The real estate market in Bend Oregon continues to slump. It is now a buyer’s market.
Prices are coming down and will continue to fall through the winter as the inventory continues to build. It is taking longer for homes to sell and there are more homes for buyers to choose from.
The real estate markets in California, Arizona, Florida and other key states are leading indicators on how the market in Bend will do. In1989 real estate values in Bend jumped 35%.
Out of state buyers from California, Florida, Arizona, Washington State and other hot markets were selling their homes for large profits in 1989 and moving to Bend to buy larger homes. 1990 and 1991 saw the out of state markets dry up with prices falling. The Bend market followed these markets before it picked up again.
Today’s market looks very similar to the 1989-1991 market. 102 single-family homes on less than one acre in Bend closed in October 2006 according to the Multiple Listing Service of Central Oregon. That is a decrease of 59 percent from the active market in October 2005.
The median sales price was down slightly but that does not include homes that have been on the market for almost a year and haven’t sold. There are homes that have been listed with one Realtor for six months and then listed with another. Many of these homes still have not sold.
One newer home that was listed in December 2005 at $399,500 is still on the market. The seller refused an offer of $379,500 the first month it was listed. That home is now listed with another Realtor at $329,500 and that is just the asking price. The owner would now entertain any offer.
This winter is the time to buy real estate in Bend. There are homes on the market now that have been substantially reduced with seller’s willing to take any reasonable offer. Some homes are vacant and can be bought with a lease-purchase. We look for the market and prices to pick back up next spring.
A report recently released by the Federal Deposit Insurance Corp., or FDIC reported that Bend is the 35th fastest growing job market in the country for the second quarter of 2006, wit a job growth rate of 4 percent during that period. The FDIC reported sales activity in Oregon fell 12 percent in the same quarter. This indicates demand for homes in will continue.
Some builders are starting to offer more incentives if you buy one of their homes. Upgrades in appliances, floor coverings, wood work, landscaping and other aspects of construction are now free. Some builders are also willing to pay points in order to help buyers qualify for lower payments on their loans.
The National Association of Realtor’s chief economist, David Lereah, predicted that sales through the rest of 2006 will be lower than earlier predicted. “This year, sales are slowing, homes are plentiful and sellers are negotiating,” Lereah said. “Under these conditions, we will probably see prices dip temporarily below year-ago levels as the market works through a buildup in housing inventory.”
There are still many home for sale in Bend that are over priced for today’s’ market. But there are also a good variety of homes that are for sale that are very good buys. Sellers that have to sell are forced to lower their prices and offer to pay closing costs, include appliances in the sale and replace carpets prior to close and many other “freebees” in order to sell their homes.
New home developers and builders were able to sell homes in the past few years before they broke ground. They had buyers waiting in the wings to purchase these homes as soon as the lots were developed and the builder priced the homes. The buyers chose their finish materials and waited for construction to be finished.
Today large builders particularly cannot afford to sit on their vacant homes during the winter and pay interest, taxes, insurance and utilities. These builders are offering “free” perks to sell their new homes today. Prices are being lowered substantially.
Interest rates are still low, the economy is good and gas prices are stable or falling, all good signs that the real estate market in Bend will be picking up next spring. If you have ever thought about buying real estate in Bend Oregon now may be the best opportunity you will have in a long time.
Prices are falling. Interest rates are low and there are some good buys in today’s market. Look for prices to start going up this spring.
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