My Weekly Central Oregon Real Estate Blog

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. 

Click here for the full report.

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. 

Click here for the full report.

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

This morning the available single-family homes for sale in Deschutes County is 947, up sixty from last Wednesday. Pending sales are down five to sixty-five, while sold homes are up sixteen at eighty-one. Mortgage News Daily shows the 30-year fixed-rate mortgage at 5.72%, showing steady mortgage rates for the last several weeks. With the next Federal Reserve meeting still seven days away, I do not anticipate much rate change until after the meeting. With buyers pulling back, anyone that feels housing prices will not decline dramatically has reduced competition and a growing inventory of homes to select. Sellers are more open to offers below asking than at any time in the last couple of years, and with still low inventory from a historical standpoint, it isn't easy to see much changing this selling season. Some sellers may have a sense of urgency, but to date, there have been enough motivated buyers to keep the equilibrium. 

The median list price is $779,950, with 462 price changes at a median of -5.18%. The properties sold over the last seven days were on the market for a median of eight days, with the average sale price at $962,050. Of the sold homes, 24 lowered the price before securing a sale by -5.29%, well within the range of a normal market. The biggest takeaway for buyers looking to purchase this selling season would be that 48.8% of the actively listed properties have reduced the list price. While many believe further price declines are on the horizon, many experts expect the Fed to begin lowering rates in the first quarter of 2023. If those predictions come true, don't expect housing dynamics to favor buyers for long! 

This spring, a flood of buyers motivated to leave large cities and take advantage of lower rates seems likely. With Labor Day only six weeks away, the rest of 2022 might be the best buying conditions for housing for quite some time. Many properties on the market are over-priced, and the current environment is applying downward pressure to those prices. However, the high-end inventory of homes in Central Oregon has a location and build quality that set them apart, making a steep decline unlikely. While the current conditions may seem like a significant change, the median days for sold homes from January 1, 2014, through January 1, 2019, was thirty-five compared to eight last week. Deschutes County home sellers are used to longer list times, and we are still a long, long way from market conditions that would make anyone panic. While supply chain issues and currency debasement keep retail prices and energy costs high, the same dynamics drive home prices. If you are waiting for a complete economic collapse before purchasing in Central Oregon, this report will reveal those shaping trends first. Stay tuned!

Click here for the full report.

Click here to view my Central Oregon Video Market Analysis for July 15, 2022.

As the economy continues its downward spiral, cracks in the housing market are beginning to show. This morning's CPI print for June came in at 9.1%, higher than forecast and the highest in more than forty years. According to Mortgage News Daily, the 30-year fixed-rate mortgage is 5.71%, after a relatively tame week for rates. Although, with this morning's higher-than-expected inflation number, expect rates to move after a quiet week. Inventory rose slightly to 887 single-family homes listed in Deschutes County, up thirty-eight from last week's report. The median days on the market across all price points is 35 for actively listed homes and, as the chart below shows, higher for the higher-priced properties.

Interestingly, no homes above $2M were pending over the last seven days, indicating that high net worth buyers are getting cold feet about the economy. Buyers of high-priced homes have many fantastic locations and houses to choose from, so maybe they are just on an extended fourth of July vacation? However, considering some of the unique properties on the market, that seems unlikely and is a significant change from the rapid sales pace over the last couple of years. 

The most active price range happens to be a segment of the market ordinarily subject to buyer financing, homes priced between 500k-$749,999. Of the thirty sold houses in this price range, one was a VA loan, two were FHA, five were all-cash deals, and the remaining twenty-two were conventional financing. The median sale price of the range was 620k, and the median price reduction was -5.19%. So far, in 2022, there were 995 homes sold in this range, with a median price reduction of -2.91%.

There is a lot of speculation about where the market will go from here, with some expecting further home-price increases. But, candidly, our economy is in such a tenuous situation, with another 75 basis-point Fed rate increase expected later in July, it seems unlikely home prices will climb further. Forecasters also expect negative GDP for the second quarter of this year, which will make a recession official. In the short term, desirable homes priced correctly should continue to sell reasonably fast because of the time of year. But, as we approach fall, expect any homes that have lingered on the market for the summer to begin cutting the price or be open to offers below asking. As I have said for months, the key to downward pressure on home prices is rising inventory and increasing days on the market. It may take a few days for the recent economic shocks to settle in, but our current market supports prices within a reasonable percentage of today's pricing. Stay tuned to this report to be the first to know when the market shifts further. 

Now is the time to utilize the Market Trend Reports on my website, and allow me to research any decision you are considering regarding housing in Central Oregon. Also, at the bottom of the Market Trend page, I have provided links to the Case-Schiller Home Price Index and other financial charts that are especially helpful for investors. Remember, housing is a long-term investment, and times like these create opportunity. Please do not hesitate to contact me if you have any questions!

Click here for the full report.

Click here to view my Central Oregon Video Market Analysis for July 8, 2022.

Click here to view the July 6, 2022 report.