A long-time Bend appraiser says that shrinking inventory of single family homes, especially at less than $200,000, is a significant trend in the current Bend real estate market.
Dana Bratton, founder and president of Bratton Appraisal Group, recently told brokers that the lower priced homes have been “swept off the shelves” as new buyers enter the market, both as owner-occupants and investors.
As a result, only 338 single family homes were on the market in a recent week of December, 2012. By comparison, Bratton emphasized, there were 550 homes available at the same time in 2011 and 1,700 five years ago.
A good example of low inventory, Bratton observed, is Northwest Crossing where there were recently only 17 homes active on the Central Oregon MLS. There were 47 active listings at the same time in 2011 and 75 in 2010.
Bratton also noted that prices of buildable lots are rising into the $30,000 to $40,000 range, with builders selling homes at $175,000 for $10,000 profits.
And “for the first time in many years” there are applications with the City of Bend for new subdivisions, notably one announced in recent weeks by Hayden Homes for southeast Bend.
Other points from Bratton’s broker presentation:
· Luxury and large homes are selling slowly and the trend is likely to continue.
· There is more flexibility by banks in modifying loans to keep current owners in place.
· Short sales are declining and foreclosed homes are selling more quickly as lenders make improvements to properties they take back. “They’re going to sell it if they can,” Bratton observed.
· The price differential between distressed and conventional sales is narrowing as inventory is absorbed. In July of 2010 traditional homes sold in Bend for a median of $245,000 and distressed properties for $140,000. In July of 2012 the gap was $225,000 and $185,000 respectively.
· Office vacancies remain high as the result of overbuilding during the boom years and more professionals working “in the cloud” or telecommuting, rather than at fixed locations.
· Bend’s capitalization rate for commecial properties is approximately 8% and 7% for apartments.
· Nationally, cap rates peaked in the fourth quarter of 2009 and have declined in eight of the past nine quarters, indicating improving values.
