Is a generational divide joining interest rates as factor in housing?

             Are younger potential homebuyers stuck with renting their home or condo - with scant chance of finding something affordable to buy??
            Could it be that grandma and grandpa – and maybe mom and dad – are locking the kids out of the housing market?
            That along with mortgate interest rates that have been stuck above 6% for some time are often blamed for the shortage of homes available for a younger generation dreaming of a place of their won.
            By some theories, an equity rich older generation is either staying put in their homes or selling and rolling the cash into another home, thereby driving up prices and competition for buyers, and squeezing more affordable inventory out of the market.
            In some cases retirees may be splitting that equity between a couple, or more, places—maybe a condo in Palm Spings and a smaller house Bend, after escaping the urban turmoil and traffic of Seattle, San Francosco or Portland.
            All that said, let’s take a look at the Bend real estate market for the 12 months of 2023.
            The Beacon Report complied by Beacon Appraisal Group of Redmond, OR and a continuing weekly Market Action Index distributed by First American Title together offer insights into where the market is now, where it has been and maybe where it could be heading.

            On a rolling 12-month basis median prices for single family homes in Bend on less than an acre rose a modest 1.24%, to $732,000 from $723,500 for the comparable period of 2022.
            Total sales dropped to 1,565 for the period, with 208 homes listed at year end, equating to a two-month supply of homes for sale based on the average of the past 12 months. That remains considerably below what professionals say is a balanced market of 5-6 months inventory. By comparison there were 2,033 sales in 2022 and 226 listed at year end, translating to an inventory then of only 1.5 months.
            In Redmond, Central Oregon’s second largest home market, median prices dipped from $512,000 to $486,000 for the 12 months, $26,000 or 5.08% under 2022. Redmond’s total sales sank from 782 in 2022 to 598 in 2023, with 134 homes available, or a  three months supply. That represents an increase from two-months inventory at the end of 2022.       

   Some observers say the marginal differences in year to year  median prices and inventory are reflective of a national trend wherein sellers are staying put and new home building doesn’t match potential demand. The inventory keeps the market balance on the
sellers side, except fewer owners are selling.
            That’s the conclusion in the January 24 Market Action Index snapshot of Bend housing by First American Title, which has Bend moving slightly more into a sellers market which could mean more upward pricing pressure.
            In Bend the lack of more affordable houing in relation to median incomes has led to a push to create deed restricted workforce housing. In some situations, employers are participating with non-profit housing groups to improve inventory.
            Local initiatives dovetail with an aggressive housing initiative backed by the Oregon governor, with some bipartisan legislative support. That would potentially loosen state funding that could improve affordability through incentives for entry and mid-level housing construction.