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August Market Update

We are now just a few short weeks from Labor Day and the unofficial end of summer. However, as anyone who lives in Bend knows, fall is one of the best times to be here. Similarly, despite the commonly held belief that the real estate activity fades throughout the end of the year, the fall is actually a very good time for real estate in Bend. Whether you are a buyer or seller, we expect there to be some opportunities. Let’s take a few moments to digest the data and see what brings us to that conclusion.

Median/Average Price

Prices in Central Oregon have ticked up again. As we have noted a few times in recent newsletters, despite people (mostly buyers) calling for prices to correct, prices seem to keep ticking up. In both our last newsletter and in our coming State of The Market report (CLICK HERE FOR YOUR COPY) we have highlighted why this number keeps ticking up, so we won’t touch on that here. What we will be focusing on is why the average has ticked up so much in comparison to the median. In the last month, the average non-acreage, single-family home in Bend reached nearly $1M. How can this be? Despite 25% fewer sales in July than in June, there were the same number of homes sold above $1M and 25% more homes sold above $2M in August compared to July. The fact that the average is increasing so much more than the median, tells us that there are some very expensive homes on the far extreme of the market selling. In July, the highest-priced home was $850k more than the highest-priced home in June. There are a number of high-priced homes currently pending in the market, so depending on when and where those sell, the averages could very well hold strong or even tick up again.

Days on Market

This has bounced around quite a bit in the last year, and despite peaking in February at 62, currently, homes in Bend are averaging 24 days on market. Sellers without question have gotten more realistic in their pricing and have listed homes closer to fair market values, encouraging buyers to get off the fence and act quicker. In fact, in July, 49% of the homes that sold in Bend sold within a week. That is an astonishing number and higher than any other month this year. Although buyers had been patiently waiting for the right homes at appropriate prices, when they saw the good ones in July, they acted. We would not be surprised if the days on market ticked up in the coming months as only 25% of the current pending homes went under contract in a week. Also, in the past month, a number of homes have gone pending after many months on the market, and when those close, it will naturally pull the averages higher.

New Listings

Without question, the biggest challenge the market has is the lack of homes for sale and unfortunately, that isn’t getting any better. Seasonally, new listings come to market in the highest numbers in the first half of the year and then taper throughout the second half. Normally we see the number of new listings peak in May or June and then start to decrease in mid-summer. Last month, there were 34% fewer new listings in July than in June (the peak in 2023). For comparison, July’s total was also 25% lower than July of 2022. With supply remaining incredibly low and demand remaining strong (we cover this in the State of The Market), this lack of new inventory can serve to keep upward pressure on pricing.

Pending Sales

Despite fewer new homes coming to market in July, there was actually an increase in pending sales in July. So let’s think about this, there are fewer homes on the market, and fewer homes coming to market, but the number of homes going pending is increasing? It seems inconsistent, but if you take into consideration what we discussed about how many new listings went pending in 7 days, it would indicate that buyers have either grown tired of waiting or sellers have gotten more competitive in their pricing and preparation of homes, or both. At the same time that buyers are realizing that they can’t put their plans on hold forever, sellers are realizing that they can’t just list an unprepared home at an inflated price. This combination of sellers becoming more serious about selling at fair levels and buyers deciding that starting that new job, enrolling in school, etc can’t wait, has led to a scenario where despite low overall sales numbers, the market remains very strong.

Average Sale to List Price

Given the large number of homes going pending and selling so quickly, it should be no surprise that the average sale-to-list price would be very close to 100%. When homes sell in a week, there usually isn’t much negotiating taking place. This isn’t to say that no negotiation is happening. If we were to look at a broader range of home sizes, acreage sizes, and areas, and compare it to the original list price (not the most recent list price), we would see ranges between 95-98%. Also, it is worth noting that this statistic needs to be used with caution. If a seller prices a home fairly or below market value, paying 100-105%  of the asking price could still be a very good decision. At the same time, if a seller is way inflated on their pricing, paying 90% of the asking price could still be too much. It is best to work with someone who can help you determine fair pricing for a house and not get caught up in how that compares to the list price.

Some other points to consider…

Mortgage Changes: Unfortunately, interest rates have finally broken out of a fairly tight range between 6.5-7% and it was to the upside. As you all know, this is probably the biggest influencer of market activity, so you can see a live update on interest rates here.

Inflation: This monthly data is what helps dictate the course of action of the Federal Reserve Bank and what they do with the interbank lending rates (not mortgage rates). This chart shows that inflation is coming back down and well off its highs, but still well short of the Fed’s target of 2%.

We would like to point out that although we have brought up the market levels prior to the pandemic on a few occasions, we are not saying that we expect to get back to these levels any time soon. But we do think that keeping some perspective on where we are in relation to years past is helpful. Things feel significantly less alarming when you see the big picture and since people make the best decisions when they are able to remove the excess emotion and fear, it is our goal to make sure you have the most information at your fingertips.

We hope you find this information valuable and that it helps you towards your ultimate real estate goals. If you have any questions about this month’s content or would like to dive a little deeper into the data, please reach out to your Ladd Group broker. If you don’t have one, you can reach me at steve@bendpropertysource.com or on my cell at 541-280-2132. 

There are also several ways to reach the team, so please let us know how we can help. 

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Our agents write often to give you the latest insights on owning a home or property in the local area.

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