Thinking of buying or selling a home in Bend anytime soon? Then you’ve probably been doing your best to piece together what’s in store for the market in 2019 and beyond.
Well, we’re here to help: this is our 2019 forecast for Bend’s real estate market. Since we’re already well into 2020, if you’re looking for the latest on what’s going on in the market, we have you covered: check out our Q3 2020 Market Report and 2021 Forecast for Bend and Eugene.
You may have heard suggestions that Bend’s market is due for a slowdown, or even worse, a full-fledged housing bubble. Buyers may be looking forward to lower prices. Prospective sellers may be on edge, wondering if they’ll be able to fetch what they paid for their homes.
2008 is still fresh in many Bend residents’ minds. The financial crisis hit Bend’s market pretty hard. At LOHR Real Estate, we know all about it firsthand. In the years following the crash, we successfully negotiated hundreds of short sales. We focused upon helping homeowners get out from under mortgages on homes that in many cases had lost more than 50 percent of their value.
Our opinion, as we pointed out in an article earlier this year (Are Bend and Eugene Headed for a Housing Bubble?) is that fears of a full-fledged real estate bubble in Bend are ill-informed.
Nonetheless, before you dive into Bend’s real estate market–or a market anywhere else for that matter–you’re going to want to know what’s in store. Unfortunately, there’s a lot of conflicting information out there.
We’ve aimed here to cut through some of the competing signals and get to the bottom of what to really expect in 2019 for Bend’s housing market.
Digging Deeper: What’s the General Prognosis for Bend’s Real Estate Market?
It’s not so much that misinformation is spreading about Bend’s market. Rather, much of the information you’ll find about market trends is either too broad or too narrow to really tell you what you need to know to make an informed decision.
We’ve all seen the headlines pointing to a leveling-off of the national real estate market. Hot markets like Seattle, Portland, and the Bay Area are cooling off.
The current buzz has it that Bend’s market is cooling off too, with an influx of new construction leading to swelling inventory with buyers no longer lining up to move into what’s available. Bend’s Source Weekly recently reported “a mix of up and down” for the local real estate market, with sales in December 2018 17% lower compared to December 2017.
Spoiler alert: we do agree with the prognosis that Bend’s market is cooling down. But with that said, this doesn’t mean that housing is going to become more affordable in Bend anytime soon. Nor does it mean that we’re going to see a huge increase in inventory, even at the upper end of the market.
Actually, we expect a cool-down to affect the upper-middle end of the market most strongly. In other words, how the cooling-down of Bend’s real estate market will affect you in 2019 depends largely on which price point you’re looking at and what you’re trying to accomplish in the market.
There is no one-size-fits-all recipe for success in this or any market, so we’re going to do you a big favor by analyzing Bend’s real estate scene at several different price points. At the end of it all, we hope you’ll be inspired to speak with a knowledgeable Realtor (ahem) about your own situation and how you can best navigate the market.
Bend Starter Homes for Sale
Our 2019 Forecast for Starter Homes in Bend: What Will it Take to Buy a “Starter Home” in 2019?
It’s news to almost nobody that prices in Bend’s real estate market have climbed through the roof in recent years. The median sale price for single-family homes was an extraordinary $439,900 in 2018, $27,000 higher than the 2017 median of $412,750.
Normally, we’d call a “starter home” something with an asking price that a family at or near the median income for the area can qualify for. With Bend’s median income of $52,471, to be able to afford even a $200,000 house, a $40,000 down payment would be necessary. Most first time home buyers do not have that much money saved.
The unfortunate reality right now is that “starter” homes just aren’t available in Bend. Affordable homes make up a miniscule portion of new construction, and in desirable neighborhoods like River West, a 2-bed 1-bath fixer might set you back close to $400,000.
Let’s take a look at the data, courtesy of the Central Oregon Association of Realtors’ market statistics. Through 2018, only 172 detached single-family homes sold with a price under $300,000, which includes a whopping 2 homes under $200,000 in Bend’s city limits. Compared to 2017’s total of 394, that’s less than half as many.
Sales of sub-$300,000 homes in Bend through the first six weeks of 2019 total only four, out of a total of 160 sales. Only six such homes are available on the market as of February 11, 2019, meaning there’s an inventory of just 0.4 months at this price point. Let that number sink in for a bit.
Basically, starter homes are a rare commodity in Bend and are only becoming rarer. With inventory that low and Bend residents with below-average or even average income lining up to get into them, this segment of the market is bound to be insulated from any cooling-off.
Of these homes, you can expect to find smaller homes in decent shape in less-desirable neighborhoods, more moderately-sized homes in worse shape in less-desirable neighborhoods, and smaller homes in worse shape in more desirable neighborhoods.
We wish that affordable housing were more available in Bend and have written about the topic before, but we’d be lying if we said we thought the situation would improve in 2019. On the contrary, we forecast that affordable housing will only become scarcer for the foreseeable future.
We do forsee an opening-up, however, in the middle end of Bend’s real estate market in 2019. Read on as we delve into Bend’s market for trade-up and premium homes.
Bend Trade-Up Homes for Sale
Our 2019 Real Estate Forecast for Trade-Up Homes in Bend: “Trading Up” from What to What?
If there’s a single narrative thread we’d like to follow in our article here, it’s this one: home prices in Bend have simply risen beyond what most of the people living in Bend can afford. 2018 was something of a tipping point, with Bend’s median home price finally climbing to a point where people are starting to say “enough is enough.”
As a result, we expect a natural correction in Bend’s overall market. This is a normal feature of healthy markets, and any frenzied shouts of “Housing Bubble! Housing Bubble!” should be taken with a grain of salt. But this leveling-off of Bend’s market becomes especially apparent in the trade-up range.
$300,000 to $400,000 won’t actually get you a home in most of Bend’s neighborhoods that could legitimately be considered much of a “trade up” from a starter home a first-time home buyer purchased in Bend 5 years ago. Realistically speaking, this price point comprises now of starter homes for upwardly-mobile young professionals or working families who have finally accumulated the necessary savings.
It therefore makes perfect sense that inventory at this price point is extremely tight, weighing in at just over 1 month. The $300-400,000 range represents the single largest chunk of Bend homes for sale, with 922 sold in 2018, but the demand more than meets the supply.
Once we get into the $400,000 to $500,000 price range, we start to see a bit more inventory, close to 2 months as of February 11, 2019. That’s still not very high.
Overall sales of single-family homes in Bend were basically identical in 2017 and 2018, with 2,770 and 2,776 sales respectively. But this price point of $400-500,000 saw the single largest leap in 2018, with 125 more sales than the year before.
That’s a significant figure, begging for explanation. We wouldn’t want to disappoint. Everyone loves a good detective hunt, so we’ve taken a deep dive into the data.
The majority of this increase comes from sales in Southeast Bend, with 68 more sales in the $400-500,000 price range in 2018 compared to 2017. To contextualize this number, we looked at new construction currently on the market in Bend. If you simply just can’t put down this novel, read on and find out why.
A Great Migration: Why the Upper Middle of Bend’s Real Estate Market Will Shift East in 2019
The median list price for new construction on the East side of Bend as of February, 2019 is $424,990. The current median list price for new construction on the West side of Bend is $699,990. That’s a huge difference, though of course luxury homes make up a larger portion of new construction on the West side. That’s especially true in the coveted Northwest quadrant.
But what will this median amount get you on the East side versus the West side? In East Bend, according to COAR market statistics, $424,990 will get you a 3 bed 2.5 bath 2,078 square foot home with some of the trendy finishes everyone these days are looking for. That’s not too shabby: for a growing family, we could call that a genuine trade-up.
So what does West Bend’s median new construction price of $699,990 get you? The answer is… A 3 bed, 2.5 bath home with 2,340 square feet, with a few more of those coveted finishes. So a nice trade-up on the West side will set you back $275,000 more than a not-as-nice but similar home on the East side. That’s just the premium cost of landing a trade-up on the West side.
Most of Bend’s residents simply can’t afford that. Hence, we’re starting to see a migration of market activity from the West side to the East side of Bend.
New construction in the $400,000 to $600,000 range in East Bend is attractive not only as a trade-up. It’s also attracting people who are looking for “starter luxury,” with many of the modern finishes and custom touches that are available on much more expensive West side homes.
Inventory in this range is still relatively low, right around two months. But we expect new construction in the $400,000 to $600,000 range to become more and more prevalent on Bend’s east side.
Meanwhile, with premium, $700,000-plus homes now the norm in West Bend, only a small portion of buyers can actually afford to live there. $700,000 actually won’t even buy you a premium home in centrally-located, high-walkability neighborhoods like River West and Old Bend.
Bend will continue to be an attractive destination for people getting priced out of even more expensive markets like the Bay Area, Southern California, and Seattle. We’ve outlined all the reasons why in another article. But with prices in Northwest Bend inching closer and closer to those markets, that option will only continue to be attractive for so long.
That’s not to say we expect people to stop moving to Bend from California anytime soon. Bend’s lifestyle perks will continue to be a thing, and well-off Californians will continue to be attracted to expensive real estate on Awbrey Butte with expansive views of the Cascades or riverfront property in River West.
We’ve got data to back up that conclusion too. Read on.
Bend Premium Homes for Sale
Our 2019 Forecast for Bend’s Premium and Luxury Home Market
One important thing to note before we offer our verdict for luxury homes in Bend is that more premium and luxury homes sold in Bend in 2018 compared to 2017.
Sales between $700,000 and $1,000,000 totaled 343 in 2018, compared to 258 in 2017. Million dollar-plus sales totaled 148 in 2018 compared to 113 in 2017.
Inventory was also lower in 2018 compared to 2017, at an average of 4.8 months in the $700,000 to $1,000,000 range in 2018 compared to 5.7 months in 2017.
In the million-dollar plus range, inventory dropped from an average of 14 months through 2017 to 10.7 months through 2018. Meanwhile, the average days on the market for properties in these price ranges have largely remained flat over the past 2 years.
Bend, in other words, continues to be a hot destination for premium real estate. Once we get into the price range where money is no longer such an object, demand continues to meet a gradually-increasing supply of luxury construction.
In the $700,000 to $800,000 range, people can choose whether to purchase premium-grade real estate in the hills of Northwest and Southwest Bend, or else nice-ish but middling property close to the Deschutes in River West or Downtown.
Another intriguing option is to look at property outside Bend proper, where not only will you get more bang for your buck on your house but you’ll also stand to gain some serious acreage. Horse-lovers take note. If that’s your cup of tea, we’ve got an article for you: check out our article on What You Need to Know about Oregon Farm and Ranch Properties.
There is some possibility that new luxury construction will over-saturate the market, particularly in Northwest Bend. People may decide that the kind of home they can get for their buck on Awbrey Butte and Summit West is no longer worth the price of admission, opting instead for homes with more space and nicer finishes elsewhere.
But through 2019 at least, we basically see more of the same for Bend’s market for premium homes. That’s our forecast for premium homes in Bend for 2019, and we’re sticking to it.
So What’s our Advice for Buyers and Sellers Entering Bend’s Real Estate Market in 2019?
If you’ve followed us this far, you already have a general sense of the state of Bend’s market for starter homes, trade-ups, and premium homes in 2019. But if you’re thinking of entering Bend’s market in 2019 as a buyer or seller, how should you act upon that information?
Buying or Selling a Starter Home in Bend in 2019
Let’s start with starter homes. On the buyers’ side, we’re not telling you anything you don’t already know, but it’s almost impossible now to afford a starter home in Bend if you’re at or near the median household income. Homes are available for less than $300,000, but many of them are fixer-uppers, and these will become even more scarce in 2019.
With a bit of luck and some elbow grease, you might get a home in this price range in Bend. One intriguing option is The Hiatus, a new cottage-style community in the Old Farm District of Southeast Bend.
But most buyers will want to look at outlying communities. Redmond is slightly less expensive than Bend, but prices are rising there too, and unfortunately, it’s a long drive from Prineville or La Pine if you’re working in town.
For sellers with property in this price category, you might expect to be able to write your own checks and have a quick sale regardless of what condition your home is in. The reality, though, is that plenty of inexpensive homes sat on the market for more than 60 days in 2018. Consider cosmetic repairs, though be judicious with which ones you choose.
As we noted, for all practical purposes, the new starter home price range is 300-400k. For most first time home buyers in Bend, these homes will still be out of reach, unfortunately. But for those who can qualify, most if not all the homes you’re looking at will be on the east side of Bend.
There are several wonderful neighborhoods on East side to choose from, including the Orchard District and Southeast Bend, two of our picks for Bend’s Top 5 Neighborhoods. Although there’s still low inventory at this price point, there are some gems to be found, so be patient.
For sellers in the $300,000 to $400,000 range, the market is still hot, and inventory is still low, but that still doesn’t mean you can put just any price tag on your home. It’s still important to make sure your home is staged properly, clean, and easy to show.
Needless to say, you should make sure to hire a good agent. Interview two or three, and don’t be afraid to negotiate your commission. We at Lohr Real Estate believe firmly in negotiating our fee with each of our clients to meet their particular needs. Talk to us! We want to know how we can help you.
Buying or Selling a Trade-Up Home in Bend in 2019
As we’ve already discussed, when we talk about “trade-ups” in the context of the Bend market, we really mean homes between $400,000 and $700,000.
In this price range, buyers are able to start looking at homes on the west side, though the bang you can get for your buck is significantly better on east side. Expect better quality finishes, a little more square footage, and nicer neighborhoods to choose from.
But especially in the $400,000 to $500,000 range, you can see still a lot of competition for the small amount of inventory available. With homes throughout this price range, understand that you’re not necessarily going to get all of the things on your wish list. Your realtor needs to have a good sense of what your exact priorities are and the savvy to be able to locate a property that checks off as many boxes as possible.
For sellers, really make sure that you can move on to your next adventure with the equity you’ll get from selling your home at this price point. If you’re hoping to live on Awbrey Butte or Northwest Crossing, it might be difficult to make that trade up from where you are. So again, make sure you interview and hire a good agent to help walk you through all the different considerations before making a final decision to put your home on the market.
Buying a Premium Home in Bend in 2019
If you’re looking to buy a home in Bend in the $700,000 plus range, what can we say? Congratulations, you’ve made it. The world is your oyster.
Bend has some of the most beautiful homes you’ll find anywhere at this price point, and really, the sky is your limit. You’ll just need to decide whether you want a million dollar view of the Cascades or whether you’d rather to take just a few steps outside your door to get to the Deschutes River, or your favorite brewpub, or the Central Oregon Saturday Market Downtown.
Tough choices, huh? Homes at the lower end of this price range might not be quite up to your standards if you’re landing in River West or Old Bend, but the amenities and walkability should more than make up for it.
For sellers, there are still plenty of transplants coming from California and all points beyond who are interested in the coveted Bend life. That isn’t going to change any time in the forseeable future. So have no fear: there are plenty of buyers out there.
But there are still plenty of choices in the upper echelons of Bend’s market. You’ll need to know just what it takes to make yours the shiniest penny around and just exactly how to price it. Hiring a top-rate agent who knows the market and area is an obvious step. They should be willing to spend the necessary bucks on professional photos and videography, including drone photos if applicable.
This is also important: make sure that your home is easy to show, because a lot of the folks who are coming in from out of town have a tight window for being able to see the properties they want to see. So being as accommodating as possible is key. If they can’t catch you this trip, you will fall off their radar.
Don’t expect your home to sell quickly. Close to half of the homes at this price point take 120+ days to sale. So be patient, and don’t get too anxious. Buyers are still coming to Bend. The bubble is not due to burst. That’s our final word.