Published May 13, 2024
May 2024 Market Update: Will inventories continue to rise?
MAY MARKET UPDATE: PRICES SIMMER, VOLUMES SOFTEN, INVENTORY ON THE RISE?
IS CHANGE IN THE AIR?
It was no surprise when we saw April's sales numbers post and noticed that the median and average price of a home in Bend had made a considerable correction from March, with the median dropping back down to the 720K range from last month's high of 770K. This was somewhat expected as we saw the median “pending” price of a home in March come in at $720K, and this metric is always a good leading indicator as to what to expect in the following month. Not to mention, we rarely see a nearly 10% month over month increase in the median sales price stick as a longer-term trend.
What was quite surprising in this month's numbers is that new listing activity came in up 30% year over year, a healthy increase, and April represents the 4th month in a row that we saw a listing increase. Since late 2023 our team was forecasting and preparing for a surge in inventory, but this month's surge was a bit larger than expected. With pending volumes now falling for the past 3 months year over year, we are now at 2.9 months of supply, which represents the greatest amount of supply compared to sales going back to 2015! Furthermore, April's pending sales suggest that we could see months of supply break above 3 months next month and could possibly be the largest supply number we've seen in a decade!
New Listings By MonthApril brought a large year over year increase in new listing volumes, up 30% year over year! This puts our new listing inventory up 12% compared to the first four months of 2023. This trend could spell relief for buyers who are waiting for more selection and time to shop before writing offers.
Homes Pending By MonthPending home units came in down 13% to last year. This is our 4th consecutive month where pending units came in down year over year. If this trend continues for another month, we will see months of supply climb to levels we have not seen since 2014.
Months of SupplyMonths of Supply increased year over year by 50% and came in at 2.9 months for April. This is the highest value for April since 2018. With fewer pending units on record for April, we can forecast that May's metric will come in higher. If May's number does come in above 2.9 months, then that will be the highest recorded May metric since 2014!
Financing AffordabilityAffordability eased primarily due to the large drop in Bend's median sales price as the Freddie Mac rate survey data actually increased over last month. Once again, A $4,000 monthly payment (not including taxes and insurance) continues to remain the threshold on our affordability metric.
Thoughts for Sellers
Since late fall of 2023 we've been prepping our sellers to get on the market early in anticipation of an increase in listings during 2024. Even though we've seen inventory increase, we are still seeing strong activity around properly marketed and priced homes. If you are thinking of listing, you should be making an effort to list as soon as possible. We believe that unless we see rates break below 6.5%, new inventory will continue to outpace the volume of new buyers into the market. Since we typically see our highest listing volumes during June, July, and August, we think that getting your home on the market soon, will yield better results.
Thoughts for Buyers
Now is an excellent time to be a cash buyer as we are seeing some deals out there. Homes that are competitively priced and have something truly unique and desirable to offer are still going fast, but with inventories increasing, we think this will present an opportunity for buyers. Financed buyers will need to wrestle with higher rates that may not make the deals look appetizing, however it is the elevated rates that are currently keeping prices at bay. There is a strong possibility that the buyers willing to take on the higher rates will win over the long term, as refinance opportunities may present themselves over the next few years, setting up for an overall lower cost of ownership compared to those that wait for rates to drop, which will most likely lead to a nearly immediate increase in housing prices.
IS CHANGE IN THE AIR?
It was no surprise when we saw April's sales numbers post and noticed that the median and average price of a home in Bend had made a considerable correction from March, with the median dropping back down to the 720K range from last month's high of 770K. This was somewhat expected as we saw the median “pending” price of a home in March come in at $720K, and this metric is always a good leading indicator as to what to expect in the following month. Not to mention, we rarely see a nearly 10% month over month increase in the median sales price stick as a longer-term trend.
What was quite surprising in this month's numbers is that new listing activity came in up 30% year over year, a healthy increase, and April represents the 4th month in a row that we saw a listing increase. Since late 2023 our team was forecasting and preparing for a surge in inventory, but this month's surge was a bit larger than expected. With pending volumes now falling for the past 3 months year over year, we are now at 2.9 months of supply, which represents the greatest amount of supply compared to sales going back to 2015! Furthermore, April's pending sales suggest that we could see months of supply break above 3 months next month and could possibly be the largest supply number we've seen in a decade!
New Listings By Month
April brought a large year over year increase in new listing volumes, up 30% year over year! This puts our new listing inventory up 12% compared to the first four months of 2023. This trend could spell relief for buyers who are waiting for more selection and time to shop before writing offers.
Homes Pending By Month
Pending home units came in down 13% to last year. This is our 4th consecutive month where pending units came in down year over year. If this trend continues for another month, we will see months of supply climb to levels we have not seen since 2014.
Months of Supply Months of Supply increased year over year by 50% and came in at 2.9 months for April. This is the highest value for April since 2018. With fewer pending units on record for April, we can forecast that May's metric will come in higher. If May's number does come in above 2.9 months, then that will be the highest recorded May metric since 2014! |
Financing Affordability
Affordability eased primarily due to the large drop in Bend's median sales price as the Freddie Mac rate survey data actually increased over last month. Once again, A $4,000 monthly payment (not including taxes and insurance) continues to remain the threshold on our affordability metric.
Thoughts for Sellers
Since late fall of 2023 we've been prepping our sellers to get on the market early in anticipation of an increase in listings during 2024. Even though we've seen inventory increase, we are still seeing strong activity around properly marketed and priced homes. If you are thinking of listing, you should be making an effort to list as soon as possible. We believe that unless we see rates break below 6.5%, new inventory will continue to outpace the volume of new buyers into the market. Since we typically see our highest listing volumes during June, July, and August, we think that getting your home on the market soon, will yield better results.
Thoughts for Buyers
Now is an excellent time to be a cash buyer as we are seeing some deals out there. Homes that are competitively priced and have something truly unique and desirable to offer are still going fast, but with inventories increasing, we think this will present an opportunity for buyers. Financed buyers will need to wrestle with higher rates that may not make the deals look appetizing, however it is the elevated rates that are currently keeping prices at bay. There is a strong possibility that the buyers willing to take on the higher rates will win over the long term, as refinance opportunities may present themselves over the next few years, setting up for an overall lower cost of ownership compared to those that wait for rates to drop, which will most likely lead to a nearly immediate increase in housing prices.
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