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Market Statistics and Data

The days are still hot, but the nights are definitely cooling.  Interestingly enough, this statement has a similar theme to the current real estate market, there are some segments that are still hot while others are definitely cooling. We would like to take the next few moments to outline some of the evidence for this and provide some insights on what may be in store.

Median Home Price 

In September we saw the median and average price in Bend (single family residential, under 1 acre) fall back to levels we haven’t seen since early this year. The median was $717k and the average was $830k.  Although part of this is driven by inventory rising and buyer demand cooling, it is worth noting that part of this also comes from a shift in what price point the burying is happening. From July to August we saw about 33% fewer homes above $1.5M sell while the number of homes under $750k was steady and slightly higher. Also, $500k and below was a segment of the market which was non-existent a year or so ago with single digit sales each month, however we have seen the number of sales jump from 18 in June to 39 in July.  This will absolutely pull both the median and average lower since that segment now makes up 15% of the sales (it was 7% in June).  We will keep tracking all of this, but it should serve as notice that there is usually more to just the headline number. 

New Listings and Pending Sales

As expected, new listings have slowed again. The seasonal pattern of fewer new listings come on the market as the summer trails off has continued this year, but the dropoff has been steeper than past years. From peak of late spring/early summer thru Aug during the two years of the pandemic, we saw the number of new listings drop between 5-11%.  This summer they dropped about 40%.* Since things during the pandemic were anything but normal, we took a look back to the 3 years leading up to the pandemic and found that on average, new listings dropped by about 40% as the summer wound down, so we are actually appear to be following a pattern that has been the norm for some time.  

*Please note, this is a drop in the number of homes that are new to market, and does not represent a drop in prices. 

It is interesting that as new listings dropped, the number of homes that went pending actually ticked up. We normally see fewer homes go pending in August than in July, but this year was an anomaly. Usually people are out vacationing and enjoying the last of summer, getting settled into the home they bought in late spring, or getting ready for a new school year and this causes buyers to be on the sidelines a bit.  However, it is our belief that a good part of the reason for this is that after some stock market and mortgage rates movements in July, these markets stabilized a bit in August. This appears to have caused some of the people who went to the sidelines in July, back in the buyer pool in August.  In years past, there has been a small bump higher in Pendings in the fall (Sep/Oct) so we are expecting that this could very well be the case again this year, especially if some overall market factors (mortgage, inflation, stock indices) provide some stability. 

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New202294372410436449359267
Pending239272297288307234226274

Days on Market (DOM)

Even though we saw the combo of more Pending sales and fewer new listings, the days on market have ticked up again. This data point now shows a median of 15 days on market (up from 4 earlier this year). This is a good sign for the market as a whole. Buyers are being more patient and taking their time in making decisions and getting into contracts which hopefully leads to more overall happiness in the home.  For sellers, this is good since buyers have  more time to do their due diligence up front and make sure that the house is right before jumping into a contract. For a good stretch of the pandemic buyers felt the need to jump and prematurely make an offer, and when some market factors started to change earlier this summer, this led to a record number of canceled contracts. With more time to plan and decide prior to acceptance, buyers are less likely to get cold feet while in contract. This can give the sellers some much needed assurance during the stressful selling process. 

Average Sale to List Price

The trend of buyers having more choices, more patience, and some headwinds at the macro-economic level, has led to another small decrease in the average sale to list price. It went from 99.5% in July to 99.5% in August, and is down from a high of 103.5% in April. In addition to the changes in buyer demand mentioned above, the sellers are quickly coming to the realization that they can’t simply extrapolate appreciation from their neighbor’s sale. However, there are still a number of homes that were priced with high expectations who are coming down to reality and helping bring this average lower.  We now sit very close to the norm from the years just prior to the pandemic when homes sold for roughly 96-98% of asking price. 

Although we may sound like a broken record, we do want to reiterate our comments from teh last newsletter. List price is not the end-all-be-all and really only represents a seller and their broker’s opinion of pricing. Sometimes they are right on, sometimes they are way over and sometimes they are underpriced.  Having the strategy of only offering X% below asking, can still lead you to overpay and there are times when offering an amount over asking still represents a good value.

Some other points to consider…

Mortgage Changes: Contrary to what we saw in August, the start of September has led to some increases in rates once again. We are now near 6% again for the average buyer. We have included this table which shows what the experts are expecting moving forward.

National Projections: Experts are continuing to predict appreciation in the 11% range this year, however it is worth pointing out that much of, if not all of this has likely already happened this year. They are also expecting national appreciation dropping to more historical norms of 3-5% in the coming years.  

Price Changes: Price changes continue to be a part of this market, and although the number is still increasing, the rate at which it is increasing is slowing.  We would expect that as sellers get more realistic in pricing their homes well out of the gate, that this number will continue to stabilize and come back down in the coming months. 

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Price Changes444075115234290317325

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 on the data, you can always reach me at steve@bendpropertysource.com or on my cell at 541-280-2132. Also, keep an eye out for our coming State of the Market report this fall. It is packed with more information and a more comprehensive look at the market as a whole.  REGISTER HERE for more information.

There are also several ways to reach the team, so please let us know how we can help. 

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