December 2020 Market Update

As 2020 comes to an end, our thoughts are with the scores of Americans who were affected by the pandemic. This year has brought heartache and strife to so many, and we can only hope that 2021 brings health and prosperity to those who need it most. 

On the real estate end of things, we have an opportunity to reflect upon the year and try to gain some insight into where things are heading in 2021. Let’s start with a quick recap of some recent numbers. 

Median Home Price 

This number slipped slightly last month dropping from $560k to $540k. Although this represents a 3.5% decline, the median home price in Bend is still up 20% on the year. Also, it is worth noting that this pattern of a falling or flat median home price from October to November has occurred in each of the last 5 years. In most of these cases it also fell in December before rebounding in January.

Number of Homes Sales

We have been tracking the Pending sales all year to give us a gauge on real-time sales.This number fell off a cliff during the initial stages of the pandemic, but quickly rebounded as people began to re-evaluate their housing needs. Since then, every month from May to October has seen a fairly sizable increase over the number of homes that went Pending in the same month of last year. However, November Pending sales saw a small decline compared to last year. 

So, what does this mean? We think this decline is not a sign of slowing or weakness, but rather a result of a drastically diminished inventory. It is clear that with many fewer homes for sale, there will naturally be fewer homes going Pending. For perspective, as of this writing, there were 196 homes listed in the City of Bend compared to 552 at this time last year. 

*number of homes going pending each month

Days on Market (DOM)

Looking back over the last 16 years (max in our dataset), we could not find a period of time that had a lower number of days on market (DOM) than the last few months. On average, homes are going Pending in just 6 days and many are Closing just 2-3 weeks later. Seeing the lowest DOM of the year at this point in the year is extremely abnormal. Looking at the chart below, you can see that in normal years, the DOM is rising going into the end of the year, with December or January representing the highest DOM for the year. 

Inventory

This topic has come up repeatedly in our webinars and newsletters and has been in the national headlines, as well. Simply put, there is an inventory crisis across the nation and, in particular, in towns like Bend. If you take into account the rate at which homes are selling and the number of homes available, we will run out of inventory in less than 1 month if no new homes come onto the market. This is about 5 months sooner than what would occur in a balanced market. As with many of these metrics, the pattern is generally cyclical: low inventory during the winter months, and high inventory in the summer. 

As we enter the new year, we will be keeping a close eye on the numbers to see if we can see any new trends emerging. There are a lot of people who are trying to figure out their next move with regard to real estate, and our goal is to help them navigate this process. 

As always, be sure to follow us on Facebook at facebook.com/bendpropertysource/. If you’re not on social media, don’t hesitate to call or email us so we can send you the information you need via email or through our website at bendpropertysource.com. Be sure to check out our recent webinars, market updates, and resource pages to stay informed on current conditions. 

Happy Holidays from the Ladd Group!

Call our main office line at 541-633-4569 if you have any questions!

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