Q3 2020 Central Oregon Housing Market: In Review

In a word, this market is nuts. We’ve got about a month of inventory available to a pool of buyers that are actively seeking to purchase a home, multiple offer situations, lengthy appraisal times, and increasing median home prices. And, we’re in the midst of a pandemic.

We’re seeing record-low mortgage rates that are giving more buying power to home buyers, record-high median home prices, record-low inventory of homes on the market, record-low days on market, and record-high buyers in the market to purchase a home and ready to negotiate in multiple offer situations now commonplace throughout the area.

 

Central Oregon Association of REALTORS® Q3 Report

At the time of the first-quarter report, we were in the early stages of the COVID-19 pandemic with an increasing rate of unemployment, and with uncertainty about how quickly the virus would spread and how it would impact the real estate market. While much uncertainty remains, we now have a better understanding of the current state of the economy and how the real estate market is being impacted.

This recession is playing out differently than anything we have seen before. Due largely to federal stimulus payments to individuals and businesses, we have not seen a drop in incomes despite an unprecedented amount of job loss. That is not to say that individual households have not been impacted, but in aggregate, incomes have not decreased during the recession, while consumer expenditures have recovered almost entirely to pre-pandemic levels. While the ultimate pace of the economic recovery is unknown, jobs have recovered more quickly to date than originally predicted by the Oregon Office of Economic Analysis (OEA). This is good news, which is sorely needed in these challenging times. Unfortunately, as is typically the case during recessions, vulnerable populations are being disproportionately impacted with higher employment and income losses than the broader population.

In September, the unemployment rate decreased to about 8 percent statewide (165,000 continuing claims). In Central Oregon, unemployment rates have tracked the State average, while unemployment claims have dropped 65 percent to 4,600 in September from their peak of 13,300 in April.

Negative impacts to the residential real estate market in Central Oregon have been limited, other than a small decrease in sales in April and May. Since then, sales have rebounded and are at 99 percent of the rate seen last year through September. In fact, the volume of sales over the last two months has been higher than in 2018 and 2019. Typically sales volume peaks in late June, then decreases for the rest of the year. During the pandemic, we have seen sales volumes at their highest rate in recent weeks. It is unclear if this is pent-up demand for decreased activity earlier in the year, or indicative of increasing demand in the region for households looking for more rural housing options based on the ability to work remotely. Prior to the pandemic, Bend was the highest market in the county for share of remote workers (OEA).

Increased sales volumes in Central Oregon are consistent with national trends, where the National Association of Realtors reports their Pending Home Sales Index reached an all-time high in August, growing 8.8 percent since July.

Median home prices jumped 17 percent since the third quarter in 2019, the highest increase since 2014. This is due to a change in distribution of prices of homes listed on the market. Compared to this time last year, there are fewer homes listed below $399,000, and more homes listed above $400,000. This is particularly the case above $750,000 where there are more than double the number of listings.

We have been tracking market absorption as a leading indicator of market demand in the past couple quarterly reports. The number of months of supply continues to drop in the region, now down to 1.5 months. As mortgage rates hit new lows and market absorption continues to drop, the market is showing no signs of slowing down despite recent upticks in the number of COVID-19 cases across the region.

 

Read the full Q3 COAR Report:

ECONW_COAR_2020_Q3_Report

 

Q3 Statistics By Location:

 

The Beacon Report – Third quarter 2020 finishes strong in Central Oregon

In the past quarter, the SFR (Single Family Residential) median sale price in Bend spiked to over $500,000 ($529,000 in July) and finished at $547,000 in September.  The inventory level of SFR properties has been low for several years, lowering further in 2020.

There has been a significant increase in the number of sales of SFR properties in the $700,000 to $1M+ price range this quarter. The increase in the number of sales in the upper price ranges resulted in significantly increasing the SFR median sale price in Bend.  In September, sales in the $700k-1M+ made up about 31% of all sales.  The upper price range in June made up about 24% of all SFR sales in Bend.

Other Central Oregon SFR markets shows a similar pattern of inventory levels declining, like Bend, have not followed the sharp increase in SFR median sale price. Redmond SFR market shows a steady increase in price trends; however, the inventory level has declined to under a one month supply. Most smaller Central Oregon SFR markets, were all around a 1 month supply of SFR inventory while Jefferson County had approximately a 2 month inventory level last month.

Read the full October 2020 Beacon Report:

BEACON-REPORT-October-2020

 

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About Keeley Mannila

As the co-founder and owner of Fred Real Estate Group, Keeley is the driving force behind company culture, branding, and creative marketing strategy.