Oregon, WI Real Estate Market Update - July 2022

July 2022 - Oregon, WI Market Update

Hey there, Oregon. There is lots of chatter happening out there about the economy and housing market. Inflation, interest rates and home prices are going through the roof and the media loves using words like bubble, crash and recession. But where are we really headed? Is it a good time to stay out of the market?

Let's take a closer look at what's affecting us in Oregon in this month's Oregon, Wisconsin housing market update.

Through the first half of 2022, Oregon numbers are historically low. Our 81 single family home sales is the lowest number we've had in the last 10 years. Likewise, the number of new listings coming on the market is also among the lowest in the last decade and down 6% from last year. Now, this doesn't mean that houses aren't selling, because obviously sales are connected to how many options are available. As we have fewer and fewer houses hit the market, there's fewer and fewer opportunities for sales to take place. The name of the game in our local market has been lack of supply. Demand has remained consistent over years and years and years, but the supply is at the lowest number we've seen.

But there is a shift happening - I don't have numbers to support this, but I have seen more price adjustments in the last month in Oregon than I've seen in any time in recent history. Showing activity is down with many houses only getting four, five or six showings on the first weekend. We're actually seeing people get offers accepted with subject to sale of their existing home.

But is this bad news for us? Well, not quite. For starters, we need to understand that price reductions are not always directly tied to price depreciation. Out of the 12 houses in Oregon that have required a price reduction over the last month, only one of those was listed by a local agent. This speaks to the value of working with somebody who understands the nuances of the Oregon market. Oregon agents understand that our market fluctuates a little bit differently than the Madison market. So sellers and agents that price their property based on the Spring market or based on what's happening in Madison are not accounting for the fluctuations that we often see during the summer months in Oregon. In other words, market trends that are historically normal.

Many people believe that the recession looming spells trouble for home values and they're staying out of the market because of this. Yet, historically you can see that home values actually increased in four of our last recessions.

I would not be surprised to see the rate of appreciation slow down as we've gone up with our median sales price in town; 23% since 2020 - that's not sustainable. So if we go down to 5% appreciation or 3% appreciation, that's going to feel like a big shock to the system, but it's certainly not dangerous.

So what does this all mean for buyers and sellers? Well look, if you want to buy a house, if you are prepared to buy a house, if you've outgrown your house, if you need to downsize from your house, buy a house. There is nothing you can be waiting for that is actually going to happen. Many people are waiting for rates to drop and that could happen, but it's certainly not a guarantee. If rates do drop in the future, you can always refinance into the lower rate. But the longer you wait, the more likely we're going to see prices continue to go up, which means that monthly payment for any house is going to keep getting more and more expensive over time.

If you're ready to sell, you need to do so with today's market in mind. People who try to sell with the Spring in mind or what their coworker did with their West Madison house in mind, those are the people that are going to have trouble. Yes, it is still a great time to be a home seller, but you need to have realistic expectations on what's going to happen based on the market right now.

If you prepare your house appropriately, and your agent markets it effectively and you price it wisely, you're going to do great. If you cut corners or miss one of those steps, you're going to run into some problems.

For more tips, tricks and resources make sure you follow us on social media. As always, if you have questions about this or your unique situation, give our team a call. We love helping our Oregon neighbors.