Bend homes set third straight monthly record

The median sales price of Bend homes hit another record high in August — barely. It marked the third month in a row the median sales figure established a record.

At $414,000, the median sales price in August was $1,500 (0.4 percent) higher than July’s amount. That’s an even smaller increase than we saw from June to July, when the median sales price rose $3,500 (0.9 percent).

The last three months are the only time during 10-plus years for which the Skjersaa Group has data that the median price has reached $400,000.

Year-over-year prices rise for Bend homes

Year over year, August’s sales figure represents a 15.3 percent increase – the highest year-over-year increase this calendar year except for what occurred in January.

By the standards of Bend real estate, the inventory in August remained high, at 3.7 months (the second month in a row inventory was that high). Looking at the historical data for spring and summer months, August’s inventory was the highest since a 6.2-month figure in September 2014.

The inventory of homes in the price ranges of more than $625,000 again had an outsized influence on the inventory for the Bend market as a whole. Every price range above $625,000 was above the monthly average.

Inventory in price ranges of $625,000 and less, on the other hand, maxed out at 3.2 months. That shows that the competition for homes that aren’t in the boutique price range is keen, with the market favoring the sellers.

Some statistics indicate cooling period might come

But some of the data points indicate a possible slackening in the market. August had 638 Bend homes on the market, the most in a month since October 2014 (when there was also 638).

The average days on the market in August was 136 days. That’s five days less than in July. The last two months experienced the highest number of days on market in the spring and summer months since March and April 2014.

September began with 606 active listings for Bend homes, easily on pace for the most since fall 2014.

Looking at the slower pace of the increase in the median sales price, the relatively high inventory and the number of houses on the market, it wouldn’t be unreasonable to expect the Bend real estate market to cool. The last year there was a decline in the median sales price from August to September was in 2014.

With the median sales price of a Bend home at an all-time high, the need for a dependable, ethical Realtor can’t be overstated. Wherever you are in the real estate cycle — buying a home or thinking of selling — I can help you. My integrity and experience will ensure you of an optimal outcome. To learn more about how I can assist you in your real estate transaction, contact me at (541) 383-1426, or visit Bend Property Search to connect with me through my website.

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ARM vs. fixed-rate loan: Which is right for you?

Even though interest rates for traditional 30-year mortgages are near the lowest on record, some home buyers in Bend, Oregon, take on adjustable-rate mortgages, or ARMs. These loans start, for a predetermined time, with an interest rate even lower than that of a traditional 30-year loan, after which the rate adjusts – and payments can increase dramatically.

Are there advantages to ARMs? And if so, who can benefit from them?

The obvious benefit of an adjustable-rate mortgage is the money saved during the initial, fixed-interest rate period. A few years ago, The Motley Fool ran the numbers on a $200,000 home and said the difference in lower payments and greater equity after five years – just before the interest rate would adjust – would be $8,450 compared with a fixed-rate loan.

Adjustable-rate loans can work for short-term owners

The example from The Motley Fool highlights one type of home buyer who can benefit from an ARM. “For people who know they probably won’t remain in their homes beyond a five-year period as the result of personal, work, or family situations, an ARM could make a lot of sense,” the article notes.

Even if an owner will be in a home after the interest rate in an ARM changes, there is a window of time in which an ARM will have required less in payments than a traditional mortgage.

A financial services firm in Bend provided an example of a $300,000 loan, a 10-year ARM at 3.625 percent and a 30-year fixed rate of 4.25 percent. The firm’s calculations showed that the ARM would be $107 a month cheaper than the fixed-rate loan for the first 10 years.

And even in a worst-case scenario of the interest rate adjusting to 8.25 percent after 10 years, the home buyer would save money compared with a fixed-rate loan for 22 months into the adjustable-rate period. So, for nearly 12 years, the homebuyer would have paid less with an ARM than with a fixed-rate loan.

An ARM can work if your income will increase

If you know your income will increase before the interest rate on an ARM resets, this type of loan might be something to consider. An adjustable-rate loan can allow you to get into a house at a lower monthly price point than a traditional loan, and once that bump in income arrives – a spouse re-enters the work force, for example – the post-adjustment payment could be manageable.

Many of the scenarios in which an ARM appears not just workable but even advantageous are predicated on knowing what the future holds about your situation – whether you will still be in your house, whether your income will be greater, and so on. As the cliché goes, even the best laid plans … .

Knowing one’s risk-tolerance level and understanding the subtleties of an ARM are necessary in weighing whether one is better than a traditional fixed-rate mortgage. I have a wealth of contacts in the financial services industry and can put you in touch with a professional who will help you map out the most advantageous loan for your situation.

If you’re in the market for a home, or considering putting yours up for sale, as your Realtor, I will exceed your expectations in the course of your transaction. To learn more about how I can assist you in your Bend real estate transaction, contact me at (541) 383-1426, or visit Bend Property Search to connect with me through my website.

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Record for median sales price in June; $400K mark exceeded

Back-to-back months of declines in the median sales price of homes in Bend, Oregon, ended in June: The median price was $409,000 – a record for the 10-plus years for which the Skjersaa Group has data and the first time in that period that the median price has reached $400,000.

June 2017 figures share some characteristics from the same month in previous years, and the most important one might be that only once in the preceding 10 years was June the high-water mark for the median sales price in a calendar year.

June had the highest number of active homes (442) and the highest number of sold homes (246) this calendar year to date, as was the case with June each of the previous three years. In all three of those years, the June sales price exceeded what was then the year-to-date median price for the respective calendar year, but later months those years exceeded June’s median price.

Translation: Based on data from the last three years, June’s record-breaking sales prices could very well be eclipsed this calendar year.

It’s worth remembering that the median sales price is not an average sales price. The median is the amount at which half of the homes sold in a given month went for less than the median, and half went for more than the median.

Using the median figure rather than the average prevents the figures in question from being skewed by a handful of high-end homes.

(Which didn’t happen, anyway. Ten homes priced for $825,100 or more were sold in June, one fewer than in each of April and May.)

The inventory of homes on the market increased in June to 3.3 months. That’s the highest for a June since 2014, when it was 4.2 months. But, similar to a phenomenon we pointed out last month, the inventory for Bend as a whole is weighted by the most expensive tier of homes.

Inventory for homes in the range of $825,100 and $925,000 was 3.2 months, and for homes priced at $925,100 and up, it was 15.2 months. For homes priced up to $825,000 – which made up 79 percent of the active listings in June – the inventory was three months and less.

June’s median sales price was 10.5 percent higher than in June 2016. That marked the third year in a row that the year-over-year increase in June exceeded 10 percent. June’s $409,000 median price was 7.9 percent over the previous month’s – and that’s the highest month-over-month increase for a June since 2011, when the region was clawing its way out of the housing decline.

Another record was set in June, and that was for lowest average days on market: 91 days. It was the first time the average was less than 100 days since July 2016 (when it was 97 days) and only the third time since at least January 2007 (the extent of our data set) it has been less than 100 days.

It seems clear the real estate market in Bend has hit full stride. It’s an exciting time to be in the market – as a buyer or a seller. Whatever your position, I can assist in bringing about a solution that leaves you satisfied and in a great position.  To learn more about how I can assist you in your real estate transaction, contact me at (541) 383-1426, or visit Bend Property Search to connect with me through my website.

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Median sales price falls for second month in a row. What happened last time that occurred?

The housing market in Bend, Oregon, tapered slightly in May, as the median sales price fell for the second month in succession and the inventory of homes on the market rose compared with April. Still, the year-to-date median price remained steady at a price that represents a high for the 10-plus years for which we have data.

May’s median sales price was $379,000. That’s 4.1 percent lower than March’s median sales price of $395,000 and 2.8 percent lower than April’s median of $389,950.

If recent history is any indication, this dip could eventually turn into a trampoline. The last time monthly median sales prices declined in consecutive months was in 2016 (when they fell for three months in a row, in fact). That stretch of monthly declines after the median price reached $374,000 in May ended emphatically with a 7.5 percent month-over-month increase from August to September to $385,750 – the calendar-year high for 2016.

Two hundred seventeen homes were sold in May, four fewer than in April. The number of houses whose priced was reduced was 107 — 32 percent. The last time the percentage of active listings with a reduced price was that high was in the three-month stretch in 2016 when the monthly median sales figure dropped. (See the previous paragraph for what happened after that three-month stretch.)

Year over year, May’s median sales price showed a 1.3 percent increase from the corresponding month in 2016. That is the smallest year-over-year increase in a monthly median sales figure since January 2016. That month, the median sales price of $317,450 was 3.7 percent lower than in January 2015.

The 2017 year-to-date median price stayed at $380,000 after taking into account May’s sales. That remains the highest year-to-date median price on record. In fact, each month of 2017 has reset or tied the record for the highest year-to-date median sales price.

High-end homes a big part of inventory

The inventory of homes rose to 3.1 months in May. Inventory — expressed as the time that would be required to sell all homes on the market given the current pace of activity — was 1.7 months in May 2016.

May 2017’s inventory is skewed, however, toward higher-priced homes. Of May’s 337 active listings, 33 percent were priced at more than $725,000 (that percentage was 25 percent in March and 31 percent in April). For homes priced from $225,100 to $625,000, the inventory is in the range of two months. And two months of inventory falls well on the side of being a “seller’s market.”

Tied to the inventory is the volume of homes on the market. Each month this year, the active listings have been the fewest for those respective months in the 10-plus years for which the Skjersaa Group has data. As mentioned in the previous paragraph, the quantity of homes priced at $725,000 and less is particularly tight.

Late spring and summer traditionally are the most active months for real estate, and if you’re looking to buy a home or considering putting yours on the market, I can be of help. In my time as a Realtor, I have helped clients achieve their desired results regardless of the time of year and the trend of the market. To learn more about how I can assist you in your real estate transaction, contact me at (541) 383-1426, or visit Bend Property Search to connect with me through my website.

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Solid evidence that we’re not in another housing bubble

As the median sales price of a home in Bend, Oregon, nears the heights reached before the housing market crash, it’s reasonable to wonder if we’re experiencing another bubble.

Although no one can predict the future, there are solid indications that the rise in housing prices is not due to speculation or unsound lending practices. Instead, the evidence supports the theory that supply and demand are driving housing prices.

Interest rates this week hit a calendar-year low, despite recent increases in the Federal Reserve’s benchmark rate. The average of 30-year fixed-rate loans dropped to 3.95 percent (assuming an average of 0.5 point — a fee a borrower pays that corresponds to 1 percent of the loan amount.) Rates such as these — very low from the long-term U.S. housing market perspective — increase the buying power of those looking for homes.

Another piece of evidence is the percentage of mortgage originations with a relatively low credit score. Credit scores of less than 620 drew the largest percentage of mortgage loans in the first quarter of 2007 than at any other time in the last 14 years. In fact, sub-620 credit scores in that quarter had a larger share of the market than credit scores between 620 and 659.

Today, sub-620 credit scores make up a small fraction of mortgage originations — it’s the smallest credit-score segment obtaining mortgages. The conclusion: People who are buying houses have the financial means to do so.

Labor market indicators and the trend in the United States’ gross domestic product also argue against a recession in the near future. In Bend specifically, there are a sizable number of residents whose livelihood does not rely on local economic activity. The diversification that Bend’s abundant home-based workforce adds to the local economy provides a foundation of support to the local real estate market.

Also, as Bill Valentine, of wealth management firm Valentine Ventures has said, there are more people who want to live in Bend than the local housing supply can keep up with. Bend’s population has grown by 5 percent from 2016, according to a U.S. Census Bureau estimate released this week. The Bulletin noted that equates to 12 people moving to Bend every day.

When CoreLogic’s national forecast calls for a 4.9 increase in home prices by March 2018 — and that’s a forecast that encompasses all of the United States, not just a growing city such as Bend — it seems reasonable that prices in Bend could continue to increase — and increase more than the national average.

“If you want to see where we’re headed, look to other exclusive mountain towns,” Valentine said. The median price of a home in Boulder, Colorado, for example, is almost $550,000, about 38 percent higher than in Bend.

Clearly Bend’s is a dynamic housing market. Whether you’re looking to buy a home or considering selling, I can use my background and experience to help guide you through the process. To learn more about how I can assist you in your real estate transaction, contact me at (541) 383-1426, or visit Bend Property Search to connect with me through my website.

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Sales prices approach highest on record

March homes sales in Bend, Oregon, picked up compared with the previous month and registered the second-highest median sales price in the last 10 years.

The median price climbed to $395,000 in March. The only month in our data set (dating to the start of 2007) that figure has been higher has been May 2007, when it was $396,250.

March’s median sales price was 11.3 percent higher than February’s mark of $354,853. Year over year, March’s median represented a 14.2 percent increase.

The 11.3 percent monthly increase in March was the largest in Bend since January 2015 had a 13.7 percent increase from the month prior.

Can anything be learned from January 2015 that can be applied to the future of the current Bend market?

That can’t be answered. But it is worth pointing out that January 2015’s median sales price of $329,700 turned out to be greater than the year-end median sales price for the entirety of 2015 ($327,500).

And January 2015 represented the fifth-highest month for sales price in that year, whereas January usually is among the lowest months for median sales price.

Returning to the present year, remember that typically, March’s median sales price represents a “support” level, or a springboard, for prices for the remainder of the calendar year. In each of the last six calendar years, the month with the highest median sales price has been September or August. So it would be unusual for March’s median sales prices not to be exceeded in the coming months.

Other information in the March sales data support the position that Bend remains strongly a seller’s market.

For one, the inventory of homes on the market was 2.0 months. Inventory represents the amount of time it would take for all homes on the market to sell, given the current pace of sales. There is some debate about the boundary between a buyer’s and a seller’s market (with figures ranging from three to six months), but there’s no debating that March’s inventory was the third-lowest for the time span the Skjersaa Group has data and the lowest for any March in that period.

The average days on the market in March was 112 days. That is 24 fewer days than in February (a halt to our record-breaking winter weather undoubtedly helped), and, perhaps more significant, 18 days fewer than in March 2016. The average days on market for the entirety of calendar year 2016 was 118 days.

We entered April with 273 pending sales, a number that promises another busy month.

As the real estate market gears up, it’s as important as ever to have a trusted, experienced Realtor on your side. Whether you’re looking to sell your home or considering buying, I can provide guidance and advice to ensure an optimal outcome for you.  To learn more about how I can assist you, contact me at (541) 383-1426, or visit Bend Property Search to connect with me through my website.

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Jason Boone | Principal Broker, CRIS | Duke Warner Realty | Skjersaa Group
Oregon Real Estate Licensee | 1033 NW Newport Ave Bend, Oregon