Historical Perspective

The national average for fixed-rate 30-year mortgages yesterday was 6.38%, up slightly from earlier in the week but down from a peak of 7.24% in mid-October. As always, check with your local lender, as many in Bend have lower rates than the national average. In addition, actively listed single-family homes in Deschutes County decreased to 694, in line with last year's inventory trend. However, last week's sales of forty-five homes are significantly less than the 119 sales for this week in 2021. There is little doubt that higher mortgage rates have slowed buyer demand, but the rise in rates may also be a factor in fewer sellers listing their homes. Whatever drives the data, declining inventory in Deschutes County keeps prices firm. The median sale price of homes sold last week compared with the same week one year ago was up marginally, although the median sale price week to week is dependent on the particular home sold and is too small a sample to show price trends accurately. 


In Deschutes County, sales year to date for 2021 were 5,157 with a median price of 602k, compared to 4,069 sales at a median of 680k in 2022. The last time yearly sales in Deschutes County were below 4500 was in 2014 when sales were 4,009. In 2006 sales were 4,002 before a steep decline due to the sub-prime lending fiasco triggered the housing crash. In 2007, sales dropped to 2,703, then to 2,043 in 2008. By 2009 sales rebounded to 2,844, and from 2010 through 2013, sales went from the low to the high three-thousand range. The recent sales history in Deschutes County shows robust activity today, despite higher rates. 


Mortgage rates in 1982 were 16.93% before steadily declining to ~7% through most of the 90s. In the new millennium's first decade, rates were in the 6% range before dropping to ~4% from 2010 through 2018. Rates below 4% first appeared in 2012, again in 2016-2017, and between 2019-2020. The below 3% rates of 2021 are an anomaly, not the norm. All of these numbers may make your eyes glaze over, but the history helps to give perspective on today's market. 


Whether all the data combine to drive home prices down remains to be seen. Although looking at the recent past, home sales are remarkably robust, inventory remains historically low, and prices are firm. Significant price decreases in the median sale price seem unlikely without rapidly rising inventory and decreased buyer demand. For example, in April 2022, there were only ~330 homes for sale in Deschutes County! As buyers grow accustomed to higher mortgage rates, I anticipate demand to increase, not decrease. 


Whether you are interested in talking about the data or need help navigating our market, I can help! Please feel free to reach out to me anytime.

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Clicking on the Market Action Index chart below will show how parts of Central Oregon behave in today's market. Every zip code, town, neighborhood, and price range has a unique dynamic, and the Market Trend Reports are a big help in seeing how your community is performing. Please review these reports weekly to follow trends or have me run a detailed analysis for a better view of price activity.

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Reed Melton

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