April Bend Real Estate Market Update – Early Signs of Slowing from COVID-19
It is mid April here in Bend and although the March numbers show little change to the market due to COVID-19 we are starting to see some impact now that we are half way through the month of April. The March metrics listed below appear to paint a rosy picture however, as most of you know real estate is not a leading economic indicator and it tends to react slowly to change. This is partially due to the time frame involved in selling a home (100 or so days for the average home to list and close) and also due to the fact that homes are just not investments, meaning there is more going into a decision to buy or sell a home rather than profit.
The one early sign in the March data that suggested some impact by COVID was the number of homes that went into contract that month. Typically we see 320 units go into contract during March and this year we only saw 200 units go pending, and most of that slowdown came in the tail end of the month.
Since the start of April (not included in the numbers below) we are seeing more signs of a velocity slowdown including a significant reduction in the number of new homes hitting the market. Just how significant? The 5 year average for the month of April is 430 listings and as of April 20th we are somewhere in the ballpark of 150 new listings so far this month. The 5 year average for homes that have gone “pending” in the month of April is 345 units. As of April 20th we are somewhere around 100 units. In both metrics we could see April’s number come in at about half of what we traditionally see.
Even though velocity is slowing down, we still have not seen a major impact on sales prices The median price for a Bend area home came in at $465K for March, and as of April 20th the median sales price for this month is trending at $444K. Given that we still have 10 days left, we could still be withing striking distance of the March number. The average sales price thus far for May is $596K, up nearly 10% over last month and up 10% over last year as well.
Bend’s Median came in at $465K for March 2020, up about 4% to last year. The average sales price came in at $550K, up 6.9% to last year.
Months of inventory came in incredibly low as for the majority of the month as most buyers were not yet influenced by news of COVID-19. Most of these buyers were in contract late January or early February, well before the pandemic was in full swing.
Homes pending is the one early sign in March signaling that the housing market is slowing. Normally March sees an average of 320 units go “pending”. This month only 200 units went into contract. Expect this to result in a steep downward trend in the number of closings during May.
New listings also came in down compared to the March trend but they were not off by that much. The 5 year average is 377 units, and this March we came in at 338 units.
It is difficult to say what the future holds. If we continue to stay in lock down for another few months, those waiting to sell may be forced to take action which could create additional inventory that could put pressure on prices to drop. With interest rates continue to fluctuate at all time lows, there is still good incentive for buyers to shop . At this point it is anyone’s guess as to how it will play out.