Higher Mortgage Rates Putting the Squeeze on the $550k - $650k Bend Housing Market
If you checked out the C.O. Housing Market Index for Bend in the Market Trends section of the my site, you’d have noticed that buyer activity has tapered off in April since March. While there may be various factors at play, the primary reason appears to be the significant increase in mortgage rates observed in early April. This market shift has not only caused a slowdown but has also affected different segments of the Bend market in varying ways.
Homes priced at $700,000 or higher continue to attract decent buyer interest. Buyers in this price range are less affected by interest rate fluctuations as they often have the option to pay in cash or make substantial down payments. Similarly, homes priced at $550,000 or lower are also experiencing some impact, but are maintaining steady activity. This could be attributed to potential buyers aiming for homes priced slightly higher, in the $550,000 - $650,000 range, finding themselves unable to afford the monthly payments, which would leave them financially strained.
This implies that homes listed in the $550,000 - $650,000 range are currently most affected by the rise in mortgage rates. There are two perspectives to consider when supporting this theory.
Where has the buyer activity shifted since the start of the month? Noticeably, the $550k - $600k range has witnessed a -2.3% reduction in buyer activity, while the $600k - $650k range experienced a decrease of -1.8%. One could argue that this reduction is buyer activity is attributed to fewer homes available in these price ranges. While this explanation holds some weight, it prompts the question: why isn’t the market experiencing a decline in buyer activity in the higher price ranges despite a similar decline in market share?
Median days on market for those price points shows a distinct difference. Below, I’ve plotted the days on market for homes in Bend priced under $1 million that have gone under contract, represented by blue dots. The orange dots indicate the median number of days on market for homes within each $100,000 price range. I’ve further separated the $500k and $600k price ranges into $50k increments to better understand how homes within these ranges are affected. What stands out is the consistent median days on market across most price ranges, except for the $550k - $650k range, where homes are currently sitting longer.
If you are a buyer looking at this price range, now is the time to have serious conversations about leveraging this market trend to negotiate a favorable deal. Exploring opportunities to negotiate a better price or, ideally, negotiate for seller credits to help adjust the monthly payments to a more manageable level until you can refinance in the future.
If I’m a seller in this price range, the market is sending a clear message, and it’s crucial to be prepared to pivot, most likely through a price reduction. If you’re preparing to list your home in this range, be ready to make adjustments after a week or two, especially if you find that your home isn’t attracting significant interest at the current asking price.
