My Weekly Central Oregon Real Estate Blog

With the end of summer rapidly approaching, it isn't surprising that pending sales decreased from last week's torrid pace but remained high at sixty-nine. Moreover, forty-three of those pending sales lowered the price before securing a contract by -6.57%, typical for the last several weeks. While the pending sales had a median of thirty-five days on the market, the sold properties the previous week were listed for a median of twenty-two days. Last week, the median sale price of single-family homes in Deschutes County was $661,995.

The bigger story will unfold over the next several weeks once we get past Labor Day weekend, which is typically slower for pending sales. Sold properties are also typically lower with one less business day in the week. Here in Sunriver, the volume of out-of-town visitors has noticeably declined with Washington and California schools back in session. Fall buyers usually do not have school scheduling concerns and are focused solely on finding a property before winter. 

While winter may not be far away, this week, temperatures will remain in the 90s even though morning temperatures have cooled considerably. Home sales have also cooled from the 2021 record highs, and the real estate business is beginning to feel more normal, although prices have remained firm with only 929 homes actively listed in Deschutes County, an increase of one from last week. Even though there will not be a large influx of new listings at this time of year, new properties are still hitting the market, and those that get the price right are selling fast. Four hundred ninety-three of the actively listed properties have reduced the asking price by -5.36%, with a median of fifty-six days on the market. Consider that the pending sales last week were listed for thirty-five days and the sold properties for twenty-two days, illustrating how price is crucial to competing in today's market. As we get closer to the winter holiday season, I expect the pace of price reductions to continue as sellers try to take advantage of the remainder of 2022 to secure a sale. Buyers and sellers alike should remember that there are only ninety days to secure a contract on a property to close before 2023! Now is the time to make offers or adjust your price if a sale this year is part of your plan. 

With fall being such an active season in the real estate market, you can rest assured that I am working and available to help with anything you need in Central Oregon! Please do not hesitate to reach out if you have any questions about a specific property or the market in general.

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Last week, I read several articles proclaiming either a housing bust or highlighting growing July inventory and a slowdown in the real estate market. Those reports indicate the problem in following mainstream media for real estate news; they are not up to date. Considering that we have almost completed the month of August, quoting July numbers is tripping over something that is behind you. While real estate is local, and some markets may be experiencing growing inventory, our inventory dropped again this week to 928 single-family homes actively listed in Deschutes County, down twenty-six from last week. The days a home takes to sell have increased to a median of fifty-four, and there were 496 price changes amongst the active inventory. However, we also saw the highest pending sales since May 4 at one-hundred-three, with sixty-nine sales. Keep in mind that sales will increase over the coming weeks based on the increase in pending sales. With a reduction of new listings hitting the market, inventory will decrease from now until the winter holidays, putting upward pressure on pricing. Not every home is overpriced and deserving of a price change, and as inventory declines, sellers are holding firm and, in many cases, being rewarded with prices near asking. 

Mortgage News Daily reports the national average for a 30-year fixed-rate mortgage at 5.73%, an increase of .31% from last week. Unfortunately for those buyers hoping to see a steep drop in home prices, prices have remained firm, and interest rates have risen. There is no indication that prices will decline in Deschutes County for the remainder of 2022, and 2023 is setting up to be another low inventory environment. On February 16, 2022, I reported 201 actively listed homes in Deschutes County; on April 20, 2022, there were 333 actively listed homes. Those numbers indicate how rapidly the volume of listings decreased over the winter and how long it takes for the number of homes for sale to build up in today's economic climate. With higher mortgage rates, higher rents, and higher home prices, home-sellers have very few incentives to list their properties for bargain rates, especially considering the low rates many have on their current mortgage and substantial equity. 

Last week I mentioned that real estate trends lag the current economic conditions, and how the market is shaping up today is consistent with that assertion. For example, if corporate earnings decline, layoffs exponentially increase, and workers cannot find jobs, home values may decrease. Further, if mortgage rates continue to climb and inflation remains entrenched, economic conditions for many buyers may deteriorate. There needs to be a glut of inventory before home prices decrease, and the long-term trends show the opposite of a surplus. Many buyers today focus on the housing collapse of 2008 while ignoring the long-term trend of rising prices. While the Case-Schiller Home Price Index may look inflated today, the consistent trend shows increasing home prices. Home purchases are often long-term investments and a higher quality of life for many people relocating to Central Oregon. Is an attempt at gaming the market preventing you from getting on with your life? 

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Regarding real estate, my predictive powers extend no more than several weeks or, at best, a season. However, I stay on top of the data and trends weekly, which gives me an excellent view of where we are today, although that data can be a poor future predictor as markets change quickly. I bring this up in response to numerous articles published at ever-increasing rates predicting a housing crash and personal conversations I've had along the same lines. Having been a real estate agent from 2004-2010 in Sun Valley, Idaho, I completely understand the hesitancy regarding today's economic conditions and have the scars to prove it! So, before I pontificate on the economy, here are the numbers from this week's single-family homes listed and sold in Deschutes County. This morning there are 954 active listings, a drop of eighteen from last week and the first week of declines since I started a spreadsheet tracking these numbers on April 20, 2022, when the active listings were 333. The median days on the market for active listings is forty-nine, with a median price of $747,000. A whopping 508 homes have reduced the asking price by -5.3%. Pending sales were the highest since June 29 at ninety-six, one shy of the June number. That is thirty-one more pending than last week and fifteen higher than the next biggest week since June. From this point until the winter holiday season begins, I anticipate a steady reduction in the active inventory. Reduced inventory may be a catalyst to increase buyer activity, as waiting makes for fewer opportunities. Sold properties last week were down to fifty-nine because of fewer pending properties in previous weeks. The median price of the sold homes was $661,500 with twenty-one price reductions, a median of -5.26%.

How does all that data stack up against the broader economy and predictions of a housing market collapse? The real estate indications of a declining market are increased inventory, increased days on the market, and a reduction in sales price. However, while we may have price drops in actively listed homes, those drops have been modest, and overall prices remain steady. Moreover, none of the other current indicators indicate a declining market. Remember, real estate is a lagging indicator of a recession or economic decline, not a predictor. The current rates for a 30-year fixed-rate mortgage are 5.29%, inflation is at 8.5% (that does not mean we had 0% inflation!), and gas is over $5 per gallon. There is little doubt that these factors negatively impact a segment of the home-buying public. But, as anyone tracking sales in Deschutes County knows, many of today's buyers can look past these financial obstacles and pay what it takes to purchase a home. Although, if corporate earnings decline to the point of lay-offs and the previously employed are not able to find replacement jobs at equal pay, all of those factors could combine to create a significant impact on home prices. With so much gain in home equity in the last couple of years, many homeowners with mortgages below 3%, and rising rents, it seems unlikely that owners will feel compelled to sell at bargain prices. So if you are waiting for a housing collapse, it is unlikely to happen in the next few months. 

As I have mentioned many times over the past several weeks, all indications show a stable housing market in Deschutes County for the remainder of 2022. However, if conditions worsen for sellers, expect fewer listings as homeowners wait it out. Spring 2023 may tell a different story, but that relies entirely on the economy. Pick your favorite "expert" if you are a gambler, or use the tools on EnjoyBendLife.com to track the current market with Market Trends, Market Reports, or by reading this email weekly. My weekly updated Market Trends are a fantastic way to find out what is currently happening in the active market. I strongly encourage you to make them a regular read if you are a buyer or seller in Central Oregon.

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The Consumer Price Index was unchanged in July compared with the June report, which many analysts will interpret as good news. However,  June and July numbers are at forty-plus year highs, and celebrating may be premature. Pending and sold single-family homes in Deschutes County declined last week to sixty-five and sixty-nine, respectively, but days on the market for those properties also dropped slightly. However, the inventory of homes for sale increased by only two, and this morning shows 972 single-family homes actively listed in Deschutes County. 

A strong jobs report typically provides inflationary pressure on the economy. Yet, a closer look at the breakdown of multiple job holders and other more granular data shows the economy is still facing challenges. On a positive note, the national average for 30-year fixed-rate mortgages is steady at 5.35%, and home buyers seem to take it all in stride. Moreover, of the sold homes in Deschutes County last week, the sale price to original list price ratio was 98.93%, while the median price reduction was -5.69%. Whichever number you focus on, the data shows homes are, in most cases selling for at or very near the asking price. Although 518 houses of the 972 listed have reduced the asking price, showing that sellers are motivated to sell, the market overall is not as frothy as it was only a few months ago.

Of the 134 homes that were either pending or sold last week, six were over $2M; twenty-six were between $1M-$1,999,999; forty were between 750k-$999,999, and sixty-two were below $749,999. A sign that stable, reasonable mortgage rates, increased inventory, and motivated sellers show in the fifty pending and sold homes last week between the 500k-$749,999 price range. 

Labor Day signals a shift in the marketplace with schools back in session and summer vacations relegated to the memory banks. In communities like Central Oregon that experience winter weather conditions, the fall up until Thanksgiving is tantamount to a second summer when looking at sales activity. The combination of fewer buyers, motivated sellers, and looming winter weather makes for excellent buying conditions, and this fall is likely to be the most favorable for buyers since 2019. Housing sales continue through the winter, although inventory will naturally decline, and depending on snow levels, viewing acreage properties is challenging. After the holiday season, many buyers begin their research anew, focusing on purchasing in spring as new listings hit the market. 

No matter your schedule, EnjoyBendLife.com has the tools to track the market so you can be confident that the price you offer or ask for your property is appropriate. In addition, I am here to apply my boots-on-the-ground knowledge of Central Oregon to assist you whenever you are ready!

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Click here to view my Central Oregon real estate Video Blog for August 5, 2022.

After a steep drop in mortgage interest rates last week, rates increased again, with this morning's national average for a 30-year fixed-rate mortgage at 5.3%. Rates are still .2% lower than last week, and a local lender reported rates in Central Oregon on Friday of 4.66%, evidence that shopping local pays! Inventory of single-family homes in the county increased by thirteen to 970, while sales increased by twenty-four to eighty-eight. Pending sales dipped slightly to seventy-four, making minimal overall changes from the previous week. Considering the heat Central Oregon has experienced and it being peak summer vacation season, the sales volume and activity are substantial. Last week, the average sold price to list ratio was 97.5%, with a median price reduction of 4.86%. However, 50.4% of the active inventory took a price cut by a median of -5.19%. On June 15, 45% of the actively listed properties had lowered the asking price; today, that number increased to 50.4%. Anecdotally, many agents are experiencing fewer buyers in the market compared to 2021. Still, the buyers engaged in the market are putting homes under contract, as the sales volume shows. Ever-increasing prices have backed off from last summer, and many sellers are adjusting their asking prices quickly to align with current market conditions. With the dog days of summers here, many sellers are motivated to secure a sale before fall, making life a bit easier on buyers. 

Comparing sales from April 1, 2021, to August 3, 2021, against the same period this year shows some interesting developments. In 2021 for the period, there were 2059 sales, while this year, there have been 1590 sales, a significant decrease. In addition, the median days on the market for those sales decreased by one to five this year, and the median sale price dropped from 699k to 600k. The percentage of price reductions increased from 16.5% to 23.3%; evidence that peak pricing is behind us. The decline in the median sale price is most likely a result of buyers in lower price points having more favorable conditions rather than an overall decrease in home values. An illustration of that assertion is the April 1 through August 3 comparison of last year and this year of sales above $1M. In 2021 during this stretch, there were 316 sales at a median sale price of $1.35M, five days on the market, and 54 price changes at -5.97%. This year, sales over $1M increased to 358, median sales price and days on the market were unchanged, and there were 55 price changes at a median of 6.27%. In 2021 17.1% of the sold homes in this price range reduced the asking price before securing a sale, compared with 15.4% in 2022. 

There is much speculation about where the economy and home prices are heading. Although, there are pre-indicators that show the direction the home market is trending. While inventory is rising, the pace has slowed considerably, and without a glut of homes for sale, it is unlikely prices will see a steep decline. The days a home sits on the market also need to increase significantly to facilitate a price drop, and to date, buyers have continued to step up and purchase homes. In 2019 from April 1 through August 3, there were 1,781 total sales in Deschutes County, and for the period in 2020, 1,777. While almost two hundred fewer sales this year is significant, the bifurcation in our market is apparent when you consider sales in the higher price points. From April 1-August 3, 2019, there were ninety-four sales above $1M, 121 in 2020, 316 in 2021, and 358 this year. Higher price point buyers are continuing to purchase in Central Oregon! 

For those of you waiting for a decline in prices, it is more likely that waiting to see what happens in 2023 is the only solution. Regardless, the fact remains that winter weather condenses property sales towards the summer and fall months, and 2022 continues to produce buyers that, to date, have prevented a steep drop in home prices. 

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Click here to view my Central Oregon Video Blog for July 22, 2022.

Inventory in Deschutes County in the last seven days increased to 957 single-family homes, only ten more than last week. In addition, pending and sold numbers flipped, with eighty-one homes pending compared to sixty-five last week and sixty-four sold against eighty-one the previous week. This week's numbers could very well mark the peak inventory for the season, as strong sales and a decrease in new listings widdle away at the volume f unsold properties. The days on the market for pending properties increased by five to twenty-three, while the sold days on the market doubled to sixteen. Of the actively listed homes, the days on the market are up by four to forty. As the numbers show, proper pricing is the key to sales in this changing market. 

An increase in days a home is on the market can be an early indicator of falling prices. Although, limited inventory and strong sales have dampened a steep price decrease so far in 2022. The Federal Reserve announces this round of monetary policy change at 11 AM Pacific Time, a likely increase to the overnight rate of another 75 basis points to bring down inflation. Interestingly, mortgage interest rates have been stable and decreased recently, with this morning's 30-year fixed-rate national average at 5.5%. The Central Oregon real estate market has taken all of this in stride, with the median sales price reduction of the sold homes in Deschutes County last week at -8.03%. Although, only twenty-one of the sixty-four sold properties changed the price before securing a buyer. It is impossible to know what the Fed will do in the September meeting, but analysts are already predicting a more pedestrian 50 basis point increase. Some analysts even predict rates coming down as early as the first quarter of 2023, a move likely to add fuel to an already hot housing market just in time for the next selling season. 

For several weeks here, here, and here, I've spoken about how now may be as much of a buyers market as we will see in the current cycle. While, by all accounts, the market still favors sellers, higher mortgage interest rates gave sellers a wake-up call, with many lowering their prices in the face of decreased buyer activity. So while today's market may not have reduced as much as many buyers anticipated, this may be as good as conditions get! Without a significant decrease in buyer demand or an increase in available inventory, there isn't enough downward pressure on the market to significantly reduce prices. As a result, today's buyers market looks different than many anticipated, and while the fall is a great time to buy, waiting for lower prices may prove fruitless if you miss out on a property you loved. Unfortunately for buyers, the likelihood of significantly more homes for sale through the remainder of 2022 is low. 

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Click here to view my Central Oregon Video Market Analysis for July 22, 2022.