Heading into 2019, we forecasted continued low inventory and steadily rising prices at most price points for Bend and Eugene’ real estate markets. But now that we’re through the first quarter of 2019, what do things look like on the ground for both of these markets?
Several of our clients have recently said something to the effect of, “Well, I’ve heard the market has kind of slowed down a little bit.” There does seem to be the feeling in the air that cracks are appearing in the economy and home prices are bound to fall from the historical highs they reached in 2018. Beyond the mere feeling level though, what’s the reality for Bend and Eugene’s markets?
Our Quarter One 2019 Market Report for Bend
In Bend, first-quarter sales do at first glance look sluggish compared to the beginning of 2018. According to the Central Oregon Association of Realtors, sales are down 16.9% in 2019. But there are also less properties entering the market–16.4% fewer than in Q1 of 2018.
Notably, the average days on the market for Q1 of 2019 is nearly identical to that of a year ago. The average price per square foot is up 5.6%, a bit lower than the increase from 2017-18 but still indicative of a healthy market. In other words, it isn’t actually any harder to sell a home in Bend than it was a year ago, nor is it easier to purchase one. There’s just less market activity in general.
We believe that this drop in market activity reflects an environment of uncertainty around the economy. Compared to last year, sellers have been somewhat hesitant to put their homes on the market, while buyers have been hesitant to make a financial commitment.
The end of 2018 saw a significant spike in the federal interest rate, from 2.2% to 2.4%. But on March 20 of 2019, the Federal Reserve announced plans to halt rate hikes for the foreseeable future. That’s good news for anyone seeking to obtain financing for a home in 2019, and we expect a corresponding increase in buyer activity.
If you’re looking for a home at the lower end of the market–which in Bend really means anything under $400,000–the picture is not so rosy. In Q1 of 2019, listings of such homes are down 40% from a year ago, while sales are down just 31.8%. People seeking affordable housing are still being driven out of Bend, lowering the number of buyers at this price point. However, the demand continues to outstrip the supply.
Buyer activity in the $400,000-650,000 range also remains robust compared to seller activity. Sales are down only 5.9% compared to Q1 2018, but listings are down 12.9%. That means buyers in both the lower and middle end of Bend’s market have less inventory to choose from and more competition than they did a year ago.
Unsurprisingly, the premium end of Bend’s market is where we really start to see signs of a slowdown. In Q1 of 2019, listings of $650,000-plus homes are up 1.9% from a year earlier, while sales are down 26.8%.
We expect the numbers to plateau and remain similar throughout 2019. That means more leverage for buyers and more inventory to choose from. We’ll be watching for signs of a downturn as opposed to just a cooling-off as we go further into the year. But premium-end buyers shouldn’t hold their breath waiting for prices to drop.
Meanwhile, the data for Quarter 1 of 2019 shows that buyers and sellers on the lower and middle rungs of Bend’s market should expect neither lower prices nor more inventory to choose from.
Our Quarter One 2019 Market Report for Eugene
Through the first quarter of 2019, we’ve worked with buyers in the lower, middle, and upper ends of Eugene’s market, with our clients seeking homes anywhere from $250,000 and under up to $1 million. We certainly would expect low inventory at the bottom end of Eugene’s market, but we’ve been struck by how few choices there are at any price point in Eugene’s market.
There are 272 homes currently listed for sale in Eugene on the Regional Multiple Listing Service. That may seem like a lot, but once you’ve narrowed it down by location, square footage, finishes, lot size, and exact price, there just isn’t something for everybody.
Market statistics from the RMLS confirm these on-the-ground impressions. Compared to Q1 2018, listings in the first quarter of 2019 are down about 17%, at 517 compared to 633. Sales are down 14% in the first quarter of 2019, with 446 compared to 517.
Homes also sat on the market about a week longer, with a median of 34 days in Q1 of 2019 compared to 27 the year before. None of this is to say that homes are going for any cheaper, with an average sale price of $312,500 in Q1 of 2019 compared to $299,000 in 2018.
Like in Bend, Eugene has seen a general all-around drop in both seller and buyer activity compared to last year. But, especially with the spring weather and recent good news from the Federal Reserve, we expect buyers and sellers to shake to shake off some of the jitters that kept them from entering the market over the winter.
At the lower, middle, and upper end of Eugene’s market, the ratio of sales to new listings has basically kept pace with what we saw in the first quarter of 2018, again with somewhat lower numbers all-around.
The exception is in the $600,000-plus range, where 93 properties have been listed so far in 2019 compared to 87 in Q1 of 2018. Sales of such properties are identical, with 34 in the first quarter of both 2018 and 2019.
Because these listings represent such a small portion of Eugene’s market, it’s difficult to draw any conclusions here. This modest increase in listings may indicate some amount of anxiety that prices for high-end real estate in Eugene will start to level off. Or, it could simply be a coincidence.
Drawing Conclusions about Bend and Eugene’s Markets
All in all, 2019 has been short in surprises so far for Bend and Eugene’s real estate markets. During the second quarter of 2019, we should see definitively whether buyers and sellers have simply chosen to wait it out for the warm season or whether Bend and Eugene’s markets really are heading for a cool-down.
Whichever the case may be, we’re still confident that homes won’t get cheaper and that inventory wont increase in Bend and Eugene anytime soon, possibly excepting the luxury market in Bend.
We’re therefore encouraging our buyers to take advantage of the inventory that will be hitting the market as we move toward summer, and not to find false security in the thought that it’s going to get any easier to find a home here. We’ve heard so many stories from our clients about “the one that got away.”
With such low inventory, it’s especially important to have a skilled agent along for the ride to help you manage your expectations and identify the diamonds in the rough. The lower ends of both markets can be especially cutthroat: for some actionable advice, check out our Tips for Buyers in a Tight Market.
Conversely, if you’re thinking of selling, rest assured that there will still be plenty of buyers out there, and likely not a ton of competition depending on your neighborhood. But if you have a quirky property–as many Eugene homeowners do in particular–it may just take a bit of extra effort on the part of you and your realtor to find the right buyer.
There’s no such thing as a guaranteed sale, but you also don’t want to spend money on renovations or high-tech marketing that won’t net you an equal return on your investment. A savvy realtor will know what will and won’t sell your home–and will tailor their services to maximize your return. You can get started by requesting a totally free and totally customized valuation.