What is going on in our market? Is it seasonal or something else?
Every Fall since I started in Real Estate 10 years ago, we see the market slow down. Some Fall seasons are slower than others, but the demand and the inventory generally drop as well. Most of us, in real estate or not, know this is true in Bend.
But this fall I hear more questions about whether this is normal or not. While I do not profess to have a crystal ball, I can speak to what I’m seeing from buyers/sellers and other industry professionals.
What the common thought right now is, this is a combination of normal with a tad bit of uncertainty. The uncertainty stems from our feeder markets experiencing a bit of a “dip”. I wouldn’t call it a significant dip yet, but for the first time since the recession of 2008/2009 prices are not jumping up monthly in the Bay Area, Seattle and Portland markets. These are strong feeder markets for the Central Oregon area and when people can sell their homes for well over asking price within weeks, they end up as strong buyers for our area because their money goes so much further here. With the healthy difference in values between those feeder markets and our area, buyers are thrilled to buy a nice home here and have all that extra money in their pocket as they move to our lovely area called “poverty with a view”.
That is one important aspect that is different. Interest rates are another. Even though most of us know that traditionally, interest rates are still low, they have been exceptionally low for so long that we have all grown used to it. Now as they climb up every quarter, it is the first time in my 10 years that I’m hearing it mentioned by my clients in all price range. (Not just the first time buyers or buyers in the under 400K range). All buyers are noticing the difference in their monthly payments.
I just had several high-end buyers adjust their purchase price range based on rising interest rates. They realize that the rising rates are a variable in what price range they feel comfortable with.
What does this mean? It means a few things for sure. First, the market is really balancing itself out as neither a sellers’ market or a buyers’ market, but instead if a home is priced correctly, it will sell because there are buyers out there ready to go. I call this more of a balanced market and it is nice for buyers to feel some power after years of jumping through hoops to get their offers accepted in a competitive market.
Secondly, it means it is all the more important for sellers to price their homes correctly this time of year and in this current market. Sellers who hit the market in early spring may have more room to test the market and come down quicker while the market is still hot. For sellers coming on the market now in the fall, it is important to price your home competitively. By this, I mean not low, but competitively where a buyer can justify a full price or close to full price offer. This creates excitement and multiple parties possibly interested in the first few weeks.
Buyers that are still looking in the fall are ready to buy but they are analyzing prices more closely and they are taking their time to make a decision. The only way you win as a seller in that scenario is to be competitive.
This is a lot for a seller to take in after years of being in control (overall) but we have been seeing this trend the last few seasons, where homes that are priced “right” sell and homes that aren’t don’t. And we all know the more the days on the market stack up the harder it is to get anywhere near the list price or even harder to get buyers to come see your home in the first place.
What I’m sharing with my clients right now is to be educated on what the current market is telling us-whether you are a buyer or a seller, don’t rely on the way it has been for the last 5 years. Don’t rely on generalizations about the national trends. The Bend area market is different.
Be sure your Real Estate professionals are knowledgeable about what is happening in our area, but also about what is happening in our strongest feeder markets and create your plan of action accordingly.
The best news in all this is that Central Oregon
remains an amazing place to live and work, so people still want to come here!