February 2024 Market Update

FEBRUARY MARKET UPDATE: SALES UNITS INCREASE, MEDIAN PRICE SLIDES

HIGH LEVEL MARKET RECAP
For the first time in a year, Bend's median sales price fell below $700K, reaching $699K, a 5% decrease from the previous month's $739K. This deviation is somewhat unusual for January but aligns with expectations, considering the significant surge in interest rates observed in the latter half of 2023. Although rates stabilized around mid-December, contributing to increased sales unit volumes, they did not have the anticipated impact on prices. Since the begining of Janurary we've seen a continued shift in higher demand, and do anticipate median prices to increase slightly this spring.

MONTHS OF SUPPLY

The months of supply have significantly increased year over year to 2.24 months but have decreased from the previous month, remaining well below pre-pandemic levels. This decline in supply can be attributed to the rate drops in mid-December, leading to a rise in units under contract.

New listings remained steady YOY, while experiencing an approximate 30% increase compared to the previous month. The limited influx of new inventory is contributing to robust performance on new listings. Competitively priced properties are sparking minor bidding wars, with buyers vying for the limited supply of new listings.

HOMES PENDING BY MONTH (RECENT DEMAND)
Pending home sales in January showed a slight year-over-year decrease but a 14% increase compared to December. We anticipate a robust volume of pending activity as long as interest rates remain below the 7% threshold. Currently, rates are nearly identical to last January, suggesting a probable continuation of the trend with an increase in pending units as we move into the Spring

AFFORDABILITY TRACKING FOR A MEDIAN PRICED HOME
Our affordability gauge has shown a significant improvement, with both published rate data and median home prices experiencing a decline. Over the last four months, there has been a notable decrease of over $600 in the monthly cost of a mortgage, utilizing Freddie Mac's published rate data and Bend's monthly median sales price. This suggests a likelihood of robust buyer demand unless there is an increase in interest rates

THOUGHTS FOR SELLERS
We believe that the early spring remains an optimal time to sell. While the recent dip in the median sales price may necessitate adjustments to pricing strategies for new listings, steady interest rates could encourage buyers to act early, before the spring rush. Limited inventories should also benefit sellers entering the market early. Notably, this year has witnessed exceptionally strong sales in neighborhoods and areas with little or no competition. Even in such areas, competitive pricing is crucial, as buyers in this market tend to be discerning, waiting for well-priced homes rather than settling for higher-priced options.

THOUGHTS FOR BUYERS:
With prices and rates currently down, there's limited indication that this trend will persist into the upcoming spring selling season. Given the scarcity of inventory, we recommend acting promptly if you come across the right property, as we anticipate a potential slight increase in prices. However, we advise against rushing into a decision solely to secure a home. More inventory is expected, so it's crucial to take the time to ensure the property is a good fit before making a commitment. Finding the right fit is far more important than pursuing a "deal" that may have negligible significance in the long term, particularly over the next five years.