Summer is in full swing and we are noticing what feels like the start to the summer lull that predictably takes place in mid to late July. Traditionally this lull arrives after a strong spring push as people take time to enjoy the outdoors and summer vacations. Let’s take a look at the numbers and see what is behind the trends.
Median Home Price
The median home price in Bend reached $640,000 in June. This represents a slight increase from the prior month ($625,000) and sits just below the record of $661,000 from April. June 2020 had a median price of $468,800 placing us 36.5% higher than where we were just a year ago. If we look at year-to-date, we see a 10% increase in the median home price since the start of the year. Looking at the same period last year, we saw a 5.8% increase in median home price from January to June.
New listings generally reach their highest point of the year in June, and this year was no exception. However, what will be interesting to watch is whether June 2021 ends up being the top for the year. As potential sellers watch the prices continue to climb, they are finding themselves more and more compelled to list their home and make the change they had once considered. Currently, July has experienced a continued push with a number of new listings coming. We anticipate July, and possibly even August, to end up being the peak for 2021.
Number of Homes Sales
As new homes are listed monthly, we consistently see them being absorbed by buyers. The number of home sales in June reached 372. Looking back one year, we see June as the peak with 350 home sales, just 6% lower than this year. It is worth noting that in three of the last five years August was actually the peak in sales/pending activity, so it remains to be seen if that holds true this year as well.
Days on Market (DOM)
It is no surprise that given the numbers discussed above, the market remains very strong and homes are still selling very quickly. We look at two data sources for this statistic and we see that with one, it remains extremely low at four days on market. However, based on the data provided by our local MLS, we are seeing that Days on Market actually ticked up slightly going from eight to nine days. We are not sure why there is a discrepancy, but regardless of the exact number, it is still a small fraction of what we have been accustomed to seeing in previous years.
Average Sale to List Price
As mentioned in our last newsletter, it was in August of 2020 that we saw our first month where Bend’s average sale price was over the list price. This has now continued for ten consecutive months, and by the end of summer we will have almost surely spent a full year above this threshold. Our data goes back to 2002 and there has not been another period of time where this has happened. As we have previously discussed, this metric also has a seasonal component, so barring any major external factors, we would expect this to taper as we head into the fall and winter months.
Some other points to consider…
- Price changes: Although not displayed in a chart, we are also keeping our eyes on the number of price changes, which is something that many buyers notice and look at as a sign of a shift. At the time of this writing, so far there have been 188 price changes compared to 132 in June. Is this evidence of overzealous sellers pricing their homes too high or sign of a shifting market? The answer is likely both.
- Interest rates: Rates continue to fluctuate but remain close to 3% for most buyers. Rates are still at historic lows and continue to fuel new purchase interest from buyers. Significant shifts in rates may taper demand, but as of yet, we have not seen large enough movement in rates to keep people on the sidelines.
- Demand: This does not seem to have changed and remains very strong for all of the reasons we have discussed (tens of millions of millennials entering the market in their prime home buying years, COVID related job flexibility, COVID related reassessment of priorities and needs, low interest rates, and climbing rental rates.)
- Expected appreciation: A survey of various real estate groups including Fannie Mae, Freddie Mac, National Association of Realtors, and others have the average expected national appreciation at approximately 8% for 2021. As of the end of Q2, it was up 4.5% for the year.
We hope you find this information valuable and helps you towards your ultimate real estate goals. There are a number of ways to reach us, so please let us know how we can help.
As always, you can reach us a number of ways…
- 650 SW Bond St, Ste 100
- Tetherow Sales Office