Are Sisters home sales cooling?

If you talk with realtors and read national trend headlines you’d assume that the market for single-family homes in Sisters Country would be slowing, maybe even plummeting. If the raw data is any indicator — you’d be wrong.

Homes are on the market for more days now and bidding wars are less common, but for some properties, price skirmishes are still happening.

“Buyers are being a little more choosy and a little less panicky,” said Tina Perin at Coldwell Banker BAIN on Cascade Avenue.

Her boss, Brian Houston, sees some softening in the market but says that Sisters remains a place people want to live. The numbers support his opinion. Rising interest rates, which were 3.2 percent on January 1 and are now 5.51 percent for a 30-year jumbo loan, are more likely to impact lower-end homes and have little bearing on homes above $750,000, still dominated in Sisters by cash buyers.

June 2022 over June 2021 sales contradict any chatter of a declining market. A year ago there were 30 sales in zip code 97759, totaling $22,307,273, with five homes fetching over $1 million. The average sales price then was $622,500 and the median price, a far better gauge of the market, was $743,576.

Fast-forward a year, and last month there were 26 transactions — only four fewer than 2021 — totaling $21,826,347. The average jumped dramatically to $839,745, with six selling for over $1 million. The median did decline to $691,250. That compares to the statewide median of $509,539, further proof that Sisters is “hot” even if the market here is no longer sizzling.

The price per square foot in Sisters Country remains stubbornly high due to materials and labor shortages. Tradesmen, the vast majority of whom live more than 50 miles roundtrip from Sisters, have to charge more for their labor, especially when diesel, what most need for their rigs, is $6.49 gallon.

This June had three sales on the low end of the spectrum: one at $430,000, one at $256,000 (a 961-square-foot cabin), and one at $215,000. These were the only three under $500,000 as compared to June of 2021 when there were 10 under $500,000.

On the other end, a 5,170-square-foot home on Golden Stone garnered $2.6 million, finishing at $503 per square foot.

So far in July, signs of a cooling market are not readily evident, although Ben Diamond, an appraiser in Bend with Home Advisor Network said: “It’s as if the switch went off on June 15. New orders came to a complete standstill.”

Through July 14, Sisters Country posted eight sales, for $12.58 million, including two at $3.3 million each, one clocking in at $613 per square foot and the other at a whopping $793. A year ago July, in the same 14-day period, there were 10 sales, for $11,837,967, with six over $1 million.

Even with the many cash buyers, home lending has been disrupted in several ways. Borrowers typically get mortgage locks on prospective purchases from 60 to 90 days, in some cases 120. Delays in construction are resulting in many of those locks expiring, and buyers being forced to pony up more or to figure out how to exit their contract.

Sellers in Sisters remain stubborn, realtors say. They saw their neighbors or friends getting big prices earlier in the year and think the same will or should hold for them. Predictions are that at some point the market will adjust to national trends, as cash buyers particularly have seen an erosion in their portfolios or retirement plans by 25 percent or more.

Houston does not expect the market to go off the cliff, but to gradually slow, both in the number of sales and the price. Real estate is historically cyclical, and even Sisters cannot defy gravity forever.

“I can’t afford to buy my own home” is a common refrain for buyers who purchased homes in Sisters between 2014 and 2018. So-called starter or affordable homes — those in the $300-per-square-foot range, such as Hayden Homes’ Cold Springs Village, would now be selling for at least $395 per square foot for the same unit today.

A two-bedroom, two-bath on West Jefferson sold for $473 per square foot, and two cottages in ClearPine under 1,200 square feet brought $500 per square foot.

Sisters is attracting more buyers who work from home. They are less stymied by higher prices, seeing it as a cost of doing business for them, with many subsidizing their higher purchase price by the home office tax deductions they take on their Schedule Cs.

The simple fact is that Sisters is attractive to empty nesters, retirees, and the continuing exodus from big cities of higher earners, particularly those where quality-of-life issues are forcing relocation.