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Market Trends Newsletter

Central Oregon Real Estate News and Market Update April 2019

Hi everyone. It sounds like the warm weather is on it's way! Sounds good to me. With T-ball games being played and soccer balls flying all over the place, it is a sure sign that Spring is here.

The biggest news to come since my last newsletter is regarding the new rent control laws that are now in effect. Senate Bill 608, which caps rental increases to just once a year, at 7 percent plus inflation, and forbids no-cause evictions after the first year, effortlessly sailed through both chambers of the Oregon Legislature, and was signed into law by Gov. Kate Brown Feb. 28. With the current inflation rate, the rental increase is capped at 10.3 percent this year... Click HERE to read the full Source Weekly article. 

The real estate market appears to be starting off fairly strong again. Inventory levels remain low. I hope to see more inventory come on the market as the warmer weather sets in and the grass gets greener.

The comments below are from Donnie at Beacon Appraisal Group after which you will find a link to the most recent Beacon Report. The Beacon Report offers market data about real estate activity over the entire central Oregon area. Let me know if you have any questions or need any assistance.

Beacon Report 1st Quarter 2019

2019 appears to be off to a good start for the Central Oregon Single Family Residential market. SFR inventory levels are low in all the areas included in the Beacon report.

The Bend SFR market experienced an increase in median sale price and number of sales last month when compared to February 2019.

Redmond SFR market also shows an increase in sales and the median sale price is slightly lower than in February 2019.

The quarterly numbers for the small Central Oregon market areas are included in this report and the inventory levels range from 2-3 months.

Have a great Spring

Link to Beacon Report.
 

Information received from the Central Oregon MLS and Beacon Appraisal Group, is deemed reliable, but not guaranteed.

US Real Estate Overview

Note: February 2019 data below are the most recent released by the National Association of Realtors.

Existing-home sales rebounded strongly in February, experiencing the largest month-over-month gain since December 2015, according to the National Association of Realtors®. Three of the four major U.S. regions saw sales gains, while the Northeast remained unchanged from last month.

Total existing-home sales (transactions including single-family homes, townhomes, condominiums and co-ops) shot up 11.8 percent from January to a seasonally adjusted annual rate of 5.51 million in February. However, sales are down 1.8 percent from a year ago (5.61 million in February 2018).


National Association of Realtors February 2019 DataNAR's chief economist, Lawrence Yun, credited a number of aspects to the jump in February sales. "A powerful combination of lower mortgage rates, more inventory, rising income and higher consumer confidence is driving the sales rebound."

 

The median existing-home price for all housing types in February was was $249,500, up 3.6 percent from February 2018 ($240,800). February's price increase marks the 84th straight month of year-over-year gains.

Total housing inventory at the end of January increased to 1.63 million, up from 1.59 million existing homes available for sale in January, a 3.2 percent increase from 1.58 million a year ago. Unsold inventory is at a 3.5-month supply at the current sales pace, down from 3.9 months in January but up from 3.4 months in February 2018.

Properties remained on the market for an average of 44 days in February, down from 49 days in January but up from 37 days a year ago. Forty-one percent of homes sold in February were on the market for less than a month.

Per Freddie Mac data, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 4.37 percent in February from 4.46 percent in January. The average commitment rate across all of 2018 was 4.54 percent.

First-time buyers were responsible for 32 percent of sales in February, up from last month and a year ago (both 29 percent).

The Price Is Right...Or Is It??

If you are planning to put your home on the market -- especially if you live in a place where prices are rising and buyers are competing for homes -- it can be tempting to list your property at a high price hoping that you'll actually get it. After all, it can work with cars, why not with homes?

You may want to think twice -- the resale of homes and automobiles are very different things.

Experienced Realtors who have been through dozens, scores, or even hundreds of transactions, will advise you to price your home appropriately from the outset because it's pivotal to seeing the home sold quickly and at the best price. Research backs up what experienced Realtors already know: overpricing your home and then lowering the price a few times most often leads to a final sales price significantly below what you originally should have asked for it.

And, to make matters worse, the longer a home remains on the market, the deeper the discount is likely to be off the original price. Ouch!

How to price your home correctly

Many homeowners seek to price their home based on factors like the price they paid for it, the balance that they currently owe, or simply on the profit they need to buy another house or to meet their financial goals. These motivations are perfectly understandable but in reality the value of your home is what the market will bear. Here's the problem: If a property is overpriced, some potential buyers will avoid looking at it at all (and having no one show up to see it is a pretty clear message from the market). Others may view the home but walk away without making an offer.

So, what can you do? Choose a Realtor who can provide you with the best comparative market analysis (CMA) and who understands your local area intimately. Some agents may attempt to woo you with an inflated price -- it probably happens every day somewhere -- but in the end the market will speak clearly, and choosing an experienced Realtor who understands the importance of market-driven pricing will end up being a choice you won't regret.

Your Realtor's CMA should include sales prices for similar properties nearby that have sold recently, prices for currently listed homes (these will be your competition), and prices of homes that were taken off the market because they didn’t sell. Look for a Realtor with demonstrated experience who can factor in a range of local market issues to produce that all-important first price.

If the price is right from the beginning, it usually means not only a faster sale, it typically means more money in your pocket.

Investing in Real Estate

Today's low interest rates and rising home prices have created some great investment opportunities!

Investing in real estate has unique advantages over other types of investments. Let's take a look at some of the reasons why real estate investment should be on the "short list" for many investors:

  • Interest in mortgage loans are tax-deductible. Investors can lower their tax liability while increasing their equity.
  • Renters pay down your mortgage loan. Investors reap the benefits of rental income, which offsets your mortgage cost and build equity.
  • Real Estate values increase over the long term. Real Estate is limited and will always be in demand. 
  • 1031 exchanges are available to defer taxable income when you are ready to sell.

Many investors are taking advantage of these great market conditions. Have questions? Give us a call. We are happy to help!