Prices Rise, Inventories Low in Bend, Oregon Real Estate

At the risk of sounding repetitive, we have more fairly good news to report for the Bend, Oregon real estate market. As we recently reported in our monthly eNewsletter, Bend home prices continue to rise as inventories stay low. You'll notice some trends in the chart below.

Prices continue to chart an upward trajectory. The average sale price for a home and the average price per square foot in the Bend area YTD are over 20% above the same period a year ago. The gain in NorthWest Crossing is slightly less but still comfortably within double digits. The average price in NorthWest Crossing YTD is 49.1% above the average for the Bend area as a whole.

New construction sales have increased by nearly 90% and represent 22.4% of all home sales in the Bend area. Rising land and material costs are applying upward pressure to new home prices. 

On a national level, data reveals a growth gap between new and existing homes, a byproduct of low inventory levels that are plaguing the industry from coast to coast. Single-family resales were up 9% over April 2012 while new single-family home sales charted a 29% increase. Single-family housing starts, building permits and new home sales also were up sharply over the rates recorded 12 months before.

This is all good news, but buyers may have a harder time finding completed homes with the low inventories as our builders try to keep up. Now's the time to start looking! 

More Good News! Bend, Oregon Real Estate Rocks

Bend, Oregon real estate is hot right now. We're excited to see the market shifting, which is creating some unique "problems" like low inventory. The classic laws of economics can be seen at work, as this low supply is driving up prices on residential real estate listings. New home construction is continuing to rise, helping to alleviate some of the inventory demands (new construction sales have increased by 65% over last year), but constraints remain.

Active residential listings at the beginning of May were 18% below the same point a year ago. Last month the gap was 8.5%. This is pushing the number of sales down in comparison with last year at this time. The current inventory calculation is three months.Average year-to-date sale prices in Bend are 27% above last year at this time, with the price per square foot up a similar amount. This calculation is similar to CoreLogic index figures for the Bend Metropolitan Statistical Area, released May 7, that show March prices up 3.3% from the previous month and 19.8% over March 2012.

The inventory pinch is not the only factor supporting higher prices. Building material costs are rising across the country. National Assn. of Home Builders chief economist David Crowe said prices of gypsum, softwood lumber and concrete are running above 90% of housing boom levels. This is causing home construction costs to rise faster than appraised values.

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Low Inventories & Strong Prices for Bend, Oregon Real Estate

Continuing on it's upward swing - along with the rest of the nation - the Bend, Oregon housing
market report is still positive. The only "negative"? Low inventories are making it hard for some buyers to find what they're looking for, thus affecting total number of transactions recorded. Yet, with the laws of supply and demand, this phenomenon is keeping prices strong.

Low inventories might not last, as builders are taking up the slack: new construction represented 27% of homes sold so far this year, nearly double last year at this time. According to a recent article in realtormag.com, construction job growth is marking recovery. "While commercial construction job growth is most impressive—a 3.1 percent seasonally-adjusted gain over year-ago figures and an addition of 15,500 jobs in the past 3 months—residential construction employment isn't lagging too far behind. The sector was up 0.6 percent over the last 3 months, reflecting the 3,300 jobs added over that time."


In the Bend, Oregon real estate market, sale prices remain strong. The average sale price in Bend year-to-date in 2013 was 18.7% above the same period in 2012. The average sale price in NorthWest Crossing was 5.7% above YTD 2012 and 39.5% higher than the Bend area. Active residential listings in a March 5 snapshot were 17.3% behind last year and represent 2.5 months of inventory. The national absorption rate is tracking downward at 4.2 months.

Calculations above and figures in the accompanying table are based on Central Oregon Multiple Listing Service data. They represent single-family detached homes on less than one acre in the greater Bend area extending from Tumalo to Alfalfa.

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