Thus far, the winter season of 2021 has been anything but typical. We've been blessed with warm days—that is, warm within in the context of Central Oregon's version of winter warmth. Central Oregonians are finding themselves spending more time outside than is usual for the winter months, and then of course there is the housing market. Ordinarily, the market tends to quiet a bit during the holidays and winter months. We generally see a dip in inventory and a slight dip in buyer demand and pricing. That is certainly not the case for Winter 2021.
The inventory shortage is standard for this time of year. Our yards are dormant, the trees barren and the general vibrancy of colorful and lively curb appeal doesn't exist. The typical trend in years past has been to wait until spring to list a property for sale. That is not the case this year. There has been a massive inventory shortage in the preceding months and that doesn't look as though it will change anytime in the near future.
Buyer demand is another key factor in in driving the shortage for inventory and price growth. With the interest rates continuing to remain low—that includes the jumbo rates, buyers are looking to take advantage of the low rates across all price ranges. In addition, the continued evolution and growth of industries shifting to remote working is fueling the demand for larger homes to accommodate home offices and the migration from urban to suburban and rural areas. This continued growth in demand has led to unusually active winter market conditions.
This sustained buyer demand has continued to fuel price growth. In years past, the thought was that better "deals" could be found during the winter months when there is less competition with other buyers. Again, 2021 is demonstrating that is not the case for Central Oregon. Buyer demand is higher than we have experienced in the region, especially during the winter months. The days of the winter "deal" have waned and the winter market remains as competitive for buyers, as multiple offers have become customary.
Another factor driving the increased wintertime demand is the fear of becoming priced out of the market. The year 2020 saw huge gains in price growth and median home prices both nationally and locally. With many economists forecasting significant price growth again in 2021, a lot of buyers are spending the winter months looking to purchase a home for fear that prices will continue to rise in the latter half of 2021. For example, if prices rise just 5% from the December median home price in Bend of $524,000, that will result in a $26,200 price increase. That kind of increase can potentially price a buyer out of the desired area or size and style of home.
All of the above factors have changed the landscape of the winter real estate market. Regardless of the barren scenery and colder temperatures, buyers are lacing up their winter boots and hunting for real estate to buy, turning what has been a historical slowing of the market into a hot winter market.