March Monthly Market Check In- There’s Fear in the Air!
March 14, 2025
The weather is changing and the daffodils are popping up. This is a great time of year! However, are you feeling a little anxious lately? The news networks are full of fearful information and America seems to agree! What are you digesting daily?
Here at Paramount Real Estate Services, we are enjoying seeing the Real Estate activity increase and helping our clients get what they want as we choose attitudes of JOY.
Here is the breakdown for this month…
The real estate market activity in our office has been steadily increasing, signaling a potential resurgence in buyer and seller confidence. Despite this, broader economic conditions remain uncertain due to political volatility, which has led to fluctuations in financial markets. Investors and consumers alike are keeping a close watch on economic indicators, as political instability often translates to heightened market sensitivity. While our local market has shown resilience, external factors continue to shape the real estate landscape.
The stock market has experienced significant downturns over the past month, reflecting investor concerns. The Dow Jones Industrial Average has dropped 6.86%, while the S&P 500 has seen a decline of 7.78%. The technology-heavy Nasdaq has been hit the hardest, falling 11.35% over the same period. These sharp declines highlight investor uncertainty, potentially affecting consumer spending power and, in turn, real estate transactions. Market confidence plays a crucial role in home purchases, and when financial markets are in distress, buyers may hesitate to make large financial commitments.
The Fear Index is recorded as a leading indicator of investor sentiment. It currently sits at 21 in an Extreme Fear state as of this writing. Historically, the index has been a reliable indicator of turns in equity markets. The index sank to a low of 12 in September 2008, when the S&P 500 fell to a three-year low in the aftermath of the Lehman Brothers bankruptcy and the near-demise of insurance giant AIG. By contrast, it traded over 90 in September 2012 as global equities rallied following the Federal Reserve’s third round of quantitative easing. On March 12, 2020, during the rise of the COVID-19 pandemic, the index fell to an annual low of 2 when stocks plunged 10% and entered a bear market. By November 2020, the index registered at 69 in the extreme greed category territory when optimism grew about a coronavirus vaccine. What we have found is that God calls us not to have fear, but a spirit of power and love and of sound mind. He is in control.
Locally, the Mid Willamette Valley real estate market has experienced a slight downturn based on the limited data of 2 months. The average home sale price has decreased by 2.3% from the previous month, a shift that may be attributed to broader economic concerns. Additionally, new listings have dropped by 12% at a time when more homes typically enter the market. This contraction in inventory could mean a more competitive market for buyers, but it also underscores hesitancy among sellers who may be waiting for more favorable conditions before listing their homes. As we further along in the year, we will gather more data information that usually flattens out those more volatile numbers in the early months.
Mortgage rates have been another key factor influencing real estate activity. While rates dipped in recent weeks, they are now currently climbing back to levels seen a month ago; hovering just below 7%. Higher mortgage rates can reduce affordability for buyers, limiting purchasing power and potentially slowing down transactions. On the other hand, some buyers may rush to lock in rates before they increase further, leading to short-term bursts of market activity. Tracking mortgage rate trends remains essential for both buyers and sellers in navigating the current landscape.
One slightly positive economic indicator has been the Consumer Price Index (CPI), which reported inflation rising by only 2% from last month. While this suggests a slower pace of inflation, it remains to be seen whether this will have a meaningful impact on the real estate market. If inflation remains under control, it could help stabilize interest rates and boost consumer confidence. However, given the ongoing political and economic volatility, market participants should remain cautious and informed. As we move forward, staying attuned to these economic shifts will be key in making strategic real estate decisions.
| Current Active Listings (All Types) | 2600 | Up .4% from last month & up 16% from this time last year |
| Current Pending Listings | 928 | Up 14% from last month & up 1.6% from this time last year |
| Sold Listings Last Month | 469 | Down 8% from last month & down 12% from this time last year |
| New Listings Last Month | 881 | Down 12% from last month & up 4% from this time last year |
| Months of Inventory | 3.79 | Up 1% from last month & up 15% from this time last year |
| % List to Sold Ratio | 98.40% | Up .4% from last month & even from this time last year |
| Absorption Rate *Based on current active listings vs sold listings for the past month | 18%* | Down 10% from last month & down 25% from this time last year |
| Average Sales Price in All Categories | $449,000 | Down 4% from last month & down 1.7% from this time last year |
| Median Residential Sales Price Average Residential Sales Price **Based on Willamette Valley Multiple Listing Statistics | $450,000** $492,573** | Down 3% from last month & up 2.3% from this time last year. Down 2.4% from last month & up 1% from this time last year |
| Average Owner Occupied Interest Rates ***Based on Freddiemac.com Statistics of 30 year fixed mortgage | 6.63%*** | Down 4% from last month & down 3.6% from this time last year |
| Consumer Price Index (CPI) **** Core items-FED’s Goal is 2% | 3.1%**** | Down 6% from last month & even from this time last year |
+Some numbers are rounded
We hope you have a wonderful Spring!