The holidays are upon us, and while there is still some activity in the market, we are largely seeing a trend of window shopping and waiting. Some are holding off until the new year, others are anticipating potential inventory increases in the spring, and many are waiting for a possible drop in interest rates. While waiting can make sense in certain situations, relying on uncertain outcomes can be risky. It’s worth considering the benefits of staying ahead of market trends. Let’s take a closer look at the monthly numbers to understand what’s happening now and what may lie ahead.
Mortgage Rates
As we’ve noted in the past, this remains the top concern for both buyers and sellers. For over a year, there have been calls for interest rates to ease. However, despite some fluctuations over the past 12 months, rates are currently almost exactly where they were at this time last year. This means that those who have been sitting on the sidelines, hoping for a more favorable interest rate environment, have effectively put their lives on hold for much of the year.
Looking ahead, we’re now seeing adjustments to the estimates for how much rates might drop over the next 12 months. While earlier projections suggested rates could return to the low 6% or high 5% range in the near future, more recent estimates are more conservative. Many experts now predict rates may only decrease by about 0.25 percentage points from current levels.
It’s worth speaking with your lender about how much a 0.25-point reduction could impact your financial situation. Additionally, discuss with your broker strategies to negotiate a rate buy-down or credit now, which could potentially save you more in the long run. It’s entirely possible to structure a deal that allows you to buy now and achieve greater savings, rather than waiting for a rate drop that may never materialize.
Median Price
The other half of the equation making affordability a challenge is the median home price, which has remained stubbornly high. As we’ve discussed in prior market updates, it’s important to be cautious about placing too much emphasis on month-to-month changes in the median home price. With sales volumes at the lower end of historical norms, these fluctuations can often appear more dramatic than they truly are. The past two months have been a prime example of this.
A recent appraisal report revealed that, for single-family homes on non-acreage properties in Bend, the median price increased by $85,000 in October but then dropped by $100,000 in November. This volatility was largely due to the small number of homes sold during these months, combined with a higher concentration of expensive homes sold in October compared to November.
Looking at the bigger picture over the last 12 months, we’ve seen a predictable trend: prices rose gradually during the first half of the year and then tapered off by an expected 6–10%. However, they still remain slightly higher than where they were at this time last year.
If you’re interpreting this data to mean that June or July will guarantee the highest price for your home sale, we encourage you to reconsider. Median price trends don’t always tell the full story, and there are many factors to consider when determining the best time to sell. Give us a call to discuss why this is often not the case and how we can help you make the most informed decision.
Median Price (Monthly)
Median Price (3 month rolling average)
New Listings
As expected, the number of new homes coming onto the market during the winter months has continued to decline month over month. However, despite this typical seasonal drop, November saw more new listings than either of the past two Novembers. Several factors could explain this trend.
First, some sellers may have waited until after the election to list their homes. We’ve heard from many clients—both buyers and sellers—that they didn’t want to make any major moves until the election was over. This may have delayed listings that would have otherwise occurred in September or October.
Second, some sellers who were hoping for interest rates to drop may have decided to list their homes when rates briefly decreased in September, only to rise again in October and November. Realizing that waiting was no longer an option, they may have opted to sell sooner rather than later.
Third, some sellers may have recognized the advantage of listing during a time of reduced competition while still benefiting from a pool of motivated and ready buyers.
It’s likely that these factors, along with others, contributed to the rise in November listings. Overall, we’re seeing the expected seasonal ebb and flow of inventory, without any unusual surges in either direction.
Pending Sales and Homes for Sale
The number of homes that went pending in November followed the expected pattern as well and although it did tick down from October, we are still higher than the number of pending sales from November 2022 or 2023. We are still under what we had grown accustomed to prior to the pandemic, but we also have fewer homes for sale, so fewer pending homes would be expected. In our next State of the Market Report, we will be looking at how some of the metrics we track compare, so when we are looking at prior trends, we are making apples to apples comparisons. If you would like to see the last edition and make sure you are on the list for the next edition, please click here.
Given that new listings, although dropping, were still seasonally high, and also that pending sales were declining, it is no surprise that this would lead to more homes on the market. This can be quoted as homes for sale or you can also track inventory, which is defined as months of supply. For the sake of this discussion, we will just talk about the number of homes for sale, but will bring it back to inventory in future reports. Either way, they both show the same trend, and that is that we are normalizing and heading back to levels that had always been considered a balanced market. If you look at the number of homes for sale, although we are about 10% higher than where we have been over the past two years, we are still about 30% lower than what we had routinely seen in the years leading up to the pandemic.
Days on Market (DOM)
The average and median days on market ticked up again in November, and we are now very close to where we were to start the year. Overall, homes that have been sitting for a while are unusually the ones that sell in the winter as buyers try to do some bargain shopping. The median days on the market is now just shy of two months and if history is any indication, we would expect that it would peak in the next month or two and then continue to drop as spring buyers step back in the market. Please also keep in mind that we continue to track the number of homes that are selling quickly, and about 18% of the current Pending Sales in Bend, went Pending in a week. We would caution buyers from thinking that they always have time to sit back and wait, and if they see a home that is presented, priced, and marketed well, there is a good chance it will go pending in less than the median would indicate.
Sale to List Price: This has remained steady and is currently at an average of 97.7% of list price. Here is a chart of this over the past few years. Please keep in mind that this is the sale to last list price. If you take into account sale to original list price (price before any price reductions), this stat dropped to 94.6%. Please keep in mind that averages are affected by extremes in the data set and there are still a large number of homes trading hands at or very near their asking prices.
Inflation: This is a big indicator for the Fed and although the Fed cut their lending rate a few times now, inflation remains above the Fed’s target of 2%. You can see a chart of inflation here.
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.
- facebook.com/bendpropertysource/
- Bendpropertysource.com
- info@bendpropertysource.com
- 541-633-4569
- Main office: 650 SW Bond St, Ste 100
- Tetherow Sales Office
- Assembly Office in Northwest Crossing
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