While a new year typically signals new beginnings, fresh starts and endless opportunity, for those of us in the real estate industry, we choose to look back and see what history might say about the year ahead. And while no crystal ball exists, I find it helpful to review numbers from the past 4 quarters and year-end data compared to the previous year, and to look at economic trends to plan for 2019.
Overall, 2018 was a good year for the Bend real estate market. Sales of single-family homes increased by 7% over 2017, with a median sales price of $427,000, but was lower than the 10.8% gain made between 2016 and 2017*. This slowdown has led many industry experts to describe the current market as one that is “decelerating.” Home prices aren’t falling, they just aren’t increasing as quickly as in years since the post-recession recovery began. It also has been described as a “stabilizing” market, and this is not necessarily a bad thing.
While economists project a slowing real estate market in 2019 and into 2020, there are reasons for optimism. Bend continues to attract an influx of buyers from major metropolitan areas, predominantly from those on the west coast, with growth projections estimating 5,000 people moving to Central Oregon annually over the next several years. Current inventory of single- family homes in Bend is slightly under a 2-month supply.*
Cash buyers may find there is a silver lining in a slowing real estate market. Purchasing as the market stabilizes, rather than chasing an accelerating market, will provide opportunities for the savvy investor. Real estate may also be a refuge or a way to diversify funds for some if stock market volatility and losses persist.
It is no surprise that the growing clouds on the horizon come in the form of rising interest rates. Assuming the Federal Reserve moves forward with their promise of regular rate hikes in 2019, we know housing affordability will decline as a result. Many first-home buyers will be priced out of the market or delay their decision to buy. Homeowners who might otherwise be interested in making a move will weigh whether selling a property financed with historic-low interest rates makes sense. If they elect to sit tight and demand for housing exceeds inventory, it will put pressure on the market and drive prices higher.
Due to the high cost of land and construction, Bend has been grappling with the housing affordability issue for several years. Fortunately, new multi-family units for rent are a good option for those who want to live in Bend but cannot afford to purchase, or who are not yet ready to buy. Options include the recently completed Range Apartments in NorthWest Crossing, and Outlook at Pilot Butte apartments on the east side. Apartments under construction or soon to be built include a 200-unit apartment complex on the former Ray’s Food Place site and units in Century Washington, both of which are convenient to the OSU-Cascades campus.
While a slowdown of the Bend real estate market is anticipated, there is no indication that a seismic shift or a Great Recession-style “cliff” is forming. People will continue to move to Bend for its beauty, world-class outdoor amenities, and as a lifestyle choice—which provides opportunity for both buyers and sellers in 2019.
*Data provided by Beacon Appraisal Group LLC. Search parameters used for Single Family Residential (SFR) data in Bend includes homes on up to 1 acre.
About the Author:
Attracted by the region’s beauty and lifestyle, Linda followed family members migrating to the area from California and moved to Bend in 1993. In 2005 she joined the sales team at Brooks Resources Realty, a subsidiary of Brooks Resources Corporation, and became principal broker in 2009.
Linda works in all areas of residential real estate and has specialized in representing Brooks Resources in homesite sales in The Tree Farm and North Rim communities. Linda is a licensed real estate broker in the State of Oregon.