Home prices in Bend, Oregon, continued their general upward trend in January 2018. The rise in the median sales price here has been part of a nationwide increase in home prices.

In this environment, it’s understandable to wonder if the market might be prone to the type of free fall it experienced the last time prices were regularly breaching milestones. Although we can’t predict the future, we can cite evidence that shows the current strength in the housing market comes from a solid foundation.

One data point to look at is the percentage of mortgages 30 or more days delinquent. According to CoreLogic, in November 2016, it was 5.2 percent across the United States; in November 2017, it was 5.1 percent. The change of minus-0.1 percentage point equals a 1.9 percent decline. So even as home prices rose last year, fewer mortgages became in danger of foreclosure.

CoreLogic examines all stages of mortgage delinquency, and in two time “buckets” – 60 to 89 days past due and 90 to 119 days past due – the percentage of mortgages in November 2017 that were delinquent did exceed the corresponding figure from November 2016. But for mortgages 120 or more days past due and those in foreclosure, November 2017’s figures were at least 20 percent lower than a year prior.

As a point of comparison, the portion of mortgages that were seriously delinquent (defined as 90 or more days past due or in foreclosure) was 4.5 percent in the second quarter of 2008. That same date point was 2.6 percent in November 2017 – a decrease from 3.1 percent in November 2016.

Why is a high percentage of mortgages that are current important? For one, it shows that homebuyers have the financial means to purchase and own their homes. When the bottom fell out of the market in the previous decade, much of the cause was attributed to “sub-prime” borrowers – those who couldn’t afford a home to begin with – defaulting on their loans.

Also, as homeowners pay their mortgage and build equity month after month, they have more and more incentive to stay current on their loan and not let their investment vaporize via foreclosure. Rising home prices strengthens that incentive, as homeowners see their residence appreciate in value.

Here in Bend, Oregon, the sales environment is starkly different from the last time home prices surged so strongly.

Entering 2017, the highest median sales price for one month was $396,250, in May 2007. That month, there were 1,371 active listings and an inventory of homes of 15.2 months.

More recently, even as the median sales price has crested $400,000, there have been fewer than half as many homes on the market as in 2007 and an inventory of less than six months.

If you’re looking to buy a home in Bend or are considering selling, I can help ensure an outcome you’ll be happy with. My experience in this market coupled with my integrity and ethical approach to real estate will come to bear on your behalf. Please contact me at (541) 383-1426 or visit Bend Property Search to connect with me through my website.