Looking Back and Going Forward - A Tough Forecast

             If any “experts” pretend to know where the real estate segment of the economy is heading in 2026 maybe take their predictions with a large dose of skepticism
               In fact, as 2025 has drawn to a close it’s even challenging to dissect all that happened in a clear and convincing analysis. There is simply still too much of a firehose of conflicting data and national policy uncertainty spewing from the chaos of the Trump administration.   
            One day tariffs are going to be massive, the next negotiated or otherwise reduced. Trump wants Fed chair Jerome Powell gone, insulting him in typical Trump style, and having his lackey Jeanine Piro, US attorney for DC, try for an indictment.
            Could it be that Trump’s dispute with Powell is less about interest rates but has been accelerated by an earlier tour of a Federal Reserve construction project? Trump thought he had Powell in a “gotcha” media moment, pulling out papers he alleged showed massive cost overruns on the project. But Powell carefully pointed out that the numbers Trump showed included a project completed several years earlier.
            The upshot: Trump doesn’t like to be caught in his continual purveying of misinformation, especially as the cameras are rolling.
            Now The Dissembler in Chief is pulling out the stops in attempts to show he’s getting a handle on this pesky housing affordability issue.
            It started some weeks back with the idea of a 50 year mortgage to spread out the monthly pain of buying a home when interest rates are high. Most reasonable analyses pointed out the horrendous total interest payments in this scenario, as well as a drag on building equity over such an extended period.

            Also introduced more recently is the idea of Fannie Mae and Freddie Mac, stepping in to buy $200 billion in mortgages to be packaged in bonds to jumpstart the housing market. Another idea is to cap credit card rates at 10%, ostensibly relieving consumers of burdensome interest payments. In the latter, banks are not rushing to join the bandwagon.
            Trump’s carping about Powell and the Fed has hit strong pushback from former Republican and Democrat appointed Fed chairmen, as well as the head of the nation’s largest Bank who has supported the central bank’s historic independence. And Chase CEO Jamie Dimon said moves to “chip away” at the separation from interference could push rates higher.
            Chase CFO Jeremy Barnum said the 10% credit card rate idea would in effect reduce credit available for consumers, “the exact opposite consequence to what the administration wants..” Banks would likely offer less credit, Barnum said.
            Trump is also claiming he will find a way to prevent corporations and hedge funds from locking up portfolios of single family homes to flip. But data shows that the practice has been declining year to year and that about one-third of the buy, rent and flip market involved “mom and pop” investors rather than big money corporations. 

Trump behavior destabilizes the economy 

            Moreover, Trump and his sycophantic Cabinet and advisers seem oblivious that continuing inchoate foreign policy rumblings – from Venezuela to Greenland – and insults to long term allies in Europe and across the globe are destabilizing to the economy.
            In all of this there appears to be at least one potentially positive trend emerging. The stay put trend of homeowners enjoying low interest rates may be loosening, theoretically opening more inventory for the market.
            Axios reported in mid-January that mortgages above 6% now exceed those below 3% for the first time since 2020, showing a sight movement overall to the reality of market rates. But 80% of mortgages remain below 6%.
            As the report noted, at some point regardless of their mortgage rate homeowners are compelled to move—whether with a new marriage, a divorce, to downsize, have kids or retire. On the negative side as inventory improves slowly, a wave of pent up demand could drive up prices, in turn exacerbating the affordability problem.

Dollar decline with Trump term

            In the past two years the S&P 500 has risen more than 45%. But as the AI boom fuels the stock market there’s increasing concern of an expanding bubble that could drive more investment in assets such as real estate.
            Whatever the impetus, increasing investment in or migration to the housing market, without concurrent inventory increases, could further squeeze new homeowners out of the American dream of home ownership. Many of them are not in the investor club where members have enjoyed substantial returns and likely already have a primary home and maybe even a real estate portfolio.
            If we can’t deduce what is happening the present, or even coherently parse the past, how will we determine what’s ahead? Is the year ahead in this 250^th anniversary of the country a shining light at the end of the tunnel? Or is it, as the cliché goes, just a train roaring our way?  
      With the preceding smorgasbord of cliches and fractured metaphors on the table, let’s consider a single premise:
            Real estate is a tangible asset. You can buy it, live in it, rent it, improve it and sell it. It’s also something you can hold onto without the fear that in a single day it will be worth half of what you paid for it, except in extreme circumstances. And you can insure it against catastrophes such as weather or fire in most situations. 

In Central Oregon 

            All that said, let’s go deeper in what’s happening in Bend and Central Oregon using statistics from Beacon Appraisal Group as compiled from the regional multiple listing service.
            For the 12 months of 2025 Bend single family median home prices rose on less than one acre rose by 4.36%, from $710,500 to $741,000 as calculated on a rolling 12-month period.

            There were 1,738 sales in the past 12 months with 345 active listings, compared with 1,582 in 2025 and 319 listing then. Those numbers translate to approximately a 2.5 month inventory at the end of both 12-month periods.
            The number of sales at more than $1million was slightly more than 25%, continuing a trend of higher priced closing, with 103 of the 445 in that category more than $1.8 million. More than 41% of sales were in the $500,000 to $700,000 range.
            Results in both years indicate a mostly static market sales volume and sale prices trend of the past few years following dramatic price increases and total sales during and just after the pandemic period.
            Up to the north in Redmond, the region’s second largest real estate segment, median prices of home on under and acre rose 2.95% during 2025, from $509,000 to $524,000.
            Redmond year sales totaled only 626 a drop from 712 in 2025. There were a scarce 75 single family homes listed at year-end, compared with 111 at the end of 2025, an inventory of 1.5 months.
            For a summary of activity and the past year for smaller market segments in the region visit the Beacon Report:         

Bend home prices over 28 years

 The multi-family market 

            In recent years as an attempt stimulate more housing growth the City of Bend established tax incentives for new apartment development.
            One of the more notable examples is the new Jackstraw project in an area just north of the Old Mill area of the Deschutes River with a mix of retail, office, lodging and residential facilities.
            Jackstraw, a project of Portland’s Killian-Pacific, opened for leasing in late 2025, with approximately 313 units ranging from studio to three bedrooms. The developer received a 10% property tax deduction from the city, maintaining it would not be economically feasible given unfavorable interest rates and construction costs.
            With community and competitor backlash, the city backtracked on the incentives for another 1,600 unit  project proposed nearby by Los Angeles based Kennedy-Wilson, which led the company to delay plans and recast the design to include fewer units.
            Jackstraw’s leasing effort has moved lowly, with reports that more than 80% of units were still available as of early January.https://www.centraloregondaily.com/new-jackstraw-apartments-in-bend-still-has-hundreds-of-vacant-units/video_f095d305-79c0-5b00-ab8b-e1ad57842a43.html
            From a Q3  post regarding the regional multi-family market trends:
            The aggressive push for more apartments has run up against the reality of rents that have yet to adjust significantly to reflect area incomes. Vacancies in newer more upscale buildings have prompted incentives such as free months’ rent. And colorful balloons float above tent signs encouraging potential renters to take a tour.
            In single family neighborhoods rental signs that were largely absent only a few years ago now languish in front yards for weeks. One factor could be that single family home rentals were in demand for transient healthcare workers who enjoyed substantial six-figure incomes during the Covid shutdown.
          

 

Not much clarity for now: Waiting for that "inflection point"

         As Q3 2025 has wrapped, is there anything in the statistical tea leaves of Central Oregon real estate to predict year end and the future in 2026.
        A short answer: not much clarity there but many murky issues swirling.
        For all the uncertainty emerging from the first three quarters of the Trump administration the regional housing market appears to be performing slightly better than many parts of the country. This continues a trend of the past few years.
        The question, then, for Bend and Central Oregon is whether it can continue to outperform national trends. That’s far less certain.
        As usual the interest rate bogeyman is still stalking. Despite a modest decline this year and the talk of a more accommodating Federal Reserve, rates are still at 6.30% as of October 9, according to the Federal National Mortgage Association (Freddie Mac) database. That’s nearly a point and half below the high of 7.76% reached on November 2, 2023.
        But it’s still a whopping rise from the low of 2.67% recorded on the last day of 2020, before rising to first cross 7.0% on October 27, 2022, followed by ups and downs, yet remaining above 6.0% since then.
        On its website, Freddie Mac notes on October 9 that: “Over the last few weeks, mortgage rates have settled in at their lowest level in about a year. There is growing evidence that homebuyers are digesting these lower rates and gradually are willing to move forward with buying a home…”

        Although any downward move in interest rates could be welcome, there are substantial other factors at play in the economy – and by association, the real estate market across the country.
        On the positive side, the securities markets are apparently ignoring the headwinds of interest rate uncertainty, contraction in hiring and lower GDP growth. There’s also the ever-present specter of how much, or how little, Trump’s tariff wars will impact longterm inflation of many goods, including building products that affect new housing costs.
        Lower interest rates could help the housing market. But the positive influence could be mitigated by rising construction costs, lower employment and wage stagnation.
        And there’s rising concern that the lengthy bull market run on Wall Street is bound to moderate, even implode, resulting in a rush to gold and even once-derided cryptocurrency as hedges. Part of the gold rush is attributed to the potential decline of the dollar as the bulwark of world currencies.
        Moreover, much of the equities runup has been accelerated by a buying frenzy wishfully tethered to the as yet unknown contribution of AI.  Advanced chip development and data centers have mushroomed on the back of debt and even government investment rather than financed with booked revenue.
         As Jamie Dimon, CEO of JPMorganChase, expressed recently, there are many imponderables facing markets:
     "All these things cause a lot of issues that we don’t know how to answer,” he said. “So I say the level of uncertainty should be higher in most people’s minds than what I would call normal.”
        What all this means for real estate – local, regional and national—is (drum roll) for now unpredictable.
    So back to the basics as noted in new statistics as recorded at the end of September as gleaned from the Beacon Report of Beacon Appraisal Group using data from the regional Multiple Listing Service.
        The median price of a single family home on less than an acre in Bend for the rolling 12 months was $741,000, a rise of 14,000 or 1.92%, more than for the comparable period that concluded at the end of September of 2024.

        During that period there were 1,693 sales closed and 560 homes listed at the end of the month. That translates to an inventory of four months of available homes, based on the average of sales for the previous 12 months. It’s a half-month more available for sale than in late 2024, but only slightly in the range of 4-6 months usually considered to be a market in balance between sellers and buyers.
        By comparison, for the previous 12-month period ending September 30, 2025, Bend single family inventory was 3.5 months with 1,537 sales for that span and 451 units listed.
        Of the sales, more than 25% closed at a price of more than $1 million, continuing a trend that has run for at least a year. Also, of the total sales at all price points, more than 30% were cash transactions rather than financed with conventional loans.
        Up the road only 15 miles north to Redmond, statistics show some differences in the single family market.
        The median price of a single family home there rose slightly less, only 8,500 or 1.65% from $515,000 to $524,000 for comparable 12-month periods ending September 30. But Redmond inventory was only two months, based on 666 sales the recent period and 121 homes listed.
        In the “luxury” market, there was only a single sale that closed above $1 million, a scant .01%. And Redmond recorded more than 10% fewer cash transactions, at 20.57% than the 31% in Bend.
        Elsewhere in the region, Sunriver, which includes the Crosswater and Sunriver golf resorts, recorded a median single family sale price of $950,000 with only 115 sales and 49 listed at the end of September.
        Sisters had 117 sales at a median of $743,000 with 54 listed; Lapine, 130 at $375,000 and 75 listed; Jefferson County (Madras and Crooked River Ranch, 168 at $350,000 and 75 listed; and Crook County (including Prineville), 264 at $426,000 and 120 listed.

Inflection Point? About face?.....Pivot?: Bend real estate market

             At the halfway point of calendar year 2025, and midway of Trump’s first year in office there appears to be no clearcut consensus as to direction of the economy or the various sectors such as real estate that it comprises.
            There is one widely accepted fact, however. TACO Don’s wild tariff swings are leaving a wake of uncertainty. The starts and stops are impeding investments in manufacturing, services and retail businesses, even though the stock market has rebounded from Trump’s tariff “Liberation Day” performance.
          Wall Street, or the investor class, now appears to have written off tariff worries--for now. But there’s still considerable concern on Main Street, which drives the economy with retail and services purchasing power. The upshot-- a nervous wait and see attitude.
        Barring an untenable spike in already high interest rates, will the great American dream of home ownership be more attractive as a refuge – a scramble to tangible asset safety? There’s no clear consensus.
        Pivotal to real estate is the direction of interest rates, against the backdrop of continuing tension between Trump and the Federal Reserve – specifically Chairman Jerome Powell, whose term expires under a year from now.
        In his trademark social media carping, Trump has been insulting and goading Powell to reduce interest rates. But the Fed chairman and the board majority prefer to hold the course given the potential effects of tariffs and other Trump policies to push inflation higher.
        Real estate markets, especially residential, have been struggling in many areas of the country. A Redfin report notes that 15% of national home sales contracts have failed. Central Oregon real estate has previously bucked national trends. But the region thus far has not been able to build itself out of high prices that challenge a large portion of the workforce to enter the housing market.
            One sign of a possible shift has emerged in Bend, by far the largest market segment in the region. From a marginally favorable sellers market for the past few months there are signs of a slight edge toward favoring potential buyers.
            But the caveat is whether any slight change – absent more favorable interest rates and a coherent administration tariff policy-- will benefit either buyers and sellers.
            In Bend, the largest regional submarket, the median price of a single family home on less than an acre was $724,500 for the 12 month period ending June 30. That was 1.90% lower than the $738,500 recorded over the previous 12 months of mid 2023 through mid-2024.
            Through June of this year the monthly median hit a high of $832,000 in April and a low of $700,000 in November and  December of 2024, and February this year.
            Of note, more than 24.66% of the total 1,610 sales for the 12 months closed at more than $1 million, including 84 at more than $1.8 million. Only 94 homes sold at less than $500,000.

            As outlined in the July Beacon Report by Beacon Appraisal Group, there was nearly five months inventory of homes available for sale, as calculated by averaging the previous 12 month sales compared to homes currently listed. That was the same as June and has risen from a low of 2.5 months in November and December of 2024.
            That level of homes listed in relation to past sales puts Bend on the edge, or by some interpretations, of  a shift from a sellers to buyers market. However, consistently high prices along with buyer and seller hesitancy given economic uncertainty could keep the market in more of a static situation than revealing a trending direction.
            In Redmond, the second largest regional market segment, the  rolling 12-month median price of a single family home on less than an acre was $518,500 or 1.57% higher than the $510,500 for the previous comparable period. Redmond inventory was lower than Bend, at three months, with 693 sales during the period and 166 listings at the end of June.
            There were only two sales at more than $1 million, with most clustered in the $400,000 to $600,000 range.
            Together, Bend and Redmond account for about 75% of all single family home sales on less than an acre in the seven submarkets tracked by the Beacon Report with data from the regional multiple listing service.
            Of the five other submarkets, Sisters and Sunriver held positions as the highest median priced areas of Central Oregon, with Sisters recording a median of $739,000 in June and Sunriver $897,000. Note that Sisters and Sunriver include Black Butte Ranch and Sunriver Resort, respectively.
            Median prices for June in the other three submarkets ranged from $360,000 in Jefferson County (Madras); $394,000 in LaPine and $417,000, Crook County (including Prineville).

Some indicators of a changing market

 Hints of an evolving market can be noted in anecdotal and on the street observation.
Open houses, once an oddity of the blistering Covid era market, now dot the Bend weekend landscape. 
            For Sale signs also remain in front of homes after the listings are no longer active on the multiple listing service, providing brokers an opportunity to reset the date for the number of days the home has been on the market. That also leaves the listing broker with an opportunity to interest a potential drive-by  buyer.
            Builders are also stepping up to energize sales. Some are offering interest rate “buydowns” and also credits for “upgrades” that would add thousands of dollars to the listing price.
            “We’re tired of these rates, and we know you are too. So we decided to take it down a notch!,” reads a recent email from a large Bend builder.
            The term “Price Reductions” on listing flyers and email blasts is now obsolete, in favor of more euphemistic terms like “New Price,” “Revised Price” or “Price Adjustment.”

 Multi-family housing:: Struggling From Oversupply

 Another indication of softening of the real estate environment is a glut of vacant apartments in Bend, coupled with more new ones flowing through the construction pipeline.
            A report by a leading Bend commercial brokerage estimated earlier this year that as many as 1,000 Bend and Redmond apartments were vacant, noting that another 1,000 were expected to come to market in the near future.

Facebook ads increase

            The City of Bend has aggressively pushed new multi-family developments, initially offering substantial tax breaks to a couple of projects south of the downtown area. The city then backtracked on breaks for subsequent projects, shifting to a tax increment financing strategy, rather than upfront break, to encourage building in the urban core.
             A major Los Angeles based developer has backed off plans to begin consruction of a 1,600 unit project, citing interest rates, high construction costs and a generally unfavorable multi-family market.
            The aggressive push for more apartments has run up against the reality of rents that have yet to adjust significantly to reflect area incomes. Vacancies in newer more upscale buildings have prompted incentives such as free months rent. And colorful balloons float above tent signs encouraging potential renters to take a tour.
            In single family neighborhoods rental signs that were largely absent only a few years ago now languish in front yards for weeks. One factor could be that single family home rentals were in demand for transient healthcare workers who enjoyed substantial six-figure incomes during the Covid shutdown.
            For investors in multi-family projects, capitalization rates – as calculated by net income in relation to listing prices – have started to rise. The higher the “cap rate,” the more attractive to a buyer, the lower better for the seller. And investors require cap rates closer to prevailing interest rates.
            Local commercial brokers say there may be a tipping point wherein apartment owners decide that more substantial resets of rental rates make more sense than leaving units vacant. Again, interest rates are a factor, especially for newer projects still carrying higher rates of recent years with possible balloon payments coming due and refinancing providing little cash flow relief.
            A turnaround in the multi-family market may have to wait until overall direction of the economy is more clear, allowing for loosening of interest rates and giving renters and their employers more confidence in the future.

Housing: A Macro View from Axois

     As reported by Axios, the national housing picture is exhibiting clouds on the horizon. Updated on February 19, 2025

Talk about a head fake. After a surge in homebuilding in the final weeks of 2024, new data today shows a sharp pullback in activity.

Why it matters: Few sectors capture the story of the economy in recent years better than housing — Americans' frustration with high prices, elevated borrowing costs, CEO uncertainty, and a supply-demand mismatch (for goods and workers).

• Two new economic factors could be added to that list of long-running housing issues: President Trump's trade war and deportation policies.

"[U]ncertainty over the scale and scope of tariffs has builders further concerned about costs," Robert Dietz, chief economist at the National Association of Homebuilders, said Tuesday alongside an index that showed dampened industry sentiment.

The intrigue: High housing costs — made worse by an upswing in mortgage rates — are keeping some would-be buyers sidelined. Trump's policies could have more inflationary consequences than not.

• Homebuilders rely heavily on immigrant workers, who could be difficult to find with a crackdown on immigration (though at least one top Fed official has pointed to immigration contributing to higher rents).

2024 down; 2025 Ahead - Major changes or more of the same? Too many unkowns

             Now that 2024 is in the rear view mirror, along with the presidential election, are there any emerging clues to the 2025 real estate market direction?
            To hear newly-installed Trump tell it he’s going to take care of one critical variable – interest rates.
            “I’ll demand that interest rates drop immediately,” Trump said. “And likewise, they should be dropping all over the world. Interest rates should follow us all over.” Trump blustered in a virtual appearance before the the World Economic Forum, often jusst shortened to “Davos,” for the cognoscenti of the financial world.
            Well now, that taken care of, everything should be hunky dory in real estate. He’s president and  never lies, dissembles or breaks a promise. Let’s keep an eye on eggs, which Trump touted before the election would be less costly along with prices of other consumer goods. 
            As  Elon Musk, often called Trump’s “First Buddy,”shakes things up in the federal sphere, one of the more curious new presidential edicts, euphemistically known as executive orders, is to force federal remote workers back to the office. This could mesh with another strategy to sell much of federal office space. Fewer employees left after firings and resignations would mean less needed office space, and what is left would be made unattractive to returnees.
            Maybe interest rates will fall along with the price of eggs as the bird flu abates. Maybe the idea of a “sovereign wealth fund” Trump has floated will be a reality, funded by all that surplus oil revenue from ramped up “drill baby drill.”  But how does that work to reduce the the country’s current budget deficit? One possibility mentioned is to issue more debt to “fund the fund” so to speak.
            Hmmm. Reduce the deficit by borrowing to invest and build sovereign wealth? What could go wrong?
           Let's pivot from Trumpisms, albeit realizing that  the chaos created thus far by the new administration will nevertheless hang over the economy in some way at least in these early days and weeks, and likely much longer.  

The Year Past 

            Looking back at 2024 in Bend real estate maybe the most salient observation could be the lack of any well-defined trend. Inventory of single family homes for sale remained tight, prices remained high relative to local median incomes and total sales stayed about the same as the previous 12 months.

            All this, according to the Market Action Index of First American Title Co., translated to “stasis” and a “slight sellers market,” thanks to continued low numbers of homes for sale as reported in early January.
            That assessment could easily be translated to “nothing new to see here,” in that virtually the same language had been used in nearly all of the title company’s weekly reports for 2024.
            The final Q4 2024 Beacon Report by Beacon Appraisal Group shows the the rolling 12- month median price of Bend single family homes on less than an acre was $710,000, a 3.0% drop from the $732,500 for the previous 12 months of 2023.
            The median monthly price hit a hgh of $800,000 in October and the low point in February, at $682,000.
            There were at total of 1,582 sales during the 12 months, a slight uptick of 17 closings compared to 2023, with an inventory of 2.5 months as calculated using the 319 active listings at the end of December and dividing inventory by the average monthly sales in 2024.
            In Redmond, Central Oregon’s second largest market segment, median prices for the 12 months rose by $23,000 to $509,000 from $486,000 at the end of 2023, a slight bump of 4.73%.
            Redmond sales also rose by 16%, or by 114 additional sales in 2024 from the 598 in 2023. Inventory there was also tighter than in Bend, at only a 2.0 months supply.

Affordability Remains an Issue

            Moving into the new year, the quest continues to find  strategies that will that will enable families with the Bend median household income of slightly under $89,000 to obtain affordable housing. At the median income level, with an optimistic 6% interest rate, a healthy 30% down payment, and modest $550 monthly debts a family could afford a home priced at $447,000.

            According to the Beacon Report, only 78 homes out of the total 1,582 homes sold in Bend during 2024 were priced from $400,000 to $500,000 – and only five listed in that range at the end of December.
            There is a disconnect between the availability of “affordable” homes for those with median incomes, and the high end of Bend sales  Last year 393 homes, or 24.8%, sold for more than $1 million, and 73 above $1.8 million.
            As has been reported throughout the country, among factors that likely drive higher sales prices are owners with low interest rates, or even no mortgage, who have been in their homes for a considerable time, and others who bought during the early 2000 decade recession. These may be able to roll generous cash margins into other properties – without the onus of having large mortgages at currently elevated interest rates.
            Also part of the affordable equation for the local workforce is the availability of rental inventory.

The Rental Market

In the past few yeas Bend has experienced a substantial increase in multi-family investment and new construction- to the extent that for Q3 2024 one of the region’s oldest, leading commercial brokerages concluded: “Looking ahead the wave of new apartment development will hit the brakes.”

Also in the third quarter of 2024, Compass Commercial’s Navigator market report noted that the region’s slowing population growth had reduced demand, resulting in “stagnated” rental rate growh with increased length of vacancies leading to more landlord concessions.

“Rent rates will likely remain flat, at best, for the next couple years. For property values to rise again, we will need to see both increasing rents and declining interest rates,” the Q3 report for 2024 noted.

That assessment was validated later in 2024 when a Los Angeles based owner delayed planned construction of a massive 1,600 unit mixed use project on former industrial land near the Old Mill District, citing interest rates as a reason.
            Another factor is the city’s pause and reconsideration of offering tax deductions to developers in that area, after two builders had received them and started construction of apartments.
            Now, seemingly a whiplash about face in barely three months, Compass Commercial’s new multi-family report for the final quarter of 2024 cites an assessment of the national real estate site CoStar which paints a much rosier picture.
             “Among apartment markets with inventories under 10,000 units, Bend landed among the top 10 performing markets, a cohort that spanned the Pacific Northwest, Midwest, and Sun Belt regions,” Compass quotes from CoStar.
            If the more recent analysis and predictions for 2025 come to pass, compared to the report only a few months agin, the Bend multi-family market would indeed be a turnaround star.

 

Tourism and Real Estate

        Finally, a look at the Central Oregon tourism sector, which contributes substantially to the local economy in terms of employment in lodging and other service businesses, by some estimates  as well as real estate in the form of vacation home puchases.
             In a presentation to city officials in early January the senior budget and financial analysit for the Community Economic Develoopment Department noted that development fee revenue since 2022 showed, “development is slowing down…the type of development is changing.”
            Reasons, he noted, could be due to, “everything that happened with Covid and the macroeconomic picture with interest rates? Or is that just….a result of Bend hitting a certain size.”
            And every city that hits that certain size then slows down or the development type changes,” according to Roger Serat.
            Amond the dramatic shifts Serat noted were fees for  short term rental permits, which in 2024 according to his research showed a decline from $301,119 in fiscal year 2022 to only $42,561 in 2024.
            One report said that all of Central Oregon, including resorts such as Sunriver,  Black Butte Ranch and Eagle Crest brought in $1.5 billion in related tourism revenue for 2023.
            However, statistics from Visit Bend, the city’s tourism promotion group, have shown lodging room occupancy dropping by 6.5% in July and August of 2024, likely due to wildfire smoke in the region but possibly also the tailing off of post-pandemic travel.
            What’s the bottom line?
            With the background of a chaotic first few weeks of the Trump administration best not to count on anything in real estate – especially as to lower interest rates suddenly creating a boom in sales.
            If tariffs on Canadian building products continue to be an on and off and on again roller coaster expect new construction and housing affordability to be problematic.
            Moreover, if the stock market – a favorite performance metric of Trump– can’t digest economic uncertainty maybe look for real estate sectors to tread water in the near term.

           

Is a generational divide joining interest rates as factor in housing?

             Are younger potential homebuyers stuck with renting their home or condo - with scant chance of finding something affordable to buy??
            Could it be that grandma and grandpa – and maybe mom and dad – are locking the kids out of the housing market?
            That along with mortgate interest rates that have been stuck above 6% for some time are often blamed for the shortage of homes available for a younger generation dreaming of a place of their won.
            By some theories, an equity rich older generation is either staying put in their homes or selling and rolling the cash into another home, thereby driving up prices and competition for buyers, and squeezing more affordable inventory out of the market.
            In some cases retirees may be splitting that equity between a couple, or more, places—maybe a condo in Palm Spings and a smaller house Bend, after escaping the urban turmoil and traffic of Seattle, San Francosco or Portland.
            All that said, let’s take a look at the Bend real estate market for the 12 months of 2023.
            The Beacon Report complied by Beacon Appraisal Group of Redmond, OR and a continuing weekly Market Action Index distributed by First American Title together offer insights into where the market is now, where it has been and maybe where it could be heading.

            On a rolling 12-month basis median prices for single family homes in Bend on less than an acre rose a modest 1.24%, to $732,000 from $723,500 for the comparable period of 2022.
            Total sales dropped to 1,565 for the period, with 208 homes listed at year end, equating to a two-month supply of homes for sale based on the average of the past 12 months. That remains considerably below what professionals say is a balanced market of 5-6 months inventory. By comparison there were 2,033 sales in 2022 and 226 listed at year end, translating to an inventory then of only 1.5 months.
            In Redmond, Central Oregon’s second largest home market, median prices dipped from $512,000 to $486,000 for the 12 months, $26,000 or 5.08% under 2022. Redmond’s total sales sank from 782 in 2022 to 598 in 2023, with 134 homes available, or a  three months supply. That represents an increase from two-months inventory at the end of 2022.       

   Some observers say the marginal differences in year to year  median prices and inventory are reflective of a national trend wherein sellers are staying put and new home building doesn’t match potential demand. The inventory keeps the market balance on the
sellers side, except fewer owners are selling.
            That’s the conclusion in the January 24 Market Action Index snapshot of Bend housing by First American Title, which has Bend moving slightly more into a sellers market which could mean more upward pricing pressure.
            In Bend the lack of more affordable houing in relation to median incomes has led to a push to create deed restricted workforce housing. In some situations, employers are participating with non-profit housing groups to improve inventory.
            Local initiatives dovetail with an aggressive housing initiative backed by the Oregon governor, with some bipartisan legislative support. That would potentially loosen state funding that could improve affordability through incentives for entry and mid-level housing construction.

A mostly static market: But million dollar sales on rise

             With more than half of 2023 behind us the Bend real estate market trends appear to be tracking much the same as with the past few years --- from the pandemic boom and the ensuing spillover in 2023 and 2022.
            But listing prices are often being adjusted downward– rarely the case in the recently overheated market. Open houses have also proliferated, when before many single family homes would hit the MLS of Central Oregon as pending sales within days of a listing
agreement.
            Other key markers in the August report by Beacon Appraisal based on MLS statistics:

 

·         Inventory as calculated by averaging sales of the previous 12 months continues in a tight range of about two months.

·         Median single family home prices on a specific monthly basis continued to hit new highs in June, $785,000,  and July, $800,000, after falling to $660,000 in February from a high of $773,000 in February of 2022.

·         Even with a new monthly high price, on a rolling 12-month basis the median closing price at the end of July was $690,500, down $12,000 or 1.71%, from the previous 2021-2022 period.

            As widely reported across the country, prices in traditionally more heated markets have continued to hold well above pre-pandemic levels, with some moderate downward adjustments as noted in Bend.
            The overarching factor, the consensus appears, is continued high interest rates reaching 7% for a 30-year mortgage. Existing owners are reluctant to sell when they may have loans of 4% or less, thereby squeezing inventory while new homebuilding has not kept up with demand.
            When existing owners do sell, they’re holding years of built-up equity and may push prices higher with the extra cash when they buy another home.

            One trend noted in the Beacon Appraisal report is a rise in Bend sales above $1 millon--46 of the total 141 sales, or about 32% in July. And inventory at the $1 million plus level was only two months. For the 12 months including August of 2022 through July 2023 there were 381 of  a total 1,705 sales above $1 million, or more than 22%.
            However, the report said inventory for sales in the $1.6 to $1.8 million range stood at five months, and above that price level at six months.
            A report by First American Title Company provides another snapshot of the Bend market. As of August 16, the FATC Market Action Index categories Bend as a “slight seller’s market.”

            “In the last few weeks themarket has achieved a relative stasis point in terms of sales to inventory. However, inventory is sufficiently low to keep us in the Seller’s Market zone so watch changes in the MAI. If the market heats up, prices are likely to resume an upward climb,” the report concludes.
            In Redmond, Central Orgon’s second largest housing market, the Beacon report shows a median price increase from June to July from $473,000 to $500,000, but below the $542,000 monthly peak in August of 2022.
            On a rolling 12 months through July the median as $470,500, down $21,000 or 4.27% from the same period of 2021- 2022.
            Overall Redmond inventory, as in Bend, was approximately two weeks but jumped to seven months in the $600,000 to $700,000 category and six months in the $550,000 to $600,000 range, Beacon reported.

Bend home price rise slows; Sales dropping but inventory remains tight

            A quick glance at Bend’s residential real estate market appears to show more of the same in terms of tight inventory and gradually increasing sales activity entering the traditional Spring sales cycle.
            But at the end of March the once superheated 12-month rolling median price increase of single family homes sold on less than an acre has slowed remarkably compared with the same period of 2021 to 2022. The new numbers come from the April report of Beacon Appraisal, based on MLS of Central Oregon data.
            The median price of sales ending March 31 of this year was $706,500, up 8.61% from the $650,500 for the 12 months ending March 31, 2022. However that rise was dramatically below the leap from the previous 12-month period  when the median rose by 21.59%, or $100,500 from $535,000.

            Most national, regonal and local market observers say pandemic-fueled housing price increases that began in 2020 appear to be abating. The question, though, is the extent to which markets may return to more normal price appreciation.
            The fact remains that in Bend, and many areas of the country, prices are beyond the reach of many families in the workforce.
            The key component for direction into the rest of 2023 and beyond will be interest rates for the mid to lower market price sectors, affecting not only first-time and move-up buyers but also builders relying on the commercial lending environment.
            For the first three months of 2023 inventory of single family homes on less than an acre remained steady at only a single month, dropping from a high of 2.06 months in July of 2022 and down from 1.5 months in December of last year. There were 1,890 sales in the past 12 months, 613 fewer – or 24.49% down – from the 2,503 for the same period ending in March of 2022.
            In Redmond, Central Oregon’s second largest home market, the 12 month median sale price was $491,500, $41,500 more than the same period from 2021 to 2022 – a 9.22% increase. That was below the 23.80% jump during the 12 months in 2020 to 2021.
            There were 693 sales in the 12 months ending March 31, 2023, a significant drop of 54% from the 1,506 single family sales in the 12 months ending March 31, 2022.
            The 93 Redmond listings at the end of March translated to an inventory of 1.6 months, still considered a seller’s market – although slightly less constricted that the supply of available homes in Bend.