Single family home or stock market - the 5-year results

            It makes for good conversation over breakfast, lunch, wine, beer or dinner- and could be preferable to discussing the contentious, borderline absurd trajectory of the current presidential campaign.

            The question is: how’s real estate performing in relation to other investments, specifically the stock market?

            As a micro-microcosm of broader national market, Bend real estate as measured by the median price of a single family home has performed admirably since reaching bottom in 2011.

            At the low of the market for a single full year in 2011, the median price of a single family home stood precisely at $200,000. By the end of June this year it was $370,000, an 85% increase.

            By comparison the broad S&P 500 stock index on January 2, 2012 when the market opened for the year closed at 1,277. On June 27 of this year the index read 2,102, a 64% climb.

            Of course, it’s all a question of market timing and few investors or anyone just wanting a roof over his or her head could have picked the precise moment that either real estate or stocks would begin to recover.

            In fact, the stock market had already begun to emerge from the recession depths before Bend housing. The lesson may be that the real estate or stocks question is simply good conversation among friends.

Bend Median Price Trend

S&P 500 year-end 2011 through June 2016

Bend median price at mid-2016 tops previous record

            As the first six months of 2016 came to a close Bend’s real estate market marked a milestone as the median sale price of a single family home hit $370,000, $5,000 above the all-time high of $365,000 recorded in 2006 before the recession collapse.

            And a look back five years to the depth of the slump reveals Bend has rebounded more than 55% since the end of 2011 when the median cost of a single family home had dropped to $200,000 after the 2006 peak.

            Also indicating demand for housing, new homes sold as a percentage of all sales rose to 23.26% in the first six months of 2016, compared with only 12.54% in all of 2012 as the market began to recover. At the market bottom in 2011, new homes sold acconted for only 7.45% of total single family sales. (*New homes are defined as those completed and sold within a two-year period).

            Other points of interest in the mid-year 2016 statistics, as shown in the accompanying chart:

• Although only a small slice of all Bend sales, homes that closed at more than $1 million in the first six months of 2016 grew to 3.18% (43 units) against 2.07% (27 units) in the same six months of 2015.
• Sales of homes in the $200,000 to $299,999 range decreased by 23.21% year to year as prices moved upward.
• The largest gain in any range of $100,000 was in the $600,000 to $699,000 category, with a 71.19% boost in unit sales.

No surprises: national statistics confirm bustling Central Oregon

            For any resident driving around, shopping or otherwise out-and-about in Central Oregon the past year the release of several categories of statistics will come as no surprise.      

Among the numbers:

·         The Bend-Redmond metropolitan statistical area, or MSA, is Oregon’s fastest growing in terms of population, with a 3.4% increase among areas with more than 50,000 residents.

·         Bend-Redmond ranks seventh among the top 10 metro areas in net in- migration with 4,289 reported new residents in 2014 according to US Census figures, a 2.5% increase.

·         The Federal Housing Finance Agency ranks the area No. 3 nationally for 12-month housing appreciation through March of this year, at a 14.44% increase.

·         For the past five years through March Bend tops all of the more than 260 MSAs in the FHFA for housing appreciation index, at 69.90%.

            The Bend trend tracks the overall state peformance, with the FHFA reporting that that Oregon led all states in housing appreciation as measured by purchases, not-including refinancing, at an increase of nearly 12% for the 12 months ending March 31. Florida was tops in the nation, followed by Washington, Nevada and Colorado.

            Another set of statistics for larger metro areas in the new S&P/Case-Shiller index, a widely followed national housing barometer, ranks Portland at the top of appreciation, at 12.3%, followed by Seattle, 10.8%: Denver, 10.0%; Dallas, 8.5%; and San Francisco, 8.5%.