· Bend was recently touted as “one of the nations top much-touted Zoom Towns” named for the migration of residents from larger cities to more desirable places to live.
· This is thanks to popular work from home technology and other factors including low interest rates, building costs and just plain supply and demand.
· We feel like there is no supply here in Central Oregon but as compared to other areas in the nation if you choose to live in one of the smaller surrounding cities you will have a much better price point and opportunity to purchase.
· It has been over a full year since we felt COVID-19s impact on the bend home sales and the resulting demand for Central Oregon homes.
· This demand continues to impact our local housing market.
· We have had a year of tremendous buyer demand and real estate sales which have broken records.
· Multiple offers and bidding wars have pushed our home prices to never before levels with cash offers typically beating out any offer that involve financing.
· Entry level buyers have found the Bend market to be unaffordable and many have determined that Redmond, Prineville ,LaPine and Madras may work better for their finances. Buyer demand continues to exceed supply.
· Google reported last week that the search “When is the housing market going to crash?” had spiked 2,450% in the past month. “Why is the market so hot?” searches had doubled in just a week.
· At the start of this month, 42% of homes were selling for more than their list price,. This was 17 plus percentage points higher than the same period a year earlier.
· It does sound concerning..
· There is increasing concern among consumers that housing is experiencing a price bubble – and that the bubble may be ready to burst.
· 17+% year over year home price appreciation is CRAZY, right? Yeah, but it is still a GREAT time to buy a home! Don’t believe me? Let’s talk about WHY this market is so nuts. (HINT) IT’S NOT A BUBBLE!
· I recently listened to a Pod Cast from Bomb Bomb from and economist and lender out of Arizona and I thought some of his comments and statistics about the differences we are seeing between now and prior to the Great Recession are important to Note – Mortgage Market – the new protections for loan qualifications and appriasals – the average age of first time buyers – much larger right now – the lower interest rates allow buyers to qualify for more expensive homes and open up for more buyers to qualify to purchase homes. The ability to work remotely.
· It’s true we have an acute shortage of supply on the market for sale at the same time that record low mortgage rates are driving the appetite to buy
· There are about half as many homes actively listed for sale compared with this time a year ago, according to realtor.com. That has caused competition to ignite to the point where buyers are more likely to find themselves in bidding wars.
· The housing market is more competitive than we’ve ever seen it, but a couple indicators are causing us to ask whether we’re nearing a peak in terms of how fast demand and prices can grow. .
· Sellers’ asking prices may be starting to flatten in what so far appears to follow a typical seasonal pattern.
· the decline in mortgage purchase applications as a sign that some people are dropping out of the market because there’s a lack of affordable homes for sale.
· If these trends continue it could mean that we are NOT in the midst of runaway home price speculation or a housing bubble.
· As mortgage rates rise, which they are slowly doing now, and buyers hit an affordability wall, expect to see annual home price gains nationally cool to the 3% range. But all real estate is local.
· We have seen our Bend market out price the affordablity for average wage earner.
· Average sales price up 40.7% to $776k
· Median sales price is up 32.2% to $597K
· Number of new listings down 8.2% to 225
· Homes for sale down 84.9% to 99
· Sold homes down 6.3% to 177
· Months supply down 87.9% to 12 days
· The number of SOLD homes are down 6.3% compared with 2020 yet the dollar volume of sales is up 31.7%.
· Bend home prices are on such an upward trend that appraisers are having a hard time justifying some of the prices and we are seeing more homes not appraising, despite the huge demand and multiple offers.
· It is challenging to be a buyer in this market especially a buyer that needs to finance their home purchase.
· The question is “Will the upward trends continue?”
· Right now we do not see an end to what we have experienced year to date with homes sales. Our low inventory of less than half a month supply remains a key indicator of Bend real estate sales.
· If/when this figure starts to increase, we will know that we are starting to move towards a more balanced market.
· Building costs have seen significant increases in the last 4 month due to shortages of lumber and other materials and these prices are not expected to go down anytime soon. One of our larger local builders Pahlisch Homes has announced it will no longer be pre-selling homes, instead waiting until the home is closer to completion before releasing them for sale. And they are not the only builder doing this. We are experiencing many of the builders in our area doing the same thing.
· We all wonder the same thing is this a bubble like 2007? If it is it has inflated very quickly this time and the shortage of inventory has been a big inflating factor, which is different than the Great Recession because we had inventory to sell then and buyers to buy. We have buyers but no inventory this time. So it would be nice to see prices flatten a little, and I do see buyers being more cautious right now we still have a big demand for housing here in Central Oregon and one of the reasons for this is the number of people that want to live here and can now tele commute for their work.