In the decade that David Gilmore has worked as a real estate broker in Bend, the city has gone from a large supply of underwater homes and short sales, to a time when just finding a house for sale is a struggle.
“I’ve never seen inventory this low. It was definitely a much different market a decade ago,” said Gilmore, a broker with Coldwell Banker Bain.
Home inventory in Bend is currently just three weeks, according to a report from Beacon Appraisal Group, which offers real property valuations in Central Oregon. That means all the currently available homes in Bend would be sold in three weeks if no new properties came on the market, given the current sales pace.
Typically, a six-month supply of homes is associated with moderate price appreciation. When the supply is less than six months, prices rise faster. When the supply is more than six months prices are flat or will decline.
The Beacon report shows inventory data back to 2015 — three weeks is the shortest time frame on the report.
Inventory in Bend typically fluctuates between a two to three months supply. The lack of inventory comes with a corresponding spike in prices. Median home values in Bend are $530,000, a historical high.
During the recession, “there was some optimism that the market would eventually rebound, but we’ve exceeded pre-recession highs with no end in sight to the upswing in prices,” said Gilmore.
The low inventory can add stress to the buying process, as buyers encounter multiple bids and few choices in their price range. Patience and flexibility are essential when home shopping in Bend, said Gilmore.
“I stay positive, but also paint a realistic picture of a market that is more favorable to sellers than buyers and educate them with current statistics and market data so that they are informed,” he said.
Homes are often selling for well above their asking price, said Stephanie Ruiz, a broker with Cascade Sotheby’s International Realty.
“I personally have been involved in multiple offer situations where there are 20 to 25 offers. We are seeing homes in the $450,000 range going for $550,000. It is pure insanity. I’ve never seen anything like this,” said Ruiz.
Interest in homeownership in Bend has soared in recent months as U.S. companies are increasingly allowing their employees to work remotely. That has made Bend an attractive destination for city dwellers looking to escape high rents and overcrowded freeways in Seattle, San Francisco, and other metro areas.
Bruce Hardie, owner of the Keller Williams real estate office in Bend, said the low inventory allows sellers to maximize the value they will get out of their house. For buyers, the low-interest rates allow people to afford more house.
“It allows people to buy into the market now,” he said.
A 30-year fixed-rate mortgage is 2.87%, according to lender Freddie Mac. That’s down from 4.65% two years ago.
One reason for the lack of listings, said Hardie, is a worry among prospective sellers that once a property is sold they won’t be able to buy back into the market, so sellers are instead choosing to upgrade their existing properties.
“The remodeling business has been booming,” said Hardie.
Bend is not the only place experiencing a housing boom. The median home price in the Western states rose 11.8% year-on-year, according to a report by the National Association of Realtors.
Gilmore said homebuying has come particularly late this year due to market disruptions in spring, when COVID-19 was new and caused uncertainty in the market.
“Shutdowns in March delayed our peak selling season for several months, and August and September are looking more like the spring selling season,” said Gilmore.
The increasing demand for homes is shortening the time they sit on the market. Homes sat for an average of just 10 days in August, compared to 64 days during the same month a year ago, and 73 days in August of 2018, according to the Beacon report, which includes only single-family residences.
“We have people coming to town to look and it’s hard to find things to show,” Jordan Grandlund, a broker with Cascade Sotheby’s. “I had clients come to town with 12 homes on their list to see. Five were already pending, and three had multiple offers on it already. It’s tough, but if you want a house then you need to jump on it as soon as it hits the market.”
The number of homes sold is also on the rise. In August, 296 homes were sold in Bend, compared to 252 in August of 2019, according to Beacon.
For folks waiting for a market price drop to buy a house, brokers say don’t hold your breath.
“I don’t see prices dropping too much or at all. We may not see the steady climb, but prices will hold pretty strong. Rent prices continue to go up, which holds the lower end prices,” said Mark Garcia of Cascade Sotheby’s.
Sales are white-hot even for homes still in the planning phase. Most of the homes under construction or even just in the permit stage are already pre-sold, said Gilmore. Much of the interest is from buyers in Portland or out-of-state.
“I think Bend remains a big draw for people leaving big cities,” said Gilmore. “With more opportunities for people to work remotely, that gives them a chance to live anywhere and Bend is a relative bargain.”