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The following analysis of select counties of the Central and Southern Oregon real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.
Regional Economic Overview
The Central and Southern Oregon areas covered by this report have now recovered all of the jobs that were shed due to the pandemic and added 720 new ones. Although the Medford metro area is still lagging, the other markets contained in this report have made up for the shortfall. The area’s unemployment rate was 4.8%, matching the level of a year ago. That said, the number of unemployed has started to trend a little higher across the board. By area, the lowest jobless rate was in Deschutes County (4.1%) and the highest was in Klamath County, where 6.1% of the labor force is still without a job.
Central and Southern Oregon Home Sales
❱ In the final quarter of 2022, 1,721 homes sold, which represented a drop of more than 42% compared to the same period the prior year. Sales were 29.4% lower than in the third quarter of 2022.
❱ Home sales fell in all counties relative to the third quarter of 2022. Only Josephine County saw a decline in sales of less than 10%.
❱ Sales fell significantly in all counties compared to the fourth quarter of 2021.
❱ The reason for the drop in home sales is likely because higher inventory levels gave buyers more choice. It also appears that many buyers are waiting to make a move in the hopes that prices and mortgages will fall further in the coming months.
Central and Southern Oregon Home Prices
❱ The average home sale price in the region rose 1% year over year to $557,517, but it was down 8.4% from the third quarter of 2022.
❱ Compared to the third quarter of 2022, average prices fell in every county other than Jefferson, where they rose 3.4%.
❱ All counties contained in this report saw prices rise year over year, but prices in Deschutes and Jackson counties were essentially unchanged. It doesn’t appear that home prices have been significantly influenced by the increase in mortgage rates yet.
❱ Compared to the third quarter, median listing prices fell in Deschutes, Jackson, Crook, and Josephine counties, but rose in Klamath and Jefferson counties.
Mortgage Rates
Rates rose dramatically in 2022, but I believe that they have now peaked. Mortgage rates are primarily based on the prices and yields of bonds, and while bonds take cues from several places, they are always impacted by inflation and the economy at large. If inflation continues to fall, as I expect it will, rates will continue to drop.
My current forecast is that mortgage rates will trend lower as we move through the year. While this may be good news for home buyers, rates will still be higher than they have become accustomed to. Even as the cost of borrowing falls, home prices in expensive markets will probably fall a bit more to compensate for rates that will likely hold above 6% until early summer.
Central and Southern Oregon Days on Market
❱ The average time it took to sell a home in the region rose 26 days year over year. It took 21 more days for a home to sell compared to the third quarter of 2022.
❱ The average time it took to sell a home in the final quarter of 2022 was 54 days.
❱ All counties saw market time rise compared to both the same period the year prior and the third quarter of 2022.
❱ It appears that buyers are being far more selective and taking their time when it comes to making an offer on a home.
Conclusions
This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.
Sellers are adjusting to the changing market, as shown by the drop in asking prices in several markets, though this is not the case everywhere. The spring market will be a bellwether for the housing market in 2023. It appears as if mortgage rates have peaked, which should be good news for home buyers. Furthermore, sellers lowered their listing prices by almost 3% in the fourth quarter, demonstrating that they are aware that the market has shifted.
The market appears to be moving more toward buyers. As such, I have moved the needle closer to the center, but I cannot say definitively that the market completely favors buyers. The spring market will be very telling.
About Matthew Gardner
As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.
In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.
