Moving into the early days of 2015 a look back at the
previous year could provide some clues to where the Central Oregon real estate
market might be heading.
In analyzing the 2014 numbers available through the MLS
of Central Oregon database there’s a clear indication of a market continuing to
recover from the several challenging years that followed the 2006-2007 peak --
or that overused “bubble” period.
The encouraging news is that in most of Central Oregon
prices are still rising at manageable levels, for now. Of more concern is that
some price momentum--especially in Bend--is being driven by the shrinking
inventory of housing availability in an “affordable” range more in line with
the region’s median income levels.
Although the economy and demographics of Bend and Central
Oregon are changing, the area is still heavily reliant on tourism and other
service industries where wages are generally lower than resource or
agriculture, manufacturing and technology sectors.
And a considerable segment of the residential market is
pegged to retirement and vacation homes, even though those statistics are not
measured in the local real estate database.
In Bend the affordability issue has been closely tied to
the discussion of density as the city grapples with completing a much-delayed
Urban Growth Boundary plan to satisfy state land use requirements. Essentially
the state has informed Bend that an earlier plan inadequately addressed
potential residential building land already within the city boundary, among
other issues. Bend Urban Growth Boundary
An example of the upwardly migrating prices can be found
in 2014 single family homes sales on all lot sizes calculated in $100,000
increments up to $299,000. (Refer to Table 1-sales by market segment)
In the eight key sub-markets of Central Oregon, incuding
the largest of Bend and Redmond, sales of single family homes up to $199,000
dropped by 8.6% as those in the $200,000 to $299,000 range increased by 6.29%.
However, in Bend--which accounted for more than 55% of
all sales--the decline in sales up to $199,000 was even greater at 11.31%,
while closings in the $200,000 to $299,000 range rose by 6.11%.
Altogether, sales in the $200,000 to $399,000 range were
more than half of sales in all the regional sub-markets, 52.85%, and in Bend
individually, 61.64%.
Among other notable points emerging from the 2014
statistics:
- Bend and Redmond sub-markets together comprised 75% of single family sales on all lots sizes in Central Oregon.
- Redmond was especially strong with unit sales rising 15% to 881 and median prices by 10% to $205,000. Although a much smaller sub-market, Jefferson County, including Madras, saw sales increase by 28% and median prices by 25%.
- Bend median prices rose above $300,000 to $303,750 for the first time since 2006, increasing 8% from 2013. However Bend unit sales fell slightly by 2% to 2,512 closings.
- Sisters was the only sub-market to show a decline in both median prices, down 9% to $320,000, and unit sales, off 3%, with 195 sales.
- Although making up only 13.53% of the regional market Sunriver and Sisters had the highest home prices, at $369,000 and $320,000, with Sunriver resort and Black Butte Ranch near Sisters being major factors.
- Sales at more than $1 million in the region increased by 25.87% but were only 1.25% of all closings. In Bend sales of more than $1 million rose by 29.41%, from 34 in 2013 to 44 in 2014, or just 1.75% of all Bend 2,511 closings.
- Inventory of single family homes, as calculated by averaging 12 month sales on all lot sizes remains extremely tight in Bend, at only 2.74 months, and Redmond, 3.20%, the latter which recorded a drop of 37%. Inventory in the 5-6 month range is considered more “normal.” The other sub-markets had inventory in mid-January ranging from just below five months to more than eight months in Sunriver and seven months in Sisters.
- Another encouraging sign of market strength is the continued decline in the number of short sales and bank owned properties. In Bend the 2014 percentage from dropped from 8.70% to 6.57% year-to-year and from 14.39% to 8.70% for the region. That's a far cry from the 40% to 50% levels of the bust years.
Note regarding tables:
Table 1 is an overview of all Central Oregon single
family home sales by individual sub-markets. Table 2 shows sales in price
segments of the market for Bend individually and for all of the region.
A view of the national real estate market from CNBC
A view of the national real estate market from CNBC
Table 1
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| Market overview by sub-markets |
Table 2
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| Sales by price segments |
