With all the real estate housing data recorded for 2022, it’s clear it was a year of transition. The Bend median home price in January was $683,000 before peaking in March at $773,000 and finishing the year at $678,000. Further, there were 171 sales in Bend for December 2021 compared to just 98 in December 2022. This decrease in value and sales is directly connected to the Federal interest rate hikes in order to combat record high inflation. Inflation numbers are improving and rates have leveled off in the mid 6% range.
So, 2023 will likely be a year of fewer sales and prices may soften further in the first part of year. This doesn’t mean the market is crashing, but it is correcting. Inventory will remain low through 2023 after the pandemic created unprecedented demand for housing. There will be fewer new construction starts as caution sets in to not over extend plus many homeowners may not want to sell because they have locked in a record low interest rate.
There are currently 222 active single family homes under 1 acre in Bend with 140 homes that are pending. The average days on market for those pending homes is 55. Note, 44% of those homes went pending within the first 30 days proving that pricing homes appropriate is key to attracting a buyer in this market.
Lawrence Yun is a Chief Economist and Senior Vice President of Research at the National Association of Realtors had this to say about the 2023 housing market:
“Half of the country may experience small price gains, while the other half may see slight price declines. However, markets in California may be the exception, with San Francisco, for example, likely to register price drops of 10-15%.”
Yun forecasts U.S. GDP will grow by 1.3%, roughly half the typical historical pace of 2.5%. After eclipsing 7% in late 2022, he expects the 30-year fixed mortgage rate to settle at 5.7% as the Fed slows the pace of rate hikes to control inflation. Yun noted this is lower than the pre-pandemic historical rate of 8%.
“The demand for housing continues to outpace supply,” Yun said. “The economic conditions in place in the top 10 U.S. markets, all of which are located in the South, provide the support for home prices to climb by at least 5% in 2023.”