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Over a week, I consume a lot of real-estate-related content, whether working for clients in Central Oregon or reading and watching reports from different analysts. Recently, I've noticed a trend in the comment sections of videos and written accounts of incredulous agents taking issue with the data. First, I think it is essential to scrutinize the source, as many people working in this space are aiming for clicks or trying to sell you something. However, most legitimate reports use national numbers or, at best, provide a brief cursory overview of large to medium-sized cities. In almost every case, the data is at least 30 days old and, in many cases, closer to 60 days stale. Nowadays, the comment section of almost anything can quickly devolve into a mess, and the real estate forums are no different. However, I always find it interesting how anecdotal most commenting agents' views are rather than data-based. Others are demanding an opinion on what the market will look like in six months. If I, or any other analyst, could predict the market six months into the future, I would not be working in real estate! In most cases, I feel reasonably safe forecasting the next three months based on the last three months and following the financial markets. The latter being more volatile than ever makes those forecasts increasingly tricky.
Comparing the sales from the week ending April 20, 2022, to the week ending April 12, 2023 (this morning) clearly show the changes over the past year. Using the seven days last April, there were ninety-eight sold single-family homes in Deschutes County at five days on the market, a median sale price of 685k, and fourteen price changes at a median of -1.32%. The previous seven days ending this morning show forty-three sold homes, seventeen days on the market, a median sale price of 639k, and thirteen price changes at a median of -4.62%. For the period in 2022, there were 100 pending sales compared with seventy-seven this week.
The market has softened from last year's frenetic pace, shown in the data above. As you probably recall, the Fed initiated the first rate increase of 2022 in March (25 basis points) and was telegraphing several more increases throughout the year. Since last March, the Fed has kept its promise and has raised rates by 475 basis points. Preceding the coming rate increases, the fast-paced market of 2021 through early 2022 stepped on the gas as both buyers and sellers rushed to make moves before the full effect of future rate increases took hold. By September 2022, the Central Oregon real estate market (and the national market) slowed considerably, with mortgage interest rates near or above 7% (7.24% on October 17, 2022). However, By early February this year, sales began to pick up as mortgage rates eased back. The national average yesterday afternoon for a 30-year fixed-rate mortgage was 6.52%, still elevated compared to the last couple of years, although a pivot (or pause) seems likely for the second half of 2023. For comparison, the rate in April of 2022 was 5.13%.
January 1, 2022, through April 12, 2022, shows 1149 single-family home sales in Deschutes County, compared to 679 for 2023. It would be easy to look at the reduced sales volume and increased mortgage rates as signs of a softening market. However, while the market has slowed from last year's head-spinning pace, the dearth of sellers has kept prices firm, and many properties are commanding full-price offers quickly. Pending sales are down 23% since my report on April 20, 2022, but still robust at seventy-seven. More importantly, the days on the market for those sales was only ten. This morning there are 525 single-family homes listed in Deschutes County, down seventeen from last week. That breaks down to 343 in Bend, 163 in Redmond, ninety-six in La Pine, thirty-nine in Terrebonne, and thirty-six in Sisters. There are 121 listings in Crook County and seventy-three in Jefferson County.
On May 18, 2022, there were 538 single-family homes listed in Deschutes County. So while the national reporting may beat the drum of high inventory and low prices, that simply has not been the case in Central Oregon. Whether sellers enter the market in the second half of 2023 remains to be seen, as well as whether the Fed blinks and backs off rate increases or even lowers rates. However, until something changes, our market looks more like it did in 2021 and 2022 than in pre-2019. As rates decrease, more buyers enter the market, and prices remain firm or increase. My prediction of a 9% increase in home sale prices may have been a miss, but the housing market in Central Oregon remains strong.
Multiple offers may not be prevalent, but ten days for pending sales are moving quickly, and many properties have more than one buyer interested. Waiting on a home you like or waiting for more, cheaper inventory is not a good strategy in today's market. There are always homes to buy, but the more specific your needs are, the more critical it is to take action on a great property. Central Oregon has an incredibly diverse geography and home selection; in many cases, unique properties are only available rarely. For the casual observer, it may seem like there are myriad options. Still, considering the price point, location, and home attributes, it is clear that most buyers only have a handful of options.
Regular readers of my report know I am a proponent of taking a long-term view of housing rather than trying to time the market. Conditions today may be challenging for buyers, but the long-term view of Central Oregon remains bullish. Sellers may not be commanding as high of prices as the last couple of years, but close. So don't wait to buy real estate. Buy real estate and wait!
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