Buyers Gain a Little More Leverage but Bend’s Market Remains Active
August brought another shift in the Bend real estate market but perhaps not as dramatic a change as the headline numbers might suggest.
The median sale price moved down to $721,000, sales slowed from the unusually strong pace we saw earlier this summer and homes took longer to sell. At the same time, inventory held steady at 3.5 months and the median price per square foot remained within the range we’ve been seeing for much of the year.
Put it all together and Bend appears to be moving toward a market that gives buyers more time and negotiating room but well priced homes are seeing good showing activity and selling relatively quickly.
The Beacon Report covers Bend area single family residential properties, it excludes condominiums, manufactured homes and residential properties on more than one acre.
Median Home Price: $721,000
August’s $721,000 median sale price was down $59,000 from July’s $780,000.
That sounds significant but this is where I think some perspective is important. July followed several months of fairly large swings in the median price including $795,000 in May and $728,000 in June. Monthly median prices can move considerably depending on the mix of homes that happen to close, particularly when the number of higher end sales changes.
August’s $721,000 median is therefore better viewed as another point in the longer term trend rather than evidence that Bend home values suddenly dropped $59,000 in a month. The Beacon Report defines the median as the midpoint, with half of sales above and half below.
Median Price Per Square Foot: $360
The median sale price per square foot was $360, compared with $373 in July and $356 in June. This is one of the reasons I’m hesitant to read too much into the monthly median sale price. Looking back over the past couple of years, price per square foot has moved around, but August’s $360 is hardly an outlier. The longer-term chart suggests Bend pricing has been much more stable than some of the monthly median-price swings might lead you to believe.
160 Homes Sold
August recorded 160 single-family residential sales, down from 187 in July and the very strong 201 sales recorded in June. So yes, activity slowed but 160 sales still represent a healthy number of transactions.
We’re also heading toward the time of year when Bend typically begins transitioning out of its busiest summer selling season to an active fall season. Normally the fall sales season is strong in Bend so the big question will be whether sales continue slowing through fall at a normal seasonal pace or whether buyers pull back more significantly.
Cash vs. Financing
August had 44 cash purchases and 99 conventional financed purchases.
One trend I’ve been watching this year is the financed buyers. June recorded 130 conventional purchases, July 110 and August had 99. Interest rates have been stuck in the mid 6% (plus or minus) range for almost two years, so it is not just interest rates that affect these buyers. The overall economy and how it hits their pocketbook is a much larger influence. Cash buyers tend to be better insulated from the same affordability issues and have remained fairly steady over the last three months at 56, 57 and 44 respectively.
The numbers have come down along with overall sales but the ability to finance the purchase of a home continues to account for the majority of transactions in most all markets. That’s encouraging because buyers using conventional financing are still finding ways to make purchases work in today's interest rate environment.
If you are thinking of financing your next home, I have some great lenders who have some extraordinary loan programs. You might be surprised how they can make your numbers work for you!
Homes Are Taking Longer to Sell
This may be one of the more important trends to watch heading into fall.
The median time on market increased to 34 days in August, compared with 27 days in July and just 18 days in June. Earlier this spring, the median was down around two weeks. That doesn't mean homes aren't selling, it means buyers have become more patient.
When buyers have more properties to choose from, they can compare condition, location and price rather than feeling pressured to make an immediate decision. For sellers, that makes the first few weeks on the market increasingly important.
A home that's priced realistically and presented well will attract attention. A home that comes out of the gate too aggressively priced may find itself sitting while buyers move on to the competition.
Inventory Holds at 3.5 Months
Bend had 522 single-family homes listed at the time of the September 8 report with 1,832 sales during the preceding 12 months. The Beacon Report calculated that at 3.5 months of inventory.
Interestingly, that's the same inventory level we've seen for four consecutive months. That tells me the market isn't suddenly being flooded with homes. Instead, buyers simply have more choices than they did during the extremely tight markets of a few years ago.
At roughly 3.5 months of inventory, I wouldn't call Bend a strong buyer's market, I would call it a more balanced market. We are certainly seeing conditions that give buyers more leverage than they had when inventory was closer to one or two months.
Price Range Matters
There is considerably more available inventory in some price ranges than others. For example, the report shows 69 current listings between $550,000 and $600,000 and 56 between $600,000 and $650,000. At the upper end, there were 48 listings above $1.8 million.
Your market depends heavily on where your home is located, its price range, condition and what you're competing against.
The same is true for buyers. Someone shopping at $600,000 can be facing a very different market from someone looking at $1.5 million.
What It Means for Buyers and Sellers
For buyers, August offered a little more breathing room. Homes are taking longer to sell, inventory remains considerably healthier than it was a few years ago, and buyers can afford to be more selective. That doesn't necessarily mean waiting for a dramatic price decline is the right strategy. It means buyers have a better opportunity to compare homes, evaluate value and negotiate when a property has been sitting on the market.
For sellers, the message is becoming increasingly clear: pricing and presentation matters!
Today's buyers are doing their homework. They know what else is available, they notice when a home has been sitting, and they're generally less willing to overlook condition or pay a premium simply because inventory is limited. The homes that are well presented and realistically priced are still selling.
Bottom Line
August's Bend market looks more balanced than weak.
The median sale price was $721,000, price per square foot was $360, 160 homes sold, market time increased to 34 days and inventory remained at 3.5 months.
Buyers have gained some leverage, particularly as homes spend more time on the market but we're not seeing a dramatic buildup of inventory. Instead, Bend appears to be settling into a market where both sides need to be realistic.
For buyers, that means opportunities.
For sellers, it means price and presentation matter more than they have in quite some time.
If you're considering buying or selling in Bend or anywhere in Central Oregon, I'd be happy to help you look beyond the citywide averages and see what's happening in your particular neighborhood and price range.
