Both inventory and sales pulled back in September which was not a surprise as it happens almost every year. Usually it begins in August with the low point coming in February. This year we didn’t see signs of a seasonal decline until September which any other year would be encouraging news for the Bend real estate market.
This year there are two clouds hanging over the real estate market in the form of a government shutdown and a debt ceiling. Those two issues could produce a larger than normal drop in activity during October and a hangover that carries into the spring of 2014.
Does that mean we could see a new 10 year low in the number of Central Oregon homes for sale come February? Maybe. At the moment inventory is just 10 percent above where it was this time last year. A 10 percent improvement over last February would put the number at 1456 homes for sale. The key to whether or not we reach a new low will be sales.
There were 57 more homes sold this September than last September. That is a 15 percent improvement which, again, is encouraging. However, if sales continue to chip away at inventory it is easy to see a scenario like February 2013. At that time inventory was so low relative to demand that it wasn’t uncommon for sellers to see multiple offers.
As a result, prices, which had been fairly flat for the previous eight months began to climb steadily to this month’s average of $157/square foot. It would not be unreasonable to expect prices to continue to rise given the market conditions noted above. Two factors that could slow or even halt price increases are buyer uncertainty as a result of the government shutdown and rising mortgage interest rates.
*Sales data courtesy of Central Oregon MLS