Housing Market and More, Bend
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Central Oregon News Digest
Compiled by Harcourts The Garner Group Real Estate
Bend year-to-date housing statistics move solidly into positive territory; inventory remains low.
The Bend housing market is gathering momentum as the year moves into its third month with year-to-date figures as of March 5 comfortably above 2014 in all categories other than active listings. The number of residential sales in the period was nearly 7% above the comparable 2014 mark, a welcome reversal of fortune after several months of lackluster performance. New construction sales in the first two months of 2015 were 13% ahead of the same period in 2014. New construction sales represented 24.3% of the total number.
It comes as no surprise that sale prices continued to keep comparable 2014 figures at arm’s length. Average sale price for the year-to-date period outpaced last year by 21%.
Active residential listings trailed 2014 by 10%, illustrating a continued inventory shortage that limits buyer choices and depresses sales activity. The absorption rate (months required to sell out inventory at the current sales pace) calculates to 2.8 months of inventory, down slightly from 3 months a year ago.
Bend area residential 2015 2014 Gain (loss)
(Year to date, except as noted)
Active residential listings 3/5/15 438 489 (10.4%)
Number of residential sales 251 235 6.8%
New construction sales 61 54 13.0%
Average sale price $378,766 $313,042 21.0%
Average price per sq. ft. $187 $163 14.7%
NorthWest Crossing 2015 2014 Gain (loss)
(Year to date, except as noted)
Active residential listings 3/5/15 31 15 106.7%
Number of residential sales 7 9 (22.2%)
New construction sales 2 4 (50.0%)
Average sale price $625,714 $483,421 29.4%
Average price per sq. ft. $270 $237 13.9%
NorthWest Crossing year-to-date figures are beginning to become statistically relevant as the year progresses. As this report has pointed out in the past, the small number of homes relative to Bend as a whole causes movement in any category to create a large percentage swing. This is mitigated as the year moves along and more data are accumulated. The average sale price in the planned neighborhood year-to-date is nearly 30% above last year and 65% higher than Bend as a whole.
Get ready for another surge of new homes–new construction accounted for 22 of 31 total listings for sale in NorthWest Crossing when these statistics were compiled March 5. Activity is centered in the panhandle near Skyliners Rd. and the Discovery Park area west of Mt. Washington Dr.
Calculations 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.
February retreat leaves prices well ahead of 2014
Selling prices for Bend homes settled back in February after a spike the month before. Monthly readings fluctuated over the past year, with the median sale price in February 2015 a comfortable 17.2% above February 2014. Our rolling 12-month survey in this issue began in February 2014 with a median of $274,000 and registered a median of $321,000 this February. The high point was $338,000 in January, followed by $334,000 last August.
The NorthWest Crossing median sale price in February settled back to $588,000, a healthy gain of 14.4% over February 2014.
Charting the number of homes sold in Bend offers promise that the erratic fall in monthly numbers since last summer may be arrested by unseasonably mild weather and the promise of spring. The comparison with January was nearly flat.
Charts presenting monthly levels for the past year are derived from Central Oregon MLS data and may be viewed on Pages 5 and 6 of this newsletter. Figures represent sales of detached single-family homes on less than one acre in the greater Bend area.
Price increase rate 10th in nation
Deschutes County home prices in the fourth quarter of 2014 registered an 11.25% increase over the same period in 2013. This placed the Bend-Redmond Metropolitan Statistical Area in tenth spot among MSAs in the nation in terms of year-over-year price appreciation, according to the Federal Housing Finance Agency. Bend area home prices increased 28.51% over the past five years. Merced, Calif., topped the list with an appreciation rate of 14.84% on the agency’s House Price Index.
Despite monthly dip, national figures exceed 2014
On the national scene, housing numbers in January were solidly in positive territory compared with the same month a year ago. Month-to-month performance in some categories was inhibited by the severe winter weather experienced throughout the Midwest and East Coast.
Pending home sales in January were pushed to their highest level since August 2013, according to the National Assn. of Realtors. “Contract activity is convincingly up compared to a year ago despite comparable inventory levels,” observed NAR chief economist Lawrence Yun.
Single-family housing starts were 16% above January 2014 despite a dip of 6.7% from December. “After a strong single-family report in December, it is not surprising to see some pull back in January,” commented David Crowe, National Assn. of Home Builders chief economist. “With continued job creation and a growing economy, single-family production should make gains in the year ahead,” he said. Single-family building permits in January were nearly 6% ahead of the same month a year ago.
New single-family home sales in January were virtually the same as December and 5% ahead of January 2014. “The fact that January sales numbers maintained the gains we made in December is encouraging news, especially considering harsh weather affecting certain parts of the country,” said NAHB chairman Tom Woods. Crowe said to expect continued upward movement in the housing market this year. Sales in January exceeded December in the $150,000-$300,000 and $400,000-$750,000 ranges. As first-time buyers enter the market, sales growth should occur in the lower price ranges, according to NAHB.
1/15 vs 1/14
Jan 2015 Gain (Loss)
All types 1,065,000 18.7%%
Single family 678,000 16.3%
All types 1,053,000 8.1%
Single family 654,000 5.8%
All types 930,000 9.4%
Single family649,000 6.6%
New home sales
Single family 481,000 5.3%
Existing home sales
All types 4,820,000 3.2%
Single family 4,270,000 3.9%
Median sale price
Existing homes, all types $199,600 6.2%
Existing homes, single family $199,800 6.3%
New homes, single family $294,300 9.1%
Existing home inventory (1/31) 1,870,000 (0.5%)
New home inventory (1/31) 218,000 15.3%
Pending home sales index 104.2 8.4%
Sales of existing single-family homes in January were 4% above the same month a year ago despite numbers that were down from December. “January housing data can be volatile because of seasonal influences but low housing supply and the ongoing rise in home prices above the pace of inflation appeared to slow sales despite interest rates remaining near historic lows,” Yun commented.
Median sale prices for new and existing homes were roughly 9% and 6%, respectively, above January 2014 levels.
portfolio of 12 properties in the United States and Canada.
buys forest land
Whitefish Cascade Forest Resources, a Singapore-based company registered in Oregon, has purchased 197,000 acres of forest land in Deschutes and Klamath counties from Fidelity National Financial Ventures. FNFV received a cash distribution of approximately $63 million that covered assets of its portfolio company, Cascade Timberlands LLC, which was formed as a holding company in 2004 by creditors of the bankrupt forest products company Crown Pacific Partners LP. Property includes the former Bull Springs Tree Farm, 33,000 acres west of Bend that the Deschutes Land Trust is attempting without success to acquire and preserve as the Skyline Forest.
Alaska adds flights
Alaska Airlines will add two daily flights from Roberts Field in Redmond, one to Portland and one to Seattle. This increases the carrier’s schedule to four daily flights to Seattle and five to Portland. The new flights will begin June 7.
Madras project begins
The Oregon Department of Transportation has embarked on a $4.5 million project to realign northbound lanes of U.S. Highway 97 at the south end of the one-way couplet in Madras. The first of two phases should be complete by October. The project will alleviate an awkward situation for cross traffic.
Central Oregon News Digest
The table below shows national housing figures for January 2015 compared with the previous January. Figures originate with the U.S. Census Bureau, National Assn. of Home Builders and National Assn. of Realtors. Starts, permits and sales are seasonally-adjusted annual rates.
Industrial, office vacancies tighten
Vacancy rates for commercial properties in Bend continued to shrink in the fourth quarter of 2014, reflecting a general improvement in the economy. “Buyers and tenants no longer hold all of the cards, as landlords and sellers now have equal or greater leverage in negotiations,” wrote principal broker Erich Schultz in the latest edition of Compass Points, issued quarterly by Compass Commercial Real Estate Services. Schultz is vice president of finance and a founding partner of the company.
Rents in Bend industrial and office markets have not increased at a rate commensurate with rising land and construction costs, Schultz noted. “In addition, the supply of land in Bend remains constricted as a wearisome seven-year effort to expand the Urban Growth Boundary continues.”
Commercial Property Vacancy Rates
4th qtr 2014 3rd qtr 2014 4th qtr 2013
Bend office market 10.5% 11.3% 16.0%
Bend retail market 6.7% 8.3% 8.6%
Bend industrial market 6.7% 8.0% 12.3%
Redmond industrial market 10.5% 16.0% 18.2%
Reduced vacancies coupled with a lack of significant new construction will keep applying upward pressure to rents in 2015. “Price conscious industrial space users may have to give Redmond or Prineville serious consideration,” he wrote.
Figures in the accompanying table compare vacancy rates in the four sectors tracked by Compass Points. Rates in three of the four markets dropped by over five percentage points, with Bend retail bringing up the rear. Details at www.compasscommercial.com.
Job picture brightens in Central Oregon
Central Oregon finished 2014 with a strong increase in employment, according to the latest report from the Oregon Employment Dept. Deschutes County registered a seasonally-adjusted unemployment rate of 7.1% in January compared with 7.6% in December and 8.5% in January 2014.
Deschutes is adding jobs faster than initial estimates indicated. Non-farm employment added 4,550 jobs, or 7%, over the past year. A predicted loss of 1,640 jobs in January failed to materialize; jobs were down by 600. This was due largely to normal seasonal declines in retail trade and leisure and hospitality. An increase in construction jobs attributed to unseasonably warm weather helped take up the slack “The county only needs to add about 420 jobs on a seasonally-adjusted basis to match the peak employment month prior to the recession,” wrote regional economist Damon Runberg.
The Crook County unemployment rate in January was down less than a percentage point from December and January 2014. Jefferson County’s unemployment rate of 8.7% in January was down from 9.2% in December and 9.8% in January a year ago. Crook added 80 jobs in the past year, up 1.5%. Jefferson added 190 jobs, up 3.3%.
Charts on this page and the next provide an overview of sales and price trends in the Bend real estate market. Figures are derived from statistics compiled by Central Oregon MLS. Bend figures represent single-family homes on less than one acre in the Bend area, extending from Tumalo to Alfalfa. NWX is the abbreviation for NorthWest Crossing.
Experienced real estate agents at Harcourts The Garner Group can help buyers and sellers interpret home values and market trends. Their knowledge of local real estate markets and market niches provides clients with the insight needed to make informed decisions.
These charts may also be viewed on our web site, www.thegarnergroup.harcourtsusa.com, click Market Watch on the navigation bar.