimistic analysts predicting several rate cuts through 2024 have backed off that assertion as inflation has been up for four of the last five months, with the outlier a flat month. Jerome Powell has repeatedly indicated he will keep rates higher for longer in the fight against inflation and hasn't ruled out another increase. Wall Street's propensity for ignoring Powell's narrative is misguided. In short, I do not expect interest rates to change much for the coming year. 

This morning in Crook County, there are 128 single-family homes for sale, down seven from last week. This week in 2022, there were 130 active listings. Watching the inventory in Crook County during these times of low availability, it appears the market has reached a low point and is not breaking considerably down from current levels. The low point for the year was in late April at 107 listings. However, sales at current prices have slowed, with another week of zero sales. That makes two out of the last four weeks in Crook County with zero closed transactions. Before the first week of zero sales in late November 2023, every week going back to July 2022 shows closed sales. Considering the time of year, I wouldn't put too much weight on the absence of closings, although it indicates slow sales for the county. 

Jefferson County shows eighty active listings, down one from last week and the same as three weeks ago. This week last year shows eighty-three listings. Like Crook County, Jefferson County has reached a stasis point for the current low inventory environment. With five pending sales and three closings, Jefferson County shows typical activity for the week. Even though sales are down, price reductions are trending below 5% of the asking price. While there are certainly deals available in both Jefferson and Crook County, with such limited inventory, there is a hard floor on how low sellers are willing to go. 

This morning in Sisters, thirty-eight active single-family listings are at a median asking price of $972,500. One pending sale at 585k, with five closed sales at a median of 890k, wrap up the weekly activity. There is tremendous diversity in price and the type of property listed in Sisters, giving buyers with specific needs few options. 

For 2022 year-to-date in Sisters, 211 homes sold at a median of 750k and seven days on the market. For 2023, sales are down to 173, a median of 720k, and 26 days on the market. While this year may not be as red-hot as 2022, sellers have a solid advantage based on the remarkably low inventory. Without more homes for sale, it is unlikely conditions will change significantly in Sisters. Unique properties in great locations are still selling quickly. Of the available single-family homes, six are new construction at a median asking price of $812,400. Sisters is such a beautiful community with excellent access to hiking, the Pacific Crest Trail, Hoodoo Ski Resort, and the Metolius River that it is not surprising it is one of the most desirable locations in Central Oregon. 

There are no active listings in nearby Camp Sherman, but ten sales year-to-date at a median of $765,500. Camp Sherman sits at the headwaters of the Metolius River in the shadow of Black Butte. Many homes available in Camp Sherman are on the Metolius River, and sales are brisk, so act fast if something comes up! No matter the market conditions, Camp Sherman properties do not sit for long.

Rounding out the Sisters options is nearby Black Butte Ranch, an idyllic resort community with golf and recreation opportunities abound. There are seven properties in Black Butte Ranch at a median sale price of $1,595,000, with one pending sale listed at 825k. Fourteen homes sold year-to-date at a median of $1,090,000 and forty days on the market. Contrasted with sixteen sales year-to-date 2022 at a median of $1,320,000 and seven days on the market, Black Butte Ranch activity is strong. Like Sisters and Camp Sherman, the properties available are diverse and limited, and I would refrain from reading too much into the lower median sale price. In communities like these, lower prices year-over-year have more to do with the mix of homes sold than price retreats. 

Stay tuned next week as I break down the activity of another community in Central Oregon!

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