The housing market continued its uneven recovery in 2013 and will enter 2014 closer to normal than it was a year earlier. Consumer optimism is climbing back: in Trulia’s latest survey, 74 percent of Americans said that homeownership was part of achieving their personal American Dream – the highest level since January 2010.
Even among young adults (18-34 year olds), many of whom struggled through the recession and are still living with their parents, 73 percent said homeownership was part of achieving their personal American Dream, up from 65 percent in August 2011.
Rising prices over the past two years have been great news for homeowners, especially for those who had been underwater, and the real estate industry has benefited from both higher prices and more sales volume. At the same time, the effects of the recession and housing bust still sting: the barriers to homeownership remain high, and a few markets – mostly in Florida – still have a foreclosure overhang.
Plus, the housing recovery itself brings its own challenges including declining affordability and localized bubble worries, especially in southern California. source: http://pro.truliablog.com
What should you expect for next year’s housing market? Take a look at how the Central Oregon 2014 housing market will be different from 2013.Housing affordability worsens with increasing prices. Take a look at the Westside and you will see prices escalating at rates even those of us in the business are shocked by.
Tiny 1920’s built homes are commanding and getting prices in the high $200.000s and if the floors are not slanted, the foundation intact, the plumbing and electrical systems functional, they are selling for $300,000 plus. These are very old 800-1,200 square foot homes commanding $250-275 per square foot. Fortunately not all of Bend has gone crazy but the price of a single family residence in Bend went up 19.7 percent in 2013. It was $141 per square foot in December 2012 increasing to $169 in December 2013.
The highest month was September at $171 per square foot. Redmond has also been moving up but not quite as hard and fast. Redmond price per square foot is up 11 percent over last year with the average price per square foot increasing from $101 to $112. The highest month was October at $130 per square foot. Fortunately there is a lot of new construction going on to balance demand and supply.
NorthWest Crossing sold the most homes of any subdivision in Bend due to the new construction and demand for Westside properties. New construction has gone up 197 percent in Redmond and 107 percent in Bend over 2013. That is a trend that will continue.
Investors change their buying strategies. A few years ago we had investors buying single family residences right and left. It was difficult to get our first time buyers homes when they had to compete with all cash offers. With the current price points the ROI, even with all time high rents, don’t pencil for most and many are going into multi-unit properties.
Rental Action Swings Back Toward Apartments. This country has an all time low rental vacancy of less than 2 percent. Bend is no different. Property managers are experiencing bidding wars for prime rental homes. The demand for quality apartments will increase. Most of our 20-30 year olds, including the expanding population of students cannot afford $1,200-1,800 a month rent for a house.
Out of area buyers continue to drive the economy and drive up real estate prices.The average sale price of a home in Bend went up last year from $271,000 to $341,000, that’s an increase of 26 percent. In the same time period the average sales price in Redmond went up 33 percent, from $156,000 to $208,000. The challenge will be supplying affordable housing for all of our community.
Have you ever visited Aspen or Jackson Hole? Both are resort communities where the people who work there don’t live there. They can’t afford it. These are the people who serve the community; the teachers, police, firemen, and those in the hospitality industries. They drive long distances for affordable housing. That scenario creates instability in the job force and the local economy. The vibrancy of our town, the very reason people move here, will diminish without our younger generations and their kids participating and living in our community.
The trends I share here come from Trulia, the Central Oregon MLS and my experience as a real estate broker here in Central Oregon. I have no crystal ball. I get questioned daily on what the future holds in terms of home values and interest rates. My response is always, “Buy what you love within your current means. Live your dreams.”
Live Love Bend! Elizabeth Ueland
Real Estate Broker
Bend Premier Real Estate