My Weekly Central Oregon Real Estate Blog

Every Wednesday morning, when compiling the data from the previous week, my preconceived notions of where the market is heading are challenged. While looking at homes and evaluating our inventory daily, I also read a lot of national news about data trends and speculation about the economy. Like most, the information influences my opinions, and it is easy to believe the market is moving in directions that do not align with reality. Unlike the information I present, which is accurate in real-time, most of the national data on real estate is thirty to forty-five days old. I am keenly aware that the national data is stale, and I prepare myself for the local data I pull from our MLS to challenge any beliefs I may have taken on during the week. This week, I believed signs of the market slowing with higher mortgage interest rates could develop. The data shows my assumption to be completely inaccurate. 

Jefferson County's inventory of single-family homes dropped by two, now at seventy-three, while Crook County increased by seven to 156. Deschutes County has 861 single-family homes listed, an increase of one. This week last year, there were 957  single-family homes listed in Deschutes County, with two more weeks of increased inventory before the seasonal decline. The inversion of inventory numbers year-over-year has only increased, putting pressure on buyers waiting for relief. This week's median pending sale price in 2022 was 660k. Despite higher mortgage interest rates, the median sale price for the previous seven days was 710k. While yesterday's national average for a 30-year fixed-rate conventional mortgage was 7.04%, rates through this year have fluctuated between 6-7%. The rate volatility has been head-spinning, but the range has been remarkably consistent. Nonetheless, buyers have seemingly embraced higher rates, with ninety-four pending sales in Deschutes County this week, the highest since late August 2022.

Speaking of rates, I believe the Fed will raise another twenty-five basis points today. I also expect another twenty-five basis point hike before year-end. Beyond that is anyone's guess. 

The high sales volume and low inventory have combined to create firm prices despite higher mortgage rates. A $50,000 increase in the median pending sale price is not insignificant. I expect strong sales through Labor Day as any buyers biding their time are now taking action on the available inventory. In this market, I have often been evaluating what a property might sell for today, only to see the home be placed under contract before a client can make an offer. Questioning prices is a healthy exercise with value, but conditions today leave little time to ponder. Presenting low-ball offers in today's market can backfire when other buyers are more than willing to offer the asking price.

With market conditions still strongly favoring sellers, knowing how many buyers are evaluating a particular home is impossible. It is also difficult to predict potential sale prices with so many willing buyers chomping at the bit to secure a property. When a property that fits your needs comes up, presenting an offer in the early days of a new listing is a great first step. In many cases, coming in under asking isn't a dealbreaker, but ideally, the price would elicit a counteroffer. Unfortunately, offers so low that a seller rejects them completely don't give any insight into a seller's temperament. Begging back after a rejected offer requires a price and terms that might be even higher than what could have been negotiated by starting closer to the asking price. For reference, the pending sales in Deschutes County this week had a median price reduction of -6.13%. There is no question some properties have aggressive price tags and may take more significant cuts, but that is the exception, not the rule.

With the unaffordability crunch at all-time highs, it is understandable that buyers are having difficulty wrapping their heads around prices. Testing the market with lower offers is not a bad strategy, but in my experience, buyer fatigue sets in rapidly, as nobody likes multiple rejections. Regular readers of my reports can guess that this is where I espouse the benefits of a long-term view of housing. With equal amounts of reporting predicting a solid economy and catastrophic doom, it is impossible to figure out what comes next. The recent strength in the equity markets seems to be thumbing its nose at the likes of Peter Schiff predicting doom. At the same time, I enjoy reading "Dr. Doom's" analysis, but living like Chicken Little can be exhausting. 

Our economy and the housing markets have become increasingly complex. While there may be issues of concern, having the stars align perfectly to create a significant drawdown in home prices has proven elusive. I recently read that there are 60% more short-term rental properties than homes for sale nationwide. Conditions in the large west coast cities are not improving, and the exodus to areas like Central Oregon continues. With commercial properties in San Francisco seeing nearly 30% vacancy rates and work-from-home here-to-stay for high-income employees, buyer demand has not subsided. Whatever your long-term view of real estate, none of these factors will significantly impact home prices in 2023. Many analysts are predicting further home price increases in 2024. Over the last several years in Central Oregon, waiting has proven costly. 

The flip side of strong buyer demand is a strong seller's market. However, accurate pricing is imperative to maximize your sale. The tools on EnjoyBendLife.com are second to none but are not a replacement for my local knowledge. If you are considering selling your home, allow me to run a detailed market analysis to see if my price opinion aligns with yours. I am available and always happy to share my perspective. 

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Bend is a great place to raise a family, with several neighborhoods that are well-suited for young families, providing a combination of family-friendly amenities, quality schools, safety, and a sense of community. If you are searching for homes for sale in Bend, contact us any time, and consider one of these neighborhoods in your search.

Choosing a Neighborhood in Bend for Your Family

Understanding your own wants and needs as you look for a home for your family will help immensely in the house hunting process. Each of these neighborhoods, and others, offer different features that may be a top priority for you. Take some time to ask yourself questions like these to help guide your decision making process:

• How long a commute am I willing to have?
• Which schools would I like to be close to?
• How important is walkability to my family?
• What community amenities do I want to have access to?
• Do I want to live in a neighborhood with an HOA?

Northwest Crossing

Located on the west side of Bend, Northwest Crossing is a desirable master planned community known for its family-friendly atmosphere. The neighborhood features parks, playgrounds, and walking paths, creating ample opportunities for outdoor activities. It offers a strong sense of community with regular events and even a farmer's market. Residents of Northwest Crossing also enjoy convenient access to excellent public, charter, and private schools in the area.

Larkspur

Larkspur is a newer neighborhood on the southeast side of Bend, offering a mix of single-family homes and townhouses. The community features parks, open spaces, and a community pool, providing ample opportunities for recreation. Larkspur is close to schools, shopping centers, and medical facilities, making it convenient for families.

River West

Located along the Deschutes River, River West is an established neighborhood that offers a mix of older homes and newer developments. The area provides access to parks, trails, and recreational opportunities like fishing and kayaking, while also being  in close proximity to downtown Bend and its amenities. This is a desirable neighborhood for families who want to enjoy the best of both worlds with restaurants and shops  just as close as wide open scenic areas.

Old Farm District

Situated in the southwest part of Bend, the Old Farm District is a popular neighborhood for families. It offers a mix of older and newer homes, with tree-lined streets and parks. The neighborhood is close to schools, shopping centers, and recreational facilities, making it convenient for families with children of all ages.

Mountain View

Mountain View is located in the northeast part of Bend and is known for its affordability and family-friendly environment. The neighborhood features parks, schools, and a community center with activities for all ages. Mountain View is well-connected to amenities, including shopping centers and medical facilities.

Tetherow

Tetherow is a more upscale neighborhood situated on the west side of Bend. It offers luxury homes and community amenities that include a golf course, fitness center, and restaurants. The neighborhood has a strong sense of community and is located near schools and outdoor recreational opportunities.

Ready to learn more about finding homes for sale in one of these Bend neighborhoods? Contact us any time.

This morning there are 860 single-family homes listed for sale in Deschutes County, -9.2% less than this week last year. The median list price of the active inventory is 840k, up from 778k. The median days listed this year is forty-seven, up eleven from last year. At this time last year, the market was slowing after a spike in homes for sale that corresponded with rising mortgage interest rates. However, the national average for a 30-year fixed-rate mortgage was 5.87% compared to 6.88% yesterday afternoon. Still, today's market has been remarkably stable compared to last year, when sellers adjusted to fewer buyers than in 2021 and the first half of 2022. 

Once the housing market began the typical spring increase in activity this year, the sales volume remained consistent with sales from the second half of 2022. There is little doubt that higher mortgage interest rates have sidelined many buyers, reducing sales from the 2021 and early 2022 frenetic peaks. Although, the lack of inventory has been a contributing factor. 

Year-to-date 2022, there were 2462 sold single-family homes in Deschutes County compared to 1674 this year. But, those comparisons are very much apples and oranges when considering the market conditions and buyer sentiment. From July 20, 2022, through year-end, there were 1667 sales at a median of 661k and twenty-two days on the market. The second half of 2022 looks strikingly similar to the first half of this year, with 1674 sales to date at a median of 645k and twenty days on the market for closed transactions. Barring any market-shocking events between now and year-end, I anticipate approximately 3500 sales for the year. 

For perspective, my data for Deschutes County sales goes back to 1997, showing 2003 as the first year sales exceed 3000 total transactions. That was the beginning of the housing bubble of that era, and interestingly mortgage interest rates mid-year were 5.26%. After a significant slowing in late 2006, the next years with total sales above 3000 were 2010-2013. From 2014-2019 sales were in the 4000s before the massive spikes of 2020-2021, with sales exceeding 5000. Last year's total sales were 4130, and mortgage interest rates mid-year were 5.7%.

Smoothing the data from 1997 through today is of little utility as market conditions, population growth, and the entire socioeconomic landscape has changed dramatically over the years in Central Oregon. Commercial property vacancy rates in large west coast cities are approaching 30%, and working from home is a part of the lexicon previously reserved for sick days. I frequently hear people talk about returning to a "normal" market, and many of the data points above illustrate how difficult it is to identify what that means. Housing is in continuous transition, new residents are targeting Central Oregon, and factors like short-term rentals have clouded market dynamics. 

So, what is normal today? While I cannot answer that meaningfully, I suggest focusing on your long-term goals and working with what is available. Recently mortgage interest rates have been a significant challenge, and it is undoubtedly correct that there have been some short-term spikes. However, the market has been stable for the last several months, and conditions are unlikely to change dramatically up or down. Typically, the median sales price reduction falls at -5%, which looks to continue. That doesn't mean that every home is subject to a five-percent decrease, but it does give some insight into home sale prices relative to the asking price.

In the stock market, there has been a lot of talk about decreased corporate earnings reported in recent data. However, that data is all stale, and stock analysts focus on future earnings. The reduced earnings reported today have already been priced in and do not indicate things to come. Most analysts expect growth in 2024 and beyond, which also applies to housing. It is understandable to be concerned about overpaying for real estate, and careful due diligence is an important step. But, worrying that today's prices will collapse soon is not supported by the data or the overall economy. Buyers and sellers choosing to remain in Central Oregon may have important considerations that make the timing of a sale or purchase essential. However, for out-of-town buyers looking to make Central Oregon home, finding the right property is more of a concern than price. Anyone actively searching for a property in Central Oregon can speak to the diversity of our inventory and the difficulty in finding the perfect home. When the right house comes up, waiting might not be the best option.

My knowledge of Central Oregon housing, neighborhoods, and market trends is unmatched, and I can help you find your perfect home. I regularly provide detailed analyses of specific properties for buyers and sellers looking for assistance evaluating our market. If you need broader breakdowns of the market, my website has all the tools you need to do your own research. Market Trend Reports provide detailed analyses of the active inventory by zip code, and many of my property search pages include sold data to keep you abreast of recent activity. Or, use the home valuation tool to give you an immediate price range for a specific property. Market Trend Reports are updated weekly, and the other data on EnjoyBendLife.com is updated every fifteen minutes! Whether you call me or use the tools available on my website, I always strive to provide everything needed to make the best decision for your needs. 

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In the ever-evolving world of real estate, the year 2023 brings a fresh set of priorities for homebuyers on the hunt for their dream properties. With diverse preferences influenced by location, lifestyle, and personal needs, it is crucial to stay attuned to the latest trends in amenities that buyers commonly seek. In this quest for the perfect abode, certain features have emerged as top priorities, capturing the attention and interest of prospective homeowners. Whether it's a sustainable and energy-efficient living environment, a designated space for remote work, or a seamless integration of smart home technology, the desires of buyers are transforming the landscape of real estate.

Additionally, the significance of outdoor living spaces and wellness-oriented amenities has witnessed a notable surge, reflecting a growing emphasis on balancing relaxation, health, and connection with nature. By exploring these sought-after amenities, both buyers and sellers can gain valuable insights into the evolving landscape of real estate preferences in 2023.

Top 5 Amenities Buyers Are Looking For In 2023

#1 Energy-Efficient Features

With an increased focus on sustainability and environmental consciousness, buyers are seeking properties with energy-efficient features. These can include solar panels, energy-efficient appliances, LED lighting, smart thermostats, and double-glazed windows.

#2 Home Office or Flexible Workspace

The shift towards remote work and flexible schedules has made dedicated home offices or flexible workspaces highly desirable. Buyers are looking for properties that offer a designated space for work or the potential to create one easily.

#3 Outdoor Living Spaces

The COVID-19 pandemic has emphasized the importance of having outdoor areas within the property. Buyers are seeking homes with balconies, patios, or gardens that provide a space for relaxation, entertainment, and connection with nature.

#4 Smart Home Technology

The integration of smart home technology continues to be a popular amenity. Buyers are interested in properties equipped with features like smart lighting, security systems, thermostats, door locks, and voice-activated assistants that enhance convenience, comfort, and security.

#5 Wellness Amenities

Health and wellness have gained significant importance, leading buyers to prioritize properties with amenities that support a healthy lifestyle. These can include fitness centers, yoga studios, saunas, pools, walking trails, or proximity to parks and recreational facilities.

In Conclusion

It is important to acknowledge that buyer preferences in 2023 are not a one-size-fits-all scenario. Location, market trends, and individual needs play a significant role in shaping the priorities of potential homeowners. To navigate the dynamic real estate market successfully, thorough market research becomes indispensable. By delving into the intricacies of a specific area, real estate professionals can gain a comprehensive understanding of the demands and desires of buyers.

This knowledge enables them to align their offerings with the specific amenities that resonate most with potential homeowners, ultimately maximizing their chances of satisfying their client's needs and securing successful transactions. Whether it involves adapting to the growing emphasis on sustainability, accommodating the demands of remote work, or capitalizing on the latest trends in technology and wellness, staying attuned to buyer preferences is key. By continuously assessing and adapting to the changing preferences of buyers, real estate professionals can stay ahead of the curve and create opportunities for both buyers and sellers in the dynamic world of real estate.

For comprehensive details and an in-depth exploration of the thriving real estate market in Bend, I invite you to reach out to me at any time. With a wealth of knowledge and experience in the local property landscape, I'm eager to provide you with valuable insights to assist you in making informed decisions

Surprisingly for this time of year, the inventory of single-family homes for sale in Deschutes County dropped thirty-two, now at 823. That is sixty-four less than this week in 2022. Last year at this time, inventory was still climbing before peaking at 972 on August 10. Remember that less than 1000 homes listed in Deschutes County are historically low, a statistic that is easy to see graphically in the charts of my Market Trend Reports. 

Single-family inventory in Crook County increased by six to 147, and Jefferson County saw an increase of two, now with seventy-six active listings. The median price of active listings was 595k and 455k, respectively. With several weeks of summer remaining, there is a chance for some spikes in the number of homes listed, and buyers actively looking should stay on top of the market if something great becomes available. While the days sold properties are listed has increased slightly, there is still little time to waste if you want to secure a contract on a newly listed home. 

Another surprising number is the median price of active listings, now at 849k, the highest since I started tracking the data in April 2022. The median price of pending listings was down this week at 600k, but a significant eighty-eight homes are under contract. The median sale price of the sixty-three closings was 760k and averaged 867k.

Sales thus far in 2022 of 1596 reflect a -32.4% decline from 2022, while the median sold price of 642k is -7.2% less than 2022 year-to-date sales. Days on the market are up in 2023 to twenty-one from only five last year, and the median price reduction for sold properties is -5.4%, an increase from 2022's -3.3%. 

I've mentioned previously that the data indicates an inversion from last year's number for the second half of 2023, and with inventory already declining, I expect that prediction will hold. However, with the 30-year fixed-rate national average mortgage rate yesterday at 7.09%, the cost of credit may take a bite out of prices. While inflation came in lower than expected at 3% for the latest CPI print, I still expect the Fed to raise the overnight rate in the upcoming July meeting by another 25 basis points in light of other strong economic indicators. 

With housing affordability suffering from high mortgage rates and sticky prices, what will happen to home prices if the Fed pivots to lower rates? I don't expect that pivot to occur this selling season, but if low inventory persists and rates decrease, there is every reason to believe home prices will increase. How much rates might decrease after a Fed pivot is uncertain, but for those who can afford today's credit terms, prices may be appealing before another price surge occurs. 

Comparing mortgage payments in different scenarios shows some of the potential for saving in a refinance compared to waiting for lower rates. Using today's rate of 7% for a 30-year fixed-rate mortgage on a 500k purchase price, with 20% down, $3100 of annual property tax, and $1000 of homeowners insurance would be ~$3000 per month. Using the same criteria with a 5% mortgage rate would decrease the payment to $2500 per month. Although, sticking with a 5% rate and increasing the purchase price to 600k brings the monthly payment to $2900. A 20% increase in the purchase price would be significant, but in a low inventory environment not unheard of. It is impossible to know when (or if) we will see rates at 5%, but a lower price today would equate to an annual savings of $6000 with a refinance at potentially lower rates. The selection of appropriate homes is a significant factor in these calculations since it is impossible to know what prices and the value of your dollar will bring in the future. But, using the data from the last decade in Central Oregon, betting on a refinance to lower rates has a better chance for success than hoping for a price collapse.

There is much more to purchasing a home than crunching numbers, and I regularly evaluate all aspects of home purchases. One of the important pieces of the puzzle I provide my clients is the research and information gathering for potential options. As a real estate professional and licensed Principal Broker in Oregon, I have access to the tools necessary to evaluate every aspect of listing or purchasing a home. My intimate knowledge of neighborhoods, trail networks, proximity to schools, and other important parts of helping you find the perfect spot are extensive. Whether you plan to buy this month or in the next several years, please don't hesitate to use me as a resource for valuable information about Central Oregon!

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I hope you all had a great Fourth of July! Whether that was an extended weekend or just a pause during a busy week, there is much to celebrate at the midpoint of another year. Independence means many different things to different people. Yet, in the context of my report, I've witnessed the freedom of people moving to Central Oregon to begin a life in an area that allows for abundant sunshine, recreation, and community. Whatever your vision for life in this corner of the world, I wish you every success. 

From a real estate perspective, the Fourth of July marks the beginning of a shift in the market. In just two months, kids will return to school, and the peak of the selling season will be behind us. Over the next several weeks, price reductions will increase as sellers whose listings have lingered on the market adjust in hopes of finding a buyer before the end of the year. As always, if a home has been on the market for some time, now is a perfect time to make a lower offer. 

At this time last year, the inventory of homes for sale began to increase significantly from extreme lows due to buyers' pulling back based on economic uncertainty. While the economy has been surprisingly robust, it hasn't been immune to changes. However, many of those changes have barely put a dent in the housing market of Central Oregon. The market is stronger today in many ways than last year. Whether that strength continues through the year's second half remains to be seen. 

This morning in Deschutes County, there are 855 single-family homes listed, six more than this week last year. There were seventy pending sales the previous week compared to seventy-seven last year and seventy-eight sales compared to ninety in 2022. These numbers are very similar, considering how the market behaves during the holiday week. Although, some differences stood out, in particular prices.

First, the comparison to mortgage rates is striking. Last year, many buyers I spoke with were very concerned about rising rates. After years of extremely low rates, 5.68% for a 30-year fixed-rate mortgage on July 4, 2022, was shocking. That was a low point after a spike to 6.11% in June before a peak in October to 7.22%. The rates and corresponding uncertainty slowed buyer demand, and inventory began to increase. According to Mortgage News Daily, on July 3, 2023, the national average for a 30-year fixed-rate mortgage was 7.03%. Seeing activity that nearly matches last year when rates today are more than one and a quarter points higher is surprising. But, buyers seem to have adjusted to more expensive credit and continue snapping up homes. 

If you only considered mortgage interest rates, it would be an easy assumption that home prices have fallen. However, the opposite is true. This week in 2022, the 849 active listings had a median price of 795k, 730k for pending sales, and 680k for sold homes. The median price reduction for sold properties during that week was -5.48%. This week, the 855 active listings show a median of 835k, 706k for pending sales, and 765k for closed sales, and the median price reduction of the closed sales is -4.41%. While the available inventory may be similar to last year, the levels are historically low and not enough to temper prices. View the Market Trend Reports on EnjoyBendLife.com for a chart showing how our current inventory measures up to years past. 

Year-to-date sales for 2023 single-family homes in Deschutes County are 1520 compared to 2279 last year. However, all indications show that the gap is narrowing as the year progresses. If sales remain strong or increase, expect prices to do the same. 

One factor influencing prices is the condition of homes for sale. Many buyers were willing to take on projects at lower interest rates and a calmer overall market. Today, many buyers are spending their resources up front, leaving little left for renovations. Not to mention that the contractors of Central Oregon are spread thin, making timelines for improvements hard to pin down. Material prices also play a role in the renovation equation. As you sort through the available homes for sale, it is clear that many of the properties lingering on the market have some challenges. It stands to reason that more turnkey homes will sell at a higher price, and this is not just a Central Oregon phenomenon. As older sellers choose to downsize or move on, I expect more properties to list that are dated or need significant repairs and improvements. As always, there is an opportunity for anyone willing or skilled at renovation projects!

Peak summer may not be a great time to find available contractors, but many builders and remodel experts have more time in the fall and winter. For buyers with the ability to delay moving into a home and the means of financing a renovation project, there are great opportunities available. Despite the challenges, the three keys to real estate are location, location, location, and homes in great places still sell quickly. 

Of the seventy pending sales last week, the median days listed was fifteen, identical to this week last year. Not every home sells quickly, but in today's market, you need to assume that many buyers are considering every property available. Housing prices can be irrationally aggressive, so contact me anytime for a market analysis. I have deep knowledge of the inventory and Central Oregon housing market and can send you comps and a price range to help you determine a strategy. A knowledgeable real estate professional on your side is more important than ever!

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The home you buy is one of the most significant financial decisions you will make, and it's about more than just the purchase price. Determining the actual cost of a home you are considering, and whether it will meet your needs within your budget, requires looking at both the one time costs and the ongoing expenses.

We would love to help you find homes for sale in Bend that meet both your needs and your budget. Contact us any time to learn more, and keep these factors in mind to help yourself make an informed and confident decision.

One Time Costs

Some of the one-time costs associated with buying a home will be obvious to you: the purchase price of the home and the down payment, closing costs, and fees you pay to your lender.

However, there are also plenty of other one-time costs that you should consider, which will vary somewhat between the different homes you are considering.

Renovations

As you look at a home, make note of any renovations you will want to do right away. This might be as minimal as repainting or replacing some hardware, or it may be much more extensive.

In some cases, your renovation expenses can be delayed or spread out for years to come, but some homes will require immediate attention after moving in. To be sure you are getting an accurate idea of the cost, make a thorough list of what the house needs right away and then talk with a local contractor or two to get an estimate of the expense.

Furniture

When calculating the cost of buying a home, many people neglect to consider the furniture they will buy right away. Of course, you can expect that you will want to buy some furniture over time, but there may be some things you purchase immediately. For example, your dining table may not fit in the new house, or perhaps the bedrooms will require you to purchase bunk beds or a different storage solution.

Landscaping

There are ongoing landscaping maintenance costs to keep in mind, and then there are one time expenses to also take into account. Don't forget to consider the property the home is on, thinking about what would need to be done to it once and on an ongoing basis. Two houses with identical purchases price and virtually identical size and features can still present a radically different cost depending on the yard.

Appliances

If you are comparing two homes, consider the status of all of the appliances. Does one of the homes require you to immediately purchase a new refrigerator or anticipate replacing the furnace in the immediate future? The cost of updating appliances should be factored in as you consider which is the more affordable choice.

Ongoing Expenses

After you have settled into your home and the significant one-time costs have been covered, the ongoing maintenance expenses set in. This is just as important, even if the costs seem much lower in comparison because these ongoing expenses can make or break your regular budget.

HOA Dues

Find out as much as you can about the HOA if the home you are considering is in a neighborhood with one. In addition to finding out what the dues are, inquire about how the HOA handles unexpected expenses and what kind of cash reserves they keep on hand to manage emergencies and major projects.

Utilities

When you are comparing two similarly priced homes, the amount you spend on utilities may distinguish the two. While you will not be able to get an exact number to reflect the titles you will pay in either home, you can likely estimate which will cost more. Take into account the size of the home and the age, in addition to how new and energy efficient the windows and appliances are.

Lawn Care

Look into the cost to care for the lawn and landscaping at the home. Whether you plan to hire professionals to provide this service or handle it yourself, there will be costs associated. If there is a large lawn, you may need to pay to get a better lawn mower and increase the amount you spend watering the lawn. Other outdoor features may also require seasonal maintenance that you should take into account.

Housekeeping

If you plan to hire someone to handle the housekeeping in the home, this is something to factor in while you are considering the home. Some housekeepers will charge more for two stories, or perhaps charge by the number of bathrooms. Get an estimate from your current housekeeper, or from a few local choices if you are new to the area.

Ready to begin looking for your new home in Central Oregon? We can help. Contact us any time to get started.

Real estate activity in Deschutes County for single-family homes remains strong, with seventy-eight pending sales and seventy-seven closed weekly transactions. More importantly, the active listings only increased by twenty-five to 787, twenty-two less than this week last year. The year-over-year weekly difference in inventory may be small, but the available homes for sale continued to rise last year and peaked at 972 on August 10. Rising inventory is likely for a few more weeks, but it is increasingly unlikely that we will see the same surge in available homes for sale as last year. Home sales are down by 737 compared to 2022 totaling 1431 year-to-date. I do not expect our yearly sales of 2023 to surpass last year's lofty 4,129, although the year-over-year comparisons should narrow considerably. The biggest unknown will be the impact of higher mortgage rates on buyers, which so far in 2022 has been less of an issue than many expected. The steady influx of new residents coming to Central Oregon seemingly offsets any slowdown due to tighter credit.

While the inventory of homes in Deschutes County has slowed, in Crook and Jefferson Counties, available homes have reversed, with fourteen fewer than last week in Crook and three fewer in Jefferson than the previous week. Sales and median sale prices are down in Crook and Jefferson County, but decreased homes for sale should increase prices through the second half of 2023, barring a slowdown in the current sales pace. 

The next Fed meeting doesn't take place for another month, scheduled for July 25-26, but expect another 25 basis point hike in the overnight rate at that meeting. Mortgage News Daily reported the 30-year fixed-rate national average for a conventional mortgage at 6.92% yesterday afternoon, and with 50 basis points in hikes by the Fed expected by year-end, it seems obvious mortgage rates will surpass the 7% threshold in the coming months. Rising rates have taken some wild volatility from the mortgage markets and replaced that with stable and high. I expect rates to continue recent trends until the next Fed meeting, so keep in close contact with your lender to avoid being caught off guard. I strongly encourage anyone considering a purchase in the remainder of 2023 to get pre-approved now.

In most cases, a pre-approval is good for six months, and while you might not be able to lock in rates for that long, a completed pre-approval allows your lender to run accurate numbers based on the daily rate. Most importantly, your lender can respond immediately with a pre-approval letter if you want to make an offer. Not every property is subject to multiple offers and single days on the market before securing a pending sale, but our market is still moving quickly. Scrambling to provide financial documents at the last minute is an inconvenient hassle, and in a multiple-offer scenario, a strong offer should include your financing approval. The better prepared you are, the better your chance of getting your desired home! Anyone who has made multiple offers that didn't work out knows what a draining experience it can be. Losing out on a great property after searching for months is never fun. Please let me know if you have any questions about a strategy for your specific needs. There are myriad ways of presenting an offer with a strong chance of being accepted, and in many cases, it isn't necessarily all about price. 

I regularly sort through all available homes in our MLS on behalf of my clients and have been surprised by some of the recent pending sales. Identifying a property as overpriced or undesirable and seeing it under-contract days later happens constantly. I remind myself that every buyer is different; one person's unwanted home is another's castle. For properties that have been on the market for a while and do not have buyers circling, you might have the time to contemplate and enter into negotiations. However, most reasonably priced homes (relative to the neighborhood, etc.) will move, and in many cases, when you least expect it. 

Our supply-constrained market creates a sense of urgency for today's buyers. While I spend considerable time opining about quick sales and the competitive conditions, 2023 is on pace to be the first year since 2013 where sales do not exceed 4000+ homes. For reference, 2020 and 2021 exceeded 5000+ sales. A doubling of the 1431 year-to-date sales of single-family homes in Deschutes County would be the lowest sales volume since 2009 when sales totaled 2,844. In the catastrophic collapse in 2008, the sales volume was 2,043. Sales volume in 2007 was 2,703, in contrast to 5,369 sales in 2005 and 4,002 sales in 2006. 

Looking at sales volume from years passed provides little relevance to today's market because of population growth and migration from large west coast cities to places like Central Oregon. But, here is an interesting metric; The median sold price in 2009 was 199k compared to today's median year-to-date median sale price of $637,500. That is an increase of over 220% in fifteen years! It isn't easy to imagine another 200% increase in home prices over the next fifteen years. Still, home prices are unlikely to decline, with an expected Deschutes County population growth of thirty-five thousand people by 2030. 

I am always available to discuss market conditions if you like to examine the data. But if you want to buy or sell your home and don't like getting deep into the statistics, I am happy to assist without nerding out on numbers! Whether you are considering improvements before a sale or renovations to a home you might want to purchase, I know how to help you plan the best approach. I can also provide local contractors to give you specific timelines and cost breakdowns when ready—my years of experience in housing are at your disposal. 

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A home inspection can provide major peace of mind, or reveal major red flags, during the escrow process. Take this process seriously to make sure you can move forward confidently with your home buying process. A home inspection may feel like a formality if the home you are considering buying is relatively new or has been advertised to be recently renovated, but understanding the condition of the home you are about to take on is essential.

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To take full advantage of the benefit of a home inspection report, this is what you need to know.

What is a home inspection report?

After your offer is accepted for a home, you will enter the escrow period. During this period your lender is making sure that your funding is cleared to go through and that the home is worth what you are about to pay for it. Part of this process is the home inspection.

You will hire a licensed home inspector to review the condition of the home, looking at the major systems of the home and providing a report. The home inspection report provides valuable information about the condition of the property and can help you make informed decisions during the escrow period.

What should I look for on the home inspection report?

Take the time to thoroughly review the report and ask follow up questions if you have any. Pay particular attention to any issues regarding the safety or integrity of the home, including:

• Evidence of a renovation not being conducted up to code
• Termite damage or other pest infestation issues
• Plumbing leaks or other issues
• Problems with the electrical system
• Poorly functioning water heater, air conditioning, or furnace
• Any signs of water damage
• Presence of outdated or banned materials, like lead pipes or asbestos
• Hazardous materials, like radon
• Mold
• Cracks or damage in the foundation

What happens if something is wrong on the home inspection report?

In an ideal scenario, your home inspection report will come back with little to no concerns and you can move forward with a confident purchase. But what happens if this is not the case? If you see something on the report that gives you pause, there are a few things you can do.

First of all, make sure you are working with a real estate agent you can trust, who can provide you with professional advice to navigate the situation and negotiate to your advantage.

There are a few options available to you if you have concerns about something on the home inspection report:

• If you have a home inspection contingency in the offer, you can opt out of the purchase without penalty. In some cases, this is going to be your best move to avoid a major issue that is simply more than you want to worry about.
• Some problems can be easily repaired or replaced before you close on the home. You can negotiate with the seller to have the issue resolved before you close, sometimes agreeing on a later closing date.
• If you would like to hire your own contractors or do the work yourself, you might negotiate differently. You can either ask for a lower purchase price to accommodate for the condition of the home, or ask for a credit at closing to cover the cost of repairs. Many sellers in today's market are happy to provide this credit from their equity, as it requires no cash out of their pocket and can allow them to let go of a home with a problem.

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Before I pulled the MLS data this morning, I prepared to write about cracks beginning to appear in the housing market based on stubbornly high mortgage interest rates. My speculation about a slowing market originated from an early week spike in inventory and my incorrect assumption that buyers would not step up to absorb all of the new homes. Normally I do not get caught up in the data between my Wednesday reports since so much can happen in seven days. I've found that analyzing the data once per week gives a better representation of the market than getting into the weeds daily, even though I am looking at new listings all week long. There is a reason I do not pre-write these reports, and this morning's data is a perfect illustration of why preconceived notions cloud reality.

There are twenty-three more listings today in Deschutes County single-family homes than last Wednesday, totaling 762. However, pending sales were eighty-nine, and closed sales were seventy-four, both highs for 2023. The median pending sale price is up from this week last year by 5k to 700k, and the closed price is up 15k to 665k. There were twenty-six more pending sales this week than this week in 2022. Inventory of available homes dropped four from this week in 2022. Considering that I have been calling for an inversion in the year-over-year data, this development should not have surprised me. With some doom-and-gloom reporting in the national outlets, I was shocked by how robust our buyer demand is in Deschutes County.

Crook County inventory increased by thirteen to 146, with seven pending sales at a median of $476,500, while Jefferson County inventory only increased by one to seventy-one single-family homes. Jefferson County also had seven pending sales, with a median of $399,900. However, of the five sold homes, one in Camp Sherman listed for 499k sold for 670k! Camp Sherman is wonderful, sought-after, and only has one active listing, making for a competitive market. But, these scenarios play out all over Central Oregon for extraordinary properties and show that it is hard to know what a home will sell for in some cases. My reports are a great weekly snapshot of the overall market, but they do not replace individual analyses of homes and neighborhoods.

Where do we go from here? Since last week, the national average for a 30-year fixed-rate mortgage dropped slightly to 6.87%, and anything below 7% appears to be providing very little (if any) drag on buyer demand. Just one month ago, rates were 7.05%, exactly when many of the sales reported today would have gone under contract, with rates comparable to today ~six weeks ago. Further, twenty-five of the seventy-four sales in Deschutes County were cash, from 400k to $2.5M. While the volume of cash sales is significant, 25% of sales coming from cash buyers is not out of the norm. The financed sales included conventional, FHA, VA, and USDA loans. 

While the Fed has intimated that another 50 basis points in rate hikes are likely before the end of the year, markets seem to be looking past that towards easier credit ahead. Although, there is still a chance that market conditions will prevent more rate increases. Also, the fear of even higher rates may pull some buyers forward. Although, it is safe to say the bulk of rate increases are in the rearview mirror. Seven percent rates have brought a significant affordability crunch to many potential buyers, even if the Central Oregon housing market seems to be shrugging that off. 

Without significantly rising inventory and growing days on the market, there are unlikely to be any meaningful price reductions. And, considering the days listed for pending sales in Deschutes County last week was ten, down from twelve this week in 2022, our market appears to be heating up, not cooling down. I've heard of some properties not appraising to the contract price, which is not unheard of in a hot, supply-constrained market. High contract prices not appraising could indicate multiple offers bidding above the list price or a lack of comps. Either way, those scenarios are best addressed case-by-case and do not indicate collapsing prices. 

Whether you are looking for multi-family investments, single-family homes, vacant land, or horse property, I regularly research these properties for clients. I am knowledgeable about Central Oregon and eager to help you achieve your goals! Please feel free to reach out to me anytime. 

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