Published March 13, 2024

March 2024 Market Update

Written by Ryan McGlone

MARCH MARKET UPDATE: FRESH INVENTORY ON THE WAY!

A note from Ryan:
Thank you to all who were able to brave the snow and attend our Sips and Tips Economic Update featuring State Economist Damon Runberg last month. It was great to get some fresh demographic insights on Deschutes County and how we compare to our state and the nation. I will be posting a recap on our blog later this month so stay tuned!

MEDIAN PRICE
With rates on the rise, it is not a total surprise to see Bend’s median sales price come in flat month-over-month at $699K. This is roughly a 5% increase year over year for February, which was the lowest performing month in 2023. When compared to the first quarter average, we are trending up 2% over last year. As anticipated, we are experiencing a surge in new listings to the market, and softer pending sales units due to rates hovering around 7%. As we anniversary a very competitive spring in 2023, we do expect that our sales prices may not keep up with last year.

MONTHS OF SUPPLY
Months of supply did tick down even though new listings saw a surge. This is due to an increased number of closings in February, brought on by an uptick in pending sales in December and January when we saw some interest rate relief. At 2.18 months of supply, we are still in a Seller’s market.

NEW LISTINGS
New listings in February surged up 11% year over year as delayed sellers entered the market adding some fresh supply. This was a 41% increase over January and with lackluster weather in the back half of the month, it is possible that some new listings were delayed and pushed into March.

HOMES PENDING BY MONTH (RECENT DEMAND)
Pending home sales softened in February compared to last year, down roughly 15%. This can be attributed to the surge in interest rates as well as lackluster weather. This decline signals that we will see months of supply increase as we head into the spring and support our analysis that the market may become less competitive as we enter Q2/Q3 unless rates shift.

AFFORDABILITY TRACKING FOR A MEDIAN PRICED HOME
Affordability weakened in February, due to interest rates increasing over the course of the month. Compared to the trailing 6 months it is still rather good (6 mo avg of $3,941 vs Feb 3,697). We do anticipate prices to rise slightly in March, and if rates stay where they are at, we will be pushing the upper limits of what we’ve seen in the past 6 months.

THOUGHTS FOR SELLERS:
As we look to exit Q1, our analysis still shows that early spring will be the optimal time to sell. Rates appear to be holding strong with little evidence of a notable downward move on the horizion. Last month's numbers confirm that more inventory is on the way, meaning more competition from sellers. As we get into the peak selling season (April through July) we expect to see a sizable increase in new listings over last year.

THOUGHTS FOR BUYERS:
Last month we encountered several multiple offer scenarios on our listings, as well as with our buyers. Even with inventories rising, the good homes are pulling strong demand and will continue to be competitive even as inventories build. Our throughput shows that we are still in a Seller's market so temper your expectatios on getting a huge deal. Expect to potentially see home values down year over year when we hit our peak months, but that trend may reverse as we enter the fall since Q4 comps will be much softer due to high rates at that time.