Update on November home sales activity in the Bend, Oregon real estate market
The number of homes for sale in Bend is still reflecting gains made in the spring despite the seasonal decline. Inventory is currently sitting 18 percent above where it was at this time last year with 1,794 homes for sale. If we continue to hold those gains through in February we would have roughly 1,550 homes for sale at the usual low point of the year.
With a tight inventory of homes for sale, prices should remain close to current levels despite slowly rising mortgage interest rates. The average price per square foot for homes sold throughout all of Deschutes County has been essentially unchanged for the last three months at $155. However, if we just look at the average price per square foot in Bend, the story is slightly different.
It appears that home sellers in Bend had been a little more aggressive in pricing their homes than the rest of the county. Bend home prices fell 2.4 percent in November after climbing all the way to $168/sqft in October. The average price per square foot for homes sold in Bend last November was $131/sqft. That is a whopping 28.2 percent improvement year over year.
Can we expect to see those kinds of price gains again in 2014? Not likely, despite the apparent improvement we are seeing in the economy. While the economy, including the lowest unemployment numbers in five years, will likely encourage more people to consider buying a home, a rising mortgage rate may conversely discourage people. The most influential factor on home prices next year could be inventory.
The Bend real estate market could see a sharp rise in inventory from an influx of investor owned homes come spring 2014. Preferred Residential is already beginning to notice more investor owned homes on the market here in Bend. This February will mark three years since home prices bottomed out at $102/sqft. The investors we have talked to recently have a huge amount of equity because they bought so well but they are tired of carrying those homes and managing them on their own. Combining that with a desire to lock in profits could provide a big bump to inventory in 2014.
If you are investor getting tired of managing your properties and thinking that now is the time to lock in profits you may want to reconsider. The rental market in Bend is still incredibly strong and the expansion of OSU Cascades is likely to make it even stronger. Give us a call at (541) 610-8003 to discuss your situation and whether or not it makes sense to hire a property management company or sell your home and take the profits.
*Sales data courtesy of Central Oregon MLS