2026 Housing Market? Here's What 2025 Taught Us
As we approach the final stretch of the year, the usual questions are making the rounds:
Will home prices go up or down in 2026?
Where are mortgage rates headed?
Is next year finally the “right time” to buy or sell?
Most of the answers you’ll see online speak to the national market. But let’s take a few minutes to zoom in on what really matters; what happened locally in 2025, and what it might tell us about where we’re headed.
2025: A Year of Gradual (and Uneven) Improvement
This year marked slow but steady progress in most local markets, at least on the buying side. Sellers, on the other hand, seemed to regain their confidence faster. In the first five months of the year, we saw a surge in new listings. But by the end of May, that imbalance between sellers and buyers had grown enough that nearly 40% of listings were on pace to not sell, a much higher rate than usual. Since then, the gap has narrowed, more in line with the mid-20% range we’ve seen in recent years. But that improvement was driven more by fewer homes coming to market after June than by buyers increasing their pace.
A few areas still stand out:
Sisters: 45% of homes that hit the market this year haven’t sold.
La Pine: 38% remain unsold.
Redmond: A bit of an outlier as inventory stayed low, but again, mostly due to fewer sellers, not a major buyer surge.
Buyers Focused on the “Right Price”
Another challenge sellers faced this year? Demand wasn’t evenly spread. In many smaller communities, entire price segments saw no traction. Sure, 30–40 homes might have gone pending in a given month, but the majority of those were clustered in just one or two price points. If your home wasn’t in those “hot” price ranges, you were faced with a tough call: Drop your price, wait it out, or pull the listing and try again next year.
Prices Stayed Flat (But That Doesn’t Mean Value Did)
Across Central Oregon, we’ve seen roughly 1% appreciation per year for the last three years...if you go by median sales price. But the nuance matters. Some homes that would have easily sold for one price in 2022 now need to be listed $20K–$30K below that to get serious buyer attention.
New Construction Became a Real Threat to Existing Homes
This could be a newsletter all on its own, but here’s the short version: Builders got aggressive in Q4. To hit year-end goals, they offered major incentives, in some cases, up to $35,000 in buyer credits, and threw in upgrades to sweeten the deal. For buyers trying to get into a home before 2026, new construction was hard to beat.
So What’s Coming in 2026?
In short: more of the same.
A strong spring wave of listings, led by sellers who didn’t succeed this year plus those already planning to move in 2026.
Gradual improvement in buyer activity, building on this year’s momentum.
Mortgage rate impact if we see rates fall into the 5% range like some experts project. But remember, improvement needs to feel sudden to really jolt buyer behavior (as we saw in August).
Sellers should prepare with realistic expectations, especially around price and time on market. Buyers who can comfortably afford today’s payments may still find opportunity, especially in segments where seller motivation is high.
Want to Know What This Means for Your Specific Area or Price Point?
Shoot me a message — I’m happy to pull the data and help make sense of it.
