In recent years the Central Oregon real estate market has been no stranger to low inventory. In June 2020, the region took a dip to less than one month of inventory for the city of Bend. Inventory is the number of homes actively for sale. There just isn't enough housing inventory for the number of active buyers looking to buy.
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The shortage of homes available causes prices to rise in areas where the in-migration outweighs the out-migration. It's no secret that Central Oregon has become a hot spot for not only tourism, but also where people are wanting to move to escape from urban areas. That has now been amplified by the novel coronavirus, and in my opinion, even more so with the latest virus surge in metropolitan areas. In the Central Oregon markets, we're seeing a tremendous number of out-of-county and out-of-state buyers, fueled by interest in areas that are considered "rural," where people can get outside and the population base is far from dense. Believe it or not, Central Oregon, even Bend, is still considered to be a rural area. So, as people are moving to the area in droves, the inventory is tighter than has been in years past. As a result, pricing and market values are increasing, because buyers are willing to pay higher prices to live in the desired area.
What does it mean for a seller? This type of market, also known as a "seller's market," is generally great for sellers. If a property is priced appropriately and within the current market parameters, the interest and activity is generally very high. The average days on market decreases and the likelihood of getting close to or at listing price is very good. Buyers who are competing for properties in this type of market tend to be pre-qualified, ready to bring their best offer to the table at first submission, if well-counseled.
A buyer looking to purchase a home where competition is high and the coveted prize of inventory is low needs to have their proverbial ducks in a row. That means being very clear on down payment ability, having a pre-qualification or pre-approval letter from their lender ready to go and being prepared for the reality that time is of the essence when writing an offer. Buyers in this current market are less and less able to take days to consider making an offer, because more than likely there are several other buyers considering the same property. The buyer's offer needs to be strong, with their best foot forward. If a seller knows that there have been 10 showings in two days, that seller may very easily pass on a weaker offer simply because they know there are few houses on the market and triple the buyers looking.
For homeowners who aren't looking to sell, all of this works in their favor as well. As market prices increase, so does the market value of their home. This in turn increases the equity and overall household wealth.
The limited inventory also has effects on households looking to sell or not. It is my opinion that we will continue to experience a massive shortage of inventory and a very competitive market in Central Oregon for quite some time. With the desire for urbanites to relocate, coupled with the record-low interest rates recorded just last week, this market will continue to move and move quickly.