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As we move into the second half of the summer selling season, which runs until Labor Day, less than two months away, it's worth noting that listings in Central Oregon have increased from the meager levels of the past few years. This is good news for buyers, who now have more options. The national average for a 30-year fixed-rate mortgage, which currently stands at 7.01%, remains remarkably consistent, if not down slightly. Buyers are experiencing stable, predictable rates, but higher than many would like.
Central Oregon Luxury Listings
With the unemployment rate up, Jerome Powell intimated to Congress yesterday that a rate decrease may be on the horizon; however, more positive data showing a decline in inflation would be required ahead of any rate changes. At this point, the data is murky, and many factors, from war in the Middle East to rising energy costs, could derail the momentum Powell anticipates with inflation. The equity markets were ebullient, with the S&P 500 posting another record close yesterday based on Powell's comments to Congress. Some analysts are discussing a July pivot, which seems unlikely. That pushes the nearest rate change out to September, with mountains of data between now and then that could alter the landscape. Commercial real estate vacancy rates are approaching 20% nationally, and banks continue struggling. Recently, Goldman Sachs failed the Federal Reserve stress test, making any future rate pivot more about shoring up the cracks in our economy than fighting inflation. Jerome Powell has a Rubik's Cube of economic issues to solve, with the myopic directive of fighting inflation becoming watered down.
Central Oregon Luxury Listings
Inventory in Deschutes County has seen a significant increase, up forty-six from last week, now at 1257 single-family homes for sale. The holiday-shortened week shows pending and closed transactions down from recent trends. Sixty-four sales were placed under contract this week, with exactly half showing an average price reduction of -3.74% and an average list price of $862,440. Forty-two homes closed this week with an average decrease of -4.17% and an average price of $992,152.
Crook County Listings
Crook County homes for sale increased by one to 160, averaging $909,959. Ten pending sales averaged $829,360, with an average price reduction of -6.75%. Three of the ten pending sales were in Powell Butte, dragging the average number up considerably. Removing the Powell Butte pending sales shows an average price of $469,685. Six transactions closed this week at an average of $585,083 and an average reduction of -1.96%. The closed sale median days listed was eighteen.
Jefferson County Listings
Jefferson County shows 111 homes for sale this morning, up six from last week. Four pending sales, an average of $312,000, and three closed transactions, at $442,316, rounded out the week. The median days listed for the pending sales was thirty, while the closed transactions were just two days.
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Price reductions are increasing throughout Central Oregon as sellers adjust to be positioned well for the second half of peak selling season. It is important to remember that many homes that linger on the market started with aggressively high prices, and the wave of reductions is more of a retreat to reality than a falling market. However, not every segment of our market performs the same. As mentioned last week, homes above $3M are outpacing the price increases of the rest of the market. Despite stable, high mortgage interest rates, prices are up. While the Fed may be talking (again) about a rate pivot, that is far from a bankable reality. Any rate increase this year is unlikely before September; even then, it will unlikely be more than 25 basis points. Mortgage rates will likely decrease if the Fed decreases the overnight rate, but there isn't a one-to-one relationship, and mortgage rates could lag or drop further than a Fed change. Either way, 25 basis points will not alter the trajectory for 2024.
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