Inventory. Or lack thereof, is what drove a large part of the market in 2017. Factoids: There has been LESS than four-months of single family residential inventory in Bend since September of 2014. Less than six-months supply is considered a seller’s market. And, Redmond has not seen higher than 3-months of inventory since that same date. Supply and demand drove the market along with a huge influx of buyers from out-of-state (predominantly California). At the time of this writing, inventory in both Bend and Redmond stands at just over two-months. Pretty amazing.
Overall, real estate has been a good investment in Central Oregon. . Considering the time value of the dollar, I calculated an approximate 6.25% annual increase since 1997. Median home price was $116,500 in Jan-1997 and $395,000 in Dec-2017. Given the huge dip during the recession this isn’t a bad number. Meaning it could have been much worse. (stats courtesy of Beacon Report. I will provide a link to that next week!)
Rural acreage properties are still a bit harder to sell than single-family residential properties close to either Bend or Redmond. I believe this is directly related to the fact that over 60% of those moving here from other cities are Baby Bo0mers. For the most part these individual are not interested in coming here to raise livestock or grow hay. In fact, they are looking for smaller homes and lots that they can leave easily while they travel or use their time for other leisure pursuits.
I am personally working with two buyers from California who are leaving that State due to taxation, crime issues and the ever-present traffic jams. Some of these are Millennial families who have the means to purchase here and jobs that allow them to work remotely or bring their businesses with them.
The difficulty for many locals is that they would like to take advantage of this market to sell but can’t find a suitable replacement property. So they stay in homes that are larger than they need because they simply see no alternatives. That is also a factor in keeping inventory low. Boomers don’t sell because they own their homes and don’t want to spend what it takes to get into a smaller house. Totally understandable.
I expect the upward trend in home prices to continue, with some caveats. First – homes priced over $750K are taking longer to sell than they were a year ago. Also, those moving to Central Oregon are becoming somewhat hesitant to pay $350-$400 per square-foot for quality that many feel is not exactly first-rate for new construction. And again – homes on acreage that include outbuildings and “horse stuff” are also taking longer to sell as more and more older people shrug-off the equestrian lifestyle.
Next week I will dish out some more 2017 stats that you might find interesting. Or…you may find you sleep better after reading my little missives. In any event – back to you soon.