This morning in Deschutes County, there are 549 single-family homes for sale at a median list price of 755k. While many homes are selling in a few days, the average days on the market for the active inventory is forty-four. Consequently, this fall, the real estate market is behaving more typically to years past, although the recent spike in mortgage interest rates has undoubtedly impacted buyers. On that note, the 30-year fixed-rate mortgage averaged 3.14%, just .04% below our 2021 high recorded in early April. Thus, peak pricing for this season may be in the rear-view mirror, although many buyers are actively looking for the right property.
Moreover, considering that 236 of the 549 actively listed homes have reduced their list price, the ratios for buyers have improved. Contrasting the sold homes last week against the active inventory shows a median sale price of 667k, with a median price reduction of -4.91%. Thus, while the days a home is on the market may only be six, actively listed homes are averaging 65 days on the market, making this is a prime opportunity for buyers to negotiate a deal before the end of the year while interest rates are still low. All the indications for this week's Fed meeting point to a reduction in the monthly bond and treasury purchases, which will lead to higher mortgage rates eventually.
While the real estate market is adjusting to the different forces applied, one of the most prominent players in the business has taken extreme losses recently. None other than Zillow has let go 25% of their workforce after their house-flipping operation turned into an abject failure. In the Phoenix, Arizona market, 93% of the homes in Zillow's portfolio (their second largest portfolio) are listed for less than what they paid. How did Zillow get this market so wrong? The early reports show Zillow's algorithm wildly overpaid for homes just as the market was cooling. What is the takeaway? Algorithms and artificial intelligence are emerging technologies in the real estate sector that are not entirely reliable. What is the solution? Work with a knowledgeable agent that knows the local markets intimately! And don't forget my Market Trends page for valuable insight into our active inventory.
