Lower Prices Leading To More Sales?

At the risk of being overly optimistic, we may have reached a point where the lower prices in some segments of the market are encouraging more and more people to get off the fence and buy. Here's what I see in Bend:

• 84 existing stick built houses on less than one acre sold in October for a median price of $308,000. The median size was 1885 square feet. Of the 67 sold a year earlier, the median price was $350,000 with 1846 square feet. Slightly more house now for 12% less.
  

• Overall, 93 existing stick built houses sold in October. The median sale price was $314k with 1924sf. In October 2006, the comparable numbers were 84 sales, a median price of $384.5k and 1868sf. Again, a bit more house for about 18% less.
  

New home builders are taking a different tack (for various reasons); much more house for about the same price. It's still been beneficial to buyers:

• 26 new homes were reported sold in October. The median price was $378k, down less than 1.5% from a year earlier. But the 50 houses sold in October 2006 had a median size of 2212sf. This year, for slightly less money, buyers were able to get a house nearly 9.5% bigger (2422sf). That's an extra bedroom, office or bonus room.

Note that the volume of new home sales is down by almost half from a year earlier. I'll be watching to see if builders will stick to this strategy or begin to reduce prices more to move some inventory.

Prices Continue Decline

The median sale price for residential properties in the greater Bend area fell to $330,000 in October, according to data from the MLS of Central Oregon. Existing homes saw the biggest drop in prices, with a reported median sale price of $313,000 in October, down 19% from a year earlier and 5% from September. New home prices were also lower, with the median sale price for October reported to be $378,000, compared to $391,300 in September.

Existing Home Sales Stabilize

Sales of existing homes in the greater Bend area registered an increase in October from a year earlier. There were 92 reported sales of existing, "stick built" (non-manufactured) houses in October compared to 84 in October 2006. The sales number matched the number reported in September, possibly signaling that the downturn in sales of existing homes is leveling off.

The rate of increase in sales was even greater for existing homes on less than one acre. The number of sales reported was up nearly 24% to 83 units, from 67 a year ago. October sales also improved slightly from 81 in September.

New Home Sales Fall Considerably

Not all sectors of the real estate market held their ground last month however. The slowdown in new home sales accelerated in October, with only 25 reported closed sales in the greater Bend area. This is a decrease of 50% from a year earlier and down from 30 units in September.

Part of the big decline in new home sales could probably be attributed to the fact that many of sales reported last October were for purchase contracts agreed to in the Spring and Summer for houses not finished until the Fall.