Published March 7, 2019 in The Bulletin
An article in The Bulletin reported that “home sales in the Bend area dropped to a level in February not seen since late 2007.” Our first question was, what does that mean? Really?
They go on to state that “there were 106 transactions last month, down 34.5 percent from 162 in February 2018. Sales volume was also down from January’s total of 125. Total sales volume in Bend dropped below 100 transactions per month in late 2007 and stayed below that level through the end of 2008, Beacon Appraisal Group owner Donnie Montagner said.”
Without additional data or context, it’s not clear what this means for the Bend real estate market. What this article doesn’t really address is supply and demand. They don’t really touch on our current inventory levels. The monumental difference between 2007 and today is the absorption rate, which is the rate at which available homes are sold in a specific market during a given time period. Traditionally, anything above 20% is a seller’s market. In the winter of 2006-2007 the absorption rate hovered around 9% for 6 months straight. This winter, 2018-2019, our absorption rate has been bouncing between 46% and 35%, with a dip in February down to 26%. In the winter of 2006-2007 buyers had over 1300 homes to choose from but now they have just under 400. In our experience working with buyers right now, they are feeling frustrated at the lack of options. We firmly feel that if we had more homes for buyers to choose from, that more homes would sell, which is a very different scenario than we experienced in 2007.
The article goes on to say that “the median sales price in Bend fell from $450,000 in January to $427,000, a 5 percent decline. That was the largest one-month drop in the past 16 months.” It’s all about your perspective. What we see in looking at a longer time period is that the median sales price hovered around $430,000 from July 2018 to December 2018. In January it jumped to $449,000 and in February it went back to $430,000. We tend to think of that as a spike in the median sales price in January, and now it’s back on trend. The median sales price in February 2018 was $405,000 so we’re up 6%. (Again, this is why we report statistics quarterly rather than monthly.)
We certainly noticed the heavy snowfall and school closure at the end of February resulted in a big slow down in the market. There was very little showing activity and hardly any new listings. Furthermore, many government offices were closed and FedEx deliveries were delayed, so many closings that were scheduled for the end of February simply couldn’t happen.
It’s true that February 2019 sales were down but from our perspective in the trenches of the real estate market, we see no reason to be alarmed. We anticipate 2019 will be another strong year for the Bend real estate market. It will look different, perhaps less frenzied and more balanced than in recent years, but still strong.
You can read the article in its entirety on The Bulletin’s website: Bend Home Sales Drop