THE STATE OF REAL ESTATE
WHERE WE STAND & WHY IT MATTERS
The real estate market in Bend continues to evolve as economic conditions shift. Buyers and sellers are facing new challenges and opportunities, making it essential to stay informed. It is our goal in the following pages to provide some key insights by analyzing market trends, mortgage rate impacts, economic influences, and follow that with a discussion of what may lie ahead. We do this so that our clients can be educated and prepared to take the next step, and sometimes that means to stay where they are. In our discussion, we won’t lose sight that housing means something different to everyone. For some, it is simply an investment, while for others, it is the canvas where cherished memories are made. Our hope is that this report can help you continue toward your desired outcome.
INFLATION AND MORTGAGE RATES
Although this is a lot to pack into one section, it is important to see the relationship between the two. If we start with inflation, we can see that although inflation has come off significantly from where it was a few years ago, it is still not quite at the levels that the Federal Reserve is targeting (2%). See Chart 1. Given this, the Fed has continued to take a cautious approach to lowering their Fed Funds rate so as not to overstimulate spending too early and reverse the trend with inflation. The other factor shown on this chart is how wages have fared over the same period of time. The good news is that when we brought this up a few years ago, wage growth and inflation were flipped, meaning that inflation was growing faster than wages were. As you can imagine, that scenario was not a good one for the consumer. We are currently on the right track with wage growth outpacing inflation, but there are other headwinds.
Mortgage rates have been the biggest driver of activity in the market over the past few years. However, although they will continue to have an influence, we are starting to see signs that this is shifting. Experts have yet again adjusted their expectations on where rates will land by the end of the year, and it now stands only marginally lower than current levels. See Chart 2. Given this, we have seen the first signs that buyers and sellers are beginning to tire of putting their lives on hold in hopes of a better rate environment in the future. They have started to look at creative ways to structure deals or adjust their price points to make a quicker move more realistic. Here’s the catch, in 2022 when rates started to tick up, people followed the same course of action and activity actually picked up significantly initially as people raced to get in before they got too high. We will touch on why we don’t think there will be this same type of rush here, but there absolutely could be a rush if rates tick down. If you are a buyer that is still selectively waiting for a dip in rates, be on the
lookout for the competition to pick up, and unfortunately prices usually go up with it.
One final note on rates and how they continue to affect the average buyer and seller. A key metric many lenders used to determine spending levels for clients is to look at the percentage of someone’s income that gets allocated to mortgage payments. From 2013-2018, the average mortgage payment was roughly between 23-26% of the household income. However, these numbers have shifted and in 2024, this metric stood between 36-38% for the average home buyer and significantly higher for low income households. This is a perfect example of how wages and rates play into the affordability matrix. The other factor is prices, so let’s dive in.
PRICES AND AFFORDABILITY
Despite some headwinds with regard to inflation and mortgage rates, the average home in Deschutes County ticked up approximately 3.3% in 2024 and is now at $738,000. See Chart 3. Bend also saw an increase of approximately 4.7% in 2024 bringing the average home to $852,000. Given the limited number of sales (we will touch on this shortly), we used a 3-month rolling average to generate these numbers. Outside just the numbers themselves, what shows strength and consistency is that we have resumed the normal yearly patterns with price movement in Central Oregon. We are not seeing huge run-ups followed by periods of decline, just the normal pattern of price movements, with the end result being some slow and steady appreciation.
It may seem confusing to hear that prices continue to tick up despite the higher costs associated with homeownership, so we will touch on a couple of reasons here. First, demand remains strong due to demographic trends. We discussed this at length in prior editions, so we won’t go into that here, but there is no question that this plays a huge part. You can find access to all prior editions in the Resources tab on our website. Secondly, if we loop back to the percentage of household income going toward mortgages, and look locally in Bend, we arrive at approximately 46-48%. On the surface, this explains the pinch we all feel locally. However, if we also look at some of our feeder markets, we see that we are either in line/slightly lower than Portland (45-46%) and Seattle (48-52%) or significantly lower than San Francisco (6879%) and just about anywhere in CA. So when buyers from these areas look at all the lifestyle benefits of Central Oregon and see that prices are at least even with where they are leaving, it keeps a large number of buyers focused on Bend. Lastly, the final constraint is that although the headlines will tell you inventory has risen dramatically, the fact is that we are still significantly lower than the norms and lower than what is needed to create more of
a balance in the supply/demand continuum. See Chart 4.
INVENTORY AND SALES
Although we have included the charts for the number of available homes as well as the number of monthly Pending sales (see Chart 5), we will focus here on what happens if these shift in the coming months. As is the case every spring, there is the expectation that there will be more homes coming on the market every month until early/mid summer. With the election behind us, rates expected to remain flat throughout the year, and many people sitting in homes that don’t suit their needs anymore (think marriages and divorces, new jobs, too much/little space, etc.), we expect that there will be a larger number of new listings than prior years. Some sellers have been on the sidelines thinking they could get more, or perhaps waiting for rates to come down for their future purchase. Buyers have been waiting for a more advantageous rate environment and waiting for more fairly priced options to come on the market. Could this be the year when these groups of buyers and sellers come together and move on? According to the experts, the answer is pretty clearly yes. There are estimates of 10-15% more sales in 2025 with an average expected appreciation of approximately 2.9% nationally. See Chart 6.
FINAL THOUGHTS
As the market shifts, staying informed is always the best strategy. We take this philosophy to heart and understand that we need to be informed of more than just market trends. Our job is to understand what is at the core of your objectives, and we do that by asking questions and listening. The reality is that although we do more business than any other team in Central Oregon, we really wish we had a tally on how many times we have helped our clients stay put or stay patient and not make a move. That is the stat we would be most proud of. The goal is not to make a sale, but to help make a wise decision, whatever that might be. We would be honored to have the opportunity to do the same with you.
- Steve LaCrosse
STATISTICS
RESOURCES
THE DIFFERENCE IS EXCELLENCE
What’s unique about the Ladd Group is that our team is built around making sure you achieve your goals in a seamless and effortless manner. Our team covers it all, with in-house experts in marketing, videography, transaction management, operations, and sales.
OUR WHY
To help smart people meet their personal and financial goals through strategic real estate investments.
OUR PROCESS
To streamline home buying and selling by supporting clients at every stage with a dedicated team of experts.
OUR RESULTS
A proven history of selling homes faster and for more money, and guiding buyers through successful purchases.
160 UNITS CLOSED IN 2024
Cascade Hasson Sotheby’s Team in Oregon & SW Washington. # 1
$1,024,836 AVERAGE LIST PRICE
98.72% SALE TO LIST PRICE
382.7K VIDEO VIEWS PAST 12 MONTHS
Team in sales above one million dollars. # 1
Central Oregon Team in total MLS sales volume for the 8th year running. # 1 SCAN NOW, AND CONNECT WITH US!
REFERENCES:
https://www.statista.com/statistics/1351276/wage-growth-vs-inflation-us/ https://www.nahb.org/news-and-economics/housing-economics/indices/cost-of-housingindex
https://docs.google.com/spreadsheets/d/1YbKlddKHfi-J4E5gcnpDSYa8stpDVy5xpQcS3AxlyC4/edit?usp=sharing
https://money.com/first-time-homebuyers-mortgage-income-rule/
https://www.point2homes.com/US/Neighborhood/OR/Bend-Demographics.html https://www.dropbox.com/scl/fi/vshyy9r6ko3hdfa8vr0jq/National-Sales-Expectations. PNG?rlkey=3uvb1miy6gd3pvb1go4gvqyy5&dl=0
https://www.nar.realtor/sites/default/files/2024-11/2024-profile-of-home-buyers-and-sellershighlights-11-04-2024_2.pdf https://zondahome.com/2024-cost-vs-value/
BUYER’S CORNER
NAVIGATING THE BUYING PROCESS WITH CONFIDENCE
In recent articles, we’ve shared insights on various aspects of buying real estate—market trends, financing, and investment opportunities. For this edition, we thought we’d return to the basics, focusing on some key aspects of the buying process that are top of mind for many of our clients. Whether you’re a first-time buyer or a seasoned investor, the journey of acquiring real estate can feel complex. Here’s a closer look at the challenges buyers face and how to navigate them successfully.
For many, the home buying process can feel overwhelming. As discussed in prior issues, understanding the market is crucial. The biggest challenge for many buyers is finding the right property—55% of buyers cite this as their greatest hurdle. With so many choices, it’s easy to feel lost in the options.
Another common difficulty is managing the full scope of the process— securing financing, negotiating terms, and coordinating inspections. Staying informed and supported throughout helps reduce stress and allows for confident decisions.
Paperwork can also be daunting, but with proper guidance, it becomes manageable. Financial considerations, especially down payments, remain a challenge. Understanding financing options and negotiating closing costs is crucial. Finally, securing a mortgage requires an understanding of interest rates and loan terms. Navigating the market may seem overwhelming, but with the right expertise, it doesn’t have to be.
Our team is here to guide you every step of the way, ensuring a smooth and successful home-buying experience.
7 HOMES
number of homes the average buyer tours prior to making an offer
SELLER’S CORNER
NAVIGATING THE EVOLVING MARKET
Navigating the current real estate market requires an informed approach, as the landscape continues to evolve. Price appreciation, while still positive, is expected to moderate, making the accuracy of a home’s pricing more critical than ever. Homes that are priced strategically, reflecting market conditions, tend to attract serious buyers more effectively and avoid the pitfalls of prolonged listings or price reductions. Achieving a balance between competitive pricing and the unique features of the property will be essential in attracting the right buyers.
INCREASING COMPETITION
As more homes enter the market, the competition is expected to intensify. While the market remains competitive, an uptick in buyer activity has been observed beginning in January, signaling an early shift in momentum. Although current metrics may not yet fully reflect this change, it is anticipated that this positive trend will continue into the spring, potentially leading to favorable conditions for sellers. With more listings entering the market, buyers will have additional options to consider. However, homes that are presented well will continue to stand out and capture attention, even in a competitive environment.
LEVERAGING BUYER INCENTIVES
Although the market’s competitiveness has shifted slightly, offering buyer incentives is still an effective tool for differentiation. Concessions such as home warranties, contributions to closing costs, or flexible terms may make a property more appealing in a market with many options. Offering incentives can help mitigate buyer hesitation, facilitating quicker negotiations and smoother transactions.
THE POWER OF PRESENTATION
In today’s market, presentation plays a critical role in determining a property’s success. Homes that are clean, well-maintained, and aesthetically appealing are more likely to command top dollar.
Buyers are increasingly seeking homes that are move-in ready and reflect careful attention to detail. Presentation extends beyond the interior to the exterior, where landscaping plays a significant role in creating a positive first impression. Ensuring that the property’s curb appeal is
Percentage of homes that were purchased through a buyers’ or builders’ agent
10 WEEKS
Media time a buyer spent searching for a home
maximized by maintaining a well-kept yard, trimming overgrown shrubs, and addressing any walkways or driveways in need of repair is essential. Small projects—such as refreshing paint, updating hardware, or regrouting tiles—can make a substantial difference. Homes that appear well-cared-for typically attract buyers willing to pay a premium for quality and attention to detail.
STRATEGIC HOME PROJECTS
When preparing a home for sale, it’s also important to be strategic about which home projects to tackle. Some upgrades have a much higher return on investment (ROI) than others, and focusing on these can make a significant difference in how quickly a property sells and for what price. Looking at data in the chart below, you can see what offers the best ROI. For those staying in your home, combining your desire to have an upgrade with the expected ROI can allow you to make an informed decision. For sellers, focusing on high ROI projects can boost their home’s appeal and maximize value without over-investing.
The number of first time home buyers in the market Nationally (down from 36% in 2023)
The number of Central Oregon transactions that are Cash (vs financed)
$1,108,348,321
Working with the Ladd Group has been an absolute pleasure—their energy, excitement, and creativity are unmatched. They don’t just show up; they invest in the work, in our mission, and in our community. We’re incredibly grateful to have them as partners and champions of what we do. If you’re looking for a real estate team that not only excels in their industry but also gives back in meaningful ways, The Ladd Group is the real deal. - The Giving Plate.
My wife and I had the pleasure of working with Stormy when buying our new house this Fall. She was on top of anything and everything that came up. Countless houses and negotiations later, she was able to help us get the best deal for the house that we always wanted. I cannot recommend her enough! - Alex
Jaclyn and her team did an amazing job of selling our home the first weekend it went live and for full list price even in a challenging market
- Michael Musco
Steve LaCrosse and the Ladd Group are just Terrific! Steve has gone above and beyond with our move to Bend over the past 2 years. He has shown us multiple lots and homes until we found the perfect fit for us and our family!
- Raymond Landes
I’ve used this amazing team a couple of times now and gosh, do they deliver on all levels. Given fluctuating interest rates and an unsettled market, Erin and her team truly stepped up to the plate in selling my home with finesse. - Pilar Albertson
My wife and I were interested in purchasing a second home in Bend back in 2023, so I contacted Erik Chapin with The Ladd Group. Over the course of 18 months, we communicated with Erik regularly from our home out of state. Once we found the right home to purchase, Erik and his team at the Ladd Group made the process simple and stress-free.
- Mickey H.
TAKING COMMUNITY INVOLVEMENT TO NEW HEIGHTS.
The Ladd Group is committed to elevating Central Oregon through dedicated engagement and impactful giving. These are just a few of the many ways in which we are honored to serve our community.
