Looking at the data for the last month, we see that the pressure has definitely come off a bit from the activity we saw in early summer. The seasonal factors of late summer vacations and kids going back to school, combined with heightened COVID restrictions, all played a part in what felt like a stabilizing of the market. Let’s recap what the numbers showed and also discuss what we are experiencing in real time (hint: it feels like it’s picking back up!)
Median Home Price
According to MLS data, the median home price in Bend retracted a bit to $639,000 in August and sits about 4% off the highs for the year which were set in April. This number stands almost 21% higher than where it was last August and is about 10.6% higher than where it was in January of this year.
As discussed last month, the number of new listings usually reaches its peak in early summer and this summer was no different. Since the peak in June when we saw 338 new listings, there was a slight decrease in July and that is now followed by a larger drop in August to 295. This is a 13% drop and is in line with expectations. If trends continue as they have in years past, we will expect to see another drop like this in September. Please keep in mind that these drops represent new listings coming to the market and not drops. With fewer homes coming to market, if demand remains strong or increases, this lack of new inventory could actually push prices higher yet again.
Number of Homes Sold
The number of homes sold in August is usually one of the highest of the year. For the most part, it represents offers that were accepted in June and July. This August showed what we have been expecting with 11% fewer homes closed in August than in July, and 30% fewer homes than in August 2020. We would like to point out that comparing this year to last year can be a bit misleading and that the number of homes sold this August is within about 10% of four of the last five August results. I think this helps support the case that we are heading toward more normal market conditions.
Days on Market (DOM)
The time that the average listing spends on the market before going Pending is also suggesting a stabilization in the market. According to MLS data, it is now taking on average 14 days for homes in Bend to go Pending. This is up from 10 days in July and has ticked up each month since May. If we look at the median days on market, although this has ticked up too, this number has remained under one week for almost a full year. What does this discrepancy mean? Without getting too far into the “statistics” weeds, it means there are a lot of homes selling extremely quickly, but that things seem to be shifting.
Average Sale to List Price
It is no surprise that with homes selling in days, the average sale to list price still remains high. What may surprise you is that they are still averaging 102% of asking price. Please keep in mind that like many of the numbers we track, the results are lagging and tracking sales that went Pending 30-60 days ago. With price changes on the rise over the last 2 months, we fully expect to see this number continue to decrease and get closer to what has historically been the norm in Bend (98-99% of asking price). The question is, how long will that take? Although we can’t predict this with any certainty, if the pace from recent months continues, we could see an average sale to list price of under 100% in the next two months.
Some other points to consider…
- Inventory: This can also be referred to as months of supply and represents how long it would take to sell through the active homes if sales continued at the same pace. Although we have been well off a balanced level (six months) for some time, the fact that we are seeing an upward trend and are now at roughly one month (up from two weeks in March) is a good sign. Balance and stability is what we want to see.
- Price Changes: Although not displayed in a chart, we are also keeping our eyes on the number of price changes, as that is something that many buyers will notice and look at as a sign of a shift. In August we saw 223 homes reduce their price compared to 217 in July. Through the first two weeks of September, we have seen 100 reductions, so September is on pace to match August and July in terms of price reductions. As the perception that we are approaching the “end of the selling season” sets in, we may even see this number surpass August.
- Interest Rates: We have seen no major shifts in interest rates and for many borrowers they remain close to 3%.
We hope you find this information valuable and that it helps you towards your ultimate real estate goals. There are several ways to reach us, so please let us know how we can help.