May Market Update

MAY MARKET UPDATE: PRICES DIP SLIGHTLY BUT THERE ARE SIGNS THAT THIS MAY BE SHORT LIVED

What a change 30 days can bring! Last month we saw a strong upward shift in the median and average price of a home in Bend compared to March. This month we saw prices slide back to the same level as March, and down year-over-year roughly 13%. We knew that the year over year numbers would not be pretty given that last April, Central Oregon home prices peaked at an all-time high. What was surprising is that prices came down from March. This could just be an off month, or the surge in new listings that occurred towards the end of March and into April could have brought just enough inventory into the market to help offset surging prices. 

Thoughts for Sellers

Even though the median sales price came in a bit sluggish in April, there are a lot of positive signs for sellers looking to list this month. If next week's jobs report does not rock the boat, rates have been relatively stable, which often helps calm the nerves of buyers. Last month's low number of new listings is also positive for those looking to list, as we are starting the month with relatively low numbers of fresh inventory. 

Sellers will also benefit from warmer weather and clearer skies, which often makes marketing homes a bit easier, and with spring in bloom, homes tend to show better during this time of year compared to the colder months we are leaving behind.

Thoughts for Buyers

For just about a year now, the cost of home ownership for those financing a home has been relatively stable, which is rather remarkable. Yes, the cost to borrow is much higher than early 2022/2021 levels, but the actual cost of homeownership for those financing a purchase has remained very stable over the past year. Unless there is a major economic shift, we expect this trend to follow suit over the next few months. If rates drop, the cost to borrow will be offset by a surge in prices and vice versa. 

If you believe this trend is going to hold true, then there is really no reason to hold off on buying, especially if you are renting. Some might even argue that with rates relatively high, and prices down 12+% off the high, now is the better time to buy and look for the future refi opportunity. 

Buyers should keep a close eye on next week's jobs report. If anything, unexpected is revealed, it could create a rather large swing in rates, especially if we see higher levels of unemployment. The continued anxiety in the banking sector of the economy, plus the recent fed move to raise short-term rates by a quarter of a percent are putting downward pressure on rates. Further news that the economy is weakening could push rates down to some of the lower levels we've seen this year.