The Two Conflicting Factors Having an Impact on the Local Housing Market
In my blog last month, I talked about what to expect in the local housing market for the rest of the year. Today, let’s look at two conflicting factors that will affect the market: people waiting until after the election to move versus improving mortgage rates.
Factor #1: Waiting Until After the Election
There’s always some uncertainty around elections, and this one is no different. In conversations with other agents, loan officers, and curious buyers,it’s becoming clear that more people are holding off on moving until after the election. While I won’t get into whether these concerns are valid, I can tell you this popular decision has had a noticeable impact on buyer activity during October and November over the past six elections.
On average, compared to non-election years since 2000:
Deschutes County sees between an additional 2% to 5% drop in buyer activity.
Crook and Jefferson Counties see anywhere between a 5% to 24% greater decrease in buyer activity.
The existing hesitancy in the current buyer pool seems likely to worsen until the election is behind us.
Factor #2: Improving Mortgage Rates Are Helping Affordability
30-Year Average Mortgage Rate:
Aug 5th, 2023: 7.21% (on its way up to its peak of 8%)
Aug 5th, 2024: 6.35%
With improved rates, talk of a near-guaranteed federal rate cut in September, and improving inflation, it seems the worst may be behind us. Buyer activity has already increased in select cities and price points locally. Two significant examples from August:
Bend: A 60% increase in homes going under contract in the $550K - $599K range.
La Pine: A 67% increase in the $300K - $350K range and a 50% increase in the $400K - $450K range.
One month of increases doesn’t yet make a trend, but if rates continue to improve, we could see stronger-than-usual buyer activity through the rest of the year.
If you’re curious what happens after the election, look no further than the United Kingdom, who already has gone through their election and a government rate cut. To highlight one particular quote from that article:
“There is no doubt that activity slowed in the buildup to the general election despite a result that was no great surprise to the country. With the election now behind us, we are seeing an improvement in buyer engagement as more certainty in the political and economic landscapes forms.”
What This Means for You
Buyers:
Now might be the time to take advantage of current and potential market conflicts: hesitant buyers, improved rates, and motivated sellers. Certain price points in Central Oregon are experiencing ‘buyer’s market’ dynamics, making this an opportune moment to jump in.
Sellers:
While the already hesitant buyer pool may slow further until the election, buyers are still out there making offers. Make sure you understand the buyer-seller dynamic for your price point in your market (or work with someone who does) to ensure your home is priced and positioned correctly.
