GDP up-- then down-- job growth steadily rising, retail
sales and consumer confidence up, wages lagging, but gas prices lower, interest
rates staying down, inflation not a worry for now, and the stock market continuing
a more than six-year mostly uninterrupted climb.
But that’s in the domestic picture. Europe is not so
healthy and much of the Middle East is still a cauldron of volatile politics
and religious fanaticism.
So how do the macro economic-financial indicators relate
to the local real estate market?
In an overly-simplistic investment scenario if you bought
a Bend single family home at the median price at the end of 2009, and at
approximately the same time purchased shares in the S&P 500 Index you’d be
considerably more pleased with the latter’s appreciation.
And if you’d bought stock in Apple at the same time there
would be even more reason to break out the champagne and book that around the
world cruise.
As the charts below illustrate, the median price of a
Bend single family home in early 2010 was $221,000, which climbed to $304,000 at
the end of 2014. That was a 38% increase.
*In roughly the same period the S&P Index -- a broader
view of stock performance than the Dow Jones Industrial Average -- increased
from 1,104 to 2,052, an 85% climb.
And Apple stock recorded a whopping 313% increase, closing
the period at 93.70 after a 7 for 1 split on June 9, 2014 when the stock was
trading at $645.
Of course some housing investments in Bend would have
outperformed the median. And an investor might have the added return of rental
income, or an owner-occupant the privilege of enjoying the property--after all
you can’t live inside a stock portfolio.
Perhaps most surprising is that housing continues to
recover with some areas such as Bend that were especially hard hit in the
recession outpacing the country, while stocks concurrently are reaching new
highs.
Whether or when one or the other asset class will jump
ahead or fall behind is a good subject for party talk or office chatter.
*The S&P Index and Apple stock prices were
recorded the first week of February, 2015
