Central Oregon Market Report

On This Day in 1980 Mt. St. Helens Erupted

On this day forty-two years ago, Mt. St. Helens erupted and, in the process, lost ~1300 feet in height. Volcanic ash covered the Pacific Northwest, and in my hometown of Gig Harbor, Washington, ash lightly blanketed the region. Considering that the S&P 500 has dropped 16% year-to-date, quickly approaching bear market territory, is the housing market soon to follow? While it makes for hyperbolic click-bait, the Deschutes County housing market shows signs of stability. For now. This morning there are 538 homes listed for sale, with 22 median days on the market at a median list price of 830k. The median price change for listed properties is negative 4.6%, with 209 homes changing the asking price. In a "normal" market, approximately 30% of listed homes adjust the price before securing an offer, with the current price changes tracking at 38.8%. Most of the robust price decreases attribute to sellers coming back to reality from the ever-increasing prices of the last two years rather than the market collapsing. However, some signs show moderation, with the pending properties' median days on the market last week moving up to seven from five the previous week. The median price of pending homes was almost unchanged at 662k.

Interestingly, the median price change for the pending properties declined from last week to a negative 3.45% from negative 5.46%. Chalk that up to solid buyer demand jumping on correctly priced homes. More evidence that correct pricing is vital shows in the sold property numbers, where 84 closings had only 14 price changes of negative 2.55% and four days on the market. For now, the migration of buyers to Central Oregon is keeping the market floating high, despite rising mortgage rates, now at 5.41%. With the Fed expected to raise the overnight rate 50 basis points in June and July, buyers could have an incentive to purchase now before mortgage rates breach 6%, a level not seen since 2008.

In recent reporting, many news outlets have asked if we are heading towards a recession? A recession is two consecutive quarters of negative Gross Domestic Product (GDP). With first-quarter 2022 GDP coming in at negative 1.4% and the stock market in steady decline, it would be more surprising than not if the second-quarter GDP numbers are positive. In addition, while the Consumer Price Index (CPI) showed the pace of rising inflation at 8.3% year-over-year, inflation measured using the same formula as 1980, continuing my Mt. St. Helens theme, would be a whopping 17.15%! For those who buy gas, groceries, etc., the higher of those two numbers is undoubtedly more in line with reality.

Real interest rates from a borrower perspective are the interest rate paid on a mortgage minus the inflation rate. For example, using the Bureau of Labor Statistics CPI numbers, borrowers earn 2.89% on the average 30-year fixed-rate mortgage. However, following Inflation calculations using the formula from 1980, that number jumps to 11.74%! So is it any wonder that buyers who can afford homes today are unfazed by the rise in mortgage rates? Also, a larger share of homes sold today are all-cash offers, eliminating any finance cost concerns. Especially when you consider the quality of life in Central Oregon compared to many large coastal cities that many new residents put in the rearview mirror. While these numbers are constantly in flux, most people believe inflation is entrenched, with the Fed running out of tools to cool off the economy and bring the plane in for a soft landing. If a plane doesn't land softly, there are only two options, a hard landing or a crash.

Please reach out to me if you have any questions or concerns regarding the Central Oregon housing market to avoid a runway calamity!

Property Search Links

Buyers and sellers alike need accurate, up-to-date information to make informed decisions. The Market Trend Reports I provide on EnjoyBendLife are a fantastic way to see how the active inventory of home prices is trending. These reports are updated on Sunday of each week, giving you insight into more than just the number of listed and sold properties. Click the links below or sign up to have a specific report emailed directly to your inbox. Once viewing the Market Trend reports, use the search box to enter any city in the country for the same data. These reports provide invaluable information for out-of-town buyers that need to sell a home in their community before moving to Central Oregon. Please let me know if you have any questions about interpreting this information.

Investor Search

Market Reports

Market Reports linked below show the active, pending, and sold properties for communities throughout Central Oregon, providing yet another powerful tool at your disposal on EnjoyBendLife. If a corner of Central Oregon you are interested in is listed below, click one of the links and view the reports. Or, use the Market Reports Tool and select your criteria for more specific information, such as subdivision, county, or city. You can choose to have these reports emailed directly to you at your desired frequency. Any Market Report you choose is updated every fifteen minutes, so you will always be on top of the market!