Thanks to the continued economic recovery, Bend’s popularity as a destination and the scarcity of land on which to build within the city, we will keep seeing rising prices.
“One of the primary forces on the local market is the desirability and livability of the region,” said Tim Duy, professor of practice at University of Oregon and senior director of the Oregon Economic Forum. “That is likely to be sustained into the next year. The fundamental forces driving that migration will still apply over 2016.”
Bend, the fourth-fastest-growing city in Oregon in 2014, attracted more than 2,800 new residents that year, according to the U.S. Census Bureau. It grew by nearly 10 percent between 2010 and 2014, according to the bureau.
In 2014, about 6,000 people moved to Deschutes county from other states, according to the Census Bureau.
In many cases, new arrivals still find homes in Bend a bargain compared to where they’re moving from like California. According to the California Association of Realtors, the median price of a single-family home in San Diego County, for example, is $473,360; in Orange County, $660,890; and in San Francisco, $896,740. In November, the median price in Bend fell to $322,000 after peaking at $348,000 in September, according to the Beacon Report.
Competition, particularly among buyers with cash proceeds from the sale of a previous home, is contributing to higher home prices in Bend.
An entry-level home for a middle-income buyer doesn’t really exist in Bend anymore. First-time homebuyers are buying in areas like Three Rivers, south of Sunriver, and commuting to Bend, Redmond or even Prineville. An entry-level home today in Bend is priced close to $300,000 .
The Bend metro area, which includes all of Deschutes County, ranked eighth of 271 metro areas nationwide for house-price appreciation in the third quarter, according to the Federal Housing Finance Agency House Price Index in November, the latest FHFA report available. Home prices in Deschutes County increased 13.18 percent for the 12 months ending Sept. 30; prices increased by nearly 59 percent over the previous five years, according to the FHFA.
Still, 537 homes priced between $250,000 and $300,000 sold in the 12 months ending in November, according to the December Beacon Report. At the high end, the most expensive 5 percent of homes for sale in Bend also experienced price appreciation. While luxury homes elsewhere in the country saw a 2.2 percent price decline, in Bend those prices increased by 10 percent in the past year. Thirty-nine homes priced at $1 million or more sold in Bend in the year ending in November, according to the Beacon Report.
Bend is becoming more and more a tech hub! The reason prices in Bend aren’t slowing could be attributed to a strong economy and a recent influx of tech talent
Continued prosperity, increased job security and growth in wages will continue to fuel demand for homes in boom towns like Bend, Duy said. The U.S. economy is expected to see continued moderate growth in the coming year, according to a Dec. 10 forecast by Zheng Liu, senior research adviser at the Federal Reserve Bank of San Francisco.
“It’s holding prices up and forcing construction at the higher end,” Duy said. “I don’t see where that problem is going to go away in the near term.”
However, talk of an inflated real estate market in Bend is premature, he said. Home prices in Bend, adjusted for inflation, can climb another 30 percent of today’s values before they reach the pre-recession peak in fourth quarter 2006, Duy said.
In a competitive market, buyers should know their spending limit, have their financing in place and expect to fall short in two or three offers before succeeding with their home purchase.
Winter is a great time to purchase a home, there is less inventory but more importantly less competition from other buyers.