Depiction of Bend Oregon Real Estate Market Report with clock, coins and wood house

Bend Real Estate Market Report

Last Updated July 6, 2022

June 2022 Bend Real Estate Market Report

Inventory continues to creep upward in Bend, rising to 1.86 months in June. Meanwhile, prices have dropped only slightly, and the median time spent on the market is still less than a week. So how should we make sense of the conflicting signals?

By and large, sellers haven’t gotten less aggressive even as Bend’s market has cooled down. The median listing price in June was $799,000, a record high. June sales went for an average of 99.7% of list price, indicating that perhaps this isn’t the wrong approach.

But what’s shifted in Bend’s market is that now, buyers can be much more selective. The properties that are selling in Bend are still selling for top dollar, and they’re going off the market about as fast as they did at the peak.

But plenty of properties aren’t selling. Buyers aren’t willing to pay a premium anymore for properties that involve some kind of compromise. Price reductions are becoming more common, and time spent on the market is definitely increasing – it just isn’t reflected in the numbers quite yet.

Depending on what kind of property you have – and how eager you are to sell it – it may be necessary to go on the market a fair amount lower than you might have a few months ago. Meanwhile, buyers can start to enjoy a bit more leverage – but it depends, of course, on what you’re looking for, and interest rates aren’t exactly going down.

Bend Oregon June 2022 market report infographic

May 2022 Bend Real Estate Market Report

It’s all over the news that real estate markets are cooling down nationwide. That’s true of Bend’s market, and the mood among buyers, sellers, and their agents is undeniably shifting. But it’s important that we qualify exactly what we mean by a “cooldown.”

Bend’s sale prices peaked in February 2022 at a median of $787,500. May’s numbers show a median sale price of $750,000, a 5% drop.

That doesn’t mean Bend’s market is in free fall. The homes that went pending in May were listed at a median of $750,000, and homes in Bend are still selling at an average of 0.6% over list price, indicating that sale prices are unlikely to drop further in June.

The numbers we saw in the late winter were simply unsustainable, caused by historically low inventory at all price points. Now, instead of “historically low,” Bend’s inventory is just “super low.” Yes, 1.4 months is a big jump, but Bend is still very much a sellers’ market.

Inventory should continue to increase through the summer, but buyers will continue to get excited about properties with the most desirable features in the most desirable locations. Interest rates peaked in the middle of May but have dropped a bit since.

As a seller, you may have the kind of property that is almost certain to attract a bidding war, or you may have the kind of property that doesn’t stand out so much from the competition. But in either case, it’s as important as ever to price your home correctly.

Properties are still going off the market in a median of just 5 days, and sitting on the market for too long will still cause you to lose a lot of leverage. Your home needs to be listed at a price that attracts the maximum interest out of the gate, and potentially multiple offers. Buyers are still anxious after losing out over the past few very competitive months and are still willing to put quite a bit on the table.

While we don’t see the bottom-line shifting too much from here in terms of sale prices, it could very well be easier to sell your home now than it will be in a few months, when inventory should be higher.

May 2022 Bend Oregon Market Report Infographic

April 2022 Bend Real Estate Market Report

April’s numbers show a clear shift starting to take place in Bend’s market. Pending sales are down 11% month-over-month, while new listings are up 13%. As a result, Bend’s inventory shot up from 0.67 months in March 2022 to 1 month at the end of April.

One month of inventory is still very low, and most properties are still going off the market as fast as ever. But March and April’s numbers indicate that Bend’s market is starting to depressurize. Anecdotally, at the end of April, we started to see properties sit on the market longer, and we predict that the shift will be even more visible in May’s numbers.

With that said, Bend’s median sale price stayed flat in April, hovering near record highs at $775,000. The trendline for list prices in Bend is still moving upward.

Bend’s market could very well reach a tipping point in the next couple of months where more properties start to sell for below list price. In April, though homes still went for an average of 2.5% above list. 

Bend Oregon Real Estate Market Report April 2022 Infographic

March 2022 Bend Real Estate Market Report

First, the good news: inventory is up significantly in Bend after plunging to record lows during the late winter. New listings are up 35% month-over-month and 12% year-over-year, while buyer activity is lagging behind last year’s.

The bad news: although sale prices have dropped 2% month-over-month, they’re still really, really high.  Some relief may be in sight, however.

March’s pending sales had a median list price of just $680,000. Granted, homes have been selling for well above list price in Bend, but that should give us a basic sense of what sale prices should look like in April. We could certainly see prices drop 10% month-over-month.

Context is important, though. The winter months of 2021-22 were exceptionally active for properties at the higher end of Bend’s market, but now properties at the lower end are getting bought up, and that’s shifting the numbers. Pending sales are down year-over-year in the $1.3 million-plus range, making it look like sellers are capitulating more than they actually are.

In other words, buyers in the sub-$700k range may not find much relief in spite of Bend’s shifting bottom line. With interest rates rising more quickly than anticipated, even if prices do drop somewhat, financed buyers won’t have any more purchasing power than they did before. On the other hand, more and more people will be pushed out of Bend’s market, and buyers are likely to have more choices earlier on than they did in 2021.

Bend real estate market report infographic March 2022

February 2022 Bend Real Estate Market Report

Hitting record sale prices during the winter is unheard of in Bend, but that’s exactly what happened in February. The median sale price jumped up all the way to $787,500, an astonishing 14% month-over-month and 33% year-over-year increase.

In 2021, exceptionally low inventory in the winter set the stage for prices to increase even further in the spring. Well, inventory is even lower this year, but it remains to be seen whether prices will ramp up from here. February’s pending sales were listed at a median of $750,000, so March’s median sale price will be lower.

List prices are on the up-and-up, however, hitting a median of $859,950. Sellers won’t be eager to make concessions, and buying pressure will increase as temperatures start to climb.

It’s important, though, to put all of these numbers into context. While that $859,950 is a record high, it’s actually only a 12% year-over-year increase. There’s just more activity at the higher end of Bend’s market than there was a year ago, driving the median sale price way higher.

The run on high-end homes should continue for the foreseeable future. But with the lower end of Bend’s market becoming more and more unaffordable and interest rates starting to go up a bit, the competition may not be as frenzied as it was in 2021. That’s pretty much the only silver lining we’re seeing – you’ll still have to pay a lot more, no matter your price point.

Bend Oregon February 2022 real estate market report infographic

January, 2022 Bend Real Estate Market Report

Here we go again: Bend’s inventory is back at record lows as we open the New Year, dropping 25% month-over-month to just 0.6 months in January. Meanwhile, prices tied the record highs that we saw in November, reaching a median of $690,000.

That’s all in spite of the signals we saw in December that buyer activity might be cooling down. Homes were spending longer on the market, going pending in a median of 18 days. In January, though, that figure was down to 11 days.

List prices fell back to a median of $690,00, with a number of new listings between $550k and $700k. Plenty of buyers took advantage, though pending sales did stay flat month-over-month in January. That could indicate some hesitation to purchase at the inflated prices we’re seeing now.

Overall, new listings were up 15% month-over-month. That could turn down the pressure valve a bit, and prices may stay relatively flat until the spring buying season begins in earnest.

That’s a pretty big “maybe” though, especially with homes still going off the market at a rapid clip. Meanwhile, list prices are still hovering around $830,000, with Bend’s $1 million-plus market remaining exceptionally active.

January 2022 Real Estate Market Report for Bend, Oregon infographic

December, 2021 Real Estate Market Report for Bend

The last month of 2021 saw inventory plunge further in Bend, from 1.2 to 0.8 months. That’s comparable to what we saw in December of 2020, when inventory climbed briefly in the fall before bottoming out in the winter. The difference this time? Sub-$500k properties are almost nowhere to be found, with 13 on the market at the end of 12/2021 versus 50 a year earlier.

Sale prices in Bend have gone up dramatically of course, with residential properties selling for a median of $675,000 in December. Bend’s booming luxury market has continued to set the trend, but buyer and seller activity alike have also increased significantly at the $600-650k price point. That’s quickly becoming the real entry point for Bend’s market, and sticker shock is inevitable if you compare homes selling at that price point today versus just a year earlier.

Interestingly, homes spent significantly longer on the market at the end of 2021 than they did in December of 2020 – 18 days versus just 6. Clearly, buyers aren’t loving what they’re seeing, and homes are selling for an average of more than 2% below list price. But with inventory so low and prices rising so fast, home shoppers are eventually settling for less. That includes homes that were listed in the fall but didn’t sell for a variety of reasons.

With listings down 20% year-over-year and pending sales up 19%, that trend is certainly poised to continue in the early months of 2022. Bend’s inventory may even approach record lows, but a lack of buyer enthusiasm should dampen the potential for price increases.

November 2021 Bend Real Estate Market Report

Hitting record-high sale prices in November isn’t exactly normal in Bend’s market. One might even call it bizarre, and yet here we are. A drop in inventory from 1.5 months in October to 1.2 months in November coincided with a 7% month-over-month increase in the median sale price to $690,000. Let’s put that number into context, however.

Over the summer, the market for residential properties in Bend appeared to be cooling down, with inventory steadily increasing. Prices remained high through the warmer months but started to drop heading into the fall, which is the normal seasonal pattern. Nonetheless, buying pressure has remained higher than normal and hit an inflection point in November.

It isn’t that bidding wars have suddenly become the norm again, with homes selling at an average of 2% under list price. List prices aren’t up either, having dropped in October and November from September’s record high. Rather, the upper end of Bend’s market is seeing more activity than the lower end.

Pending sales of $1 million-plus homes were up 13% month-over-month in November. Meanwhile, pending sales of homes between $400k and $1 million were down 17%.

In other words, we’re seeing a typical seasonal cooldown in the lower and middle-end of Bend’s market, while the upper-end is unseasonably hot. That’s skewing median sales figures upward. Bend’s inventory of luxury homes is still significantly higher than it was a year ago, but plenty of buyers are choosing to bite. For the rest of Bend’s market, we still expect prices to remain relatively flat leading up to the spring even though inventory will likely drop somewhat further.

Bend, Oregon real estate market report November, 2021

October 2021 Bend Real Estate Market Report

October is typically the time when Bend’s market starts to undergo its usual seasonal slowdown, and this year was no exception. But new listings dropped significantly more than pending sales (19% versus 8%), leading inventory to drop for the first time since the spring.

Basically, buyers are grabbing up the inventory that accumulated in Bend during the summer. Price reductions have made these properties more palatable. Though Bend’s median list price has continued to climb steadily, up 2% month-over-month, homes sold on average for 98% of list price. That’s a shift from the late spring, when bidding wars drove homes to an average of 104% above list.

Bend buyers won’t see that kind of competition during the winter months. We expect purchase activity to level off significantly in November, but if pending sales continue to outstrip new listings the scene could be set for a very hot market in the spring. Potential sellers can be reassured that Bend remains a strong seller’s market. Still, it’s much more important now than it was during the summer not to overprice your home, with properties staying on the market longer and selling for less relative to list price.

Bend Oregon Real Estate Market Report for October, 2021

August 2021 Bend Real Estate Market Report

The numbers for August 2021 are in, and they paint a clear picture. Bend’s market is finally getting less frenzied, with prices dropping some amount from the record highs we saw just a month ago. On the other side of the mountains in Eugene, things are just about as tight as ever but prices are staying flat rather than jumping up.

If you’ve recently bought a home pretty much anywhere, it’s natural to worry that you “bought at the top.” Conversely, if you’ve been on the fence about selling your home, you might be wondering if you’ve lost your window of opportunity.

But the changes we’re seeing in Bend and Eugene are incremental rather than drastic. Inventory is still really tight. Activity will cool heading into the colder months, as it usually does. But there aren’t any realistic scenarios where surplus inventory clogs either market heading into the spring and summer buying season next year.

Timing is everything, but so much depends on your situation. There are many more factors than we can go into here, so reach out to us any time and we’ll help you get your bearings. In the meanwhile, we’ll continue to keep a close eye on our local markets and keep you informed.

For Bend in August, the median sale price for all residential properties in Bend dropped from $675,000 to $632,000. A 6% month-to-month drop seems drastic, but we fully expect prices to stabilize around this point heading into the fall.

Listings were down 7% month-over-month while pending sales were actually up slightly. That’s a recipe for inventory to drop slightly the next month. We expect that trend to continue as sellers avoid listing during the colder months and buyers who missed out in the summer compete to grab up what does hit the market.

In other words, buyers and sellers should expect more of the same in the next chunk of time. List prices still trended upward in August, but sellers may need to be somewhat less aggressive heading into the fall.

July 2021 Bend Real Estate Market Report

You may have seen headlines recently that the “housing boom is over” nationwide. Inventory in Bend and Eugene reached their lowest points in the spring, and it’s been climbing steadily since. At the same time, prices are also climbing, especially in Bend. Why?

Well, inventory is still really, really low in both Bend and Eugene. Inventory averaged 6.3 months nationwide in June, but here, it’s hovering around 1 month. Things aren’t as tight as what we saw in the spring, when inventory dropped to 0.7 months in both Bend and Eugene. But in July, prices were still up 26% year-over-year in Bend and 21% in Eugene.

Through the remainder of the year, we expect appreciation to flatten as inventory accumulates heading into the colder months. That’s typical for the winter – but we still expect higher than normal activity in the fall and a market that is still overall very competitive.

The question is always: how does this bigger picture affect you if you’re thinking of buying or selling in the near or more distant future? We are more than happy to chat about that and give you personal context. Regardless of broader trends, the devil is always in the details, and we bring a level of attention and expertise that will help you navigate the choices you need to make.

n July, the median sale price for all residential properties in Bend hit an incredible $675,000. That’s up 3% from just a month earlier.

Still, there are signs that Bend’s hot seller’s market is starting to lose a bit of its steam. Buyer activity is down significantly from a year ago. New listings, on the other hand, are up. The result is that inventory is finally climbing, reaching 1.2 months in July. That’s still really, really low, but it’s welcome news for buyers. We expect that prices will start leveling off soon, but we’d be surprised if they drop much if at all from here at least through the warmer months.

Inventory is up especially in the $500-650k range. In June, there were 50 such properties available, but that number climbed to 90 in July. Sellers at these popular price points will need to do more to stand out from the crowd, while buyers should have a bit easier time.

May 2021 Bend Real Estate Market Report

Summer is just on the horizon. During a normal year, that would mean a surge of new housing inventory as Bend and Eugene sellers try to take advantage of the fair weather and influx of visitors.

But while inventory is up – marginally – in both communities, what we’ve seen so far has been underwhelming. Compared to other markets across the country, the supply of homes in Bend and Eugene remains low, low, low, and that is still the beginning and the end of the story for both markets.

With competition so fierce, potential buyers in Bend and Eugene might be wondering whether it’s better to wait out some of the craziness, especially if inventory is starting to increase even a little bit. We’ve taken a deeper dive into that question in our latest blog article, and the answer is a little complicated, so go there for the full scoop.

The first piece of news is that Bend’s median sale price dropped from an all-time high of $652,000 in April to $628,500 in May. This isn’t a huge surprise: April’s 10% month-over-month gain wasn’t going to be sustainable, particularly with inventory increasing slightly. But we predict that Bend’s market will head back there pretty fast.

The reason? New residential listings actually stayed flat between April (382 new listings) and May (384 new listings). That isn’t normal for this time of year. In May of 2019, 602 new residential properties hit the market in Bend, 43% percent more than we’re seeing right now. So why are fewer sellers putting their homes on the market when prices are so high and vaccinations are becoming more widespread?

The simplest answer is that it’s too hard to find a replacement home. It’s a Catch-22: people can’t list their home because there aren’t homes to buy, and that means even less homes for sale. Even if you can find a replacement property, if you’re relying on funds from the sale of your current home, it’s hard to beat the competition and get an accepted offer.

Unsurprisingly, new inventory is trending away from the lower end of Bend’s market. New listings in the $300-450k range were down 68% year-over-year. At the same time, new listings in the $450-650k range were up 60%, and we expect new construction to meet, at least in part, the high demand for homes in this price range.

April 2021 Bend Real Estate Market Report

The warm season is just starting in earnest in Bend and Eugene, and that means the traditional home buying season is here too.

Last April, of course, things were anything but normal, as anxiety swirled around COVID-19 and both buyers and sellers put their real estate plans on hold. Even though the pandemic isn’t yet in the rearview mirror, things probably feel more “normal” right now for most folks. But the real estate market has been anything but.

All over the country, inventory is low and prices are rising. Bend and Eugene aren’t unique in that sense, but Bend in particular is an extreme example. You won’t see it lists of the country’s hottest housing markets, which typically are limited to the 100 largest metro areas. In terms of diminishing inventory and sky-high appreciation, though, it’s right up there.

In comparison, Eugene’s numbers remain more normal in terms of what markets are seeing nationwide. As we like to point out though, Eugene’s market was already very tight before the pandemic, and it has only gotten tighter. Competition has really ramped up on homes with the most desirable features and locations, and bidding wars are becoming more and more common at higher and higher price points.

Last month, the median sale price in Bend dropped from $605,000 to $600,000, leading us to speculate that Bend’s market had finally reached its peak for now. That turned out to be far from the case, however.

Inventory was actually up very slightly in April, rising from 0.6 months in March to 0.7 months. Nonetheless, the median for all residential properties in Bend rose to a previously unimaginable $660,000. The average home sold for close to 4% above list price, going off the market in just 4 days.

The year-over-year numbers for Bend in 2021 versus 2020 are a little bit deceiving. April of 2020 was when the full scope of the pandemic really sunk in, and there was a lot of anxiety. That caused both buyer and seller activity to plummet.

Going back a year to April of 2019 to get a better sense of a “normal” spring in Bend, new listings are down 10% year-over-year while pending sales are basically flat. The big difference in 2021 though is that inventory didn’t have a chance to accumulate over the winter. As many properties are selling as the market can bear, and buyers are lined up waiting, especially now that the weather is nice.

Not all properties are getting multiple offers, but bidding wars are driving enough properties way over list price that we’ve seen home values appreciate an incredible 10% in the span of just a month. As much as those of us on the ground have become accustomed to Bend’s market being insane, this is just a new level of crazy.

Sellers and their agents have certainly been getting more aggressive, with Bend’s median list price rising 5% between March and April, but those buyers with the means to do so have come out even stronger. It’s going to be a bit of a game of chicken over the next several months in terms of whether inventory increases and enough buyers cool their jets a bit or prices reach further into the stratosphere.

March 2021 Bend Real Estate Market Report

First of all, there is one piece of good news here for Bend-area buyers: the median sale price for all residential properties finally dropped from a high of $605,000 in February to $600,000 in March.

As much as home prices have climbed in Bend year-over-year, it’s a small consolation, but the drop is a sign that prices are finally leveling off. The median list price also dropped from $760,000 in Februrary to $750,000 in March.

There’s actually more good news: new listings between $400,000 and $500,000 were down only slightly year-over-year in March of 2021, while new listings were actually up in the $500-700k range.

However, there’s significantly more competition for these homes than there was a year ago, and multiple offers have become the norm. Meanwhile, homes under $400k are quickly ceasing to exist in Bend, with new listings down more than 80% year-over-year.

In general, homes are selling faster than ever, spending a median of only 4 days on the market before they go pending.

3rd Quarter 2020 Bend Real Estate Market Report

Summer is over, and the 3rd Quarter numbers for Bend and Eugene’s real estate markets are in.

The verdict? To start, buyer activity is on the up-and-up and prices are rising, particularly in Bend. It’s also important, though, to contextualize the general direction of Bend and Eugene’s markets within the larger picture of an unfolding pandemic and possible longer-term economic fallout.

We will look at how Bend and Eugene’s markets might follow these larger trends, and how they might buck them in 2021. Read on as we give a summary of the national real estate market then dive into the numbers before offering our forecast for the road ahead.

While Eugene in some ways lagged behind national trends through Q3 of 2020, Bend galloped ahead of them, resulting in an unprecedented shortage of residential inventory. Even if you’re willing to pay (and pay you must), it’s difficult to find a home in Bend right now.

It isn’t that Bend suddenly became a hot destination in the middle of the night. Even before the pandemic took its hold in public awareness, Bend’s inventory was gradually diminishing.

At the end of Q3 of 2019, Bend had 992 active residential listings, down slightly from 1,096 a year earlier. By the end of the year, that number had dwindled to 719 compared to 898 the year before, following unusually high buyer activity in the Fall.

Of course, the fun really started at the end of Q2 of 2020, when buyers began to return to Bend’s market en masse while sellers didn’t.

The third quarter did see a significant uptick in seller activity, with new listings through the end of Q3 of 2020 down just 9% year-over-year. However, with Bend already facing an inventory shortage and sales up 25%, the scene was set for a massive decrease in available properties.

By the end of Q3 of 2020, just 323 residential properties were available for sale in Bend, compared to 1058 a year earlier. Meanwhile, the median sale price rose from $464,900 to $539,500, a 14% increase.

Through the third quarter of 2020, sales outstripped new listings at every single price point in Bend below $1 million. Not surprisingly, we’re seeing a significant shortage in the $300-450k range, with 13% more sales than new listings and only 33 currently active properties. The $600-800k range is also getting squeezed, though, with 22% more sales than new listings.

New listings tend to diminish through the Fall months. Even if more sellers than normal decide to join the party late, there are certainly buyers out there who are still looking after coming up dry during the summer buying season.

It’s all a recipe for inventory to dry up even further, even as builders work overtime to meet the demand. So what’s driving Bend’s buyers’ rush?

Low interest rates are one obvious factor. Home purchases utilizing conventional financing rose 25% between Q3 of 2019 and Q3 of 2020.

Bend’s market, however, has long been unaffordable for those making anywhere close to the area’s median income. As low as interest rates have dipped, we doubt it’s been enough, unfortunately, to tip the scales for most of Bend’s residents.

Rather, relocation from out-of-state seems to be a big, if not the biggest factor driving Bend’s surge of buyers. With people all of a sudden receiving the green light to work remotely, many are jumping on the opportunity to do so in Bend. Wouldn’t you?

Notably, all-cash purchases in Bend rose even more than financed purchases, up 29% year-over-year. It’s actually the luxury segment of Bend’s market which has seen the greatest uptick in both buyer and seller activity.

Purchases of $800,000+ homes rose 55% year-over-year, while new listings rose 50%. The vast majority of these (82%) are purchased with cash, and many are vacation homes or second residences.

August 2020 Bend Real Estate Market Report

This summer has been hot in more ways than one here in Bend and Eugene, and it’s not over yet with a heat wave hitting Central Oregon and the Willamette Valley the first and second weeks of September. Likewise, the wave of buyers hitting both markets hasn’t slowed down quite yet.

Although COVID-19 cases in Deschutes and Lane County haven’t spiked the way they have in many other parts of the country, the virus hasn’t gone away yet either. Still, the numbers point to more and more sellers finally feeling comfortable putting their homes on the market.

That hasn’t been enough, though, to make up for the severe deficit of inventory that we saw heading into the summer. As far as buyer activity, Bend and Eugene’s markets both remained plenty hot through August. Let’s take a look at the numbers.

There isn’t much new to report here when we look at August’s numbers compared to July’s. While buyer activity remained extremely vigorous in Bend, the market also didn’t tighten any further than it has already, which is positive news for buyers. While August’s median sale price of $535,000 represents a 15% year-over-year increase, it isn’t any higher than July’s median of $534,950.

In other words, prices in Bend may have finally reached their ceiling for the time being. We expect sale prices to drop slightly heading into the fall, with a little bit more inventory accumulating before the winter months put a lid on both buyer and seller activity.

Coming back to the present, total inventory of residential properties at the end of August stood at just 46% of what it was a year earlier. It is hard to find a home in Bend right now, with inventory deficits at most every price point, though most notably in the $300-450k and $500-700k ranges. Slightly less homes are going on the market at these price points than did a year ago, while significantly more homes are selling.

Homes in Bend are taking longer to sell in 2020, spending a median of 26 days on the market compared to 16 in August of 2019. The vast majority are eventually selling, however, as many buyers adjust their expectations, having come to terms with the unsavory reality of a strong seller’s market.

July 2020 Bend Real Estate Market Report

It wouldn’t be hyperbole to say there’s been a buyer’s rush in Bend these past several months. Through July, four homes went pending for every three that went on the market.

This continuing inventory crunch has created significant upward pressure on prices. Last month saw residential properties properties in Bend go for a record median of $534,950, 15% higher than a year earlier.

In comparision, Bend’s market appreciated 6% in 2019. That figure is still well above the national average of 3-5%, but 15% is just off the charts.

In July, new homes were listed at a median of $659k. That’s a record high, but it’s only $10k higher than in June, when the median list price went up a whopping $50k as sellers realized the pandemic wasn’t keeping buyers away.

15% may prove to be an anomaly, but looking closer at the data, buyers shouldn’t expect relief any time too soon. The long and short of it is that Bend is running out of inventory.

Pending sales activity is up more than 50% year-over-year while seller activity is down across all price points. Some segments of Bend’s market are even hotter.

Activity has increased the most year-over-year in Bend’s luxury market, with pending sales of $1 million-plus homes doubling compared to July 2019. New listings are also up a bit (22%), but total inventory is down 60%. Only 2 months of inventory of million-dollar-plus homes remain, which is unprecedented in Bend’s market.

The next hottest price point is the $600-800k range, with a 76% year-over-year increase in buyer activity. New listings lag behind pending sales by 42%, which means the upper-middle end of Bend’s market is starting to get very tight.

The $350-500k range isn’t far behind, with 71% more buyer activity than a year ago and 40% less new listings than pending sales.

These numbers are a big deal, but the real headline is this: in July, inventory across Bend’s entire residential market fell below 1 month for the first time ever. As of the end of the month, there were 323 active sub-$800k residential properties in Bend compared to 843 the previous year.

Let that number sink in for a bit: that’s a 62% drop. Inventory starts to climb a bit above that price point, but as we saw above, it’s still shrinking.

If anything, prices have the potential to escalate even further. Any influx of new listings may be too little, too late.

Once mortgage forebearance options run out and certain segments of the economy still haven’t recovered from COVID-19, people will have to put their homes on the market. The question, though, is whether broader economic currents will have an effect upon the demographics that are currently flocking to Bend.

Investor dollars aren’t what’s inflating Bend’s market right now–it’s people who want to live here and now can because of the remote work revolution. The floodgates have opened, and new construction will start to catch up, but this could be the new reality of Bend’s market for now.

June 2020 Bend Real Estate Market Report

When restrictions related to COVID-19 first hit Oregon, Bend’s market took something of a dive, with both buyer and seller activity significantly decreasing. In May, however, the floodgates opened and buyers came in riding the tidal wave, with pending sales outstripping May of 2019’s by a significant margin.

The same trend continued in June, and not surprisingly, prices have caught up to the reality of buyer demand outpacing new listings. June’s median sale price of $490,000 for all residential properties was 10% higher in June of 2019.

Interestingly, in spite of all the energy around buying, properties spent significantly longer on the market than they did the previous year–a median of 27 days, compared to a median of 11 days in June 2019.

Given the disparity between new listings and pending sales, one possible conclusion is that buyers are looking for the perfect home, not finding it, and then making due with what’s available. Homes that have sat on the market for months and months are finally getting bought because there just isn’t anything else available.

In June, 1.25 homes went pending in Bend for every home that was listed. If a second wave of COVID-19 forces new lockdown measures, recent history tells us that seller activity is likely to diminish more than buyer activity.

In other words, Bend’s new inventory crunch is here to stay for now, and sellers are likely to recognize that they can start pricing their homes even more aggressively. Indeed, the median list price in June was up to $650,000, 13% higher than a year ago.

Will this direction be sustainable? Perhaps not.

We’re seeing varying prognostications about what’s in store for the economy. Some people who are currently receiving mortgage forbearance will eventually need to put their homes on the market.

It’s really a question of when and how many. Even if an influx of new inventory comes at some point, if there’s already a severe shortage, it might not impact the bottom line of Bend (and Eugene’s) market too much.

As we get further into the summer, we’ll be watching closely for signs of how broader economic currents might affect the bigger picture in Eugene and Bend.

The main question in the shorter-term will be how both markets react to continuing drops in inventory. There’s certainly the potential for prices to go up even further, particularly for homes with modern finishes in the most desirable locations.

Some sellers may be encouraged to list their homes because of the prices they’ve started fetching. The continued spread of COVID-19 may discourage others, however, causing inventory to tighten even further.

Lane County and Deschutes County aren’t yet the site of a second wave. In reality, the spread of the virus was quite limited throughout April and May, but it may only be a matter of time before COVID-19 starts to spread through the area.

The result could be more furloughing or layoffs, and meanwhile, options for mortgage forbearance or augmented unemployment benefits might start running out. That will impact Bend and Eugene’s markets, though it’s hard to say just how.

We have our eyes on the ground, and we’re also alert to what might lie around the corner. Stay tuned for our next update.

As you can see above, while new listings in May were up 15% from where they were in April, they fell 35% year-over-year. That’s a steeper drop than April of 2020, when new listings were down 26% compared to the previous year.

With Lane County entering Phase 1 of reopening on May 15, one might expect to see more new listings in the second half of the month. The data doesn’t bear that hypothesis out, however. About as many new homes were listed in the first half of May as the second.

In terms of buyer activity, pending sales in Eugene failed to surge in May compared to what we saw in April. Year-over-year, the difference between May of 2020 and 2019 is about the same as it was the previous month, at -24%.

173 homes sold in May, just an 11% increase from the previous month and a 39% decrease from May of 2019. Homes sold for a median of $335,000, representing a modest 3% year-over-year increase. That’s a 2% drop from April’s record median of $342,125 for all residential properties.

Again, May’s sales numbers mostly represent homes that went into contract in March or April in the midst of Coronavirus-related restrictions. So, pending sales better reflect the current status of Eugene’s market.

What May’s Numbers Mean for Bend’s Market

You’ve heard it from us before, but we’ll say it again: Bend and Eugene are both low inventory markets. So far, the pandemic and resulting economic fallout hasn’t changed that basic fact. Actually, both markets have become tighter for buyers.

Pending sales numbers for May indicate that buyers are re-entering Bend’s market at a rapid rate, but sellers aren’t following suit. The result should be a boon for those sellers who are willing to get in on the action.

Indeed, homes spent less time on the market in both April and May than they did a year earlier. So why have home prices dropped in Bend relative to 2019?

It isn’t that homes are going significantly below list price, nor are list prices dropping, increasing 6% year-over-year. Instead, May’s sales numbers reflect less activity in the higher end of the market relative to what we’ve seen in the past.

This is no surprise. In the economic uncertainty of the earlier stages of the pandemic, discretionary purchases were bound to fall off.

What we’re seeing in May’s pending sale numbers, however, is that Bend’s luxury market in particular is bouncing right back. 56 $850,000-plus homes went pending in May of 2020, compared to just 26 a month earlier and 33 in May of 2019.

Buyer activity in the middle of Bend’s market has also increased slightly relative to a year ago. As a result, June’s sales numbers will almost certainly reflect an appreciating market.

In June, new listings won’t lag behind pending sales as much as they did in May, but there will still be a significant gap. As a result of tighter inventory, more homes will have multiple offers, and that will drive prices up further into the summer.

The reasons that sellers are hesitating to list their homes in Bend are simple. First, sellers face more COVID-19-related risk than buyers do, assuming they continue to occupy their homes. Second, supply chain issues and economic uncertainty are having a particular impact upon new construction.

Inventory in Bend won’t decrease to the point where would-be buyers will be driven out of the market unless their needs are fairly particular.

April 2020 Bend Real Estate Market Report

Last month, we took a deep dive into how Bend and Eugene’s real estate markets might respond to a post COVID-19 recession. What we didn’t have at the time was a whole lot of market data. But now that the numbers for April are in, the picture is becoming clearer.

The last time the United States entered a recession, it took several years for most real estate markets to feel the full impact. That was true in Bend and Eugene, with property values finally bottoming out in 2011 and 2012 respectively.

The situation in 2020 is very different, however. There’s an immediacy to the pandemic that is already having a substantial impact on the real estate market. As you’ll see when we analyze the market data for April, we’re seeing that impact in Bend and Eugene in terms of the number of new listings and pending sales.

At the same time, there is a separate but interrelated trajectory that will play out over time. Home values haven’t shifted overnight. Over time, there is bound to be an impact, but how that happens will depend upon factors both global and local.

Let’s take a closer look at the data.

What Bend’s Market Looked Like in April of 2020

In March of 2020, Bend saw an increase in new listings of detached single family homes compared to the previous year (+20%) but a drop in pending sales (-19%). Meanwhile, the median sale price was a $473,000, just a 3% increase from the year before.

Homes that sold in March by-and-large went pending in January or February, before the scope of the pandemic became clear. The median sale price for April dropped slightly, falling to $445,000. That’s a 2% decrease from the year before.

There’s more bad news: listings decreased from 364 in April of 2019 to just 212 in April of 2020. That’s a 42% drop.

April is normally when new listings start to really pick up in Bend, leading up to a peak in May in time for the summer buying season. We can only assume that a large number of people who had planned to put their homes on the market held off in April because of COVID-19.

Looking at March’s spike in listings, some may have put their homes on the market earlier than they’d planned, fearing worse to come.

The important question, of course, is how buyer activity has corresponded to this significant dip in inventory. What we see is a comparable drop with just 167 pending sales in April of 2020 compared to 288 a year earlier. Again, and quite uncannily, that’s a 42% decrease.

The net effect is that the balance hasn’t shifted (yet) in Bend’s market toward either the buyer or seller. An equal number of would-be buyers and sellers are hesitating to enter the market. When they do, it’s still pretty much business as usual, perhaps with just a few added delays.

Properties actually went off the market faster in April of 2020 than they did a year ago, spending an average of 58 days on the market compared to 84 in 2019.

We wouldn’t chalk this up to anything on the buyer’s side necessarily. Those most hesitant to list their homes are probably those with homes that would sit on the market even under the best of circumstances.

We’ll interpret the data further and look toward what we might expect in the future for Bend, but first, let’s look at the numbers for Eugene.

What’s in Store for Bend and Eugene’s Markets

The first point we’d like to make is that we see Bend and Eugene’s markets following parallel but slightly different trajectories. Activity is down more in Bend (-42%) than it is in Eugene (-25%).

The most obvious reason for this disparity is that Eugene’s inventory is lower than Bend’s. Coming into the spring buying season, there were simply less homes available than there were in Bend.

Homes in Eugene also go off the market significantly faster. In uncertain times, sellers are much more likely to list if they think they can get a quick sale.

Notably, Eugene homes that went pending in April of 2019 spent a median of 29 days on the market. In April of 2019, that number was only 7 days. Moving forward, Eugene’s less desirable properties will stay on the market significantly longer, but the most compelling homes will continue to move fast.

Compared to Eugene, many neighborhoods in Bend had more inventory moving into the crisis. At the same time, Bend remains a low inventory market. But with homes spending longer on the market, the decision to sell is more complicated.

In addition, a significant portion of buyers in Bend are looking for vacation homes and second residences. Anecdotally, we don’t believe these buyers are fleeing Bend’s market for good, assuming they still have the resources. Many, however, are postponing that decision.

All that being said, what lies ahead for Eugene and Bend?

Here’s What We See in Our Crystal Ball

Up to this point, both Lane County and Deschutes County have done well at containing the spread of COVID-19, with 55 and 80 confirmed cases respectively.

That’s good news, but there’s still potential for the virus to spread. Some Oregon counties will likely begin reopening May 15 but will be required by Governor Kate Brown to meet particular benchmarks involving testing, contact tracing, and declining infection rates.

The result will be a step toward normalcy. The precautions being taken will lessen the chances of a second wave, but there are no guarantees. Still, we expect market activity to begin to pick up again in June in both Bend and Eugene.

If Lane County and Deschutes County aren’t forced to shut down again, market activity may start to approach normal levels mid-summer.

There may even be a quite significant influx of new listings, with those who had held off in the Spring deciding to move forward. Particularly in Bend, we expect new listings to outpace new buyers. However, with new construction likely to drop off significantly, inventory is unlikely to swell too much in the medium-term.

There is a real potential for prices in Bend to continue leveling off or even drop slightly. In the months ahead, we expect prices to stabilize relative to the April numbers. However, there’s the potential for new inventory to put downward pressure on prices. All the same, inventory is extremely unlikely to accumulate to the point where prices start to drastically fall.

In Eugene, we’re already seeing signs that the market is flattening, but we don’t think new inventory is as likely to outpace buyer activity. As a result, prices will be relatively stable.

Looking further into the future, that picture will depend upon broader economic factors. Unemployment in certain industries, including the restaurant, retail and travel industries, and perhaps construction and manufacturing, will remain high into the foreseeable future. In addition, it will be a while before most AirBnB and vacation rentals can bring in enough cash to pencil out.

For many folks, mortgage forbearance is proving a good temporary solution. But it can only be a solution if the problem itself is temporary. Some homeowners will be able to get right back on their feet before that window ends, but others will be less fortunate.

The impact will be felt in real estate markets nationwide, Bend and Eugene’s included. There’s still no reason to expect that the long-term impact will be anywhere near as drastic as the post-2008 free-fall. But some version of that may be inevitable.

It’s important, however, to know what kind of time frame we’re looking at. Bend and Eugene’s markets will most likely see a holding pattern for the remainder of the year and for the first part of 2021.

We’ll keep you posted as the situation develops. In the meanwhile, homeowners may want to consider getting a head start and avoiding what is likely to be fiercer competition once the summer gets underway.

For now, prices will continue to be relatively stable in both Bend and Eugene. That may not be the case forever, though, unless the economy gets back on track sooner than later.

In any case, the more you can do to ensure a quick sale, the less likely you’ll be to run into choppier waters. We can certainly give you plenty of suggestions for how to accomplish that.

Right now, buyers are benefiting from less competition than normal. We see more buyers hitting the market in the summer, so now may be a good time to look if you’re after a home at a competitive price point in Eugene and Bend’s most desirable neighborhoods.

On the other hand, if you’re feeling priced out of Bend and Eugene’s markets, you might want to wait it out for more favorable conditions on the buyer’s side. That will most likely happen, but it may take a lot of time, particularly in Eugene. And if the economy comes roaring back, the effect may be minimal.

For more personalized advice–and we’ll have plenty of it–just contact our Bend office or Eugene office today. We are here to inform.

3rd Quarter 2019 Bend Real Estate Market Report

Late last year, we predicted a minor but noticeable cooling-off of Bend’s real estate market, particularly at the upper-middle end. That prediction held true through the winter, but come spring, Bend’s market started to heat back up. Inventory was lower than the year before across most price points, with the exception of properties in the $600k-1 million range.

Note: For the very latest on Bend’s market, check out our Q3 2020 Market Report and 2021 Forecast for Bend and Eugene.

Well, the numbers are in for the third quarter are in, and all signs of any impending cooldown have all but disappeared. Compared to the third quarter of 2018, inventory is now down across all price points. The upper end of the market, surprisingly, is seeing the most significant drop in inventory.

Meanwhile, sale prices for detached single-family homes hit a median of $479,000. Though that’s only slightly higher than Q2’s median of $474,000, it’s an 8.8% increase from 2018’s third-quarter median of $440,000. The gains of the second quarter seem not to have been a fluke.

Bend’s slowdown, in other words, seems to have come and gone, and the market here is again appreciating at an extraordinary level. The question is whether these gains are sustainable or not.

We’d argue, based on the most recent data, that it is sustainable–through the foreseeable future, at least, barring the usual doomsday scenarios.

Certain segments of Bend’s market may eventually reach a saturation point. But, as long as inventory remains low and money continues to flow in from out-of-area, we can’t foresee prices leveling-off, much less dropping. For better or for worse, Bend’s market is still on a steady upward trajectory.

3rd Quarter Bend Market Report for Luxury Homes ($1 million-plus)

For evidence that out-of-area money is still flowing in to Bend, exhibit A is Bend’s luxury home market. The inventory for million dollar-plus properties in Bend has dropped from 9 months through the 3rd quarter of 2018 to 6.8 months in Q3 of 2018, a record low. 67  million dollar-plus homes sold through the third quarter of 2019 versus 47 in Q3 of 2018.

The average number of days these spent on the market is now down from 152 days to 113 days. Luxury homes in Bend sold for an average of 94% of list price, compared to 92% in the third quarter of 2018.

Our main takeaway from these numbers is that Bend is only becoming more and more of a destination for luxury home buyers. A steady stream of new construction at this price point has hit the market through the past few years, but it’s by no means more than the market can absorb. Meanwhile, bare lots with the mountain views that are almost mandatory at this price point are bound to become scarcer and scarcer within Bend’s city limits.

3rd Quarter Bend Market Report for Premium-Plus Home ($800k-1m)

The second quarter of 2019 saw a drop in sales for homes at this price point and an increase in inventory. The third quarter, however, saw just the opposite, with 63 homes selling in the $800k-1m range compared to 49 in the third quarter of 2018. Inventory is down from 5.7 months to 4.8 months.

Homes at this price point are spending longer on the market than any other in Bend, at an average of 121 days. This is still lower than Q3 of 2018’s average of 129 days on the market.

Homes in the $800,000+ range are concentrated almost exclusively in Bend’s desirable northwest quadrant. Go down a tier to the higher part of the $600-800k range, and there are plenty of homes for sale in southeast and southwest Bend that are on par with their more expensive northwest counterparts.

With that kind of competition, homes in the $800-1m range aren’t selling as fast. At the same time, we’re not seeing demand for them dry up either, contrary to our expectations heading into 2019.

3rd Quarter Bend Market Report for Premium Homes ($600-800k)

The story is much the same at this price point in terms of a modest increase in sales and decrease in inventory. 144 homes sold in the $600-800k range during Q3 of 2019 compared to 121 a year earlier, and inventory dropped from 4.1 to 3.3 months.

Listings at this price point spiked in the second quarter of 2019 more than in any other segment. However, Bend’s market has been more than able to absorb that additional inventory. Homes in the $600-800k range are spending about as much time on the market as they did a year earlier (97 days in Q3 of 2019 versus 100 in 2018.)

3rd Quarter Bend Market Report for Trade-up Homes ($450-600k)

Bend’s inventory of homes in the $450-600k range dropped somewhat in Q3 of 2019 compared to a year earlier, falling from 2.9 to 2.6 months. Meanwhile, sales increased slightly from 193 in Q3 of 2018 to 206 in this third quarter of this year. These properties are spending slightly longer on the market, however, at 100 days versus 95 a year earlier.

These figures contrast with what we saw in the second quarter of 2019, when the $450-600k range saw a steeper decrease in inventory than any other price point. It’s noteworthy that inventory is starting to decrease more at the higher rungs of Bend’s market. Things are still tight in the $450-600k range, however, and don’t look poised to become any less tight.

3rd Quarter Bend Market Report for Starter Homes ($300-450k and less than $300k)

Slowly but surely, Bend’s market activity is migrating away from sub-$450k properties. There are still plenty of these homes available in Bend’s east side, however.

For homes in the $300-450k range, inventory is down only slightly from Q3 of 2018, at 1.7 months versus 1.8 months. Still, overall sales are down from 407 a year earlier to 355 in Q3 of 2019. This follows the same trend we saw in the second quarter. The average days on the market did decrease from 92 in Q3 of 2018 to 82 in Q3 of 2019.

The reason is simple: less and less new construction is going on the market at this price point. Through the first three quarters of 2019, 148 homes newly-constructed homes hit the market in the $300-450k range. During the first three quarters of 2018, that number was 263.

If anything, it’s surprising that inventory didn’t drop even more. We can only speculate that would-be buyers at this price point are increasingly looking for housing in Redmond, Three Rivers, and other communities outside Bend’s city limits.

They’re certainly doing so in the sub-$300k range, which is simply ceasing to exist in Bend apart from a few handfuls of fixer-uppers. Between Q3 of 2018 and Q3 of 2019, inventory dropped from 1.1 to just 0.6 months. Unsurprisingly, sales dropped from 42 to just 26.

In Conclusion: Where Does Bend’s Real Estate Market Go from Here?

The good news, which we’ve been sharing for a while, is that Bend’s market isn’t headed for a bubble in the foreseeable future. But not only that, the upper and middle rungs of the real estate market here actually seem to be in exceptionally good health, driven by an influx of capital from the nearly 20 people that relocate to Deschutes County every day.

Everything that we’re seeing indicates that Bend’s market hasn’t yet reached the peak of its upward trajectory. After a relatively sluggish 2018, the market could have gone in one of two different directions, and instead of continuing to flatten out, it’s bounced right back.

We would suggest that the best reason to buy a home in Bend is because you want to live here, not because you’d like to cash out at a future date. But, would-be Bend homeowners can at least rest assured that they’re making an investment that’s likely to appreciate.

Conversely, if you want to live in Bend but are waiting for the market to cool off so you can swoop in and grab a bargain, you may find that Bend’s prices only get further and further out of reach. The bad news is that Bend is increasingly becoming a place where ordinary working families can’t afford to own a home, and the data doesn’t show any relief in sight.

2nd Quarter 2019 Bend Real Estate Market Report

After a somewhat sluggish first quarter, we’re seeing signs that Bend’s market is shaking off its winter doldrums and hitting the summer in full stride. A temporary moratorium on federal interest rate hikes has likely helped normalize buyer activity and ease the anxieties of sellers following a winter which saw listings and sales drop more than 16% compared to a year prior.

At the same time, the overall sales numbers according to the Central Oregon Association of Realtors are down slightly from those of Q2 of 2018: 771 compared to 811, a 5% drop. New listings, meanwhile, remain just about identical–847 in 2019 compared to 844 in 2018. That means that inventory is up–just a bit–throughout Bend’s market.

Properties are also sitting on the market somewhat longer, at an average of 106 days compared to 100 in Q2 of 2018. Homes are also selling for an average of 95% of their list price compared to an average of 98% in Q2 of 2018.

Those are significant numbers. At the same time, signs of a plummet are few and far in between. The market continues to appreciate at rate well above the national average, with Q2 of 2019’s median sale price of $474k eclipsing Q2 of 2018’s $441k by 7.5%.

Meanwhile, inventory has actually dropped for trade-up and starter homes. Apart from the $800,000-plus end of the spectrum, Bend is still most definitely a seller’s market. New construction continues at a steady flow, but supply still isn’t outpacing buyer activity.

With new construction concentrated in the upper-middle end of Bend’s market, inventory remains especially tight in the middle and lower ends. An influx of inventory will be the first sign of a real cooldown in Bend’s market, and we simply haven’t seen signs of that.

How that overall picture affects you will, of course, depend entirely on what portion of the market you’re looking at. That’s why we’ve broken Bend’s market into a number of different price points in order to give you a much clearer picture of what to expect if you’re looking to buy or sell.

Read on for a detailed picture, starting in the luxury price range.

Second Quarter 2019 Bend Market Report for Luxury Homes ($1 million-plus)

Listings and sales for million dollar-plus homes in Bend are up in the second quarter of 2019 compared to a year earlier. All signs point to a healthy luxury market for Bend real estate, with overall inventory down from 8.9 months through the spring of 2018 to 7.8 months in the spring of 2019.

Those numbers aren’t nearly as low, of course, as the rest of Bend’s market, but a buyers’ market is to be expected in the luxury range. Luxury listings are taking, on average, a little under half-a-year to sell, but the average days spent on market has actually dropped slightly from 2018, at 169 compared to 177. Meanwhile, the average cost per square foot on these properties is up to $362.31, a 12.9% jump from Q2 of 2018.

Whatever may be happening in the rest of the market, Bend remains a desirable location for luxury real estate. At the same time, the sale price for these homes has dropped from 95% of list price to 89%. Listing agents, it seems, have gotten a bit overambitious with their asking prices. Still, prices for the luxury end of Bend’s market continue to appreciate faster than any other segment.

Second Quarter 2019 Bend Market Report for Premium-Plus Homes ($800k-1 million)

Compared to the second quarter of 2018, sales were down slightly through the spring of 2019 while listings remained nearly identical.

43 sales in Q2 of 2019 compared to 51 a year earlier isn’t a huge drop. At the same time, this corresponds to an 8.9% increase in days on the market and a 3% drop in sale price versus listing price compared to Q2 of 2018. Overall inventory is also up significantly in the $800k-1 million range, at 6.7 months compared to 5.7 in the spring of 2018.

The premium-plus price point represents a very particular segment of the market. In the luxury range, money is no longer such an object, and the quality of homes hitting the market continues to increase. $800k-1 million, however, doesn’t get one what it used to in Bend.

We see evidence that buyers are instead opting for new or recent construction at the more common $600-800k price point. As a result, buyers at this price point can expect a bit of extra leverage compared to other segments of the market.

Second Quarter 2019 Bend Market Report for Premium Homes ($600-800k)

The data from Q2 of 2019 shows both seller and buyer activity increasing in this segment of Bend’s real estate market more than any other. 183 homes in the $600-800k range hit Bend’s market during April, May and June of 2019, compared to 149 a year earlier. Meanwhile, sales increased from 106 to 128 in that same span.

This represents a slight increase in inventory, from 3.6 months in Q2 of 2018 to 3.8 in Q2 of 2019. By and large though, buyers are biting on the properties that are hitting that market at this price point. Meanwhile, homes are selling for an average of 98% of list price compared to 97% a year ago, the only place in Bend’s market where we’re seeing that kind of increase.

While even $600k is still well above Bend’s median sale price, the mainstream of Bend’s buyer activity is quickly inching toward this price point. Bend’s market for new construction is certainly following suit. In the Q2 of 2019, 45 new constructions hit the market in the $600-800k range, compared to 29 a year earlier.

Second Quarter 2019 Bend Market Report for Trade-Up Homes ($450-600k)

Not surprisingly, this segment of Bend’s market saw the greatest increase in buyer activity proportionate to seller activity. Throughout the second quarter of 2019 there were 171 listings and 200 sales in the $450-600k range, compared to 152 listings and 173 sales a year earlier. Inventory has dropped at this price point from 2.6 to 2.2 months during that same period, a greater decrease than any other segment  of Bend’s market.

It’s simply becoming more and more difficult to find anything at all for less than $450k within Bend’s city limits, and $600k-plus certainly remains out of reach for most of Bend’s residents. While the $450-600k range still represents a significant portion of Bend’s new construction, we see the market steadily shift toward the $600k-plus tier.

Profit margins are simply higher on more premium construction, and as long as the market can absorb it, Bend’s market should continue to move in that direction. That’s bad news, of course, for Bend residents with average or even above-average incomes. Meanwhile, at the lower end of Bend’s market…

Second Quarter 2019 Bend Market Report for Starter Homes ($300- 450k and less than $300k)

Homes in the $300-450k range make up the largest portion of Bend’s inventory, with 478 listings and 323 sales through the second quarter of 2019. That’s a significant drop, though, from Q2 of 2018, which had 495 listings and 396 sales.

Inventory in the $300-450k range is an exceptionally low 1.6 months, compared to 1.8 months in Q2 of 2018. Some of that inventory consists of properties requiring significant work that, by nature, spend longer on the market before finding a willing buyer. Average days on the market increased from 71 at this price point in Q2 of 2018 to 106 in Q2 of 2019.

The picture is in the sub-$300k range is fairly bleak for would-be buyers. Q2 of 2018 saw 19 listings and 38 sales, while in Q2 of 2019 those numbers have decreased to 11 listings and 22 sales. Inventory remains lower than low, at 1.2 months through Q2 of both 2018 and 2019.

What Does the Rest of 2019 Have in Store for Bend’s Market?

Sometimes the numbers call for bold predictions, and sometimes they call for more of a holding pattern. For better or for worse, our second-quarter numbers point more toward the later.

Supply continues to shift toward the upper-middle echelons of Bend’s market, and at least for the foreseeable future, buyer activity is shifting right along with it.

It’s been more-or-less exactly the same story since just a few years after the crash of 2008. Each year, people have wondered when enough will be enough and buyers will no longer pay the prices that sellers (and their agents) are asking for their homes.

But that simply hasn’t happened yet. True, Bend’s market isn’t tightening at the same pace that it was several years ago. Nonetheless, the upward trajectory is still the same.

Inventory is sitting on the market longer, but willing buyers from out-of-area are continuing to find their way to properties. Continuing into 2019, sellers will need to be patient and be prepared to sell at slightly under list price.

That’s particularly true of homes that are in subdivisions where there’s competition from new construction. All the same, Bend is still a seller’s market. A good agent can help you find the sweet spot between asking for too much and giving too much ground to buyers seeking to extract leverage from a mostly-unfounded climate of uncertainty about the market.

1st Quarter 2019 Bend Real Estate Market Report

Heading into 2019, we forecasted continued low inventory and steadily rising prices at most price points for Bend and Eugene’ real estate markets. But now that we’re through the first quarter of 2019, what do things look like on the ground for both of these markets?

Several of our clients have recently said something to the effect of, “Well, I’ve heard the market has kind of slowed down a little bit.” There does seem to be the feeling in the air that cracks are appearing in the economy and home prices are bound to fall from the historical highs they reached in 2018. Beyond the mere feeling level though, what’s the reality for Bend and Eugene’s markets?

In Bend, first-quarter sales do at first glance look sluggish compared to the beginning of 2018. According to the Central Oregon Association of Realtors, sales are down 16.9% in 2019. But there are also less properties entering the market–16.4% fewer than in Q1 of 2018.

Notably, the average days on the market for Q1 of 2019 is nearly identical to that of a year ago. The average price per square foot is up 5.6%, a bit lower than the increase from 2017-18 but still indicative of a healthy market. In other words, it isn’t actually any harder to sell a home in Bend than it was a year ago, nor is it easier to purchase one. There’s just less market activity in general.

We believe that this drop in market activity reflects an environment of uncertainty around the economy. Compared to last year, sellers have been somewhat hesitant to put their homes on the market, while buyers have been hesitant to make a financial commitment.

The end of 2018 saw a significant spike in the federal interest rate, from 2.2% to 2.4%. But on March 20 of 2019, the Federal Reserve announced plans to halt rate hikes for the foreseeable future. That’s good news for anyone seeking to obtain financing for a home in 2019, and we expect a corresponding increase in buyer activity.

If you’re looking for a home at the lower end of the market–which in Bend really means anything under $400,000–the picture is not so rosy. In Q1 of 2019, listings of such homes are down 40% from a year ago, while sales are down just 31.8%. People seeking affordable housing are still being driven out of Bend, lowering the number of buyers at this price point. However, the demand continues to outstrip the supply.

Buyer activity in the $400,000-650,000 range also remains robust compared to seller activity. Sales are down only 5.9% compared to Q1 2018, but listings are down 12.9%. That means buyers in both the lower and middle end of Bend’s market have less inventory to choose from and more competition than they did a year ago.

Unsurprisingly, the premium end of Bend’s market is where we really start to see signs of a slowdown. In Q1 of 2019, listings of $650,000-plus homes are up 1.9% from a year earlier, while sales are down 26.8%.

We expect the numbers to plateau and remain similar throughout 2019. That means more leverage for buyers and more inventory to choose from. We’ll be watching for signs of a downturn as opposed to just a cooling-off as we go further into the year. But premium-end buyers shouldn’t hold their breath waiting for prices to drop.

Meanwhile, the data for Quarter 1 of 2019 shows that buyers and sellers on the lower and middle rungs of Bend’s market should expect neither lower prices nor more inventory to choose from.

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