Bend Oregon Real Estate Blog
Bend Continues to be a Seller's Market in 2015 (3/21/15)
You hear realtors say "We are in a buyer's market" or "We are in a seller's market", but what does that mean? What realtors are typically looking at when they determine this is - How many months of housing inventory do we have? The different types of markets are...
Buyer's Market - More than 6 months worth of inventory.
Balanced Market - About 6 months worth of inventory.
Seller's Market - Less than 6 months worth of inventory.
Bend real estate looks to continue being a " seller's market" for 2015 with currently only 3.6 months of inventory based on closed sales. That means if no more homes were to be put up for sale, we only have 3.6 months of inventory before all homes are sold based on current demand. If we include "pending sales", there would only be 2.3 months of supply. This shortage is also helping the seller's bottom line, as home values are being pushed up as well. The closed sales price for single family homes in Bend is now over $360,000, compared to just $316,000 a year ago.
When will Bend return to a more balanced market? That is harder to determine as expanding the urban growth boundary in Bend continues to be in limbo (developable land is still in short supply), but mortgage rates are expected to rise to about 5% in 2015 (meaning some buyers may be priced out of the market). But until these things happen, we expect Bend to continue to be a strong seller's market through 2015 as buyers continue to look at Central Oregon as a very desirable place to live.
Housing Markets Continue to Improve (2/13/15)
National Housing Distressed Inventory
Two major economic indicators, the percentage of distressed sales and the level of cash home buyers, continue to trend toward a more normalized housing market nationally - a trend we are also seeing in the Bend real estate market as well. This week CoreLogic reported a reduction in the level of foreclosed homes at the end of 2014 to be just 552,000, down from 840,000 at the end of 2013 (34.3 % reduction). This continues the streak of reduction of foreclosed homes inventory to 38 months in a row. Also, the percentage of cash buyers in the market continues to decline from its peak, where just four years ago one out of every two homes was purchased by a cash buyer. Cash sales at the end of 2014 now make up just 36% of all home sales… a favorable trend, but still quite a bit higher than the pre-2006 rates below 20%. The reasons given by CoreLogic for the number of cash buyers still being high are 1) a higher level of discretionary income among investors, and 2) home buyers are still finding it difficult to get a home loan.
Thanks to these two indicators, the trend remains positive toward a more normalized real estate market both nationally and in our Bend housing market. However, there still appears to be quite a bit of room for more improvements in the future.
Boomerang Buyers are Coming Back! (1/29/15)
The first wave of “boomerang buyers”, those homeowners who lost their homes due to foreclosures and short sales during the 2008 real estate “crash”, are now “re-entering the market” in the Bend and national real estate markets as the seven-year window passes necessary to repair their credit and again qualify for buying a home. An estimated 7.3 million boomerang buyers are expected to re-enter the US markets over the next seven years starting in 2015 and increasing each year in number through 2018 before tapering off until 2022. According to RealtyTrac, the markets most likely to see the most boomerang buyers will be those with the highest percentage of foreclosed homes along with the lowest median home prices and a largest amounts of Gen-X’rs and Baby Boomers such as Las Vegas Nevada, and Merced or Stockton California. However, we expect to see boomerang buyers in all markets including Bend and Central Oregon real estate markets over the next 7 years as buyers are once again able to qualify for home loans.
Bend Ranks Among Top 10 Ski Towns for Investing (1/15/15)
Bend dropped 2 spots, but still ranks #9 among the top ski towns for real estate investing according to RealtyTrac analyst Daren Bloomquist. Starting with the top 221 ski resorts in the US according to ZRankings, the final analysis used by RealtyTrac included 7 criteria: distance to the nearest airport, unemployment, median home price, yearly price appreciation, rent yields, foreclosure rates, and that “pure awesomeness factor”. Topping the list this year is the ski town of Huntsville Utah which had a median housing price of just $169,950 compared to Bend’s median home price of $249,998.
NAR Chief Economist Projects Strong Home Sales in 2015 (1/1/15)
Chief Economist of the National Association of Realtors (NAR) Lawrence Yun is projecting about a 7 percent rise in home sales in 2015. As the primary reasons for this healthy expansion, Yun points to an improving economy, solid job growth, and rising home prices. Additionally, Yun predicts more first time homebuyers entering the market due to the creation of “new mortgage products” and overall housing confidence with home pricing having risen about 25% over the past three years. However, there are potential “speed bumps” as well, including anticipated rising interest rates and lenders being slow to ease underwriting standards.
Is Housing Affordable in Bend to the Middle Class? (12/1/14)
The “Housing Affordability Forum and survey” recently completed by the nonprofit group Bend 2030 brings up an interesting question… Is the Bend real estate market getting out of reach for most middle income households?
One particularly revealing statistic is to look at what percentage of available homes in Bend can the middle class afford in comparison to middle class families in other metro areas or the US market as a whole. Utilizing a standard of 31% of “median household income” for mortgage payments (i.e., principal, interest, taxes, insurance), a 30-year loan with 4% interest rate, 20% down payment, and with a median household income for full year 2013 of just $46,791 (United States Census Bureau), the ballpark figure of how much home a middle class family can afford in Bend is $235,000. This figure represents just 7.7% of all residential single-family homes currently for sale in the Bend real estate market that would be within reach of Bend’s middle class population. Read More.
What Does Falling Oil Prices Mean for Housing (11/20/15)
With oil prices plummeting from over $100 per barrel in July 2014 to about $50 per barrel now, what does this mean for the price of homes? According to Jed Kolko, chief economist for Trulia, it is bad news for anyone living in the oil production states like Houston, Oklahoma City, Tulsa, and New Orleans. These oil rich cities were all particularly impacted with job losses and falling home prices after rapid declines in oil prices in the 1980’s. But it can also be good news for those living in cities that are not oil dependent where home prices and oil prices tend to move in opposite directions thanks to lower cost of driving, home heating, and other activities. A good indicator in our area will be to continually look at asking prices in relationship to current sold prices, which tends to be a leading indicator for about a 2-month window.
The National and Local Bend Real Estate Trends (10/31/14).
Housing Inventory Remains Tight for 1st Quarter 2015 (4/10/15)
The Bend Oregon Real Estate market continues to be tight as the 1st quarter 2015 data continues to show an extreme lack of inventory and rising prices for single family homes in Bend. The average price per square foot of single family homes has increased 12% over the same time last year with the average sold price up 19.3%. Buyers are still looking and offering creating a scenario in which there are only 1.7 months of Bend homes for sale in all price points.
This lack of inventory has resulted in multiple offers on available homes and extreme frustration for buyers who don’t have their offer accepted even when they offer over asking price. Based upon available land to build on and the current issues with the City of Bend struggling to get permission to expand the urban growth boundary, it doesn’t appear that this situation of high demand/low inventory will change anytime soon.
Seems Bend makes about every retirement “Best Places” list, including the annual “Top 100 Places to Retire” recently released for 2015 by TopRetirements.com. Specifically, Bend is recognized as being a great place to retire for “active adults where the outdoors is important”. Some of the great features of Bend pointed out in the TopRetirements.com list include a beautiful natural setting, tons of parks and recreational trails, a thriving downtown, endless cultural activities including the Bend Film Festival, many performing arts centers such as the Les Schwab Amphitheater and Tower Theater, continuing educational opportunities with a community and a four-year college, a diversity of housing options including numerous active retirement centers, top notch medical facilities, and a moderate climate.
What doesn’t TopRetirements.com like about Bend as a top retirement community? Not much… but there are a couple of negatives including the distance to a larger metropolitan city like Portland (several hours away), the emergence of traffic congestion, distance to a major airport, higher unemployment rate, and increasing real estate values and rental rates.
But if the continued influx of retirees into Bend is any indication, we expect Bend to remain on the top 100 list in 2016.
Mirror Pond in Downtown Bend
Bend Oregon: A Great Place to Retire (4/27/15)
The National Association of Home Builders (NAHB) is projecting a “robust” housing market for 2015. The top reasons given by NAHB Chief Economist David Crowe for this positive outlook includes continued economic growth, projected low interest rates, and pent-up demand for housing by those who have “delayed” buying a home due to “job insecurity”. Read More.