In our last installment of the State of the Market in the first quarter of 2022, we indicated to sellers to expect a shift. At the time, the metrics had not yet caught up with our “feet on the street” experience in the Central Oregon market, and headlines were still implying the market remained “red hot.” The truth of the matter is an age-old tale: lagging data delivers headlines, but leading indicators are hard to quantify. All this said, the ensuing shift has not upended things quite as acutely as some had feared. Median sale price, though leveling off, has reached a $700,000 zenith. A seller anywhere in Deschutes County can expect an average of 29 days on market – though understandably longer for luxury homes (84 days average), acreage property (86 days average), or bare land(74 days average)(Chart D). As well, the current inventory during the tail end of this peak summer selling season in Deschutes County has increased from one month of inventory to three months of inventory – but remains firmly a sellers’ market. Six months (or more) is typically the threshold of transition to a “buyers market” as we understand it.
Perhaps one of the most prime examples is the graph found in Chart E, which upon first glance appears to show a drastic downward trend for the metric of: Listing Price versus Final Sale Price. This is often used as a touchstone of price reductions and thus is a useful “leading indicator” tool for sellers. However, the “downturn” shown here is from 101%, down to 100.4%. For context, the general average for the few years preceding the pandemic had hovered around 98% from 2016-2019 fairly consistently.
Adapt and Overcome
The sellers who are finding success in this market are those who are willing to recognize the value of accurate pricing, and who are able to set themselves apart from the growing body of inventory by taking the time and care to ensure the home shows well. Sellers must adapt to 30 minute to 1 hour showing windows once again, as the age of 10minute showings (while another buyer waits in the driveway) is no longer satisfactory.
Even still, inspection contingencies are back on the table, as are reasonable lists of repairs fora seller to tackle prior to closing.Finally, the increase in interest rates means that a seller might consider offering a buyer credit toward closing costs, which can be dedicated to an interest rate “buy down” of 1% or more.The overall value of this to a buyer over time has much more substantive impact than the same amount of money conceded off the purchase price.
The core best practices for a healthy sellers’ market remain: a well priced, well prepared home that is delivered to the market with a strategic, cohesive plan will sell within the first 30 days. But not all plans are strategic, and not many brokers launch them cohesively. Here are five key questions to ask of any broker you may be interviewing for the sale of your home in today’s market:
- How do you plan to market my home?
- In what ways will you make my home visible to buyers outside of Central Oregon?
- What is the timeline, and the specific steps, prior to going “active” on the market?
- What should I do to prepare my home for the market
- At what price do you think my home will successfully sell in approximately 30 days?