High demand, low supply equals tight inventory; records fall in most markets
REMOND, Ore. (KTVZ) – Tight supplies of new homes amid strong demand are common these days in many areas of the country, and on the High Desert, they keep sending home sales prices into uncharted territory.
Thursday’s report from Beacon Appraisal Group shows the median home sales price in Bend rose $15,000, or 2.6% in March, to a record $590,000 -- fairly typical of late.
But that’s relatively small, percentage-wise, compared to Redmond, where the median price jumped $39,000 – that’s 10.4% -- in a single month, to a record $412,000, according to the report, which you can view in full here.
Sisters also saw a record home sales median price in the first quarter of the year, rising $20,000 to $479,000, as did Sunriver, where the median price jumped a whopping $59,000 (8.1%) and hit $784,000, but La Pine home prices held steady, at $315,000.
Meanwhile, the median sales price in Jefferson County-Crooked River Ranch rose by just $2,000, to $277,000 -- still a record -- while Crook County's jumped $41,000 in the first quarter, to a record $372,000.
"March shows a low SFR (single-family residential) inventory level in all Central Oregon market areas," appraiser Donnie Montagner wrote.
"Historically, the SFR market in Central Oregon experiences a slowing of demand in the winter season and the market begins to awaken as spring approaches," he said. "This year, nothing seems to be following historical trends. Well… actually the past several years have not. The market experienced a very short slow season this winter, but it was difficult to observe by the inventory levels alone."
The average rate for a 30-year fixed mortgage dropped Thursday to 3.13%, from 3.18% last Thursday, ending an upward trend since Feb. 11, when it was 2.73%, he said.
"The migration of buyers entering the Central Oregon SFR market appears to be steady," Montagner wrote. "The median days on market for a reasonably priced property is less than one week.
"Strong competition between buyers is favorable to sellers, but creates difficulty for Realtors and appraisers. I can only imagine how difficult it is for Realtors pricing properties in the current market.
"Appraising properties in transition periods (recent rapid changes in sales price trends) is as difficult as conducting valuations with very few comparable sales," Montagner explained.
"Sales of comparable properties do not always reflect the market's reaction in real time when, as in this season, there are multiple offers (good market responses) and offers that exceed the asking prices and/or are beyond what comparable properties are selling for.
"From 2000-2005, there was an outward migration that occurred due to rising prices in Bend. This migration sparked the development of new subdivisions in La Pine, Sisters, Prineville, Culver and Madras. Migration back into the Bend market began after the recession, as prices had fallen significantly.
"Another migration is taking place, as Redmond is experiencing significant growth, from what I believe as an alternative to the Bend SFR market. I suspect communities like Terrebonne and the other Central Oregon market areas will see an increase in buyers this year.
"Unlike the prior growth from 2004-2007, this market is tempered with tighter lending regulations," Montagner wrote. "I believe it is highly unlikely (aside from an economic catastrophe) that the Central Oregon SFR market will experience a deep recession, as experienced in 2009-2011."