The year 2020 will go down in the history books as an unprecedented year in many regards. The real estate market in Central Oregon was no exception. Since approaching the year's end it seems appropriate to begin reflecting on this year's real estate activity. The National Association of Realtors reported that existing home sales hit a 14-year high in August, also marking 103 straight months of year-over-year gains; and the total housing inventory hit a record low nationally to just 2 1/2 months' supply in October.
Keeping consistent with this atypical year, home sales remained unusually high in the fall and winter months, where they typically trend downward. NAR Chief Economist Lawrence Yun states, "I would attribute this jump to record-low interest rates and an abundance of buyers in the marketplace, including buyers of vacation homes, given the greater flexibility to work from home."
There were other surprises, too. "Uncertainty about when the pandemic will end, coupled with the ability to work from home, appears to have boosted sales in summer resort regions, including Lake Tahoe, mid-Atlantic beaches," Yun commented. This also holds true for Bend and the Central Oregon area.
Home sales in vacation destination counties saw an incredible gain with 34% more sales in September, according to a recent NAR study. The coronavirus pandemic has modified where families with children want to live, with an increased preference for detached homes with large yards. To take it even further, homebuyers' preference extends to having a detached home, a large yard in a walkable community with shorter commute times.
According to our local market data source, Donnie Montagner and the Beacon Report, the median sales price of a single-family home in Bend dipped down from an all-time record high in October of $560,000 to $535,000 in November. The monthly total number of homes sold has steadily declined since the high of 318 homes sold in July, landing at 208 in November, down from 248 in October. Inventory remains very low, with housing supply dipping just below half a month.
Reflecting back on median sales prices each November tells the story of extraordinary increases over time in Bend. The year 2020 was $535,000, 2019 was $431,000, 2018 was $433,000, 2017 was $390,000 and 2016 was $374,000.
When the Federal Reserve ended its two-day policy meeting in June, it determined that rates would be left unchanged and suggested that it will not raise interest rates for a long time. In a recent Mortgage Bankers Association meeting, Chief Economist Mike Fratontoni said that rates could rise over the coming year, but will still remain near the all-time lows. We should see end-of-year rates at about 3% with rates rising to around 3.3% next year.
While predictions of 2021's housing market largely depend on the COVID-19 pandemic steadying, signs are pointing to a strong seller's market and ample buyers, but sales prices are expected to plateau, with a more steady increase.