February 2022 - Oregon, WI Housing Market Update
Oregon, WI: Market Update, February 2022
Hey there, Oregon. How is the market? Are we in a bubble? Are things going to crash? Is it ever going to be okay to buy a house? I get asked these questions all the time and I get it. When we look around town, there's not a lot of for sale signs out in yards. And despite nearly a decade of prosperity, the memories of the last crash still linger. It can be so confusing with different news stories and constant changes in the market to know what's best for you and your family. So let's take a look at where we've been and where we're going in this Oregon, Wisconsin housing market update.
First of all, anytime we have inventory levels of six months or above we're in a buyer's market. And if that number's below six, we're sitting in a seller's market. Think of it like a gas tank. If the gas tank is full, there's lots of houses on the market and that makes it a buyer's market. But if that tank swims back to empty, we're sitting in a seller's market, because there's no choices available.
Right now we are definitely sitting on empty. Not only are we under six months of inventory, but within some price points we are under a couple of weeks. In fact, inventory is so low in Oregon that at the end of January, we only had 12 homes available on the market, which is by far the lowest number we've seen since I started keeping track of numbers in 2013.
And it's not like buyers aren't shopping. If we look at this graph, you'll see that when compared against the last four years of activity, 2022 home buyer activity is right there along with it.
So if we're low on listings and high on buyer activity, what does that tell us about where we're going? The former middle school social studies teacher in me can't help but share that this is basic economics 101 - supply and demand. We have low supply, high demand, which means we can expect 2022 to once again be a hot seller's market most of the way through the year, if not well into 2023 and beyond.
However, despite competition, low inventory, rising interest rates, it doesn't mean that buyers should hold off and wait for the bubble to burst or the market to crash. We have a long way to go before the market balances out much less crashes or over-corrects too far.
Buyers that choose to wait for the market to shift are probably costing themselves thousands of dollars in purchase price and monthly payment by waiting, as houses will continue to get more expensive and interest rates will continue to rise over the next few years. In fact, I'll say that buyers that buy a house today are going to be sitting on a good chunk of equity in two to three years if they choose to buy again, and they can use that money to make a down payment on their next home. Whereas, people that continue to rent will not have the equity available to them in order to make that next down payment.
For a quick example, let's look at this: If a current house is $350,000 with an interest rate of 3.5%, it is reasonable to assume that in a year or two, this house is going to be worth $400,000 with an interest rate of at least 4.25%. When we boil that down, we are looking at a $1414 monthly payment today on the house, versus a $1771 monthly payment in the future for the same exact house.
Buyers competing in this market need to be aggressive and fast and be fully connected with their realtor and lender so they can make a move when it's time to do so.
Buyers should not negotiate like their parents did 30 years ago. That's not going to fly in today's market. Buyers need to make strong, aggressive, enticing offers and keep the big picture in mind. Don't get caught up on little details that can easily be taken care of. Think about where you're going and where you want to be and what the long term goal is instead of the initial point of pain.
And sellers hitting the jackpot are not cutting corners. They are effectively preparing their house for the market so it looks fantastic. In addition, they're working with a top-level realtor that is going to make sure that their house shines online and is seen by the highest number of home buyers possible.
Oregon sellers specifically, you want to pay attention to this interesting statistic. Based on numbers I compiled from the South Central Wisconsin MLS, in 2021, Oregon based agents, that is agents that live in Oregon, are involved in the community, do a lot of work in the community, sold their listings on average for $7,900 over asking price. Meanwhile, all other agents averaged $2,600 under asking price for their listings. That is an additional $10,000 in value that a local agent is going to bring you.
We have a bunch of fantastic realtors in Oregon, and while I certainly believe that our team would do a great job for you, you have plenty of people to choose from.
To stay on top of the local market or get more tips, see more listings, make sure that you follow us on socials or subscribe on YouTube. If you have any questions about your situation, give us a call. We're always happy to help our Oregon, Wisconsin neighbors. Let's talk soon.
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