Bend Oregon 2024 Real Estate Market Forecast

The 2024 Real Estate Market Forecast for Bend, Oregon

Last Updated January 4, 2024

It’s a New Year, and that means it’s time to dust off the old crystal ball again and offer our LOHR Real Estate market forecast, this time for 2024.

As usual, much is uncertain about 2024, but we won’t let that stop us from going back over the market data for the previous year and seeing what it might tell us about what’s in store for the coming year.

2023’s real estate market was defined by soaring mortgage rates. Even the most pessimistic folks weren’t expecting 30-year fixed rates to climb all the way to 8%, but that’s just what happened.

It’s interesting, though, to look at how high rates did – and did not – impact our local Oregon markets, including Bend’s.

Mortgage rates should also have an outsized role in determining what happens in Bend’s market in 2024. They won’t be the only factor, however. Read on and we’ll offer our prognostications.

The Year in Review: How Bend’s Market Changed in 2023

Bend 2023 Year-end infographic

We’ve covered many of 2023’s highlights to the left. Suffice it to say, soaring mortgage rates had a big impact on overall market activity.

Buyers shied away from the real estate market, with sales down 22% year-over year. Compared to 2021, home sales were down 39%.

But, high mortgage rates have also meant that sellers have little inclination to list their properties, especially if they bought them when rates were closer to 3% than 8%. New listings were down 20% in 2020.

Apart from cash buyers, trading up was a tricky proposition in 2023. One could easily pay more to end up with less.

Bend’s residential inventory did increase in 2023. At the beginning of the year, Bend had 1.6 months of inventory. By December, inventory had increased to 2.6 months, closer to Bend’s historical averages (but still lower than pre-pandemic numbers).

Overall, prices were fairly volatile in 2023, at least if you’re to take the market data at face value. Bend’s median sale price for all residential properties ranged all the way from $659,000 in February to $799,000 in July.

It’s important to consider those numbers in context. Bend’s market has always been seasonal. Sellers know they can get more money in the warmer months and won’t list their properties in the winter if they can help it.

At the same time, mortgage rates had started to spike in February and March of 2023. Buyers were understandably wary. Rates stablilized somewhat in the spring, but then climbed again in the summer and well into the fall.

People were still determined to buy though. Bend’s market was hot during the summer of 2023. Pending sale activity actually increased year-over-year in July, when prices were at their highest.

If we zoom out, though (which is kind of the point of this article), Bend’s market basically stayed flat in 2023.

Sellers made more concessions, necessitated by more aggressive list prices, even as inventory was climbing. Properties spent longer on the market – about twice as long in most cases and sometimes significantly longer.

But prices didn’t really take much of a hit. Again, that’s looking at the overall market. Certain kinds of homes certainly sold for less in 2023 than they would have in 2022.

With inventory rising, it’s more important to stand out from the crowd. Homes in less-than ideal locations with less-than ideal finishes have certainly lingered on the market, with sellers feeling pressured into making significant price drops.

What was the Overall Verdict for Bend’s Market in 2023?

On a wider scale, though, Bend’s market showed remarkable resilience in 2023. From the second half of 2020 through the end of the first half of 2022, prices rose exceptionally. Some forecasters saw a heightened risk of a real estate bubble in Bend due solely to that fact.

That isn’t a narrative we’ve really bought. Past housing bubbles have been driven by inventory outstripping demand. That simply isn’t happening in Bend right now, or elsewhere in Oregon for that matter. Inventory increased somewhat in Bend in 2023, but it’s still very much a low-inventory market.

That’s especially true for homes between $500,000 and $750,000, the price point most sought-after by Bend buyers. Inventory of these homes actually dropped 10% year-over-year.

That’s an important fact. Generally speaking, buyers have been led to expect a less competitive market than what we saw the past few years. In Bend, though, it very much depends on what you’re looking at, and where.

Even for homes between $500,000 and $750,000, you’ll certainly have more choices than you did in 2021 or 2022 and less likelihood of bidding wars. But it isn’t getting any easier to buy a home at these price points, especially if you take higher mortgage rates into account.

Nationwide, sale prices dipped in the earlier part of 2023 but rebounded in the third-quarter, essentially remaining flat year-over-year. That’s basically what happened in Bend, albeit with a spike in summer sale prices.

Lest we be accused of living in the past (this is a forecast, after all), let’s move on to our predictions for 2024, using the above data as context.

What Factors Will Impact Bend’s Market the Most in 2024?

We’ve mentioned mortgage rates already, and there’s really no way around it: whichever direction the Federal Reserve goes, real estate markets will follow, Bend’s included.

Luckily for buyers (and for sellers who may want to make a move) the Fed has been hinting at lower interest rates for 2024. In mid-December, Federal officials indicated that they might cut rates by 0.75% in 2024.

The relationship between the Federal Reserve’s benchmark and mortgage rates is not exact. However, following the Fed’s announcment, mortgage rates did take a noticeable dip. At the end of December, average rates nationwide were lower than 7% for the first time since August 2023.

Rates could continue to decrease heading into the spring of 2024, and that could have a noticeable impact on Bend’s market. We’ll offer more concrete predictions below.

First though, several other factors could impact the direction of Bend’s market in 2024. First, there is still the lingering threat of an economic recession.

Such predictions were actually more widespread at the beginning of 2023, with most economists putting the risk of a recession at below 50%. The possibility is still very much on the table, though.

A recession could cool demand in high cost-of-living areas like Bend and potentially force sellers to put their homes on the market. However, short of a global economic crisis on par with the Great Recession, the impact will likely be marginal. We’ve outlined our reasoning in another article, When Will the Housing Market Crash (and Housing Prices Drop) in Oregon?

Finally, it’s worth considering to what extent Bend will remain a “destination” in 2024 independent of economic factors.

According to World Population Review, Bend’s population has increased by about 10,000 people since 2020. Meanwhile, Bend’s housing inventory simply hasn’t kept pace. Since 2008, home builders have tended to err on the side of caution, and in August 2023, new construction reached a 3-year-low nationwide.

Even if a recession does happen, people will continue to relocate to Bend. The work-from-home revolution isn’t going away in spite of some recent corporate proclamations, and Bend will continue to be high on remote workers’ lists.

So, What’s the 2024 Real Estate Market Forecast for Bend?

The future is always uncertain, but just based on overall vibes, there’s a lot less doom and gloom in the air than there was a year ago regarding real estate markets nationwide.

For better or for worse, the drastic appreciation many markets saw across the country wasn’t an anomaly. Low mortgage rates in 2020 and 2021 were certainly an important catalyst, but the market that came out of the buying frenzy of those years has proved more sustainable than most people thought.

The reason isn’t so complicated: housing supply is still low, especially in hot markets like Bend that saw an outsized portion of transplants. Builders are still riding the brake pedal, and the housing they are building certainly isnt on the affordable side.

In Bend, one of the biggest things to watch out for is a potential squeeze at the $500-750k price point. If mortgage rates continue to drop heading into the spring buying season, a new wave of buyers could hit the market, and homes in the middle to lower-middle end of Bend’s market should be the most popular.

At the same time, people who have been stuck in homes that aren’t really fitting their needs could finally be inspired to trade up (or downsize, as the case may be.) That could lead to somewhat more inventory, but we’re expecting it won’t outpace buyer demand. Rates won’t drop enough to convince anyone who bought at 3% to list their home, unless they’re moving out of area.

The question is what impact all of this will have on prices. Bend’s market could certainly appreciate in 2024. As mentioned above, Bend homes sold for a median of $799,000 in July of 2023, a record high. That could be a preview of the kinds of price surges we may see in 2024.

Conservatively, we’re expecting Bend’s market to appreciate 5% this year, with homes selling for a median of around $760,000.

Homes are very unlikely to get cheaper in 2024. A recession could lead prices to flatten, similar to what we saw in 2023, but if you’ve been waiting for the bubble to pop, it’s probably time to stop waiting.

It might make more sense to wait for mortgage rates to drop. With that being said, buyers may also find themselves in a more competitive market in the spring and summer, with prices higher across the board.

That being the case, if you find your dream home now, you may certainly regret passing it up if you decide to wait. Rates are already lower than they were just a a month or two ago.

At the end of the day though, the decision about whether to purchase or sell a home is a completely personal one. That’s one thing that won’t change regardless of the market. And it’s also why we’re here: to help you understand all the factors that could impact a decision that ultimately is up to you to make.

Click the button to the right and we’ll be happy to start a conversation. In the meantime, Happy New Year!

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