Real Etate Market Trying to Level Off

            Flat but not flatlining.      

That might be a reasonable assessment of the Central Oregon real estate market for 2011 and the early months of 2012 as indexed by sales of single family homes.

In fact by a remarkable coincidence the number of 2011 single family home sales in Bend, by far the largest regional sub-market, were dead even with 2010—at 1,690 for each year. Bend accounts for nearly 60% of all regional single family sales followed by Redmond with 22.68%.

Sales of distresed properties throughout the reigon continue to dominate, ranging from nearly 70% (68.09%) of Redmond sales to a low of 14.29% in the small Sunriver sub-market. In Bend, there were 883 short sales or bank owned single family sales, or 52.25% of the total.

Even more dramatic, as of March 1 distressed properties accounted for more than 80% of pending or contingent sales in Crook County (Prineville and the area); LaPine and Jefferson County (Madras). The percentage was 68.93% in Bend; 75.66% in Redmond and 55.56% in Sisters.

Sunriver had the lowest rate of pending/contingent distressed properties at 41.18% as well as in 2011 total sales, at 14.29%.

Sunriver leads and Sisters lags  the market over 10 years

Looking at price trends year-to-year, median prices declined in all but one sub-market (LaPine up 1.75%). Bend’s median at year end had fallen by only $1,000, from $191,000 to $190,000, or minus 0.52%.  The largest drop was in Sisters, where the median slumped to $201,000 from $233,750 in 2010, or 14.01%.

Going back to a longer-term historical perspective, single family prices in three of the regional sub-markets have fallen below the median at the end of 2001.  All seven of the submarkets were substantially off the 2006 bubble-year highs, by a range of 46% to nearly 60%.

Sunriver was the strongest market since 2001 with the median price up 29.53%, and had the smallest decline, off 34.78%, since the 2006 peak.  Sunriver also topped the sub-market median price at $375,000 in 2011, as it has for every year since 2001.

The small Sisters market lagged the region for the past 10 years, with a median price at the end of 2011 of $201,000, or 14.47% below 2001. The past year also marked the second consecutive year that Sisters prices were below the 2001 level.

The largest drop from the 2006 peak was in Crook County, down 59.92%, followed by Sisters at 56.35%. The best price performance since the bubble burst was in Sunriver, a drop of only 34.78%, followed by Bend, down 46.01%

Distressed properties skew a "normal" market analysis

Perhaps one of the more surprising statistics in the current market is the existing inventory of active single family listings.  In early March there were 439 active listings in Bend, which is only slightly more than a three-month supply when calculated by the industry standard of averaging the previous 12 month sales. By contrast as the market collapse accelerated in the 2007-2010 period the supply of active listings in Bend was more than 13 months at one point.

Interpreting the significance of the lower inventory level is a subjective process. In an otherwise "normal" cycle the low inventory would be considered a healthy sign of a recovering market. But in this abnormal cycle an important variable is the potential overhang of the widely-dubbed  "shadow inventory" of distressed properties that could be hitting the market.
Another factor in the lower inventory could likely be homeowners who are not under any pressure to sell waiting for better market conditions.

One extreme example of the market drag created by the foreclosure process is an expensive home in a gated community near Bend.  The owner paid $2,275,000 in 2004 with a loan of more than $1.6 million.  The lender has issued three notices of default for a trustee's sale since the owner stopped payments of more than $9,000 per month in December of 2008. But all scheduled sales have been canceled, the last in November of 2011.

Meanwhile as the owner essentially walked away without winterizing the home it's now in disrepair with at least tens of thousands of dollars needed to bring it back to original condition.

SINGLE FAMILY HOMES (on lots less than 1 acre) Central Oregon-Bend MSA*
TOTAL UNITS SOLD						SOLD as SHORT SALES/REOs		PENDING/ CONTINGENT SALES		ACTIVE LISTINGS	SHORT/REO ACTIVE LISTINGS
Town or area	Total units sold Including short sales and foreclosures (REOs)				% change total units sold	Short sales/bank owned (REO) units Sold	% Short/ REO units sold	Pending or contingent sales(all)  /PendContshortREO	% short& REO of total pending or contingent	Total active listings	Active short/ REO listings	% short / REO of active listings
	2001	2009	2010	2011	2010-2011	2011	2011	Mar 1 2012	Mar 1 2012	Mar 1 2012	Mar 1 2012	Mar1 2012
Bend	1,419	1,544	1,690	1,690	0.00%	883	53.25%	428/295	68.93%	439	83	19.39%
Redmond	519	629	727	658	9.49%	448	68.09%	152/115	75.66%	152	41	26.97%
Sisters	90	70	88	95	+7.95%	28	29.47%	18/10	55.56%	71	5	7.04%
Sunriver	170	80	92	98	+6.50%	14	14.29%	17/7	41.18%	117	7	5.98%
Crook Co.	127	163	221	204	-7.69%	127	62.25%	40/32	80.00%	85	17	20.00%
La Pine	17	71	64	59	-7.81%	36	61.02%	16/14	87.50%	31	15	48.39%
Jefferson Co-Madras	NA	113	120	97	-19.17%	59	60.82%	24/20	83.33%	60	23	38.33%

Town or area	MEDIAN PRICES							MEDIAN PRICE CHANGES
	2001	2005	2006	2007	2008	2009	2010	2011	% change 2010-2011	% +/- from 2006 peak thru 2011	% change 2001-2010
Bend	168,950	279,900	352,500	345,000	289,450	212,637	191,000	190,000	-0.52%	-46.01%	+12.46%
Redmond	125,000	198,818	262,524	250,000	216,000	147,500	123,900	116,000	-6.38%	-55.81%	-7.20%
Sisters	235,000	394,250	460,500	415,000	367,450	286,250	233,750	201,000	-14.01%	-56.35%	-14.47%
Sunriver	289,500	462,500	575,000	548,547	555,738	402,000	417,500	375,000	-10.18%	-34.78%	+29.53%
Crook Co.	106,524	149,275	197,000	199,450	177,500	111,875	91,100	78,950	-13.34%	-59.92%	-15.89%
LaPine	86,000	148,500	183,250	215,000	160,000	109,000	102,450	88,200	-13.91%	-51.87%	+2.56%
Jefferson Co-Madras	NOT REPORTED	NOT REPORTED	165,080	177,950	139,950	89,900	68,700	69,900	+1.75%	-57.66%	NA-NOT REPORTED UNTIL 2006

This information is derived from the Central Oregon Association of Realtors MLS database. It is deemed reliable but not guaranteed. MSA includes three counties of Central Oregon.