Wow,2023 hasbeenawildridefor our team! It hasbeenfilledwithbothcelebrationsandlearning opportunitieswhichresultedinsubstantial personal andprofessional growthfor eachteammember hereat MOPG Theword that resonateswithour teamright now isgenuinegratitude Wearegrateful for somanythingsinlife Specifically,wearegrateful toour familiesfor all their support andfor puttingupwiththelonghoursthat hit withregularity in2023 Wearegrateful toour clientswho trusteduswiththeir real estateendeavorsthisyear andgraciously dealt withrapidly risinginterest rates,low inventory levels,anderraticpurchasingtrends Wearegrateful for our partnersandvendors whoenableustoprovideahigh-quality servicethroughout thebuyingandsellingprocess A bigthank youtoeveryoneelsewhopositively impacted usandour businessin2023.
Onthebusinessside,inamarket that experiencedroughly a25%declineintransactionsfrom2022 to 2023,wewereabletogrow our team?sproductionby 20%thisyear withthesamenumber of brokers Thisgrowthwasnot without itschallenges,aswecoined thephrase?200%effort for a50% return?welcometo2023??Evenwiththenew demandsof themarket,thewholeteamtruly embracedthereality of thenew workload anddidanamazingjob! Possibly themost significant revelationthat camefrom2023 hasbeentheimportanceof relationships.Fromour ownfamiliesto our teammates,clientsandcolleagues,thisworldwould besodevoidof purposewithout thepeople that weareblessedtodolifewith.
It isimportant tonotethat 2023 wasnot 2021.Wearenow twoyearsremovedfromthepeak of demandexperiencedinthereal estatemarket during2021,however conditionscanstill be characterizedby low inventory andrelatively strongbuyer demandfor homes(but that demanddoes not extendtoall segmentsof themarket).Althoughoverall pricinghasdroppedfromthepeak of the market,it isstill significantly higher thanthepre-covidlevelsof 2019.Lookingforward,it is increasingly difficult toforecast thecurrent market trajectory astherapidriseininterest ratesonly causedamarginal declineinpricingrelativetotheincreaseinthecost of financing Most of theupward pressurethat iskeepingpricinguphasbeenattributedtotheoverall lack of inventory andageneral lack of housing Whiletherearemany morefactorsthat areimpactingthereal estatemarket,onething isfor sure:2024 will beavery interestingyear andcouldbethemost critical year sincethecrashof 2008 tohelpdeterminethedirectionof thenext 5 years Early signsarepositivewithinterest rates beginningtotrendalittlelower andtheFedannouncingadditional ratedecreasesonthehorizon
Our teamgrew way closer asaunit over thepast year,tothepoint it feelslikeabigol?family.A commonthemeamongst theteam?sreflectionsover thepast year hasbeenthat resounding gratitudefor whoisontheteam Thereweremajor personal winsfor theteamthroughout 2023 asmany personal andfamily goalsweremet,includingtravel,huntingtrips,andgreat family time for all
Ashley: Ashley surprisedall of uswithher awesomenews that sheandMikeareexpectingtheir first baby boy (and thirdchild)inearly 2024! Wewill missher asshetakesa few monthsoff for maternity leave,but asagroupwecould not behappier for her andher family andit isanhonor for ustohelpduringthiswell-deservedtimeaway Wealso havenodoubt that Ashley will comeback withanincredible amount of freshdriveandvisionthat will probablycauseus torevamphalf of our current systems(hahaha),but it'sthat driveandability toinnovatethat madeher asenior partner early inher real estatecareer.
Alex: Alexandhisfamilymovedintotheir new rural home thisyear andarenow inthemiddleof alonglist of fun projects,includingafull kitchenremodel right before Thanksgiving Asafamily,whennot knee-deepinprojects, they got toenjoy aboatloadof campingtripsandother adventuresthroughout theyear Alexisalsonow entrenched asasenior partner andhasearnedevenmorerespect from our team Hissteady andalwayspositivedemeanor, powerful work ethicandleadershipskillshavepositively impactedMOPGat many levels.
Shannon: ShannonWester washonoredtobecomeShannon Forrest inSeptember of thisyear Wearesohappy for her andJoey asthey enter intothisnew andexcitingchapter of their lives.ShannoncontinuestocoachCrossFit (torturing poor peopleonadaily basis)andenjoysevery opportunity to get intotheoutdoors.Wearesuper proud of her asshe entersyear threeof her real estatecareer.Her diligence, attentiontodetail,andfollow-throughareservingher very well asshegrowsher business
Sam: Samhadhisbest professional year todate,but that wasovershadowedby gettingmarriedtoEricathislast October SamandEricacontinuetoenjoyall that Central Oregonhastooffer,includinghunting,fishing,hiking, camping,andmuchmore! Professionally,Samhasfoundhis nicheinCentral Oregonandwelook forwardtowatchinghis businesscontinuetogrow.Samhasagenuinepassionfor peopleandworkstirelessly onevery aspect of hisbusiness.
Evan: Evanhasbeen?mister consistent?over thelast few yearsinNEOregon Heandhiswifeenjoybalancingtheir family ranchbusinesswithreal estate,andhesaystheranch giveshimagreat perspectiveonevaluatingpropertiesand helpingunderstandtheneedsof ranchbuyersandsellers Personally,EvanandCassieenjoy findingabalancebetween outdoor adventuresandranch-stay-cations Welook forwardtowatchingEvan?sbusinesscontinuetogrow.
Jordan: Jordan,our listingcoordinator,hasliterally beenour savinggraceintheofficethisyear asshe,day inandday out, getsmoredonethanany normal personcouldandshedoesit without complainingandisalwaysfilledwithkindnessand withgreat professionalism. Wewould not know what todo without her!
Chris: Chris really enjoyed watching everyone grow this year, even more than any of his own successes The team has grown so much personally and professionally, He is proud to be a part of this group Personally, he and Juliana have continued to revamp their own health journey, focusing on learning and being consistent with healthy eating, physical conditioning, and managing stress. The confirmation of how much of an impact this has had on his life came this hunting season when Chris got to go to Alaska and Idaho for back-country hunting trips. The trips were challenging, hard, fun, cold, tiring, physically demanding, successful, and just amazing experiences
Sohereisthebigconundrumfacinganyonewholooksat thereal estatemarket today. With a 54.87%increaseinthecost of buyinga home(increaseincost of financing)how have pricesonlycomedown3.50%? Thisseemsperplexingandcounter-intuitive. What isgoing on?
Let usintroduce ?inventory" - Thepre-covidaveragemonthly inventory level wasaround 1,500 residential homes?available?at any giventime. Duringcovidweexperiencedatrifoldmarket anomaly wherewesay unprecedenteddemand for housingdueto three things: First,the lockdown,peopleacrossthecountry werelockeddownintheir homes,whichcreatedthe?need? for moreroom,morefreedom,etc. Secondwasthe cost of financing hit all-timelowswithrates below 3%for muchof thetime Lastly wasscarcity,generally speakingasdemandrises,pricesrise and moresellerscometothemarket tocapitalizeontheopportunity,andit balancesout However that didnot happenduringcovid Many peopledidnot want tosell becauseof safetyconcernsor felt they wouldnot beabletofindasuitablereplacement withtheintensecompetitionbetween buyers
Asa result, the average monthly inventory dwindled to a mere 573 homesin 2021, marking a substantial 63%decrease in available properties Simultaneously, property pricesexperienced a 39%increase within a span of just three years
Thelack of availableinventory fueledthespikeinpricingbut now isalsothekey factor inthe resilienceof pricingamidst theriseininterest rates. Today,wearestill 37.5%below pre-covid averageinventorylevels,andthisiscompoundedby thefact that theoverall quality of thecurrent inventory isalsobelow average(how isquality defined?Call usandwewill behappy todiscuss).
Lower inventory levelsarethenumber onereasonthat pricinghasremainedrelatively stable Now, the3.5%declineinthehousingmarket isalittlebit misleadingat facevalueanddoesneedsome additional unpacking. Thereare two major thingsto note: inflationandtime. Inflation issomething that hasbeenintheheadlinesfor twoyears. Weexperiencedhistorically highinflationover thelast twoyears,andthisalsohastobeaccountedfor because,historically,real estateprices outperformedinflation. However,over thelast twoyears,wehaveseena3.5%declineinthe
residential real estatemarket whileat thesametimeexperiencinginflationthat peaked out at 9 1% in2022 It iscrucial toaccount for thisdiscrepancy,withaverageinflationratesstandingat 8%in 2022 and4%in2023,coincidingwithadownturninthereal estatemarket Time isalsovery important torecognizebecausewehavenot yet seenthefull impact of interest ratesandgeneral economicconditions Wewill not know thefull effect definitively until weseepricingbeginto increaseconsistently Inother words,today weareonlypart way throughthestory of how ratesand economicconditionswill unilaterally impact thereal estatemarket
The elephant in the room that no one is talking about?
Whiletheprevailingnewsnarrativeonreal estatepredominantlycentersaroundthreekey themes? interest rates,housingprices,andthehousingshortage:It isvery noteworthy right now to look at thetotal number of housesactually selling. Theaveragenumber of homessoldinour market pre-covidwas437.During2021,it only increasedto448 (thoughit wouldhavebeenmoreif more inventory existed),but in2023 salesdroppedtoamonthly averageof 293 whichrepresentsa34.5% decrease. Thisfurther addstotheconundrumdiscussedearlier about ratesandpricing,andspeaks toanother anomaly that weareexperiencingtoday asbothbuyer andseller demandhasdecreased at moreor lessthesamerate Inother words,asimilar number of buyersandsellersdroppedout of themarket at relatively thesametime,andit produced afairlybalanced demandpicturewhichhas beenthecritical piecethat hasallowedpricingtoholdsteady despitetheoverall dropinunitssold
Looking forward,what isthebiggest risk toreal estatepricing? Risinginventory.
Withinterest ratesseemingtohaveleveledout andevenbeginningtoeaseslightly,buyer demand shouldremainrelatively steady andcouldpossibly increaseamoderateamount during2024. The questionis,asmorepropertieslist in2024,will buyer demandkeeppace? If inventory outpaces demand,oneshouldwatchfor thistopotentiallyimpact pricing
Theprecedingparagraphsaddressed thegeneral real estatemarket,meaningtheresidential housing market.Other segmentsof themarket havebeenimpacteddifferently by therecent economic changes,especially by interest rates Themarket for commercial incomeproperty ashasseenavery noticeabledecline Whilesomesectorsof thelandmarket haveremainedsteady inthelast two years,other sectorshavereceivedsignificant downwardpressure Giveusacall if youhave questionsabout thecommercial or landmarkets,andwewouldbegladtodiscussthisinfurther detail Thefollowingpageshaveadditional statisticsfor your review,breakingdowndifferent segmentsof themarket
Includesall residential saleslocated in Josephine and Jackson Countiesasreported in SOMLSDatabaseasof January8th, 2023
Includesall land and farm saleslocated in Josephine and Jackson Countiesasreported in SOMLSDatabaseas of January8th, 2023.
Includesall land and farm saleslocated in Josephine and Jackson Countiesasreported in SOMLSDatabaseas of January8th, 2023
