WOW! I just ran a market report for the Providence Neighborhood in Bend, OR and homes that were marketed without professional photos (IE: a camera phone) were on the market for an average of 30 days longer and sold for 1.3% less than those that had professional photos. If you're thinking of selling your home, make sure you're asking the right questions when interviewing brokers to sell your home.
Rising Interest Rates' Impact on Central Oregon Home Buyers & Sellers
After several years – with interest rates remaining historically low – rates are on the rise. What will this increase in interest rates mean for buyers and sellers in 2018?
Home prices in Central Oregon have been increasing by more than 10% every year since 2014, yet home buying has remained affordable and attractive, especially for first-time home buyers, due to lower interest rates over the past six years.
With interest rates hovering around 4.5% at the end of February, and additional increases expected from the FED throughout the year, home buyers are looking at reduced buying power throughout 2018. If a home buyer has a budget around $400,000, when interest rates go up by .25 of a point, it lowers buying power by about $15,000. What does that mean? It means that home buyers will have to adjust their purchase price down by $15,000 in order to achieve roughly the same monthly payment. This can be a big deal for first-time buyers whose price points are already right at or below the median sales price in Bend, which is right around $400,000 for a single-family home.
However, while interest rates may seem high, it’s important to remember that 4.5% is still considered historically very low. In the 1980s, interest rates were near 20%! Thankfully, we are a long way off from interest rates becoming that high again.
How will the interest rate increase affect buyers and sellers?
I believe that the Central Oregon housing market will continue to remain strong this spring and summer selling season. The number of new listings in Bend is down 7% in February over 2017 and inventory remains low with only 538 single-family homes available for sale in Bend. Only 225 of those homes are priced under $450,000. With historically low median days on market (the median in Bend is currently 60 days), and an increase in relocation buyers, finding an affordable home without competing with other buyers might prove difficult. While home buyers may need to adjust their desired price range slightly, there is still an opportunity to find a great home, even with rising interest rates.
Are you interested in what your home could be worth this spring? I’d be happy to sit down and provide a personalized market report for you. If you’d like to purchase a home in Central Oregon, let’s discuss how I can help you buy successfully in this competitive market.