COAR's Charitable Giving Committee has two options this year for local non-profits to apply for funds: MLSCO tour donations and/or an annual giving donation. If a non-profit is interested in applying for a donation from the Bend MLS Tour Group collection, the application is due April 15. If they are interested in an annual donation from COAR, the application is due September 15th. Non-profits are more then welcome to apply for both utilizing the same application form. Click here for the application and more information.

By Kim Gammond, COAR Communications and Public Affairs Director

On February 22, the Bend Chamber held their annual Real Estate Forecast Breakfast. This year, COAR partnered with the Chamber to bring National Association of REALTORS® (NAR) Vice President Dr. Paul Bishop and ECONorthwest Project Director Lorelei Juntunen to Central Oregon.

Dr. Bishop began the morning discussing national trends that closely align with what we are seeing in Central Oregon. Supply and affordability issues, rate increases and a strong desire for homeownership still dominate most markets. Overall sales will decrease with supply issues “putting a lid” on sales. The lack of affordability is dominated by labor shortages, regulations, building material cost increases and a lack of buildable lots. While single family home starts are still not near the historic average, this is compounded by being behind since the economic recovery. On a national level, multifamily units are above the historic average and may be to a point of fulfilling needs. With home prices rising at 6% and wages increasing at 2-3%, affordability will continue to dominate the national discussion. Unfortunately, there is no set of policies that the government can quickly implement to alleviate these issues. Going into 2018, supply and therefor housing affordability will remain tight.

Dr. Bishop also discussed the difficulties this places on first time home buyers. In recent NAR research, twenty-five percent of first time home purchasers indicated that saving for a down payment was their biggest hurdle. Student loan debt, credit card debt, childcare and healthcare costs continued to impede saving. The good news is that 75% of renters do want to buy a home and 85% percent of Americans still believe that homeownership is part of the American Dream. Dr. Bishop does not see any significant changes on the horizon even with rising interest rates and fears of inflation. The inventory shortage will continue and prices will continue to rise.

Juntunen presented the first Central Oregon Market report developed with COAR and using the data from MLSCO (click here for the report). The report provides an overview of the region, submarkets, pricing maps, financing, average sales and other graphs. A housing index based on the data and a variety of economic factors will also be available soon.

While we talk about cash buyers impacting the market, there are changes on this front. Cash buyers are actually in line with the national level are at 22% and in Bend at 25%. Further, in late 2016 we hit the point where cash sales are paying a premium-meaning cash buyers are paying more for homes than other types of financing. Also of note is that in Bend the premium for new construction is only .5%, meaning existing and new home construction sales are very close in pricing. Migration to Oregon and Central Oregon is still dominated by California and Washington with increasing numbers coming from the mid-west and Texas.

After the keynotes, Wendy Adkisson introduced the local panel. Bill Kuhn, a long time commercial banker, discussed the commercial lending market. As with the residential market there is very high demand for commercial space with very low inventory. Due to land and development costs, investors are holding off on many otherwise ready projects to wait for the equity required to come down. This also means there is not a large speculative market. Most commercial development we see around town is owner driven and occupied before completion. With the UGB lands several years out, commercial investors are looking into opportunities in the region outside of Bend. The potential for the opportunity areas of the Bend UGB will depend on a strong collaborative between large scale developers and the city for projects to get off the ground. Kuhn is also interested in seeing how the recently passed tax plan will effect Oregon since we are a high tax state that will see the impact of losing many deductions.

Jay Lyons, a local commercial broker, discussed that office and industrial vacancies are below 4% and retail space is under 3%. During the recession, many tenants were able to negotiate low lease rates and incentives. While there has been much attention paid to increasing rents and businesses closing or moving, this is the market responding to the loss of those discounted rates and incentives. Between the Old Mill and downtown Bend there is only one space currently available. Lyons also discussed that 1031 exchanges compound the problem as those buyers may be willing to pay above market prices to move their money through the exchange before they are penalized.

Builder Geoff Harris discussed how his company closely watches job growth, median income and the number of permits being pulled to decide where and when to develop. Particularly, if permits are outpacing job growth. He pointed out there are many growing employment sectors in Central Oregon and unlike pre-recession, the construction industry is not one of them. Many builders are struggling to find subcontractors, which is a problem nationally but particularly in Oregon where electricians and other trades have to start back as journeymen despite a number of years of experience in another state.

Molly Brundage, a managing broker, noted that the past couple of years have been fast paced and frenzied with no slow down yet in the first six weeks of 2018. While a six month housing supply is a healthy market, Bend is currently at a 2.5 month supply. Thirty percent of that supply is new construction and those properties may not even have active building on them. Excluding properties that have significant problems and the new construction, there is less than that 2.5 month supply of move-in ready homes.

Brundage discussed that in order to truly understand the market in Bend, agents have to understand the market forces around the country. We have entered the era of the “globalized” agent. Understanding the needs of buyers and sellers nationally is necessary to help guide your clients. As people move here, they are often buying in Central Oregon first and then listing their own homes in order not to miss out on the market. This means that even in the busy market, sellers need to be prepared for contingent offers and considering the market the buyer is coming from, not afraid of them.

Finally, the panel discussed that based on the median income in Bend and the goal of keeping monthly housing costs below 30% of income the median homebuyer would need at property at $269,000, well below our median home price of $410,000. With lots at $150,000 and permits of $25,000 this is not currently feasible. With the UGB implementation 3-5 years off it will have little to no impact on prices even when those properties go to market.

Kim’s Key Takeaways:

  • Affordability issues are going to continue for a long time in Central Oregon.
  • Construction is nowhere near to filling the back log of units needed or meeting current demands.
  • Agents need to be globalized and look not only at the local market, but also the regional, state, national and international markets to best serve their clients.
  • Public-private partnerships are going to be key to the development of the UGB expansion and opportunity areas.
  • Both commercial and residential agents need to be able to manage client’s expectations and assumptions in a fast moving market.
  • Brokers need to work together to best serve buyers and sellers.

For a copy of the keynote presentations, click here.

Building a Better Central Oregon Awards

October 10, 2018

4:00 PM

Nomination Form Available Here, Due 4/2/18.  BBCO awardees will recieve media coverage, be on the front of The Bulletin's real estate section along with other awardees and have a segment featured on Central Oregon Daily News about their project.

Properties will be judged in the following categories:
Local Economic Impact
Neighborhood Improvement
Community Improvement
Unique Design
Unique Use of Materials

2017 Awardees: 

Hydro Flask Headquarters
Mid Oregon Credit Union-La Pine Branch
Old Masonic Lodge & Loft
Tykeson Hall - OSU Cascades
Redmond City Hall
Residence- 711 NW Georgia
The Bite
The Church-Lavabells Vacation Rentals
Worthy Brewing Company Addition and Observatory

COAR has created a new, animated explainer video that breaks down a November ordinance passed by the Deschutes County Board of Commissioners. The ordinance made some key changes to the legal lot of record verification process. At just over 3 minutes, the video provides a quick and easy way to get up-to-speed on the recent changes. Click here to watch.