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January Market Update

The turn of the calendars has marked the end of a very strange year in real estate. This period was characterized by massive changes in interest rates, wild fluctuations in median home prices, and record-low levels of transactions. As 2024 gets underway and predictions for this year have already begun, let’s take a moment to review our current observations and consider what they could mean for the next 12 months.

Mortgage Rates

There is no question that interest rates are still capturing everyone’s attention. We started last year at around 6.4%, peaked at about 8%, and then ended the year on a steep downward trend, returning close to where the year began. As we start the new year, interest rates are hovering around 6.6% for most qualified buyers. With some buydowns and points, rates can be closer to 6%. This has undeniably encouraged some buyers to leave the sidelines, and as we have discussed, it will also prompt some sellers to do the same. Experts are predicting various levels of interest rate relief throughout the year, which might lead some buyers to wait and see where rates settle. We caution buyers against focusing too narrowly on a single data point and encourage them to consider the broader picture. Monthly payments are determined by both interest rates and sale prices. If rates continue to drop, this could increase demand, potentially putting upward pressure on prices. Coupled with historical trends of prices rising in the first half of the year, this may create a scenario where buyers waiting for lower rates end up spending more on their homes.

Here is a snapshot of what interest rates have looked like for the past 5 years.

Median Price 

The median home price in Bend began the year at around $700,000, peaked at approximately $800,000 in June, but then remained within a very tight range for the last five months of the year, concluding at about $750,000. When considering smaller acreage properties, as reported in a local appraisal report, the figure was closer to $725,000. Despite a year filled with negative headlines about the market’s state, we observed an appreciation of around 6-7%. We emphasized last year that due to the limited number of transactions, monthly fluctuation was not a reliable indicator of market movement. However, when examining trends over several months or smoothing out the data with rolling averages, it becomes evident that both demand and prices have remained robust. As we embark on the new year, many experts are predicting another year of moderate and normal appreciation, potentially in the range of 3-5%.

Days on Market (DOM)

The amount of time homes take to sell in Bend is now squarely within the normal range observed over the last decade. To close the year, homes were taking an average of 58 days to sell, with the median days on the market being 40. As with many of the data points we examine, Days on Market (DOM) is also typically cyclical, with peaks usually occurring in December and January. This pattern makes sense, as homes selling in the winter often came onto the market several months earlier. In contrast, during the spring and summer, a greater number of homes enter the market along with an increase in buyers, leading to a decrease in DOM. It’s also worth noting that although the total DOM has increased, the percentage of homes going pending within a week of listing remains around 21%. This indicates that well-priced and well-marketed homes can still expect to sell quickly. The demand is present; buyers are just remaining patient.

New Listings

The cycle of new listings is one of the most consistent patterns we observe in the data each year. It always reaches its lowest point at the turn of the year and generally increases throughout the spring, peaks at some point in the summer, and then diminishes towards the end of the year. This trend makes sense for several reasons and, with a couple of exceptions, held true last year. Although we observed an unexpected decrease in April and an increase in October, the overall pattern remained remarkably similar to previous years. One reassuring aspect was the approximately 30% increase in new listings in December 2023 compared to December 2022. This might indicate that the new listing season could be starting earlier than expected. So, if you have been considering putting your home on the market, please give us a call to discuss timing and strategy. There are several factors you should take into account.

Pending Sales 

One surprising metric from December was the uptick in pending sales in Bend. Historically, December records the lowest number of pending sales for the year, but this was not the case in 2023. It’s not uncommon for us to see 10-20% fewer pending sales in December compared to November, but last month we observed about 15% more sales than in November. This increase was almost certainly the result of the steep drop in interest rates from their peak in late October, providing yet another piece of evidence of buyer demand in the market. This should serve as a reminder that while the overall number of sales was lower in 2023, it was due to a number of factors, and not necessarily indicative of a diminished buyer interest. With the addition of more new listings this spring, combined with the expected interest rate relief, a significant increase in pending sales over the next few months is anticipated.

Average Sale to List Price

Although we would normally expect December to have the largest discounts off list price, this was not the case last month. In December, we saw the average sale-to-list price ratio increase from 98% to 98.7%. Similarly, the average sale-to-original list price ratio ticked up from 93.5% to 95.5%. Why would this be the case during the holiday season? There are likely two factors at play here. The first is that sellers are becoming more realistic in their pricing, which necessitates fewer price reductions or sales discounts. In fact, evidence of this can be seen in the 10% decrease in price reductions in December 2023 compared to December 2022. The second reason is that when interest rates decreased, buyers became slightly more eager and didn’t negotiate as aggressively. They were aware that other buyers were also in the market, waiting, and didn’t want to risk losing a house by negotiating too hard. The reality is that for some, every dollar in a mortgage payment counts, and so negotiating can often be the only way to afford a house. However, for others, attempting to secure a bigger discount can potentially lead to missing out on a purchase. This fear of missing out likely led buyers to pay closer to the asking price this past month. We expect this trend to continue.

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 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.