December Monthly Market Check In~A Hitch In The Trend!
December 10, 2025
Merry Christmas and Happy 2026!
Wow, the years keep piling up. Someone once told us that life travels at the speed of your age. It is traveling faster and faster every year. As life travels for you, we hope that you are able to enjoy the journey and find some peace and rest along the way.
Real Estate continues to be volatile in some ways, but also more of the same in others. Let us explain. This year we have seen one of the most volatile markets observing increases and decreases in activity. This movement seemed to often correlate to events happening globally and locally. For instance, when the trade war reared its ugly head, we saw people concerned and contracted their activity. It took a little time before people felt comfortable again. Then we experienced geopolitical events across the globe that resonated here locally stirring people to protest and then again caused people to be concerned. We saw activity contract before people felt comfortable again. Then we experienced a government shutdown that lasted longer than it should have. Any momentum that we were gaining between these events, and others, seemed to be squashed as people couldn’t count on a path of normalcy. Most people just want peace and trust that our country is on the right path. There are a lot of issues that we can get worked up about, but 2025 was one year that offered the ups and downs relating to many confrontations. With all of this confusion there are some things that really haven’t changed. Rates have not tumbled down. The jobs market is pretty flat. Inflation continues to be a problem. Values have held pretty steady and flat throughout the year. With the higher interest rates and concerns about inflation, home prices have not dipped all that much. We lost a lot of momentum when rates increased, but the low inventory at that time kept buyers limited for a long time. We are still considered to be in a Seller’s Market by definition, however it feels more like a buyer’s market on the ground.
Inventory dips for 2 straight months. We have examined the inventory list gradually increase from an all time low (as far as we are able to find records) at the beginning of 2021 of around 1.3 Months of Inventory available on the market. Even though this data ebbs and flows, it has consistently increased to 5 months of inventory with each Summer hitting a new benchmark, but then observing a dip around the holidays. For example, in 2024 we saw inventory peak around 4.6 months of inventory in August, then it dipped to around 3.6 months in December. This year we saw a new benchmark set at around 4.99 months in September, but now are experiencing a dip of around 4.5 months currently. This is common for the holidays to see a slowdown, but this year coupled with the government shutdown it feels a little slower. Data also supports less activity in sales and pending transactions from this time last year. It will be interesting to see what the beginning of 2026 reveals.
Distressed Properties are increasing. We receive county data and it shows that Notice of Defaults (NODs) are on the rise. Typically we only experience a handful of properties that are behind more than 3 months in their payments, but we have noticed that the latest reports show an exponential increase of people getting behind in mortgage payments. In September we saw in our main county the numbers double. Then in October we saw them increase by 70%. This month we see they have increased another 76%. The numbers are still pretty low, but when we were documenting around 5 houses each month in distress turning into 30 only a few months later; that is an increase of 500%! Most of those homeowners will work out plans with their lenders to become whole and won’t see the dredded Notice of Foreclosure (NOF), but this is an increasing & concerning trend to pay attention to.
Interest Rates are gradually declining. Mortgage rates have been elevated for a few years now, but we are seeing them consistently decline this year. Experiencing the highs near 8% in 2023, they have slowly trended negatively to where they currently sit at just above 6%. Historically this is still a great rate, however with other debt that people have including record high credit card debt, it has been increasingly difficult for people to justify paying a rate of 6.5%. This fact continues to bottleneck the industry even though inventory has increased. Our sales prices have held fairly steady with some minor dips over the past year. Buyers are experiencing some good deals if they can find a highly motivated seller at the right time. Many sellers are still pricing on the high side because they are betting on the data hoping that the activity will pick up sooner than later.
The FED continues to cut rates as they recently dropped the short term rates another 25 Basis Points, but as we have said many times before that their decisions rarely have a direct effect on mortgage rates. Many other factors influence mortgage rates and they may often tend to relate to the bond market. The bond market heavily influences mortgage rates through an inverse relationship: when bond prices rise, mortgage rates often fall, and vice versa, primarily driven by investor demand for Mortgage-Backed Securities (MBS) and Treasury bonds, with the 10-year Treasury yield serving as a key benchmark, plus factors like inflation and economic outlook. Higher demand for these bonds pushes prices up and yields (rates) down, making mortgages cheaper, while lower demand raises yields and, consequently, mortgage rates. However, the overall culture that the FED sets does eventually have an influence on Mortgage rates. As these graphs show, the mortgage rates have less contraction and expansion than the FED funds rates.
Here is a snapshot of our local market in the Mid Valley…
| Current Active Listings (All Types) | 3067 | Up 5.4% from last month & up 13% from this time last year |
| Current Pending Listings | 815 | Down 14 % from last month & down 7% from this time last year |
| Sold Listings Last Month | 600 | Down 17.6% from last month & down 9.6% from this time last year |
| New Listings Last Month | 698 | Down 22% from last month & up 5% from this time last year |
| Months of Inventory | 4.54 | Down 2.7% from last month & up 13.5% from this time last year |
| % List to Sold Ratio | 98.33% | Down .3% from last month & down .07% from this time last year |
| Absorption Rate *Based on current active listings vs sold listings for the past month | 20%* | Down 13% from last month & down 16.6% from this time last year |
| Average Sales Price in All Categories | $471,558 | Up .8% from last month & up .2% from this time last year |
| Median Residential Sales Price Average Residential Sales Price **Based on Willamette Valley Multiple Listing Statistics | $461,500** $512,430** | Down .5% from last month & up 2.6% from this time last year. Down .27% from last month & up 2% from this time last year |
| Average Owner Occupied Interest Rates ***Based on Freddiemac.com Statistics of 30 year fixed mortgage | 6.19%*** | Down .8% from last month & down 7.4% from this time last year |
| Consumer Price Index Average (CPI) **** FED’s Goal is 2% | 2.99%**** | There’s no data from last month & up 10.7% from this time last year |
+Some numbers are rounded
Let us know if you have any plans for a move in 2026. Most people wait too long to prepare and are stuck behind the 8 ball with cleaning, organizing, addressing repairs and staging. You can never start too early for preparation in the Real Estate space. It takes time to prepare a positive pathway forward for most people as they transition. It is not easy these days but we are here to help you, and the ones you care about, navigate through that journey.