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)
In a normal real estate market, the $300-450k range would be trade-up territory, but that’s simply no longer the reality on the ground in Bend. Homes at this price point represent a minuscule portion of Bend’s inventory, with 11 listings and 22 sales through the second quarter of 2019. That’s a significant drop from Q2 of 2018, which had 19 listings and 38 sales.
Inventory in the $300-450k range is an exceptionally low 1.6 months, compared to 1.8 months in Q2 of 2018. Much 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. This is more indicative of the desirability of the few properties at this price point rather than a sign of decreasing demand.
The picture is similar in the sub-$300k range. 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.
If you’ve stayed with us this far, congratulations: you probably know more about the state of Bend’s market than you did when you started. None of these numbers mean much, however, if you don’t know how to apply them to your own unique real estate needs.
That’s what we’re here for, and we’d love to start a conversation. Just contact our Bend Office today, and we’ll get the ball rolling, even if you’re just wanting to look at your options.