Housing market continues to feel headwinds
Last updated 11/7/2023 at 12:47pm
The market for single family homes in Sisters Country remains depressed as compared to the heady 2021 sales picture. Sales for September and October of this year are eerily similar to the same months for 2022 – a stagnation of sorts as buyers retreat in light of 30-year fixed mortgage rates that sat Friday at a breathtaking 8.09% having exceeded 8.5% two weeks earlier.
These are the highest rates since November of 2000.
The table to the right gives an overview of transactions according to analysis from Oregon Datashare.
In October of 2021 there were 31 sales, seven of which topped $1 million for an aggregate of $24.94 million. That's a drop in total market sales of almost a third in two years.
A further look at the data shows that approximately 20 percent of all closings the last two months have been in the Sisters Woodlands and Hayden Homes' McKenzie Meadows. The former has sold out its Phase One and has a waitlist for Phase Two. The latter is now completely sold out.
The bulk of sales are now in what realtors call the sweet spot: $500,000 to $700,000, closer to being affordable for the Oregon median income. However when rates hit 6 percent, a $500,000 home becomes difficult to afford for the average buyer, and at 8 percent nearly impossible for any family with an income under $100,000.
Realtors tell The Nugget that they expect no rebound until possibly next summer and that will probably be modest. Realtor.com economist Jiayi Xu said: "As the Federal Reserve's revised economic projections signal the high likelihood of another rate hike within the year, we expect mortgage rates will continue to exceed 7 percent and even climb higher."
Adding to buyer's anxiety are the rapidly increasing rates for homeowners insurance in Sisters Country. Due to catastrophic losses by insurers in the state from wildfire, some carriers have dropped insuring Oregon properties altogether while others have steadily raised rates 25-plus percent in just the last year and over 40 percent in the last two, residents report.
The real estate industry took a major blow last week when a federal jury in Missouri found the National Association of Realtors (NAR) and two of the largest real estate brokers in the country guilty of colluding to inflate real estate commissions. The verdict could change how Americans purchase homes, or more specifically, how they pay for realtor broker fees.
The jury, following two weeks of testimony, ordered the NAR and real estate franchises Keller Williams and HomeServices of America to pay $1.78 billion in damages to plaintiffs - the sellers of more than 260,000 homes in Missouri, Kansas, and Illinois.
The case is just one class-action lawsuit against the defendants, and the guilty verdict, if upheld, could spur legal action in other states.
The commercial real estate market in Sisters remains bleak, with over 100,000 square feet of unfilled space for lease. Some has sat idle for over a year, although EDCO (Economic Development of Central Oregon) reports three companies are currently working through lease agreements, all new to Sisters. And a sale is pending on the long-vacant property at 320 W. Cascade next to Sno-Cap.
Apartment seekers continue to have a choice of one- and two-bedroom traditional apartments available to them at rates of $1,325 to $1,450 for one-bedroom units and $1,650 for two-bedroom layouts. Just six months ago it was nearly impossible to find rentals in Sisters under $2,000.