A look back at the 30% appreciation insanity of Bend real estate 2013, and a heartfelt wish for a nice, easy, happy 15% year in 2014
There is a day on my Bend real estate specific calendar I circle each year. January 15th. Each year I wonder, will this year be the same in my mercurial business? Will there be a deluge of new clients, requests, queries as of this date, like there was last year?
This year the answer is once again, yes. And so, since I was so ridiculously busy last year to the point of no longer taking new clients as of October, I thought it wise to write a new blog, as it may be a while before I can do so again (witness, last year’s blog activity!).
2013 was . . . crazy. After a couple of very healthy years (2011 and 2012) that saw Bend real estate prices climb way up from the bottom, we were hit with the “big turn”, when people all over the rest of the Country were finally able to sell their own homes and make the move to Bend. Prices rose ridiculously from January through July, when, thank goodness, they reached a point of stability which they have mostly held since. When this ramp flattened out we found prices about 30% higher than they were a year before. Whew!
I too was caught up in this fury, as I had to sell my last Bend home due to divorce, made a tidy 50% profit in 2 years, and bought again very close by in an adjacent neighborhood filled with ponderosas, rolling streets, and large, private lots. I made several offers, was beaten out by higher offers several times, until I happened upon a home in the neighborhood I wanted, and I bought it the first day on the market at full price, so the seller could not possibly wiggle out and take a better offer! It was nuts, and gave me real insight into the emotional roller coaster my clients were experiencing in the Bend real estate market.
If I could have, I would have waited until later in the year, when things did level out, Bend homes could be bought without a fight, and there were more of them to be had. This is where we find ourselves now, for the moment. I have always counseled my clients to buy OUTSIDE of the main buying season of March through October IF they could, and especially outside the May through August period if possible, the silly season. But sometimes, as with my situation, the stars align in only one way and you have to do what you have to do.
I do not expect 2014 to be quite as bad. Dear God, I hope it is not. We are already up to an average sales price of about $360k, not all that far from the peak we reached in 2006 of $435k. At that time, many families and young people were totally shut out of our market. I do not wish to see that happen again. I have already seen many more requests for Redmond showings from buyers around $200-$250k, as they can get more there and there is very little in Bend real estate at $200,000. This gives me a bit of deja vu, as that is what happened in 2004-2005. Then, as Redmond got too high, Prineville and LaPine were the next to rotate up, and that is when the crash hit- those two places are still far from recovered.
What I do truly expect, after the 30% run up last year, is half that, about 15%. In the 90’s and early 2000’s, 15% was about what we got each year, and while that may seem high in most cities, for our area that is “normal”. I think we can look forward to several years of 10-15% property appreciation gains in Bend. Redmond has started to rise quickly. And, there are a couple of corners of the Bend area real estate market, especially the area near Sunriver called “There Rivers South”, and some rural areas, which are just starting to rise and represent good opportunities.
Good things to note- yes, prices have been flat since July. Inventory is, though just slightly, up from the low levels we went into 2013 with. Price per foot has held steady levels since July as well. And many, many homes continue to be built here as they were last year, though they are often sold well before completion. Rates are a little higher and should go higher later in 2014. The rental market has gone bananas as many people can not afford to buy and are renting instead. These are the “release valves” for the Bend real estate pressure cooker we have been living in.
There are caveats, of course. Rising rates have really not even begun to start rising. I do expect we will see rates between 5 and 6% by the end of the year, still historically very low. And the biggest wild card I see is the selling situation across the Country. How many folks will decide THIS is the year to move out of the big city and raise their kids in a nicer place, since they can NOW sell their own home and get good value here? I am nervous, based on last year, that this number is higher than I anticipate. My buyers who have bought recently from places like Tennessee, Florida, California, Hawaii, Massachusetts, Pennsylvania, D.C., and so on all tell me that when they tell people back home that they are moving to Bend, they are surprised their former neighbors already know about us and say things like “oh yeah? I have wondered about Bend, let me know how it is!”.
People know about Bend now, even East of the Rockies where we were a total unknown until a few years ago. That scares me a bit, and as the demographics of my clientele has gone from Pacific Coasters in 2007 to “everybody from everywhere” in 2014, especially from East of the Mississippi, I wonder if I have that 15% wrong, and that we are about to get hit with yet another tidal wave that pushes us inexorable up to the lofty price levels of places like Tahoe and Aspen over the next ten years. Make no mistake, our recreational opportunities (much more vast and varied than either of those), clean air, a moderate climate, a new four year college, and abundant water, lack of private property in a County 97% owned by the government, not to mention larger city amenities, will eventually push us there. Those places were unknown and relatively cheap once too, but once the jet set and the World became aware, as they have here . . .
But I hope it’s 20 years, and not 10. Let’s have a nice, smooth, easy 15% year, shall we?