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Should I own a Home?

1) Central Oregon’s Population Is Growing

· The population is growing, and not because families are having more children. Statistics show that the biggest contributing factor to Oregon’s population growth is due to incoming residents.

· A growing population in Oregon means more demand for housing.

· The population of Bend alone is expected to increase over 50 percent in the next 20 years by 2060. In the last 10 years, this region has witnessed healthy economic growth adding more higher-paying jobs than almost any other metro area in the US. With so much economic incentive, more and more of Oregon’s residents have the financial means and the desire to purchase a home.

· Population of the Bend Small Metro area, which we call Central Oregon was in 2022 at 208,500. ( Bend alone is approx 105,000).


· It is the 6th largest city in Oregon and the 323rd largest city in the United States.

· Bend Metro’s growth rate from 2010 to 2020 is 2.17% but since 2020 its population has increased by 6.82%.

· It has a 83.6% projected population growth between now and 2060, with the last two years growth rate of 3.41%, the rate of growth could be higher.

· It is considered to be the 7th fastest growing metro area in the nation and will be approx. 383,000+ by 2060

· This means a growing demand for homes with a shortage of single-family homes, which will lead to a lot of new home construction.

· That means the prices of existing homes will probably continue to rise unless a whole bunch of new homes magically come on the market.


· Bend especially faces a shortage of affordable land to build on. Redmond has set aside a larger urban growth boundary, so you will most likely see more affordable single family residence in the Redmond area. For Bend it will take years to make up for the housing shortfall driving prices higher.

2) More expected Home Equity locally

· According to the Oregon Office of Economic Analysis, home equity is the number one source of wealth for most families.

· The best time is now to start building home equity by owning a home and increasing your net worth.

· The Federal Reserve tells us that the average homeowner has a net worth of 230k while the average renter only has a net worth of about 5k.

· Why is there such a disparity of wealth between homeowners and renters? Because the long term financial benefits of homeownership far exceed that of a renter.

· Local rents are rising at some of the fastest rates in the nation.

· 37.4% from 2019 to 2023, making us the ninth-largest increase in rents among small metros in the United States. Despite having some of the nation’s strictest rent controls.

· Since SB 608 Oregon Rental Law passed Oregon State Legislature in 2019 the maximum rent increase formula was legislated to be 7% plus the West Coast Consumer Price Index, which changes every year. For 2022 the maximum increase was 9.9%. Beginning January 1, 2023, rent increases going into effect for Oregon residents may not exceed 14.6%

· But new rentals and renovated rentals are not subject to a starting rental rate.

· This is one thing homebuyers do not face – ever increasing rental rates.

· Yes, because most homeowner’s secure a 30-year fixed rate mortgage when making a home purchase. That monthly rate does not change and once that fixed term ends, there’s no more mortgage payment. Any increase in value of the home over the time period of the loan translates into equity for the homeowner.

· According to the US Census report, in November of 1989, the price of an average home was around $150,000. This year the average home price in the US is around $358,000. Which represents a big increase in equity value.

· And after 30 years or the length of the loan, the homeowner is no longer paying monthly mortgage payments or rent.

3) Tax Incentives.

· One thing to remember when thinking about buying a home is the Tax Incentives.

· Some of the most powerful lobbyists in Washington DC represent major players in the residential real estate marketplace. The NAR (National Association of Realtors), The National Association of Home Builders and The Mortgage Bankers Association.

· All of these organizations spend a lot of money each year pursuing homeowner interests. But this does not benefit renters. This legislation (mostly tax laws) that is regularly introduced mostly benefits the homeowner.


· some examples are:

· 1. Mortgage Interest Deduction - Currently, homeowners can deduct the interest paid on up to $750,000 of qualified personal residence debt on a first and/or second home. This applies to tax years 2019-2025.

· 2. State And Local Real Estate Tax Deductions - According to the Tax Policy Center: Taxpayers who itemize deductions on their federal income tax returns can deduct state and local real estate and personal property taxes. As well as either income taxes.

· 3. Capital Gains Tax Reduction - Capital Gains taxes are levied against the profit you make on the sale of a “non-inventory” asset like real estate, stocks, precious metals, or a special collection. However, special rules apply that protect homeowners when selling their primary residence. Specifically, Individual profit from the sale of your home is up to $250,000 or $500,000 if you are a couple filing jointly is tax-free.


4) Loan Limits for 2023 Have Increased

· Bend is just one of the few cities that saw higher conforming loan limits. In fact, in response to the nationwide rise in property values, the FHFA (Federal Housing Finance Agency) set the 2023 conforming loan limit for a single-family residence in Oregon at $726,200.

· FHA loan limits have risen as well., Bend’s 2023 FHA loan limit is now $690,000. The highest in Oregon


5) Favorable Market Conditions

· There are several favorable market indicators that suggest now is the time to buy. On average even though we saw a lot of home price adjustments going on this past year, home values still increased 7.7%

· The downturns in value don’t necessarily apply the same everywhere and homes our area is still expected to appreciate in value from this year to next year.

· In the end, the answer is simple. If you can afford to purchase a home, its a great time.

· There are plenty of reasons why it makes good financial sense to purchase a home.

· The longterm benefits of homeownership far outweigh those of renting.

· Too many consumers think of purchasing their primary residence as a quick money-making investment. But beware, while there is money to be made in real estate investing, typically you will see the big financial benefits of homeownership over a longer period of time.

· Now is the perfect time to purchase a home, take advantage of tax incentives, and start building equity.

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