Can Bend break the boom-bust cycle?
The High Desert housing bubble of 2006 is still fresh in everyone’s mind — and as demand and prices soar again, the question on many minds is: Here we go again?
“We saw the bottom in 2010 in Redmond, where they had in average 200 permits, 300 permits, to zero,” said Andy High, vice president of the Central Oregon Builders Association.
Layoffs followed, and the housing bubble quickly burst into a full-blown recession. Now, eight years later, Central Oregon’s real estate market says it’s back.
“Looking at the charts and at the numbers, we’re absolutely on the road to recovery,” said Wendy Adkisson, principal broker at Cascade Sotheby’s International.
The numbers speak for themselves. While real estate sales dropped significantly in 2006, they’re making their way back up to almost pre-recession numbers.
It’s happening so fast, experts are concerned another bust could follow this boom.
The rise is “probably a little faster than we expected, so there’s good and bad with that,” Adkisson said.
“We saw substantial increases, which there was some concerns over inflated values,” said Donnie Montagner, appraiser at Bratton Appraisal Group. “But keep in mind that we’re coming out of a time where we were over-corrected in the market place.”
Construction demand is up again, too, which means people start hiring again. While companies are optimistic, they remain cautious.
“The association, our members, are definitely seeing some bounce back,” said High. “I think a lot of them are cautious in their hiring. They’re trying to figure out where the market is going to go and what it’s going to do.”
The biggest concern now is how to keep the boom going. Prices and interest rates are up and experts are worried if they might be rising too much, too fast.
The median sales price for a one acre residential unit in Bend increased by $30,000 just from last year. Price jumps like that is exactly what could slow the recovery down.
“We don’t want to become a boom-and-bust community. We want to see some nice gradual, natural appreciation,” Adkisson said.
