The Shift Is On

The times have actually been changing for awhile; the market shift has been subtly happening for months.

We’ve seen a bit of a rise in available inventory–both nationally and locally (up to 1.3 months now!). Even a move slightly into buyer’s territory; though still a very long ways from an actual “buyers’ market.”

The big driver of the “shift” is, of course, the rapid rise in interest rates . . . pushing 6% as of last week; a far cry from the 3.1% in December. Some buyers have been knocked from the market . . . perhaps an indication that demand is leveling off.

May 2022

Despite the aforementioned cynicism and doom and gloom discourse (my wife tells me that I have indeed become a curmudgeon!), May was still a pretty fruitful month for the Bend real estate market. We saw the purchase of 217 homes (single family residential on less than an acre), with the high end continuing to lead the way. Amazingly, 54 of these sales (that’s 25%) were priced above one million dollars. A special thanks to the rich Californians who continue to come this way! Also of interest, 26% of our May transactions were cash deals!

In May, the median price in Bend dropped to $740,000 (down from $770,000 the previous month). Neighboring Redmond continued to fly high with its median price holding steady at a lofty $519,000.

Bargain Bend . . . $322,000

A rather unusual one! A two bedroom, one bath, 1100 square foot structure, fortuitously sited on an RM (meaning “mixed residential” and designed for development of duplexes, row houses , and townhomes) zoned lot and owned by the University of Oregon.

The marketing remarks were quite encouraging–“All structures need much attention or demolition. Be prepared to purchase as is for cash.” I guess somebody was! There were no interior photos posted in MLS.

The seller aimed pretty high. The property was originally listed at $400,000. But after 115 days, closed at $322,000 or $298 per square foot.

Bend’s Median . . . $740,000

As alluded to previously, Bend’s median price dropped a bit in May. I’m not really sure how significant this drop is. Whatever the case, the median priced home in Bend would have looked like this–a 3/2, 1502 square foot single level with a three car garage in Quail Pines Estates, an older neighborhood on Bend’s southwest side.

This one went pending in just 5 days at $20,000 below list (perhaps another sign of the changing times) at $493 per square foot.

The house featured a welcoming front porch and a recent remodel that included quartz countertops and new carpet throughout. the fenced backyard was low maintenance and contained a fancy Marquis hot tub.

Let’s leave Quail Pines and take a comparison look at median prices on the two sides of town:

East side   $647,000

West side   $1,000,000

Luxury Bend . . . $3,700,000

With breathtaking Cascade views (Mt. Bachelor to Mt. Jefferson), this 3/5, 4737 square foot beauty in North Rim went pending in just 9 days, albeit at nearly $300,000 below list.

The home was built for entertaining . . . an open professional kitchen, the ultimate wet bar, an indoor/outdoor room with retractable doors,

a blazing fireplace, a wonderful theater room, and a 9000 bottle wine cellar (maybe a slight exaggeration).

The home closed at $781 per square foot (oof!).

Looking Ahead

As always, a tough call. This pundit (and I use the term loosely) thinks we’ll continue to see interest rate hikes, a further effort to control runaway inflation. Those hikes will continue to eliminate more prospective buyers from the action. The hikes will also affect potential sellers . . . especially those with current mortgages of less than 4%.

In dealing with buyers, we hear all the time, “We’re at the top of the market; we’ll just wait for prices to drop.” Somehow, I think it’s going to be a long wait. While we certainly won’t see the runaway price escalation of the past couple of years, it’s likely that we’ll see a bit more modest rise (3-5%) on the menu for the year ahead.