The Beacon Report – April 2021.
I appreciate the feedback with regard to the Beacon Report and I am happy to provide this service to our community. I apologize for the delay in posting the report as I try to have it ready by the 6th day of the month. However, it has been busy in our office over the past few months, so thank you for your patience and support.
March shows a low Single Family Residential (SFR) inventory level in all Central Oregon market areas. The quarterly figures for the smaller market areas are included in this report. Thanks to the assistance of the City of Bend Planning Department, I was able to retrieve and report the past several months of new Detached SFR building permits in Bend.
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. 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.
Today the average rate for a 30-year fixed mortgage declined to about 3.13% (from 3.18% on 4/1/2021) after trending upwards since Feb 11, 2021, when it was 2.73%.
The migration of buyers entering the Central Oregon SFR market appears to be steady. 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. 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.
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.
Have a wonderful spring.
The link to the recent report is below.
The Beacon Report is compiled each month by Donnie Montagner (State Certified Residential Appraiser) of Beacon Appraisal Group LLC with information obtained from the MLS of Central Oregon with permission from the Central Oregon Association of Realtors®.