How High Can Bend Oregon Real Estate Prices Go?
The demand for Bend single family homes has not dropped off and the data from May, 2018 shows that home prices continue to rise. Homes priced well are often experiencing multiple offers which drive the price up. While new homes are being built, they are also being sold quickly and the average days on market has dropped. The following shows the figures comparing Bend single family homes from May 2018 with May 2017:
- Average days on market down 3.9% to 98
- Number of homes for sale up 10.2% to 542
- Number of homes sold down 0.9% to 220
- Number of homes pended up 6.9% to 249
- Average price per square foot up 4.3% to $240
- Months of inventory based on closed sales up 13.5% to 2.5
- Average active price down 2.7% to $656,000
- Average sold price up 9.7% to $498,000*
This last figure is significant. The average sold price for a Bend single family home is almost at $500,000. The Bend City Council has discussed the need for more affordable housing in Bend for years, but the price for a single family home continues to rise roughly 10% per year since coming out of the great recession. Although new apartments, condominiums and townhome projects have helped some with the affordable housing needs, the demand for single family homes continues to be high and builders cannot build these homes fast enough or at a price that keeps them "affordable."
What Can be Done to Make Bend Real Estate More Affordable?
Basic economics notes supply and demand as a major driving force for prices. The more the demand and the less supply, the higher the price. The same is true in reverse - the lower the demand and the more the supply, the lower the price. The demand for Bend homes has exceeded the supply for many years. State wide planning guidelines have kept Bend from expanding its Urban Growth Boundary to the extent it originally requested (10,000 acres asked in 2005 but only 2380 acres were approved in 2015). This has made land prices soar. At the same time, the prices for lumber and other building commodities have escalated and contractors have had to raise their asking price on new homes to accommodate these higher building costs. The only true control the City of Bend has on home prices is what they charge for permits. These costs are over $20,000 per home. Reducing or waiving these costs may help some with affordable housing projects, but will not offset the rising costs connected with actually building a home.
* Data from Central Oregon Association of Realtors. Original blog can be seen at Bend Premier Real Estate's blog page