Oregon, WI Housing Market Update - March 2022

Oregon, WI Housing Market Update - March 2022

Hey there, Oregon. Spring is here so what does that mean for our local market?

I drive around town and I don't see any for sale signs out there. Prices are rising on everything from gas to food to definitely houses, and who knows where global events are going to be taking us. It can be so confusing with the constant changes in the market and world events to know what's right for you and your family. So let's take a look at the numbers and see where we've been and where we're going in this Oregon, Wisconsin market update.

First of all, anytime we have inventory levels that are at six months or below, we are in a seller's market and anytime that number is above six months, we're sitting in a buyer's market. I promise you, right now we are definitely sitting in a seller's market. In fact, right now in Oregon, we're hovering around one month of inventory for all houses at all price points.

Now, what that means is that if nobody lists their house in the next 30 days, Oregon will be out of houses within the month. It's not like buyers aren't out there shopping, right? I mean, we don't have very many houses for sale, but the buyers are definitely there.

If we take a look at this graph of showing activity, we can see the average number of showings from 2018 through 2021, that's four years worth of data, and you'll see that for the most part, 2022 has been higher. It's exceeded that buyer activity, even though 2021, 2020, 2019, 2018, were all hot sellers markets.

If we're low on listings and high on buyer activity, what does that tell us about our market? Well, look, it's basic supply and demand, it's economics 101. We can continue to expect to see a very hot seller's market for the near future because we have extremely low supply and extremely high demand and there need to be a lot of changes that happen before that shifts to the point that it makes any difference for our buyer clients.

However, despite competition and rising rates, I don't think that right now is the time for buyers to sit it out and wait for a better market. Again, our market has a long way to go before it balances out - people who buy today will start creating equity in their home and maintain that stability in their monthly payment whereas those that continue to rent will continue to be impacted by the stability of the market, changing rental rates, and they will not get into their first home down the road with any money in the bank.

We heard from people last year who were waiting for the market to shift. They were convinced that it was going to happen despite the information that we were sharing. As an example, I want to share a very specific story about some of our clients.

We had clients last year who bought a house for $440,000.  They decided that it wasn't the right place for them to be and they have since put their house on the market. Purchasing last year at $440 with around a 3% interest rate and we're going to assume 20% down, puts them at about $1485 a month for their monthly payment. Now this year they're going to sell their house for $505,000, plus rates have gone up to 3.875. This means the person buying their house is going to pay about $1900 a month for the same house. That's over $400 a month more for the exact same house, simply because the people buying it this year did not buy the house last year. That's a result of rising prices and rising interest rates.

If prices had not increased and only the rates went up, the buyers today would still be paying extra $170 a month in monthly payment because of the increase in rates and price of the house would've had to decrease 10% over the last 12 months for today's interest rates to keep the monthly payment the same as what the people paid for it last year.

I'm sharing this because during the last crash, we did not have a 10% decrease in home values. That is unlikely to happen for us. That's why we say people who buy today are still sitting in a good spot.

Buyers competing today need to be aggressive and fast. It means you need to have a realtor in your corner and you need to have your pre-approval set and ready to go so that you can make a move right away and know exactly what you're capable of doing.

Sellers that really want to maximize their opportunity in today's market are not cutting corners. They're taking all the right steps and doing things the right way instead of relying on the market to get the job done for them. That means staging, making small repairs, getting the house cleaned up, making their house shine and their realtor needs to use professional photography - that should be a non-negotiable in today's market. There's no reason your realtor should be taking pictures with their iPhone.

You also should be using advanced marketing techniques to get your property in front of the most number of buyers possible. Yes, your house will sell in today's market. That's not the challenge. The challenge is maximizing your property, maximizing your opportunity so that you can make the most of this market and to do things the right way - without skipping steps. If your realtor advises you to take the easy way out, I would certainly look for a second opinion.

Hey, thanks for checking in! To stay on top of the changing market or up to date with new listings, make sure you follow us on social media or subscribe on YouTube. As always, if you have any questions about your unique situation, give us a call, we are always happy to tell. We love serving our Oregon neighbors. Let's talk soon.