My Weekly Central Oregon Real Estate Blog

Pending sales have increased in Crook, Deschutes, and Jefferson Counties since my report last week. Jefferson County has seen the most significant pending sale volume since I started tracking the county statistics last July, with eleven pending sales. Crook County also had eleven pending sales and a median price reduction of only -1.23%. Pending sales in Deschutes County increased by sixteen to seventy-six, with thirteen median days on the market and a median price reduction of -3.55%. However, inventory increased in Deschutes County to 611 single-family homes, an increase of forty-one from the previous week. Crook County's active listings increased by two, and Jefferson County decreased by seven. Growing inventory in Deschutes County is a seasonal, welcomed trend, while Crook and Jefferson County housing supply remains abnormally constrained.

With the national average for a 30-year fixed-rate mortgage increasing to 6.68% yesterday afternoon, assuming the housing market is slowing would be reasonable. However, Central Oregon real estate left reasonable in the dust three years ago and is moving quickly. With rare exceptions, testing a seller's price results in getting an offer rejected while another buyer gets the home. Additional time searching for a home will always present a different mix of properties, but finding a lower price for comparable homes has not materialized. In the large majority of situations, waiting results in paying more. 

Large West Coast cities are the source of a large majority of transplants to Central Oregon, and the policy and quality of life trends in those areas seem to be driving more and more people to the greener pastures of Deschutes County and the surrounding communities. Last week, California defaulted on a $20B unemployment insurance loan from the Federal Government. Instead, it elected to pass the repayment costs to businesses, increasing the unemployment tax from .6% to .9%, likely accelerating the trend of companies closing stores and leaving the state. While the large corporations leaving California are not coming to Central Oregon, situations like this and many other policy decisions have driven those that can work from home to our communities. There is no indication of slowing buyer demand.

With higher mortgage interest rates, it would be reasonable to assume that out-of-town buyers are flooding the market with cash offers, but of the sixty-four closed sales in Deschutes County over the last seven days, only twenty were cash sales. Buyers financed the remaining forty-four deals with conventional, FHA, or VA loans. 

Even though I have correctly predicted all of the last ten Federal Reserve Rate increases, I have no unique ability to guess what might be up its sleeve over the remainder of 2023. But I won't let that stop me from sharing my opinion! I've read and heard many arguments on the street that the Fed will pivot toward lower rates and that inflation is under control. Any regular readers of this report can guess I don't see it this way. So I'll leave inflation alone and let you use your grocery and gas bills to determine. However, I believe a pause is a more likely scenario than a pivot. While it may be possible that a slight softening of the overnight rate occurs before year-end, I would not count on a significant reversal in Fed policies and a return to the zero interest rate policies of the recent past. Instead, I believe that a pause and stability in Fed policies will positively impact mortgage interest rates, with a possibility of high five percent mortgages after labor day. A 50 basis point rate decrease will undoubtedly help buyer affordability, but this is not the windfall many are counting on. Buyers' willingness this spring to finance at today's rates and prices indicates what to expect in the months ahead. 

The primary driver of Central Oregon buyers is quality of life and the desire to be here long-term. Although, no buyer wants to purchase in a declining market. At the high end, many home sales appear to be an investment decision and a lifestyle choice. Educated buyers would not be snapping up high-end properties in anticipation of a decline in value. Two issues are keeping our prices firm, 1) Central Oregon has a limited pool of available homes divided between smaller areas and price points, and 2) many buyers are leaving areas with equal or more expensive real estate. Many of today's buyers are undaunted by our prices. 

While the sales gap from 2022 to 2023 continues to narrow, it likely won't invert until late in 2023 and may not surpass last year. Looking at Deschutes County YTD sales, the median price in 2023 is 635k, down from 694k in 2022. The average sale price went from 831k to 769k. Home prices today have stabilized, and there is a strong chance that the price gap from last year will narrow by year-end. Median and average mean little when looking at individual properties; sellers are in a strong position today. Testing home prices with low offers opens the door for other buyers circling the same property. Unfortunately, a low offer gets shopped to other potential buyers who know what price to beat to get the home. Multiple offers on a single property are increasing, and the best odds to get the home you want come from a strong offer upfront. 

To quote Jim Carey, "So you're saying there's a chance!"

All kidding aside, contact me anytime you need help navigating our real estate market. 

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There can be a lot of information gleaned from a home inspection. These can be a stressful part of the home buying or selling process. It is easy to be overwhelmed when the report is lengthy and looks to have a lot of potential issues noted by the inspector. It is important to gain as much knowledge as possible before you make your next home purchase. Before you get started, take a look at some of the key things to learn regarding your home inspection process.

What To Learn From A Home Inspection

Inspectors Are Not Experts

Your home inspector is not an expert on all areas and systems in your home. Their job is to identify problems in your home, but they cannot always report in detail what needs to be done to repair the problem. You must recognize this and then get information from those that have expertise in the specified issue. This means that you want to consult an electrician for any electrical and a roofer or plumber for those issues as well. It is worth it to pay extra for their service to give you a deeper understanding of home repair.

Watch For Issues You Want To Avoid

You want to look at your inspection with a good understanding of how much work and money you are willing to put into the property to fix it. This all depends on what you are purchasing the home for and if you feel you are getting a good deal compared to what needs to be put into it. Buying a home is a huge investment so do not be afraid to ask for repairs or credit to help you fund the repairs yourself after the purchase is complete.

Attend The Inspection

You must go to the inspection and ask all of the questions you might have. A large inspection report can be overwhelming and if you attend the inspection you will be able to discuss some of this with the inspector to get an idea of what you need to look deeper into and get their recommendations.

Final Walk Through

Your final walk-through is very important. Even if your inspection report seems to be good with minimal repairs, you want to be aware of the condition of the home right before the finalized purchase. If the home is sitting vacant it is possible that a bug infestation or other repairs could come up after the inspection and before losing. You want to make sure that everything you agreed upon is in place and repaired correctly.

Second Opinions

If you are a seller receiving large repair requests from the buyer, you are entitled to get a second or third opinion before you agree to anything. This will help you have a better understanding of what is reasonable for the buyer to ask for and where you can accommodate their request and agree for the purchase contract to move forward.

In Conclusion

For more information on the home-buying process, contact us. We would be happy to help you with any of your Bend Oregon real estate needs. 

Single-family homes for sale in Deschutes County increased this week by the most significant amount in 2023 to 570, up forty-seven from last Wednesday. The increase is welcome news to buyers working with constrained supply and up from this time last year. However, on May 25, 2022, the inventory of Deschutes County homes was 591, and the skewed comparisons of our year-to-date data are narrowing rapidly. For example, this week last year, the median list price was 827k compared to 841k this morning. On July 6, 2022, the median list price in Deschutes County dropped below 800k for the first time and dropped below 700k in October. On March 1, 2023, the median list price moved above 700k again, breaking 800k on April 19, 2023. The likelihood of a surge in inventory before the end of the peak summer selling season that floods the market and brings prices down is nearly impossible. In fact, despite the increase of available homes for sale this week, I expect prices to remain firm or increase through the summer. Although, most of the price increases reflect more expensive homes hitting the market rather than an overall increase in home prices. 

Twenty-two single-family homes are listed in Deschutes County under 400k and forty-eight under 500k, providing options for many buyers. In a volatile mortgage market, yesterday's average 30-year fixed-rate mortgage was 6.58%. Later this morning, the Federal Reserve will likely raise rates another 25 basis points, but the accompanying narrative to the hike will be the meat of the story. If Jerome Powell sends a dovish message regarding future rate hikes, the markets will most likely respond favorably in expectation of the pivot everyone has waited for. On the other hand, if Powell shows continued concern about the pace of inflation and indicates more rate increases are necessary, we could see buyers pulling back further as affordability in lending decreases. While I do not expect a hawkish Fed, anything can happen. Today's Fed narrative will be the most pivotal point of the 2023 selling season and set the tone for the remainder of the year. A pivot at the next Fed meeting in mid-June or a pause should keep buyer demand strong, while another increase could roil markets and further slow sales. Year-to-date sales are 881, compared to 1444 in 2022, and it is doubtful we will match last year's robust total sales of 4130. 

As I mentioned last week, projections expect significant growth in Deschutes County and Central Oregon through 2030. If monetary policy eases, there is a strong chance buyer demand will increase. Two issues impacting buyers today are mortgage rates and low inventory. While we may have peak rates behind us after today, there is unlikely to be a flood of inventory. Not only has the housing market in past recessions been robust, but a recession is pinpointed by data released well after a recession has started. In other words, we could be in a recession today, and judging by the general strength of the overall economy, would anyone guess that is true? Terms like contraction and expansion are excellent for esoteric economic discussions but, in real life, have little bearing on what takes place in the housing market. Supply, demand, and financing costs are the most significant factors in a real estate market, and all real estate is local. While anything can happen, nothing in today's data indicates a drawdown in home prices or the economy in general. 

Lastly, a quick look at the M2 money supply (linked at the bottom of the Market Trends page of EnjoyBendLife.com) shows a 170% increase from 2008 to today. The expansion (debasement) of the dollar is a significant contributing factor to home prices and decreased inventory. I mention this to illustrate how unlikely home prices will ever reach the lows of 2010 again. 

Now is an excellent opportunity for sellers to list and command near-peak pricing. While the process for buyers may be more challenging, some fantastic lending programs are available to make homeownership attainable. In addition, for high-net-worth buyers, looking at the growth projections in Central Oregon may ease any doubts about buying in today's market. No matter your views on the market or your timeframe, I am available to help! Whether you take advantage of the resources on my website or put me to work to help you reach your real estate goals, you can count on me to make the process easier. Please feel free to reach out anytime. 

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This week, inventory of available single-family homes declined in all three Central Oregon Counties, a sign that buyer demand is outstripping homes for sale. Pending sales in Deschutes County dropped by five to seventy-five, with twelve in Crook County and four in Jefferson County. Pending sales are a great future indication of where the market is heading. In Deschutes County, the median days listed for the seventy-five pending contracts was fifteen, with a median price reduction of -2.97%. Other than an anomaly in the data from March 2023, this is the lowest amount sellers have reduced the asking price since early May 2022. Yesterday Afternoon the average 30-year fixed-rate mortgage was 6.5%, slowly declining from recent highs of nearly 7% but still above this year's low of 6.19%.

The sixty-five sold homes in Deschutes County last week had median days listed of eight. In Jefferson County, the days on the market for sold homes was twenty-two, and in Crook County, fifteen. Crook County's median sale price adjustment of sold homes was +1.72%. Not only are homes selling quickly, but the gap between the sale and list price is narrowing, a clear sign of a tightening market. Last April 27, there were eighty-eight pending sales in Deschutes County and 401 active listings. However, by June, there was a drop in pending sales and a further drop into July and through year-end, with a couple of solid weeks mixed in. Considering the lack of building inventory, the decline in mortgage interest rates, and strong buyer demand, it is only a matter of weeks before the comparison of the YTD 2022/2023 numbers inverts. Year-to-date sales for 2022 single-family homes in Deschutes County were 1318, compared to 806 in 2023. Nationwide there was a moderate increase in inventory last week, but those trends have not appeared in Central Oregon.

While the Fed may have another rate hike up its sleeve (I expect one more 25 basis point hike at the next meeting), most lenders and analysts expect lower mortgage rates through the second half of 2023. Based on our low inventory and strong demand, buyers are not waiting. With the fear of ever-increasing rates off the table, the housing market appears to be picking up momentum. Whether that is because buyers are comfortable with current rates, assume a refi in the future, or are bullish on Central Oregon (likely all three), the results have created another competitive real estate market. 

Our market is so diverse that it can be challenging to make comparisons of the mix of sold homes. Although the median pending sale price in Deschutes County for the week ending April 27, 2022, was 647k, compared to this week at 735K! Where did the drop in home prices go? For sellers, there is no reason to wait. Unquestionably, these conditions have applied pressure on buyers, and it looks likely that multiple offers could become typical again this summer. Fortunately, there is still enough breathing room to get bids accepted without competition, but moving quickly on a home you love is imperative. Multiple offers might not be the norm, but in many cases, more than one buyer is considering a property. 

According to the Portland State University population forecasts, Deschutes County expects to add nearly 13,000 residents by 2025 and another 20,000 by 2030. With our rolling weekly average available inventory tracking at ~500 listings, it is a good bet that homes are a safe investment. Assuming three residents per household, the additional residents projected to relocate to our area would equal a full year of annual sales or more. Granted, some of those transplants will rent, but there is no question that buyer demand will outpace supply for the foreseeable future. There will always be homes for sale, and lending programs to help all types of buyers, so there is no need to panic. However, if you are waiting for a significant price drop, I am unsure what would drive that trend. Even a massive event in the overall economy is unlikely to be the catalyst as people leaving big cities would likely accelerate under those circumstances, not decrease. 

I understand that many may interpret the data differently, and I am happy to compile any information you need to help make a decision. If waiting fits your schedule, please stay current with the tools available on EnjoyBendLife.com or reach out for anything I can do to help. 

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Bend has become one of the top places to live in Oregon, offering unparalleled natural beauty and access to outdoor recreation couples with a city that features a great restaurant scene, high quality schools, and a thriving job market. If you are considering a move to Bend, choosing the right neighborhood is an important component to make your relocation a total success.

To learn more about moving to Bend, contact us any time or check out the information below on four different areas in Bend.

Northwest Bend

Living in Northwest Bend provides convenient access to many of the favorite outdoor recreation sites in the area, including Mt Bachelor just minutes away, and the Deschutes River running through the east side of Northwest Bend. This quadrant is also home to Drake Park and Mirror Pond and features an abundance of restaurants, shops, and parks including the downtown Bend area.

Featuring close proximity to both downtown and the river, many properties in Northwest Bend are priced on the high end of the market. You will find single-family homes, condos, and townhomes in Northwest Bend, many featuring breathtaking views or riverfront access.

Northeast Bend

Northeast Bend is home to the St. Charles Medical Center, the largest hospital in Central Oregon. It also features some of the most affordable real estate options in Bend, making it a top choice for first-time buyers and real estate investors. You will also find plenty of retail shopping centers in this quadrant, including a Costco and plenty of other conveniences.

Parks, schools, and neighborhoods make this a great place to settle down as a young family, and the affordability of the area is conducive to ongoing development which makes this a great place to invest.

Southwest Bend

Southwest Bend is known for its riverfront properties along the beautiful Deschutes, with some of the best views and outdoor recreation access in the area. This quadrant is bordered by the Deschutes National Forest to the west, protecting the natural beauty of the area from significant development.

The Old Mill District is located in Southwest Bend, a mixed-use development area along the river that features restaurants, breweries, shops, and more. Neighborhoods in Southwest Bend include golf communities and master planned communities, in addition to small, established neighborhoods. Most of the real estate in the area would be considered luxury homes, ideal for those looking for their dream home for sale in Bend.

Southeast Bend

If you are looking for a small ranch or acreage in Bend, Southeast Bend is probably going to be your ideal quadrant. There are still many large lots in the area, including ranches with irrigation rights. You will find a blend of newly developed neighborhoods and established communities in Southeast Bend, all with a laid back atmosphere.

Residents of Southeast Bend benefit from convenient access to the amenities, schools, parks, and entertainment of the city while enjoying a country lifestyle.

Ready to begin the search for homes for sale in Bend, or to learn more about living here? Contact us any time.

The national average for 30-year fixed-rate mortgages climbed to 6.7% yesterday afternoon. However, pending sales increased by three to eighty in Deschutes County, and only nineteen days on the market. In Crook County, pending sales more than doubled from seven to fifteen, with forty-one days listed before securing a contract. Although, the five sold properties in Crook County were only on the market for a median of nine days. Jefferson County had six pending sales, up two from last week, with the median days listed at twenty-seven. The three sold homes in Jefferson County were only listed ten days before receiving acceptable offers. 

The active inventory in Deschutes County increased by four to 529. In Crook County, the available homes decreased by four to 117; in Jefferson County, the inventory increased by one to seventy-four. Sold homes in Deschutes County had a median price reduction of -4.66%, while in Jefferson County, the drop was -5.56%. In Crook County, the two sold homes in the median were full-price sales, making the median reduction  0%. The price reductions for the three sold properties in Crook County that did reduce the price to secure an offer were -8.33%, -3.53%, and -1.11%.

Comparing year-to-date sales from this year to 2022 shows a significant decrease in transaction volume. In Crook County, sales went from 135 YTD 2022 to 99 this year, while the median sale price increased from 445k to 465k. In Jefferson County, sales decreased from 109 to fifty-one, with the median sale price at 382k, a decrease of three thousand dollars from the last YTD. In Deschutes County, sales decreased from 1231 to 735, with the median price dropping from 685k to 620k. 

Total sales in Crook County in 2022 were 431, at a median sale price of 455k. In Jefferson County, there were 312 sales at a median of 400k, and in Deschutes County, there were a staggering 4130 sales in 2022 at a median of 680k. The sales volume by the second half of 2022 was down considerably for all three counties as well as the median sale price, except for Jefferson County, where the median price increased slightly during the second half of 2022. This dynamic was in play for the entire country, so take reports of massive changes in YTD numbers with a grain of salt, as buyers were extremely active in the first half of 2022 in anticipation of rising mortgage rates. 

The lowest sales volume of single-family homes in Deschutes County since 1997 (the earliest data in the Central Oregon MLS) was 2,043 in 2008. Most of you will recall that in 2008, we were in the grips of a sub-prime lending-induced housing crash, and the median home price dropped from 399k in 2007 to 280k in 2008 before bottoming out at 176K In 2010. 

The low sales volume of 2007-2009 is attributable to the bottom falling out of the housing market and buyers sitting on the sidelines. Today, buyer demand is strong relative to inventory and couldn't be any different from 2008. However, at the current pace, it is apparent that sales volume in 2023 will be down significantly from the peak of 5,326 sales of single-family homes in Deschutes County in 2020. The results of all this data are firm home prices, although down from the peak last year. However, the median sale price is still considerably higher than just in 2021, when the yearly median price was 603k. In addition, last year's inventory peaked in early August at 972; we will be hard-pressed to match that number this year without a rush of sellers. 

Staying in close contact with your lender and being prepared to act quickly on appealing homes is very important for buyers in this market. Unfortunately, with so few listings, predicting when the next great home might be available is impossible. However, if rates decline later this year, buyer demand may increase considerably relative to the stock of homes for sale. So, believe it or not, now may be the right time to jump in and find your corner of Central Oregon.

Please do not hesitate to reach out whenever you need anything.

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Over a week, I consume a lot of real-estate-related content, whether working for clients in Central Oregon or reading and watching reports from different analysts. Recently, I've noticed a trend in the comment sections of videos and written accounts of incredulous agents taking issue with the data. First, I think it is essential to scrutinize the source, as many people working in this space are aiming for clicks or trying to sell you something. However, most legitimate reports use national numbers or, at best, provide a brief cursory overview of large to medium-sized cities. In almost every case, the data is at least 30 days old and, in many cases, closer to 60 days stale. Nowadays, the comment section of almost anything can quickly devolve into a mess, and the real estate forums are no different. However, I always find it interesting how anecdotal most commenting agents' views are rather than data-based. Others are demanding an opinion on what the market will look like in six months. If I, or any other analyst, could predict the market six months into the future, I would not be working in real estate! In most cases, I feel reasonably safe forecasting the next three months based on the last three months and following the financial markets. The latter being more volatile than ever makes those forecasts increasingly tricky. 

Comparing the sales from the week ending April 20, 2022, to the week ending April 12, 2023 (this morning) clearly show the changes over the past year. Using the seven days last April, there were ninety-eight sold single-family homes in Deschutes County at five days on the market, a median sale price of 685k, and fourteen price changes at a median of -1.32%. The previous seven days ending this morning show forty-three sold homes, seventeen days on the market, a median sale price of 639k, and thirteen price changes at a median of -4.62%. For the period in 2022, there were 100 pending sales compared with seventy-seven this week. 

The market has softened from last year's frenetic pace, shown in the data above. As you probably recall, the Fed initiated the first rate increase of 2022 in March (25 basis points) and was telegraphing several more increases throughout the year. Since last March, the Fed has kept its promise and has raised rates by 475 basis points. Preceding the coming rate increases, the fast-paced market of 2021 through early 2022 stepped on the gas as both buyers and sellers rushed to make moves before the full effect of future rate increases took hold. By September 2022, the Central Oregon real estate market (and the national market) slowed considerably, with mortgage interest rates near or above 7% (7.24% on October 17, 2022). However, By early February this year, sales began to pick up as mortgage rates eased back. The national average yesterday afternoon for a 30-year fixed-rate mortgage was 6.52%, still elevated compared to the last couple of years, although a pivot (or pause) seems likely for the second half of 2023. For comparison, the rate in April of 2022 was 5.13%.

January 1, 2022, through April 12, 2022, shows 1149 single-family home sales in Deschutes County, compared to 679 for 2023. It would be easy to look at the reduced sales volume and increased mortgage rates as signs of a softening market. However, while the market has slowed from last year's head-spinning pace, the dearth of sellers has kept prices firm, and many properties are commanding full-price offers quickly. Pending sales are down 23% since my report on April 20, 2022, but still robust at seventy-seven. More importantly, the days on the market for those sales was only ten. This morning there are 525 single-family homes listed in Deschutes County, down seventeen from last week. That breaks down to 343 in Bend, 163 in Redmond, ninety-six in La Pine, thirty-nine in Terrebonne, and thirty-six in Sisters. There are 121 listings in Crook County and seventy-three in Jefferson County. 

On May 18, 2022, there were 538 single-family homes listed in Deschutes County. So while the national reporting may beat the drum of high inventory and low prices, that simply has not been the case in Central Oregon. Whether sellers enter the market in the second half of 2023 remains to be seen, as well as whether the Fed blinks and backs off rate increases or even lowers rates. However, until something changes, our market looks more like it did in 2021 and 2022 than in pre-2019. As rates decrease, more buyers enter the market, and prices remain firm or increase. My prediction of a 9% increase in home sale prices may have been a miss, but the housing market in Central Oregon remains strong. 

Multiple offers may not be prevalent, but ten days for pending sales are moving quickly, and many properties have more than one buyer interested. Waiting on a home you like or waiting for more, cheaper inventory is not a good strategy in today's market. There are always homes to buy, but the more specific your needs are, the more critical it is to take action on a great property. Central Oregon has an incredibly diverse geography and home selection; in many cases, unique properties are only available rarely. For the casual observer, it may seem like there are myriad options. Still, considering the price point, location, and home attributes, it is clear that most buyers only have a handful of options. 

Regular readers of my report know I am a proponent of taking a long-term view of housing rather than trying to time the market. Conditions today may be challenging for buyers, but the long-term view of Central Oregon remains bullish. Sellers may not be commanding as high of prices as the last couple of years, but close. So don't wait to buy real estate. Buy real estate and wait!

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Selecting the right time to sell your home can feel daunting. Are you wondering whether the market conditions are right or if your home needs a little TLC before listing it? Consider these 3 signs that you are ready to sell your home in 2023.

1. Your Home is Not in Need of Repair

Before selling your home or deciding if it's a good time to sell, take a good look at the condition of your home. In order to sell for the price you want, your home should not be in need of any major repairs or updating. Perfectly renovated, turn-key properties are not essential, but there are some home improvement projects that will really pay off.

Your home is ready to sell if:

• The roof is either new or in good condition
• The foundation is free from cracks or damage
• HVAC stystem functions properly
• Plumbing  and electrical systems are in good condition
• All repairs and home improvements have been done up to code

2. Your Local Market is Strong

In recent years, just about every local real estate market in the nation has been considered a seller's market. This is defined as a market in which there is less than 3 months of inventory available. While some markets are becoming more balanced as interest rates have gone up, it is still a great time to be selling your home. This is because demand for homes still outpaces supply in the market significantly in nearly every market.

When you know the market is strong and there are many buyers in search of properties just like yours, it's a good time to consider selling. Even if buyers are able to borrow less now than they could a year ago because of shifts in the market, you are likely to find that there are motivated buyers for your home that can make strong offers that will be mutually beneficial.

3. You Have Positive Equity on Your Current Home

The equity you have in your home is calculated by comparing what you owe on your mortgage to what your home is currently worth. In other words, if the fair market value of your home is $300,000 and you owe $200,000 on your mortgage, you have $100,000 in home equity.

When you have positive equity, as the vast majority of American homeowners do in 2023, you are in a great position to sell. This is because your equity can be leveraged in multiple ways to make sure you benefit from the sale. This includes:

• Being able to offer incentives and sellers concessions to your buyers so that you can get the purchase price you want
• Not having to pay anything out of pocket to sell your home
• Having additional cash to use when purchasing your next home, offsetting a higher interest rate by putting more money down, cash-flowing renovations on the new house, or funding the moving expenses

Are you in search of a real estate professional to guide you through the home-selling process in Bend Oregon and surrounding areas? Contact me directly or browse the latest real estate market report to find out what is selling and for how much!

Mortgage rates improved slightly this week, with yesterday's national average for a 30-year fixed rate at 6.37%, down ~.2%. Sales in Deschutes County remained solid at sixty-five but not as hot as last week's seventy-nine. Inventory increased by the reduced number of sales the previous week, now at 542. Only twenty-five of the sixty-five pending sales reduced the asking price by a median of -4.59%. The median pending sale price was 650k, while the average was $853k.

In Crook County, inventory increased by two, now at 118, while Jefferson County decreased by one to sixty-five. Pending sales in Crook County for the previous week were twelve, surpassed by fourteen pending sales reported on March 8. This volume of pending sales in Crook County exceeded every week of 2022, indicating the continued growth of Prineville and the surrounding communities. Jefferson County had two pending sales the previous week, down from six reported last week. 

After reading several analyst reports (at this point, I hesitate to call them experts!), there seems a strong likelihood the Fed will raise the overnight rate another 25 basis points in early May. I suspect Jerome Powell would like to increase even further in his quest to squash the economy and gain control of inflation, but the state of the banking sector will likely force a more tepid response. As I mentioned last week, Powell has no good options, and despite his best efforts, the economy has been remarkably resilient. 

Mortgage rates are tied more closely to the 10-year Treasury than Fed market manipulation, but there isn't any question of correlation. That said, I suspect markets are pricing in future Fed action and expecting a pause or pivot in the second half of this year. The housing market in Central Oregon barely took a breath during the fourth quarter of 2022 and the start of 2023 before stepping on the gas again in February. Many buyers expected a steep decline in home prices based on mortgage interest rates near or exceeding 7%, but the descent turned out to be a plateau. While home prices today may not be skyrocketing, strong buyer demand and continued low inventory keep price decreases at bay. Many desirable homes are hitting the market priced correctly and, as a result, are receiving full-price offers. 

Considering all the market dynamics, home prices will likely remain firm in 2023. Myriad loan programs are available to address the higher rates, such as temporary rate buydowns, permanent rate buydowns, and even (heaven forbid) adjustable rate mortgages. However, waiting for lower rates will likely also increase home prices, which so far this year have been relatively stable. Now is where I mention (weekly) that housing is best considered a long-term investment! Attempting to time the market is nearly impossible, but rapidly increasing sale prices are more difficult for most buyers to navigate than higher mortgage rates. Plus, with an interest rate buydown, in most cases, your rate will be at least one point lower than the quoted conventional rates. I anticipate a robust refinance market starting in late 2023, as today's buyers potentially have an opportunity to decrease monthly payments and lock into a lower rate. We may look back at this time as the buying window many were seeking as rates decline in the future and demand for homes increases. Although I do not anticipate rates in the three's anytime soon. Adjusting expectations may be required to see today's market clearly.

Recently, many of my readers have taken advantage of the Market Reports on EnjoyBendLife.com to track the market. These reports are updated with the active, pending, and sold information for your chosen zip code, subdivision, or neighborhood every fifteen minutes. In addition, each property listed has a link to photos, maps, and all the necessary information to research our market. Registration is required to access these reports, so you can expect a phone call from me once you sign up! However, if you aren't ready to talk, the Market Trend Reports on my website are available without registering and provide tremendous information about the active inventory. You will not find a more comprehensive set of tools and information on any real estate website for Central Oregon! I am always available to provide a personalized, expert analysis of any community you are considering, and I am happy to work on your timeline. Information is power, and I am always available to share my knowledge. Don't hesitate to get in touch with me with any questions. 

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By every significant metric, the Central Oregon housing market is heating up. In Deschutes County, buyer demand outpaced new listings, and inventory dropped by twelve, now at 529 single-family homes. Crook County inventory was flat at 116; in Jefferson County, the available homes for sale dropped two, now at sixty-six. Moreover, all six pending sales in Jefferson County over the previous seven days went under contract at full price. In Crook County, five of the eleven pending sales reduced the price by a median of -4.65%, and in Deschutes County, twenty-nine of the seventy-nine pending sales reduced the price by a median of -5.14%. However, Deschutes County pending sales days on the market jumped slightly to fourteen. On February 1 in Deschutes County, the pending sale ratio of price decreases to total contracts was 57.9% compared with this week's 36.7%, a clear indicator that sellers are zeroing in on market pricing and buyers are chomping at the bit. Two of the seven homes I tried to schedule client showings for this week were pending after being listed for months. 

Available homes for sale, days on the market before securing a contract, and the percentage of price reductions are the most predictive metrics concerning market dynamics. Without an increase in inventory and a decrease in days on the market, sellers have little incentive to reduce their asking price, assuming the property price reflects the market. When very few options exist in a particular neighborhood or price point, sellers can command higher and higher prices, and buyers are left either paying those prices or waiting. In 2008, prices dropped significantly and stayed depressed for some time, clearly indicating the market bottom. In this cycle, our "bottom" may have been the slowdown last fall and into the first weeks of 2023. While I fully expect the Federal Reserve to raise rates another 25 basis points in early May, most experts expect a pivot or pause for the year's second half. Some analysts believe more rate hikes that last longer is the strategy the Fed should follow to reign in inflation and disengage from the past zero-interest rates policy. Still, it seems unlikely the Fed will act that aggressively. With a rate pivot or pause already factored in by most lenders, we might see rates in the upper 5% range by peak season. If so, expect the already hot market to get even hotter. 

If you are following national real estate news, you've likely read that days on the market are increasing, prices are down, and inventory is up in the Western US. However, astute readers of my weekly report know that has not happened in Central Oregon. Last week was the first time since last October that the median price of actively listed homes in Deschutes County moved into the 700k range, now at 735k. This week's median list price is 749k. While this is a significant drop from April 2022's 825k, the market is heating up. After a scorching first half of 2022, the median list price finally declined from the 800k range into the 700k territory on July 6 and then into the 600k territory on October 5, 2023. If these trends continue, there is every reason to believe this summer's pricing will reflect the first half of 2022.

There are twenty-three homes in either La Pine or Redmond in the 300k range, with another forty-nine in the 400k range in Deschutes County. The two least expensive homes in Bend are 425k and 475k. 

I can recommend fantastic lenders with creative ways to help you secure a great loan package for your situation. Once you make a purchase, refinancing at a lower rate in the future is always an option. However, waiting for lower rates will likely increase the purchase price and competition with other buyers. While we might not be experiencing a high percentage of multiple offer scenarios now, most desirable homes have several buyers circling. My broken-record statement still holds; home purchases should have a long-term focus! Whatever metric you like to track, I can run a personal report with comparables for you or use the great tools on EnjoyBendLife.com. Market Trends allow you to sort by price quartile and are updated weekly. Market Reports are highly customizable by neighborhood, zip code, or city and are updated from the MLS every fifteen minutes! My home valuation tool provides a price range from low to high, and sold searches are customizable to your particular interest. Of course, I want to hear from you directly, but many of the tools on my website allow you to research 24/7. You will not find more comprehensive data and tools on any other real estate website!

Click here for the full report.