Inventory of single-family homes for sale in Deschutes County rose again this week to 385, up from 344 last week. Buyer demand remains robust, although the combination of higher prices and more homes has introduced price reductions in specific market segments. The Market Action Index for many of the communities in Central Oregon has begun to back off, and prices have started to flatten. The national average for a 30 year fixed rate mortgage dropped slightly to 2.96%, and according to Freddie Mac, the trend is an indication that the markets view inflation as transitory. Forgive me if I do not concur with Freddie Mac's assessment of transitory inflation. That is irrelevant. No matter the reason, low interest rates are a significant factor in our market. While the Fed intimated a rate increase may come sooner than expected, for now, there are very few headwinds to accessing cheap money. While sales have shifted to higher price points, the total volume through June remains strong, showing a 6.3% increase in sales volume compared to the average over the last four years.
Historically low interest rates and strong buyer demand can only carry the market so far, and in some communities in Central Oregon, the market has begun to moderate. For example, looking at the Market Action Index for La Pine, it is clear the strong seller's market has subsided. In reality, the pricing for many homes in La Pine has reached a high for the current market. Although with an anemic inventory of houses for sale, the sellers are still ruling the roost! That said, most buyers are incredibly familiar with the market, and many homes priced aggressively have backed off their price. Typically, after a price reduction, houses are going under contract, which is normal for sellers trying to find the right price in a hot market.
Now more than ever, sellers need to price their homes correctly, and buyers need to understand the market. Contact Reed for help planning your next move!
