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.
This article appears in Jan 8-14, 2009.
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So is this a bulletin story? I kept reading waiting to be told where they were wrong but it didn’t happen. Good self control The Source!
They weren’t wrong but they did feel compelled to put their usual bullshit “positive” spin on the news. The subhed said: “Some interest rates, also at historic lows, could drive buyers back to Bend market,” and the story quoted a mortgage broker as saying, “Rates have fallen, which increase a buyerâ ™s purchase power, and weâ ™re seeing buyers come back into the market,” although there is no hard evidence that’s actually happening yet. If the buyers are coming into the market, why were December’s sales lower than November’s?
Somewhat off-topic, another example of Bulletin spin: A story at the bottom of today’s Local section front is headlined: “Fairness doctrine not needed, most agree.” The story is about Greg Walden holding a press conference to announce he’s introducing a bill to prevent the FCC from reinstituting the Fairness Doctrine. Where in the story do we find support for the statement in the headline that “most agree” the doctrine is not needed? Does it cite data from a poll or something? NO! There is absolutely NOTHING in the story to back up the claim in the headline.
Now, there could be a perfectly innocent explanation; the poll data or whatever could have been in the story when the copy editor wrote the headline and later have been trimmed out.
But I suspect instead this is another case of the Bulletin using its news columns to advance its political/ideological agenda.
So now you are in favor of blocking freedom of speech??
Jed: No, I’m in favor of fairness. Aren’t you?
Guest: I agree there probably should be a “livability premium” added to home prices in Bend — after all, this is not Detroit. But calculating that premium is difficult. And it’s obvious that it’s nowhere near as high as people believed it was during the glory days of the bubble. Home prices were driven up to astronomical heights during that period because of speculation, not because of Bend’s terrific “lifestyle.”
“I certainly agree that prices have been driven by speculation. But why the speculation? Were people speculating on Detroit? I don’t think so.”
No, but they were speculating like crazy in SoCal, NoCal, Fla., the Jersey shore, the Southwest. It was a national bubble. And bigger in Bend than in many other places.
“It’s a great place! Maybe not the best, but far, far from the worst!”
Well, I’ll agree it’s not the worst. As for “great,” that depends on individual preferences. I for one am sick of winters that go on for eight months and looking forward to getting out of here someday. We moved here 23 years ago to get away from the crowds and traffic of the Bay Area and enjoy a small-town lifestyle, but poorly planned, uncontrolled, sprawling growth has destroyed the main attributes that made Bend desirable to us.
The winters are one big factor that will discourage many people from retiring here. Old folks do not like having to shovel snow and bust their hips falling on the ice. They also like to be able to recreate outdoors year-round — and relatively few of them go in for skiing and snowboarding.
“If I were to venture a guess, Bend’s livability helped it be one of the last places to get hit in the down market, and I suspect it may help it be one of the earliest recoveries.”
Judging by the historical record, I’d say you are wrong. Bend took longer to pull out of the recessions of the ’70s and ’80s than the rest of the country.
“We moved here 23 years ago to get away from the crowds and traffic of the Bay Area and enjoy a small-town lifestyle, but poorly planned, uncontrolled, sprawling growth has destroyed the main attributes that made Bend desirable to us.”
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Not to be rude, but maybe greener pastures lie elsewhere for you, HBM?
“”If I were to venture a guess, Bend’s livability helped it be one of the last places to get hit in the down market, and I suspect it may help it be one of the earliest recoveries.”
Judging by the historical record, I’d say you are wrong. Bend took longer to pull out of the recessions of the ’70s and ’80s than the rest of the country.”
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You got that right, HBM! The guest ventured a very wrong guess. Bend lags the rest of the country. Unemployment will be double digits (ie 10-13%) for at least a couple of years… longer than the rest of the country, fur sure!
“Not to be rude, but maybe greener pastures lie elsewhere for you, HBM?”
Hell yes! If not greener, then at least warmer!