Published January 4, 2024
January 2024 Market Update
JANUARY MARKET UPDATE: SUBSTANTIAL INTEREST RATE IMPROVEMENT DRIVES HOME SALES IN DECEMBER.
BEND HIGH LEVEL MARKET RECAP
Bend's median sales price held strong in December at $739,000, up roughly 13% year over year and flat compared to October and November. This was higher than what we expected given that financed homes closed in December were most likely locked in at peak interest rates for 2023. The market also saw a notable pickup in homes pending which can be attributed to the significant interest rate drop that occurred in the first half of the month. The Freddie Mac rate survey data for the end of the year had 30 yr owner occupied rates at 6.6%, however, we've seen most quotes closer to 6% with a small buydown.
MONTHS OF SUPPLY
Counter to what we were expecting, months of supply dipped to 2.63 months, which is about 1 month more supply compared to last year are relatively close to what we saw during 2018 and 2019.
NEW LISTINGS
New listings came in up 20% over last year, and relatively where we expected. Expect to see listings increase over last year, especially if rates continue to drop.
HOMES PENDING BY MONTH (RECENT DEMAND)
Pending units jumped 24% year over year! This can be attributed to interest rates falling from a high of 8% in October, to low 6% in December. If these rates continue to hold we should expect to see pending units increase year over year.
AFFORDABILITY TRACKING FOR A MEDIAN PRICED HOME
Our gauge on affordability saw a rather large improvement as rates dipped below 7% with not much impact to price. The monthly payment for the median priced home financed with 20% down came in at $3774, which is a major improvement to October's high of $4174!
THOUGHTS FOR SELLERS
The current drop in rates is presenting a good opportunity
to list homes in late January/early February.
Typically, we find that there is building buyer demand starting just
after the new year, and that inventories remain relatively low until
March. When ideal conditions for buyers
align during this window, we typically see a squeeze in inventory that puts
upward pressure on price. This was
evident in early 2023, when after nearly 6 months of price declines resulting
in a 14% drop in the median sales price of a Bend home, the market surged as
rates dipped below 6% in early February.
The lack of early season inventory combined with the rate drop is what
caused the surge prices that continued through the spring.
THOUGHTS FOR BUYERS:
We believe right now through February is a great time to buy, and if rates continue to stay below 6.5%, there is a good chance that this is the best time to buy in 2024. If rates continue to hold, then we expect that by February we will see enough demand to put upward pressure on price. This could lead to some small bidding wars and short days on the market, forcing buyers to make quick decisions without spending much time looking into homes. Getting in early may give you a better shopping window and prevent some of the stress associated with making quick decisions while writing offers.
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