One year ago Cascade Business News reported in our annual special on real estate that following the dreadful fluctuations following the recent recession, the general consensus was that the local real estate market was witnessing an uptick in activity, with indications of both stabilization and positive future trends.
On the commercial front, following a period of relative stagnancy, several exponents were reporting increased volume in several areas within the last year.
Today’s report sounds very familiar, only slightly more optimistic with projections for real estate based on a generally favorable outlook for the economy.
A new U.S.-focused real estate forecast from the Urban Land Institute and Ernst & Young reflects renewed optimism for growth in real estate capital markets and commercial real estate fundamentals and even stronger expectations for housing than those made just six months ago.
At last month’s Bend Chamber forecast event industry experts told us that there was reason for cautious optimism regarding the region’s previously battered real estate market, with signs pointing to more sustainable levels of growth and a modest recovery.
Everyone who has been able to hold on to their residential and commercial properties during the previous challenging times is buoyed by the settling of housing values. They may not be where they once were, but they’re not declining. The new norm is holding steady.
However, a speaker at the Bend Chamber forum, Ralph W. Cole IV, CFA and Senior VP of Research for Ferguson Wellman Capitol Management, in taking a macro view on the current real estate investment landscape, offering that homes are finally appreciating with prices nationwide increasing in the range of five to 10 percent, and he predicted values rising an average of two to six percent annually over the next five-year period.
Last year Brian Fratzke, principal of Fratzke Commercial Real Estate, observed that we are experiencing a limitation in the available inventory as most lenders have worked through their distressed assets and many landlords that were underwater have faced the music and dealt with their non-performing asset.
He also pointed out that there is very little retail space for lease and for the first time since 2007 his firm was leasing more space to new businesses instead of just moving tenants around from space to space. High quality office space especially in the medical sector is in great demand.
This is clearly a much better climate than it was a few years ago; the challenge being a shortage of residential and industrial land rather than declining values and rising unemployment.
Bruce Kemp, CCIM, VP Brokerage, principal broker and partner with Compass Commercial, predicted this is a good time to buy industrial land in Bend and Redmond, industrial buildings in Bend, bare residential land, lots in Redmond and apartments.
Perhaps it’s time for a cautionary reminder that we once had dizzying price hikes in the mid 2000s, which saw Bend ranked as the country’s most overvalued housing market.
But the trend is an optimistic one for the local real estate market as long as growth occurs in a rational way alluding to a frantic desire to build quickly without a look to the future.
