Q4 2020 Central Oregon Housing Market: In Review
The biggest trends we saw this year were appreciating median home prices, record-low mortgage rates, and the lowest amount of inventory for decades.
Per the Central Oregon Association of REALTORS®:
Fires, Elections, and a Pandemic. 2020 was quite the year. On a daily basis, we experience the unprecedented nature of what is becoming the new normal. The roller coaster began with the fastest rate of job loss on record, as the economy was shut down in an attempt to save itself. In the two-month period of March and April, nearly 18% of jobs were lost in the Bend MSA. This was then followed by the fastest recovery of jobs on record, where through November, more than half the jobs were recovered and there were 7.3% fewer jobs compared to the pre-pandemic level. The recovery began to slow, then in December, reversed course with 1,280 jobs lost in the Bend, MSA, almost entirely concentrated in the leisure and hospitality sector. At the end of the year, there were 6,360 fewer jobs in the region than at the beginning of the year. The unemployment rate in Bend is 8.3% in December, slightly better than the state average of 9.2%.
How are the broader economic conditions impacting the real estate market? If you look at the current data, it would be difficult to determine that we are in the midst of a pandemic and recession. This is due to several factors, primarily that Bend’s location as the number one market for remote work prior to the pandemic has positioned it well to continue to attract the migration of well-paid workers from other parts of the country. The second is that homeowners have been much less impacted than renters in the recession, with the majority of job losses concentrated in low-wage industries.
Early in the pandemic (in March and April), the number of sales plummeted as people were adjusting to social distancing and changes in the real estate industry. By May, sales began recovering, and in July sales began to outpace the rates seen in 2018 and 2019. In aggregate, there were 2% more sales in 2020 than in 2019 in Central Oregon. In the 4th quarter, there were 11% more closed sales than in the 4th quarter of 2019.
While sales increased slightly in 2020, we have seen the number of listings decrease along with an increase in demand, aided through record-low mortgage rates, limited job and income loss for homeowners, forbearance agreements helping homeowners avoid foreclosures, and Central Oregon continues to be a desirable location for migrants from around the country. The result is record low market absorption, where there is currently slightly less than 1 month of supply of homes.
In addition to all these demand-side pressures, we have seen a marked difference in the prices of homes listed for sale. This began early in the pandemic and has continued throughout 2020. In December 2020, there were 30% fewer homes listed for sale below the $300,000 price point compared to 2019, while there was a more than doubling of listings above the $400,000 price point, including a 150% increase above $750,000. This change in the distribution of listings, and ultimately sales prices, has pushed up the median sales price in Central up 16% higher than it was at the end of the year in 2019.
In typical market conditions, changes in the median sales price are a good measure of the overall change in prices in the market. That is not holing true currently, with the change in median price being driven more by the higher price point of listing, rather than an overall appreciation rate for individual homes. A price index is a better measure of market appreciation, tracking individual repeat sales and the rate of price increases over time. The price index in Central Oregon is currently increasing at 9.8%, however, it is been slowly decreasing over the last 2 years. While the market is certainly performing well, the rate of price increases is slowing, despite large increases in the observed median sales price.
Looking ahead to 2021, the market indicators are strong. There has been an increase in the past few months in the number of sales compared to what we typically see at the end of the year. Market absorption will continue to be the leading indicator of market demand as we head into the spring season. If months of supply stays near the historic lows along with a low interest rate environment, market performance is likely to continue on a similar trajectory
Source: Central Oregon Association of REALTORS® – full report below
2020 Q4 Report – Central Oregon Association of REALTORS®ECONW_COAR_2020_Q4_Report-final_draft
Q4 Stats By Location
- Crook County | Q4 Statistics
- Deschutes | Q4 Statistics
- Jefferson | Q4 Statistics
- Bend | Q4 Statistics
- La Pine | Q4 Statistics
- Madras | Q4 Statistics
- Prineville | Q4 Statistics
- Redmond | Q4 Statistics
- Sisters | Q4 Statistics
- Sunriver | Q4 Statistics
December 2020 – Beacon Report
Smaller Central Oregon market areas have experienced a significant decline in the level of inventory in the last quarter. The median SFR sale price in Bend declined for the second consecutive month as the number of sales were nearly unchanged from November and December. Inventory declined to 0.3 month supply.
Redmond SFR market median sale price was $375k in December and had an increase in the number of sales when compared to November. The SFR inventory in Redmond remains less than a 1/2 month supply.
1997-2020 median sale price trend in Bend – Beacon ReportBend-SFR-Jan-1997-to-Dec-2020-Trend
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