My Weekly Central Oregon Real Estate Blog

Winter time in Central Oregon is beautiful, but it can wreak some havoc on your home if you haven't prepared properly. Whether you are preparing your home in Central Oregon for sale or you own a home you love in the Bend area, we have some tips to help you keep you winterize your home this fall to prepare for the colder months.

1. Check your attic insulation

A well-insulated attic is one of the best things you can do for an efficient home, maximizing the efforts of your HVAC system. Consider hiring a professional to assess the condition of your current insulation to determine whether upgrading it might be beneficial for your home.

When you are considering your insulation, pay attention to R-value. The higher the R-value of your insulation, the more efficient it is. Talk to a local professional about the recommended R-value range for your location and consider investing in your home to get it within that range.

2. Seal air gaps

Air gaps are a common source of inefficiency in a home. Whether your home is older and has settled a bit, or simply wasn't perfectly sealed when it was built, sealing up these gaps can do wonders for keeping your home warm and cozy (as well as saving you wasted money on heated air that is leaking out of windows and doors).

Some leaks will be easy to identify yourself, by inspecting doors, windows, and the spaces behind your stove and dryer. If you'd like to be sure about the leaks in the home, consider scheduling a building pressurization test. This test involves a professional lowering the air pressure in the home by using a fan to blow air out of the house. All obvious holes (doors, windows, chimneys, etc.) will be closed so that any air escaping will be more easily identifiable.

3. Clean your dryer vents

Dryer vents should be routinely cleaned, but we know not everyone keeps up with them. Before winter begins, make sure you have cleaned yours out to avoid fire hazards and inefficient drying from the machine. Cleaning these vents out will also help prevent pests and critters from deciding they are a cozy place to call home this winter.

4. Test your smoke detectors

It's best to check your smoke detectors all year long, but they are particularly important during the winter. Check that the batteries in your smoke detectors are fresh and run a test to make sure they are working properly.

During the colder months, you may be cranking up your heater, lighting a fire in the fireplace, using a space heater, or turning on your stove and oven more often. There are increased risks during the winter because of these, so give yourself the gift of peace of mind by making sure your safety mechanisms are working as they should.

5. Replace HVAC filters

An easy winterizing task you can check off your list is replacing your HVAC filter. Before your furnace enters its busy season, make sure airflow will not be obstructed by an old filter. Efficient airflow will help keep your home more comfortable and keep your bill lower too.

6. Insulate your pipes

If you live in an older home, your pipes may not yet be insulated. This is what puts pipes at risk of bursting due to below-freezing temperatures, hence the old advice to leave faucets dripping when you go out of town during the winter. If your pipes are insulated, you won't have to worry about this.

Consider adding foam insulation to your pipes, especially those located in exterior walls. This is a relatively quick and affordable home improvement project that can save you some major headaches and expense in the future.

7. Clean your gutters

Your gutters will be much easier to clean before the temperatures drop below freezing. Clear gutters are essential to keep frozen water away from the house, helping you avoid flooding and other issues that can be created by this common problem.

8. Drain and shut off exterior water

Before the first freeze, make sure to drain and shut off and water sources outside the home. Blow out the irrigation system, shut off the water source to it, and pay attention to any other water outside that might be in landscape features or pools.

9. Check your roof and chimney

Hire a professional to check on the condition of your roof, and your chimney if you have one. While we don't get much snow in Bend compared to some places, a roof in poor condition can still be aggravated by even a small snowstorm.

For the health and safety of your family, your chimney should be inspected before you begin using your fireplace again for the year.

If you would like to learn more about living in Central Oregon or search for houses for sale in Bend, we can help. Contact us any time.

The sale price of homes in Central Oregon has been remarkably resistant to falling off in the face of higher interest rates due to the balance between the volume of buyers and available inventory. While the total sales volume of single-family homes in Deschutes County thus far in 2023 is 2,861, nearly one-thousand fewer sales than in 2022 (3,858), the median sale price is down only 3%, so far this year at 645k. Although, with yesterday's national average for a 30-year fixed-rate mortgage at 7.9%, we are beginning to see segments of the market disproportionally impacted by the high cost of credit, in addition to tighter lending practices. The Central Oregon housing market is increasingly bifurcated roughly above and below the median sale price. 

The outlying areas of Central Oregon are showing the impacts of higher borrowing costs, with inventory increasing by four homes in Jefferson County and four in Crook County. At the same time, Deschutes County had another drop, now at 838, down sixteen from last week. Jefferson County now has eighty-three active listings, and Crook County has 148.

Pending sales in Jefferson County were a typical four homes last week, with the median sale price a robust 538k. However, the median sale price of the three closed transactions was 290k, with the median price reduction of those sales at 3.15%. With so few transactions in Jefferson County, it would be a mistake to draw too much from the weekly numbers, although a median sale price below 300k is something to note. Total sales year-to-date in Jefferson County are down 39.86%, the most significant drop of the three counties of Central Oregon, with the median sale price down 6.3% at 375k so far this year. Other than some larger farm properties, most of the inventory in Jefferson County are lower-priced single-family homes and higher mortgage interest rates disproportionally impact the lower price points. 

Crook County year-to-date sales are down 15.2%, the smallest drop of the three counties of Central Oregon, but the median sale price of 445k is a 6.3% drop from last year, the biggest of the Central Oregon Counties. While the mix of available properties in Crook County is more diverse than in Jefferson County, the golf community of Brasada Ranch, located in the county, skews the data significantly. The only pending transaction this week was in Brasada Ranch, at $1,625,000 at a -1.52% drop from the original list price. Our MLS data will reveal the negotiated price of this transaction once the transaction closes. Five transactions closed in Crook County last week at a median price of $570,600, but two of those transactions were in Brasada Ranch. Removing the Brasada properties from the list drops the median closed price to $302,665. 

Deschutes County's declining inventory contrasted with fifty-six sales and sixty-one pending transactions. The median price of pending sales was $750,000, and the closed median sale price was $668,374. Year-over-year sales to date show the median price down only 3%. Two weeks ago, that number was 4.6%, and the decrease was above 5% a few weeks ago. Here is where the bifurcation becomes readily apparent, as the price gap closing is due to fewer sales below the median and a bigger percentage of more expensive properties selling relative to total sales. The median sale price year-to-date in Deschutes County below $1M is down 4.8% at 599k, while the median above $1M is up one thousand dollars, basically flat. These comparisons are not stark but are glimpses into how the market is evolving in the face of higher (for longer) interest rates. 

The lower-priced properties in Crook and Jefferson Counties and many homes outside of the Bend City Limits are the most likely to reduce the price before a sale and more open to a lower-priced offer than at any time during the last housing price increase cycle. If your focus is on properties below the median sale price, now is a great time to keep current on the market and specific properties that catch your eye. 

The real estate industry churns out a lot of ridiculous propaganda encouraging buyers to dive in; the water is fine! One of those narratives revolves around the flood of buyers likely to hit the market when interest rates retreat. While it is reasonable that lower rates will make life easier for buyers, I do not anticipate a rapid turn in rates and a correspondingly robust economy, all timed in such a way as to push home prices up at the first sign of lower rates. There is little doubt that a strong economy, qualified buyers, and lower rates will put upward pressure on prices. Still, it isn't easy to imagine all of that happening below the median sale price in the next several months. 

Most metrics of years past would indicate a recession today, but the definitions have changed, and the "experts" call our current environment a "technical recession." Without going too deep into the machinations of the Federal Reserve, they do have an almost perfect record of missing every recession before it hit. Looking back to the nonsense narrative about transitory inflation is the most recent missed prediction of the Fed, which seems least likely to predict the outcome of their policy decisions accurately. Jamie Dimon, CEO of JPMorgan Chase, recently chastised the Fed's policy decisions and lamented the markets driving interest rates with current bond yields soaring. Dimon predicted the Fed would need to chase the market to give the impression they were not losing control of interest rates and predicted an overnight rate of over 7% compared with today's 5.25% rate. Priya Misra, a portfolio manager at JPMorgan Asset Management, said that despite not being able to point to specific data indicating a recession, "A hard landing is sort of our base case scenario."

Some of you will think of me as Chicken Little, but keeping an eye on more than just the housing market gives insight into where we might be heading. Being cautious in this market will never hurt, but making assumptions that everything is fine could. There is little question that owning real estate for the long haul will be a smart move, and I continue to remain bullish on Central Oregon. However, I strongly caution anyone in the market today to avoid any short-term scenarios that rely on significantly lower interest rates to be viable. Central Oregon real estate is incredibly diverse, and there is little doubt that some areas will be more resistant as the next chapter of the housing market unfolds. Many of my clients are looking at our community from outside Oregon, and I encourage you to reach out with questions about specific properties and locations. I am intimately familiar with the communities of Central Oregon and have tracked the data for years. I may not have a crystal ball, but I do have reams of data I have collected that help paint a picture of what is likely moving forward. EnjoyBendLife.com has myriad options for researching Central Oregon properties and trends, but my personalized reports go even further. Do not hesitate to ask for a detailed analysis tailored to your specific needs.

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Bend has become an increasingly popular destination for both tourists and real estate investors in recent years. Its stunning natural beauty, recreational opportunities, and vibrant community make it an attractive location for those looking to purchase an investment property.

If you are considering an investment property in Bend or other communities in Central Oregon, we can help. Contact us any time to learn more about real estate in Central Oregon, and keep reading for more information about finding the right investment property for you.

Why Bend for an investment property?

There are many reasons Bend is a great option as you consider where to invest in real estate. Often referred to as the "Outdoor Playground of the West," Bend property owners benefit from a steady stream of tourists and incoming residents that represent demand for both short and long term rental properties. Bend's tourism industry has been on the rise, attracting visitors from all over the country and the world. Known for its outdoor activities like hiking, biking, skiing, and fishing, as well as its craft breweries, Bend offers year-round attractions. As a result, the city has a strong demand for vacation rentals, making it an ideal market for potential investors.

There is also a steady demand for houses for sale in Bend, meaning this can be a great place to flip homes. Bend's real estate market has seen steady appreciation in property values over the years. While past performance is not indicative of future results, this trend suggests the potential for long-term investment growth.

It is reasonable to expect that demand for housing, and thus property values, will continue to increase in the coming years. Bend consistently ranks as one of the best places to live in the United States. Its excellent schools, low crime rate, and access to outdoor amenities contribute to a high quality of life. These factors make Bend a desirable location for both residents and vacationers.

Bend's economy is diverse and robust, with a growing job market and a business-friendly environment. The city has seen significant growth in various industries, including technology, healthcare, and tourism. A stable job market and healthy economy are favorable conditions for property investments.

What type of investment property is right for you?

There are a variety of ways you can get into real estate investing, and diverse properties to choose from in the Bend area. Take some time to consider why type of property is going to the be the right fit for your goals.

You can choose to buy a condo, single family home, townhome, or other property and lease it to long term tenants. There is steady demand for this type of property in Bend, in addition to many of the surrounding areas. A long term rental property will generally require less maintenance and ongoing work from you in comparison to a short term rental, and can be a more predictable source of rental income.

Another option is to purchase an investment property that you will renovate and sell for a profit, often called a "flip." Both in Bend and many of the surrounding areas, you can find real estate that is ready for some TLC. If you have the funding, expertise, and time to put into this type of project, it can be a great way to turn a significant profit in a relatively short period of time.

Short-term rentals are another strategy you might choose, and have become increasingly popular in recent years. Central Oregon has become a popular destination for tourists, offering access to abundant outdoor recreation opportunities without begin too far from the impressive restaurant scene and amenities in Bend. Short term rentals can be quite lucrative, but require more ongoing maintenance and property management.

There is no one best way to invest in real estate in Bend, but choosing the type of property you want to invest in will help guide your search.

Tips for Finding the Right Investment Property in Central Oregon

After you have defined your investment goals and narrowed down the type of property you are looking for, it's time to start looking for your ideal property. Here are some tips to help:

• Work with a local real estate expert who can guide you to the right properties, possibly even connecting you with homes for sale before they hit the market. Contact us any time to find out more about how we can help you reach your investment goals in Bend.
• Choose a location in Bend that makes sense with your objectives. Bend offers a variety of neighborhoods and communities, each with its own appeal and potential for investment. Consider factors like proximity to recreational amenities, schools, and commercial areas when choosing a location for your investment property.
• Familiarize yourself with Oregon's landlord-tenant laws, property tax rates, and any local regulations that may apply to your investment.
• Before finalizing your purchase, conduct a comprehensive inspection of the property. Identify any necessary repairs or maintenance, and factor these into your budget. A well-maintained property is more likely to attract tenants and appreciate in value.

Ready to learn more about homes for sale in Bend or Central Oregon real estate? Contact us any time.

In December 1990, the national average for a 30-year fixed-rate mortgage broke below the 10% barrier for the first time since October 1974. During Paul Volcker's tenure as the Fed Chairman, rates peaked at 18.45% in October 1981 to gain control over spiraling inflation. In March 2009, rates dropped below 5% for the first time in the modern era of mortgages and stayed below that threshold until April 2022. Since breaking through 5% mortgage interest rates in April last year, rates have increased dramatically, with yesterday's rate at 7.92%. While rates have been higher in the past, the price of homes today, even adjusted for inflation, puts affordability at historic lows. The average home buyer paying 18% in the 1980s was not looking at $775,000 homes. Today's median list price in Deschutes County is 775k, the equivalent of 229k in 1981. The furthest back my data goes for Deschutes County is 1997, when the median sold price was 133k for a single-family home. 

Depending on your perspective, the above numbers are discouraging or enlightening. While it is correct that real estate appreciates over time, the question today is whether a price crash is on the horizon. The catalyst for a significant price correction is missing from the equation with the inventory of homes for sale at all-time lows. This week, the median price reduction for sold single-family homes in Deschutes County was -4.92%, a far cry from a correction many anticipate. 

With many potential sellers sitting on mortgages near 3%, the lack of new listings drives today's trends more than the record buyer demand of the previous cycle beginning in mid-2020. Year-to-date sales for 2023 are 2624, down from last year's 3521. Last year's inventory for this week was 890 homes, while this morning, there are 854 homes listed. Pending sales for this week last year were fifty-six, with fifty-four this week. As mortgage rates increase, fewer sellers list houses, and the balance of homes versus buyers remains intact. The median sale price year-to-date 2022 was 690k for Deschutes County; this year, it is 660k. 

While further modest declines in home prices could occur, any significant moves are unlikely without an increase in homes for sale and days listed. However, pent-up buyer demand will undoubtedly increase buyer competition when rates eventually decline. Timing the market is not recommended, but there will surely be a "sweet spot" between falling rates and home prices. Nevertheless, it is likely easier to purchase at a lower price and refinance than to try and accomplish both simultaneously. Also, with seller credits towards a buyer's closing costs and rate buy downs, it is common for buyers today to lock in a first-year interest rate 2% below today's national average.  

Like many desirable parts of the country, housing supply in Central Oregon is lacking relative to the in-flow of new residents. Many of my clients are more challenged to find the right home than by prices. When the right property is available, waiting for better pricing only to lose out to another motivated buyer is devastating. The more specific your needs, the more challenging it can be to find the right home. How long will you put your dream of Central Oregon on hold?

No matter what type of property you seek, using a long-term focus is best when looking at your return on investment. Every property owner wants to make a good decision, and using online calculators to estimate value can be fun in a rising market. But calculating intermittent unrealized gains holds little importance unless you want to sell. Buy and hold is where the magic of real estate shines, and looking back to the median of 133k in 1997 for Deschutes County is a perfect example! The median buyer in 1997 who put 20% down on a 30-year fixed-rate mortgage has approximately three years left to pay off the loan at a monthly payment of $750. As high as today's prices seem in comparison, does anyone believe homes will be cheaper than they are today in twenty-five years? Granted, most homeowners do not stay in the same property for the life of a 30-year loan, but the power of time works on every owner's behalf.

Whatever your strategy, contractions in the economy do not last long. If you are waiting for the bottom of the market, staying current on trends and pricing is imperative. The same is true for those of you targeting unique properties in Central Oregon. In many ways, it is more work to monitor the market for change than diving in, and that is why I write these reports every week! As always, if you are interested in a specific neighborhood or metric, let me know, and I will be happy to create a personalized report that fits your needs. 

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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!

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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! 

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Buying a fixer upper is a brilliant way to get the most out of your housing budget, and can be particularly appealing for those looking to combat affordability challenges in 2023's housing market. Whether you are planning to flip the house or renovate it for your personal home, we can help you find homes for sale in Central Oregon that will be your ideal fixer upper property. Contact us any time to learn more.

Central Oregon is a region known for its breathtaking natural beauty, outdoor recreational opportunities, and a thriving real estate market. If you're on the hunt for a fixer-upper, Central Oregon offers a unique blend of potential, affordability, and lifestyle that can make your dream of owning a charming, renovated home a reality. Wondering where to buy a fixer-upper in Central Oregon and what you should consider when embarking on this exciting journey? This post is for you.

Bend: The Heart of Central Oregon

Bend, the largest city in Central Oregon, is a prime location for finding fixer-upper homes. It's a vibrant and rapidly growing community known for its outdoor activities, craft beer scene, and cultural amenities. Bend offers a variety of older homes, from historic bungalows to mid-century houses, that can serve as great renovation projects. Neighborhoods like Old Bend, River West, and Larkspur are particularly popular for fixer-upper enthusiasts.

Pros:

• Abundance of amenities, restaurants, and entertainment options.
• Strong job market and economy.
• Excellent schools and community services.
• Proximity to outdoor attractions like Mt. Bachelor and Deschutes River.

Cons:

• Higher property prices compared to some other Central Oregon areas.
• Competitive real estate market, especially for fixer-uppers.

Redmond: Affordable Fixer-Upper Opportunities

Redmond, which is located just north of Bend, is known for its more affordable real estate market. It's a family-friendly community with a growing downtown area and a variety of fixer-upper options. Neighborhoods like Terrebonne and Tetherow Crossing often have homes in need of renovation at reasonable prices.

Pros:

• More budget-friendly compared to Bend.
• Steady job growth and development.
• Close to Smith Rock State Park and other outdoor attractions.
• Community-oriented with a small-town feel.

Cons:

• Slightly longer commute to Bend and some other Central Oregon destinations.
• Smaller selection of amenities and entertainment options compared to Bend.

Sisters: Quaint Fixer-Uppers

Located northwest of Bend, Sisters is a charming town known for its Western-style architecture and strong sense of community. If you're looking for a smaller, more intimate community in Central Oregon, Sisters may be the perfect place to find your fixer-upper. Look for homes in the historic downtown area or surrounding neighborhoods for renovation potential.

Pros:

• Peaceful and scenic environment with a strong sense of community.
• Quaint, Western-themed downtown with boutique shops and restaurants.
• Proximity to outdoor activities like hiking, biking, and skiing.

Cons:

• Limited job opportunities within Sisters; many residents commute to Bend or Redmond for work.
• Fewer amenities and services compared to larger cities.

Prineville: Affordable Gems

Located to the east of Redmond, Prineville is a small, friendly town known for its affordability and rural charm. Fixer-uppers in Prineville can be significantly more affordable than those in Bend or even Redmond, making it an attractive option for budget-conscious buyers.

Pros:

• Extremely affordable real estate prices.
• A quieter pace of life with a strong sense of community.
• Proximity to Prineville Reservoir State Park for outdoor recreation.

Cons:

• Limited job opportunities in town; some residents commute to larger cities.
• Fewer urban amenities compared to larger Central Oregon cities.

Madras: Up and Coming

Madras, situated to the north of Bend, is an up-and-coming city with growing potential for fixer-upper opportunities. As Central Oregon's population continues to expand, Madras is becoming an attractive option for buyers seeking affordability and investment potential.

Pros:

• Affordable real estate prices and the potential for property appreciation.
• Proximity to the scenic Lake Billy Chinook and Cove Palisades State Park.
• A developing downtown area with new businesses and services.

Cons:

• Fewer job opportunities within the city, but potential for growth.
• Limited cultural and entertainment options compared to larger Central Oregon cities.

Ready to find the right fixer upper in Central Oregon for you? Contact us any time.

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. 

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I recently predicted that rates would increase another 25 basis points in today's Fed meeting. However, the tea leaves point towards a hold rather than an increase. While that is excellent news for the mortgage markets, which have been relatively stable lately, there are no indications of a pivot anytime soon. Powell and company have clarified that a November increase is still on the table. Still, judging by recent trends, that narrative may be as much to scare the markets from becoming overly jubilant as an actual increase. Although, I wouldn't get too excited about the recently favorable dip in the CPI as disinflation is most likely what is transitory. One thing seems clear: the Fed's commitment to keeping rates higher longer.

Last week, the peak inventory in Deschutes County occurred for the year; the exact week inventory peaked in 2022. This morning, there are 892 single-family homes listed, compared to 921 the previous year. Year-to-date sold homes in 2022 were 3,173 at a median of 695k and seven days on the market, compared to 2,380 at a median of 660k and twenty days on the market this year. The drop in sales is now 25% year-over-year, with the median sale price down 5%. However, the gaps are narrowing as the year progresses. I do not anticipate total sales volume will catch up with 2022, but the median sale price increased this week. Comparing this week with the same week in 2022 shows a 2.4% increase in the median sale price and a two-day drop in the median days on the market. Last week's median sale price was 745k, with eighteen days on the market.

Crook County also saw a drop in active listings, but it is higher than this week last year. The number of active listings in Jefferson County increased this week but is three less than this week last year. Both Crook and Jefferson County have single-digit pending and sold volume weekly, so the median numbers are not as reliable for evaluating the market. Year-to-date, Crook County sales are down 18.4%, with the median sale price down 6.1%. Jefferson County sales are down 42.2%, and the median sold price dropped 4.75%. 

Many homes on the market today have been listed for several months, with the median days listed for the active inventory at sixty-one. Many sellers today have already reduced the asking price and are likely open to offers in an effort to close this year. Fall is always a great time to be a buyer from a seasonal standpoint, and this year is no different. For buyers that can qualify at today's rates, a seller credit towards a rate buydown will get you in the 6% range and, for some, into the high 5s. Using a 2-1 buydown, which would provide a two-point reduction in year one, a one-point decrease in year two, and then the quoted rate at the time of a rate lock in years three through thirty, makes purchasing today far more attractive. Seller credits towards a buydown are a frequently used tool in today's purchasing environment. If mortgage rates concern you, I strongly encourage a conversation with a local lender to see what is available in your situation.

More and more people are asking questions about vacant land purchases, and I know a few lenders that can help. Many undeveloped land options in Central Oregon will require a well and septic system, which I have extensive experience researching. In addition, there are many recreational lots, off-grid lots, and Exclusive Farm Use zoning that I have studied throughout Central Oregon. Don't hesitate to contact me if you are digging into these options so I can help you decide if any of these properties could work. Remember that in some cases, the community CC&Rs can add a more restrictive element to building or developing vacant land. It is imperative you know everything about a vacant lot before making an offer to prevent disappointment in the future. I research these properties regularly and am happy to be a resource.

There are several active weeks in the real estate market before the holidays, and winter weather slows activity further. This fall has been beautiful, and the cooler yet pleasant temperatures make researching property and touring homes a pleasure. It won't be long before snow makes evaluating lots and land more difficult. If you are waiting for spring to get serious about a purchase, I still recommend researching today to get familiar with your target areas. For some properties, snow can linger into May or beyond, so walking lots or touring areas today can help you make a quick decision if something you love comes up this spring. 

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While the number of homes listed for sale in all three counties of Central Oregon ticked up slightly this week, prices are also up compared to this week in 2022. The average listing price of a single-family home in Deschutes County this morning is nearly $1.1M, compared to 739k this week last year. The pending sale average price this week is 865k, up from 650k last year, and the sold homes this week had an average price of 782k, up slightly from 752k last year. The slight increase in available homes is nowhere near enough to soften prices, even more so when you divide the inventory by all the different communities in Deschutes County. After filtering by home size, price, and other desired features, most buyers realistically have only a handful of options. 

This time of year is typically active as buyers look at the best opportunity of the year, and sellers are motivated to close by year's end. However, as some sellers become realistic about price and make adjustments, knowledgeable buyers are wasting no time scooping up the deals. Now is not the time to drag your feet if you see a price drop on a home that suits your needs. I would encourage any serious buyer to make an offer and negotiate rather than wait for further price drops. Many buyers are not messing around with holidays and winter weather quickly approaching!

As mentioned last week, I expect interest rates to stay elevated through spring 2024 and another rate hike from the Fed next week. However, rates have been relatively stable over the last few weeks. Yesterday afternoon, the average for a 30-year fixed-rate mortgage was 7.25%. We have witnessed significant changes in rates either motivate or stall buyers, and the recent stability has calmed the market somewhat. However, there is no question many buyers are either priced out of the market with historic unaffordability due to rates or are waiting for a correction. A correction this year is extremely unlikely without a significant increase in available homes, and new listings have started the seasonal decline. This year, the low inventory point in Deschutes County was 485 homes listed on March 1, with the high today at 909, up two from last week.

Waiting for more inventory and suitable homes may be the best strategy for some buyers, although I do not anticipate buying conditions improving significantly. Even with reduced sales, motivated buyers are snapping up the great homes. The pent-up buyer demand creates a frenzy when excellent properties hit the market, with buyers jumping at the opportunity. If waiting is the best move for you, I encourage you to stay engaged with the market and not waste any time when you see a home you like. It will be evident if the economy falters, creating a more significant issue. Otherwise, I expect our competitive market to continue.

Significant improvement for buyers may not be on the horizon, but neither are escalating prices. Mortgage rates will likely peak over the next several weeks and remain high for the foreseeable future. The analysts I follow are calling for flat home prices through 2024, making a repeat of conditions this year the likely outcome.

Many buyers today face the problem of waiting or buying a home that isn't necessarily their first choice. In many cases, there isn't much variety of available homes. Readers of these reports know I always recommend a long-term view of homes, especially in what could be flat pricing over the next year. However, a compromise to make Central Oregon home might be better than delaying months or even years waiting for the perfect property. No matter your decision, that is a highly personal choice that only you can make. Whatever suits you, I am always available to help you sort through the options. 

Year-to-date, there have been 2,309 sales of single-family homes in Deschutes County, and I expect ~2,800 total sales by year-end. For comparison, there were 3,090 year-to-date sales in 2022, 33.8% more than this year, with similar inventory levels throughout the year. The comparison between sales and inventory illustrates how few sellers are active today, likely with low mortgage interest rates as motivation to sit out the market. There is likely as much pent-up seller demand as buyer demand. What might entice more sellers into the market remains to be seen but likely revolves around interest rates. Buying at higher rates today and using a rate buy-down until a refinance makes sense could be the best strategy, as lower rates will most likely set off a frenzy of activity that will keep prices firm. 

Last week, I mentioned investors pulling back and short-term vacation rental underperformance as potential contributors to increased inventory and lower prices. There is little doubt those could contribute to a change in the housing market, but a lot would need to happen all at once to make a significant impact. If I could predict those events accurately, I'd likely not be working as a real estate agent! While I am current on economic affairs and the Central Oregon housing market, my prediction abilities only project a few months into the future. As always, I welcome the insight of my clients and your experiences outside of Central Oregon. How are things in the communities you currently call home?

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