Q1 2023 Central and Southern Oregon Real Estate Market Update
by Matthew Gardner
https://www.windermere.com/blog/q1-2023-central-and-southern-oregon-real-estate-market-update
Q4 2022 Central and Southern Oregon Real Estate Market Update
https://www.windermere.com/blog/q4-2022-central-and-southern-oregon-real-estate-market-update
Home sales drop, median prices rise in Jackson County
Redfin Reports Demand For Vacation Homes Is Down More Than 50% From Pre-Pandemic Levels
April 10, 2023 8:00 am ED
The number of people locking in mortgages for second homes dropped to its lowest level since 2016 in February and remained nearly as low in March
SEATTLE–(BUSINESS WIRE)– (NASDAQ: RDFN) — Mortgage-rate locks for second homes were down 52% from pre-pandemic levels on a seasonally adjusted basis in March, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That is compared to a 13% decline for primary homes.
Second-home rate locks fell to their lowest level since 2016 in February and remained nearly as low in March.
The drop in second-home demand follows a meteoric rise during the pandemic homebuying boom. Mortgage-rate locks for second homes reached a peak of 89% above pre-pandemic levels in August 2020. At that time, many affluent Americans bought homes in vacation destinations, encouraged by low mortgage rates, remote work, and limitations on traveling from place to place.
Second-home buyers are deterred by high rates, newly instituted loan fees, slowing rental market
A scarcity of new listings, elevated mortgage rates, still-high home prices and persistent inflation, among other economic woes, are holding back demand for both primary and second homes.
A variety of factors are causing the outsized drop in second-home demand:
- Many potential second-home buyers are priced out because it’s frequently more expensive to buy a vacation home than a primary home. The typical second home was worth $465,000 in 2022, versus $375,000 for a primary home. Additionally, the federal government increased loan fees for second homes in April 2022.
- Vacation-home buyers are quicker to pull back from the market than primary-home buyers because second homes aren’t a necessity.
- Workers are returning to the office. Second homes are less attractive when there’s less time to spend in them. While working from home is more common than it was before the pandemic, the share of job openings that allow remote work has shrunk since early 2022.
- Buying a vacation home to rent it out is nowhere near as attractive as it was during the pandemic homebuying and investing boom. Owners of short-term rentals are reporting a steep decline in business. That’s because many people became vacation-rental hosts during the pandemic, which led to oversupply. Many local governments are also instituting new short-term-rental regulations, like new taxes and stricter permitting. The long-term rental market is also cooling.
- Bank accounts are shrinking as stock markets decline, so would-be buyers have less cash on hand for down payments and monthly payments.
- Many people with the means and desire to buy a second home have already done so, during the pandemic homebuying boom of 2020 and 2021.
“With housing payments near their all-time high; a lot of people can’t afford to buy one home right now, let alone a second,” said Redfin Deputy Chief Economist Taylor Marr. “Add the recent increase in loan fees, inflation, shaky financial markets, the end of pandemic-related financial stimulus and many companies calling workers back to the office, and it’s simply a challenging time for most Americans to buy a vacation home.”
But there are still some second-home buyers out there, especially in popular vacation destinations. Phoenix Redfin agent Van Welborn said some buyers are looking for vacation condos, especially in desirable neighborhoods.
“It’s mostly affluent cash buyers who don’t have to worry about high rates,” Welborn said. “They’re motivated to buy now because they think they can get a vacation home for under asking price–and in some cases, they’re right. There are fewer buyers looking to buy properties to be used as short-term rentals, though, as they’re finding that the market is saturated.”
Interest in second homes first fell below pre-pandemic levels in March 2022 as mortgage rates rose and the loan-fee increase loomed. To view the full report, including charts and methodology, please visit: https://www.redfin.com/news/demand-down-second-homes-march-2023
Source: Redfin
Released April 10, 2023
Redfin Reports Home Prices Fell 3% in March–Biggest Annual Drop in Over a Decade
April 19, 2023 8:00 am EDT
Pending home sales dipped to the lowest level since the start of the pandemic as elevated mortgage rates curtailed buyer demand and a lack of homes for sale limited purchases
SEATTLE–(BUSINESS WIRE)– (NASDAQ: RDFN) — The median U.S. home price fell 3.3% in March to $400,528, the largest year-over-year drop since 2012, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.
Pandemic boomtowns and pricey Bay Area markets led the price declines in March. In Boise, ID, prices fell 15.4% from a year earlier, more than any other U.S. metro area Redfin analyzed. Next came Austin, TX (-13.7%), Sacramento, CA (-11.9%), San Jose, CA (-10.5%) and Oakland, CA (-9.7%). Boise also saw the largest drop in pending home sales, with a 78.8% year-over-year decline. Nationwide, pending sales fell 26.6% on a seasonally-adjusted basis to the lowest level since the onset of the pandemic (April 2020).
“I was consistently busy in the fall, but things got really quiet in March after the collapse of Silicon Valley Bank,” said Boise Redfin real estate agent Shauna Pendleton. “That killed the buyer momentum that had been building and brought us right back to where we were last year when mortgage rates shot up. There’s this fear that everything will crash. There are bank failures, inflation, recession fears, mortgage-rate volatility, a war in Ukraine, spy balloons—some people are wondering if they should pull their money out of the bank and park it in a safe rather than spend it on a new home.”
Pendleton continued: “The irony is that it’s actually a pretty good time to buy in Boise. The dropoff in homebuyer demand means that prices are falling and many sellers—especially homebuilders—are offering concessions. It’s not uncommon for a buyer to get a home for less than the list price.”
Pandemic boomtowns and expensive coastal markets are seeing their housing markets slow quickly because home prices overheated in recent years and are now coming back down to earth after many buyers were priced out. Prices in Boise, for example, surged a record 40.9% in May 2021 as low mortgage rates, remote work and relatively affordable housing brought in scores of homebuyers from more expensive parts of the country. That compares with a national record increase of 26% the same month. Redfin’s records date back to 2012.
Markets that didn’t heat up as much in recent years are holding up relatively well. Pending sales fell the least in Fort Worth, TX, Dallas, Indianapolis, Cincinnati, and Buffalo, NY. And prices rose more than 10% year over year in March in Milwaukee, El Paso, TX, Omaha, NE, Camden, NJ and Knoxville, TN—the biggest gainers in the country. When nationwide price growth hit a record 26% in May 2021, Milwaukee prices were up just 12.5%—meaning they had less room to fall.
In Nashville, the housing market has slowed from its pandemic peak, but demand is stable, according to local Redfin real estate agent Jennifer Bowers. Prices are up about 1% from a year ago and pending sales are down slightly less than the country as a whole.
“Nashville’s housing market is steady,” Bowers said. “We’re still seeing a lot of folks move in from Chicago, Texas, California and Colorado—places people haven’t historically come to Nashville from. Some are moving in for political reasons, some for our low taxes, and many for our relatively affordable home prices. Prices are high in the eyes of many locals, but we’re still pretty affordable compared to a lot of parts of the country. We also have a solid job market and a lot of newly-built houses coming on the market, which is supporting home sales.”
There Aren’t Enough Homes for Sale Even Though Fewer People Are Buying
Elevated mortgage rates are prompting both buyers and sellers to stay put. New listings fell 23.3% year over year in March to the lowest level on record aside from the start of the pandemic on a seasonally-adjusted basis.
Many homeowners are hesitant to sell because moving would mean taking on a higher mortgage rate when they buy their next home. The average 30-year-fixed mortgage rate was 6.54% in March, up from 4.17% a year earlier. Others are staying put because they already bought their dream home in recent years or fear they won’t be able to find another home they like given the shortage of listings.
A lack of homes on the market is contributing to the decline in sales, preventing home prices from falling further and leading to bidding wars in some markets. More than two of every five (44.3%) home offers written by Redfin agents faced competition in March. The bidding-war rate has hovered around that level for the past five months following nearly a year of month-over-month declines.
“Low inventory is driving the market and causing bidding wars to intensify. I have two listings that have each received around 10 offers in the past few weeks,” said Dan Close, a Redfin real estate agent in Chicago. “Buyers’ agents are trying so hard to find homes for their clients that they’re calling me before my listings even hit the market. I did a consult with a seller recently and before we had anything in ink, three brokers phoned to say they’d heard about the home through word of mouth and wanted to know more. We had two above-asking offers on the $2 million home within 24 hours. There weren’t even any photos online yet.”
“One of my sellers recently got multiple offers on their home, but pulled the listing off the market when they found out their interest rate was going to double,” said Bowers, the Nashville agent. “There are a lot of homeowners who don’t want to give up their 2.5% or 3% rate for a 6.5% rate. Both buyers and sellers are having a tough time adjusting because rates are swinging up and down so quickly.”
Roughly 55,000 home-purchase agreements were canceled in March, equal to 14.8% of homes that went under contract. That’s down from the 2022 peak of 16.8% in October, but up from 11.2% a year earlier.
“This year’s spring homebuying season is lackluster,” said Redfin Chief Economist Daryl Fairweather. “There are some signs of the typical seasonal uptick—homes are selling faster than they were in the winter—but that’s partly because there are so few new listings. Normally we see homebuyers come out in throngs at this time of year, which isn’t happening.”
| March Highlights | |||
| March 2023 | Month-Over-Month Change | Year-Over-Year Change | |
| Median sale price | $400,528 | 3.6% | -3.3% |
| Pending home sales, seasonally adjusted | 372,126 | -3.1% | -26.6% |
| Homes sold, seasonally adjusted | 444,572 | -3.6% | -22.3% |
| New listings, seasonally adjusted | 459,934 | -2.2% | -23.3% |
| All homes for sale, seasonally adjusted (active listings) | 1,508,454 | -4.7% | 5.6% |
| Months of supply | 1.9 | -0.7 | 0.7 |
| Median days on market | 43 | -9 | 23 |
| Share of for-sale homes with a price drop | 14.6% | 0.8 ppts | 8 ppts |
| Share of homes sold above final list price | 28.5% | 4.9 ppts | -25.6 ppts |
| Average sale-to-final-list-price ratio | 98.9% | 0.6 ppts | -3.5 ppts |
| Share of home offers written by Redfin agents that faced competition, seasonally adjusted | 44.3% | -2.2 ppts | -18 ppts |
| Pending sales that fell out of contract, as % of overall pending sales | 14.8% | 1.4 ppts | 3.6 ppts |
| Average 30-year fixed mortgage rate | 6.54% | 0.28 ppts | 2.37 ppts |
Metro-Level Highlights: March 2023
- Pending sales: In Boise, pending sales fell 78.8% year over year, more than any other metro Redfin analyzed. It was followed by Baton Rouge, LA (-66.3%), Allentown, PA (-60.8%), Honolulu (-56.6%) and Greensboro, NC (-53.4%). The smallest declines were in Fort Worth (-2.6%), Dallas (-4.3%), Indianapolis (-5.3%), Cincinnati (-8.7%) and Buffalo (-12.2%).
- Closed sales: In San Jose, closed sales dropped 39.1% year over year. The next biggest declines were in San Francisco (-39%), Oakland (-38.7%), New York (-37.2%) and Portland, OR (-36.9%). Closed sales fell the least in North Port, FL (-3.4%), Dallas (-3.5%), Indianapolis (-5.2%), Grand Rapids, MI (-5.6%) and Forth Worth (-7.8%).
- Prices: Median sale prices fell from a year earlier in 37 metros. The biggest declines were in Boise (-15.4%), Austin (-13.7%), Sacramento (-11.9%), San Jose (-10.5%) and Oakland (-9.7%). The biggest increases were in Milwaukee (11.7%), El Paso (11.1%), Omaha (10.7%), Camden (10.2%) and Knoxville (10.2%)
- Listings: New listings fell the most from a year earlier in Allentown (-57.1%), Boise (-55.2%), Stockton, CA (-46.8%), Greensboro (-46.5%) and Sacramento (-44.8%). They rose in just one metro—Charlotte, NC (4.3%)—and fell least in North Port (-0.2%), McAllen, TX (-2.3%) Austin (-3%) and Fort Worth (-4.1%).
- Supply: Active listings rose most from a year earlier in North Port (90.7%), Austin (65.8%), Nashville (58.7%), Fort Worth (54.3%) and New Orleans (50.6%). They fell most in Allentown (-41.7%), Cincinnati (-34.8%), Greensboro (-34.3%), Lake County, IL (-29%) and Milwaukee (-28.1%).
- Competition: In Las Vegas, 26.5% of home offers written by Redfin agents faced competition, down from 74.8% a year earlier. That 48.4-percentage-point decline is the largest decline among the metros Redfin analyzed. Next came Olympia, WA (-40.7 ppts), Colorado Springs, CO (-40.4 ppts), San Antonio (-36.7 ppts) and Phoenix (-33.9 ppts). Competition rose in just one metro Redfin analyzed: Worcester, MA (4.5 ppts). It fell the least in Washington, D.C. (-4.1 ppts) Detroit (-5.6 ppts), Atlanta (-5.8 ppts) and Baltimore (-7.2 ppts).
To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-tracker-march-2023
View source version on businesswire.com: https://www.businesswire.com/news/home/20230419005454/en/Contact Redfin
Redfin Journalist Services:
Kenneth Applewhaite, 206-588-6863
press@redfin.comSource: Redfin
Released April 19, 2023
Oregon Appraisal Services 