Recession on the horizon, or not;
inverted yield curve; flattened yield curve; blockbuster job numbers; GDP
dropping, CPI escalating etc. etc.
The prognosticator economists trying
to wrap their heads around “the metrics,” are proving one trope attributed to
playright George Bernard Shaw -
“If all the economists were laid end
to end, they’d never reach a conclusion.”
To be fair, the signals, as they’re
called, that often portend shifts in the economy are at the very least a mixed
bag.
Take the high level of employment,
many jobs available and still others going wanting for applicants. And higher
wages.
But even with the jobs bounty and attractive wages,
productivity per employee is down. And those wages are being cancelled out in
part by inflation, especially in essentials such as fuel and food. How this impacts real estate nationally,
and locally in Central Oregon, in the longer term is, as that acronym goes,
TBD.
As previously reported in early
June, there were already signs of a cooling, albeit slight, of the Bend residential
real estate market.
Bend real estate changes: crash, correction or moderation?
That post noted a rise in price
reductions, (with euphemisms such as “improved price,”) of listed single family
homes, as well as more open houses. Such changes were nearly absent in the
heated environment of multiple offers and bidding wars of 2021.
Now, a report through the first seven
months of 2022, well into the traditionally more active warmer “selling season,”
gives a broader view of the year and its comparison with 2021.
The Beacon Appraisal Group reports for
the first seven months of 2022 through July show that median Bend single family
home prices began to level off while inventory continued to edge upward.
For the month of July, the median
sale price of a single family home on less thatn one acre dropped to $722,000
from $740,000 in June, and was off from the yearly high of $773,000.
On a rolling 12 month basis, the
median from August 1 of 2021 through July 31 of 2022 was $702,500. That
represented a rise of $125,000, or 22% from the same 12 month period of 2021 to 2022,
when the median was $577,500.
There were 2313 sales for the 12
months beginning August of 2021 and 397 active listings at the end of July this
year. Nearly half, 1,105, sales were n the $450,000 to $650,000 range. There
were 182 sales above $1 million.
Since the close of April this year inventory
as calculated by averaging 12
 |
| Top: a timid price drop; Bottom, more serious |
month sales has crept up from 1.0 in April to 1.3 in May, 1.9 in June and 2.0 months at the end of July. Total July sales dropped to 175 in Bend from the high of 218 for the year in May.
In Redmond, Central Oregon’s 2nd largest market segment, the median monthly sale price was $491,500, up $115,000, or 31%, from the $376,000 median for the previous 12 month period. July’s median was $505,000, a drop from $530,000 in June and below the single month high for the period of $538,000 in April.
Redmond recorded 943 sales over the 12 months and had inventory of 1.7 month at the end of July, up from 1.2 months in June.
Even with a subtle change,none of the numbers contained the the Beacon Report, based on the MLS of Central Oregon database, provide much encouragement for alleviating the region’s housing affordability crunch for many wage earners.
State of Oregon regional economist Damon Runberg was quoted in a report by KTVZ Channel 21 that Bend is one of the least affordable areas of the state.
He pointed out that Deschutes County’s average monthly wage of about $4,940 per month translates to a family spending nearly 60% of their income on housing based on a 30-year mortgage at 5.5% for an averaged priced home in the mid $700,000s.
On the national level, the National Association of Homebuilders reported its member survey showed about 19% of builders are cutting prices in August, up from only 13% in July.
A Redfin report said sales of 16% of existing homes that went into contract in July fell through. And nationally sales of existing homes fell 6% from June to July, and were 20% below the same month of 2021.
An economist for Realtor.com, the listing site for the National Association of Realtors, raised the possibility of a market shift not seen in several years.“The housing market is resetting in a buyer-friendly direction,” Danielle Hale wrote on August 12.
But given the continuing scant inventory in Bend and Redmond, still 2 months below the accepted 4-6 months of a balanced market, Central Oregon buyers might wait a while to really feel a more "friendly" trend.
