June Mailbag

Q: What is the deal with the median sale price in Bend jumping up $76,000 in the month of May?

A: That’s a great question and reminds me of a famous quote my statistics professor quoted: “There are three kinds of lies: lies, damned lies and statistics.” This quote is somehow credited to Mark Twain and Benjamin Disraeli, so not sure exactly who to give credit to, moving along to defining median. Median is the middle number in a list of numbers ordered from highest to lowest; median is often mistaken for mean or average, which can be confusing. To clarify, 157 homes sold in the month of May in Bend, so the mean would take all the final sale prices, add them up, and divide that sum by 157. The median on the other hand would take all 157 sale prices and find the number with half above and half below, so since 157 is odd, we would take values 78 and 79 (from the list of 157) and find the average of those two values. Still awake? If so, this is a long way of saying that median does equal average, which it is often mistaken for. Median sale price is an interesting data point, but it really doesn’t tell us much without deep-diving into the data, especially since our data set is only 157 sale prices — hardly a large sample size. However, like another popular metric in real estate, price per square foot, median sale price is a way to determine “where” in the market your property is currently.

Q: My spouse and I submitted an offer on a property and the listing agent explained that there were already multiple offers. Our offer was slightly below list price (within 5%). However, the home has not gone pending, and this was over a week ago? Can listing agents lie about having multiple offers?

A: Agents are not supposed to lie about having offers they do not have; however, agents are people and people are far from perfect, so I don’t want to say something like,”an agent would never lie.” When I see a scenario like this, I often think the listing agent may have had multiple offers, but just like your offer, it was below the list price. They told your agent of the other offers hoping to get a “more competitive offer,” but none of the offers, including yours, were enough to get them to sell. At this point you can either make another offer or be done with it. I would highly recommend having your agent circle back with the listing agent to see how close your offer was, or what could be done to put a deal together.

Q: How is it that interest rates have basically doubled over the 18 months, yet prices have seemingly only come down ever so slightly?

A: Another complex question that I will somewhat attempt to answer. The shortest way to answer this is simply that demand remains high. The interest rate increases have cooled the market down compared to a few years ago. However, in Bend and many other places, supply is very limited. A lot (most) people who owned their home prior to 2021 have been able to refinance to historically low rates, thus making the prospect of selling and buying a “new” home far more expensive. Many folks here locally could no longer afford to purchase their home at today’s prices, especially with the higher rates we are seeing. This market has been tough for a few years now, for different reasons, and I expect it to remain tough for buyers through the remainder of 2023.

—Please send any and all RE questions you would like answered to jkeane29@windermere.com, thanks!

This article appears in Source Weekly June 15, 2023.