The median sales price for single-family homes in the Bend area fell to $226,000 in December, the lowest level in four years, The Bulletin reported this morning.
"The December median price is more than 13 percent off the November median and down nearly 33 percent from the December 2007 price of $337,000. It's off 43 percent from the market's peak of $396,000 in May 2007," the paper said, quoting figures from a report released by the Bratton Appraisal Group.
So now buyers are going to swarm into the Bend market to snap up all these great deals, right?
Well, probably not. When you compare the median home price with the area's median income, houses in Bend are still no bargain.
Historically, families have been able to afford 2.5 to 3 times their gross annual income for a house. With the median household income in Bend around $56,000, an affordable median price would be around $168,000. By that standard homes in Bend are still overpriced by $58,000, or roughly 26%.
Of course that doesn't mean every home on the Bend market needs to be priced at $168,000. There always have been - and always will be - some people who want and are able to afford million-dollar homes here. But during the bubble era, builders and developers seemed to assume everybody who wanted to live in Bend had a seven-figure income. Consequently we have a glut of oversized, overbuilt, overpriced houses that we can't unload.
That's reflected in the sales data for December: More than 80% of the 66 Bend homes sold last month went for less than $300,000, and not one was sold for more than $600,000. The inventory for all homes stands at 13 months - meaning that's how long it would take to sell them all at the current pace of sales - but for homes priced between $200,000 and $250,000 the inventory is only nine months.
