The Median Price Could Decline this Year. Should We Worry?

As I’m sitting here thinking about what to write about for the newsletter this month, I’m finding myself a little short on inspiration. For the most part, market activity is trending exactly how we would expect for this time of year.

After alarmingly slow buyer activity in Crook and Jefferson County in January, buyers showed up in February in a pretty impressive way. Meanwhile, Deschutes County continues to see both buyers and sellers increase their activity at a fairly normal seasonal pace. The bottom line is that proper pricing and preparation remain just as important as ever.

That being said, there is one interesting observation I’ve been paying attention to as we move through March and into the next few months.

Specifically, I’m watching the median sale prices of homes in Bend and Redmond. After two months, and yes it is still very early in the year, the annual median sale price in both communities is currently tracking lower than it was in 2025. At first glance that might sound like a sign that home values are slipping, but I believe the explanation has more to do with interest rates than with the health of the market itself.

Mortgage rates were roughly one percentage point higher at the beginning of last year. Because of that, many of the buyers who remained active in Bend and Redmond were the ones who were less sensitive to interest rate changes. In Bend, that meant a higher share of upper-end homes selling. In Redmond, sales skewed toward the upper end of the primary inventory range, particularly in the $500,000 to $599,000 price segment.

Now that rates are fluctuating between the high 5% and low 6% range, many buyers who were previously boxed out of the market are able to return. As a result, we’re seeing more homes on the lower end of the price spectrum sell. When more lower-priced homes enter the mix of completed sales, the median price naturally moves down.

There are also other contributing factors. For example, new construction in Bend has seen its annual median sale price decline every year for the past four years and is currently about 11% lower than it was in 2022.

Redmond is experiencing a similar dynamic, largely because a greater share of homes around the $400,000 price point have been selling so far this year. Redmond has been a particularly interesting market over the last couple of years because it continues to send mixed signals about where things are heading.

Meanwhile, the remaining communities in the region, including La Pine, Sisters, Prineville, and Madras, are continuing along much the same path they have been on. At the moment, there are no major changes or unusual patterns worth highlighting in those areas.

So what is the takeaway from all of this?

For me, it’s been a good reminder that headline statistics like median sale price rarely tell the full story about the health of a housing market. A changing median price does not automatically mean home values are rising or falling in a meaningful way. Sometimes it simply reflects who is participating in the market at a given moment.

In this case, improved mortgage rates are allowing more entry-level and mid-range buyers to re-enter the market. When more homes at those price points begin selling, the median price naturally shifts downward even though the overall market may still be behaving normally.

It’s something I have to remind myself of often when looking at the numbers. The high-level statistics can be useful for spotting trends, but they rarely capture what’s actually happening at the neighborhood, price point, or individual home level.