Labor Day is behind us, and with a few leaves already changing, it looks like we should be setting our sights on fall. When it comes to real estate, this isn’t a bad thing as the fall inevitably provides opportunities for both buyers and sellers. Let’s take a closer look at the August statistics to gain insights into what lies ahead for the remaining months of 2023.
Median/Average Price
In our opinion, the median home price has arguably been one of the worst metrics to follow for signs of what the market is doing overall. It has been very jumpy and has shown 5-10% monthly changes in both directions multiple times this year. This past month was no exception as the median for single-family, non-acreage homes in Bend fell 7.25% from July. It now stands at $737,000 and is up about 10% from where it was at the start of the year. We have outlined the reasons for these discrepancies in our latest
State of the Market report, so we won’t go into a lot of detail here. What we will do is Zoom out a little to offer perspective and point out that this now has us exactly where we were in June of 2022 and about 5% off the highs that were reached back in February of 2022. We point these two levels out since they provide a better vantage point to really assess what this market has looked like for the past 1.5 years. We peaked in most metrics in Feb/Mar of 2022 and then sales volumes and prices seemed to slide gradually for the majority of 2022 before steadying and gradually increasing to this point in 2023. Below you will find the chart of the median home price in Bend over the past year and a half, showing how volatile the market has appeared, but if you look at the chart with the national month-over-month price movement, you can see that this is in line with what we see when comparing our current levels to various points last year.
Days on Market (DOM)
In last month’s report, we noted the following, “We would not be surprised if the days on market ticked up in the coming months as only 25% of the current pending homes went under contract in a week. Also, in the past month, a number of homes have gone pending after many months on the market, and when those close, it will naturally pull the averages higher.” This is exactly what happened and the days on market increased to 35 days. This is starting to feel more manageable for buyers and creeping back toward levels we were accustomed to prior to the pandemic. To be clear, we are still well under the pre-pandemic norms of 40-60 DOM, but seeing this slowly work its way back to normal levels is a good sign. Also, in looking at the current pending sales this month, we are seeing a fairly normal distribution with about 28% pending in less than a week, about 23% pending in 2 months or more, and the other 50% in the range between 1-8 weeks.
New Listings
We have discussed previously how the lack of current and new listings are creating supply issues and thus keeping an upward pressure on pricing. The tricky part here is that generally, we see a fairly sizable dropoff in the number of new listings as we end the summer and head into fall. The good news here is that in August, there was only a slight decrease in the number of new listings for single-family homes in Bend (from 230 in July to 213 in August). Looking nationally, the number of new listings actually increased this past month, and on average, there were more new listings in August than in July for the first time in at least six years. Keeping in mind that sellers are also future buyers, perhaps they finally got their future arrangements in order and proceeded with getting their homes listed. We will be watching this to see if new listings continue the expected seasonal trend or if there are other factors at play that keep this higher than expected in September.
Pending Sales
As expected, the number of homes that went pending in August dropped a bit from July. This is something that we see on a seasonal basis as people take their last vacations of the summer and are generally shopping less and playing more. We often see those who didn’t purchase over the summer set their targets on purchasing in the fall with the hopes of being settled before the holidays. One thing to note is that although the market overall saw a slowdown in pending sales, there are various neighborhoods and price points that saw heightened activity this August. One area that we track closely is Tetherow, and there were more monthly pending sales in August than there had been in over two years. If you are curious about how your neighborhood held up, please give us a call.
Average Sale to List Price
In August, single-family homes in Bend sold at an average of 96.9% of the original list price. This is right in line with what we would normally expect in Bend and in the range of 96-98% which was the standard in the years leading up to the pandemic. We should note that this percentage is the percent of the original list price and that if you look at the percentage of the last list price, the percentage is closer to 99%. Last month there were 237 price changes in Bend which was down 28% year over year. This means that sellers are becoming increasingly more realistic with their pricing and not requiring as many price reductions or rounds of negotiations to get their homes sold.
Some other points to consider...
Mortgage Changes: After peaking around 7.5%, rates seem to have retreated ever so slightly. One thing we have seen is that despite these higher rates, fewer clients are buying down their interest rate as the costs of doing it often outweigh the discount in payments. The general consensus amongst experts is that rates will come down over the next 12-24 months, so spending a large amount buying down the rate now could potentially be wasted. We can share what we have seen with clients, but we highly recommend you reach out to your lender and go through all the options. If you are curious where rates are at today, you can see a live update
here.
Inflation: This monthly data is what helps dictate the course of action of the Federal Reserve Bank and what they do with the interbank lending rates (not mortgage rates).
This chart shows that inflation is coming back down and well off its highs, but still well short of the Fed’s target of 2%.
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 into the data, please reach out to your Ladd Group broker. If you don’t have one, you can reach me at
[email protected] or on my cell at 541-280-2132.
There are also several ways to reach the team, so please let us know how we can help.
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