It seems every time you turn on the news, there’s more good news about housing in Central Oregon. Sales are up. New home construction is up. More contractors are hiring. More businesses are booming.
But what are the facts behind this so-called “mini-housing boom?” We’ve dissected it for you, and here’s what you need to know: more people are entering the market–be it homeowners recovering from foreclosures, new home buyers, home buyers who are finally in the black, and homebuyers seeking to buy a second home or investment property.
All this demand is putting pressure on inventories of new and existing homes, as well as pushing prices upward. The sudden increase in demand for new homes is also causing material and building costs rise, showing little promise that home prices will level off any time soon.
Trend 1: Sales up, prices up, inventory down.
A jump in sales, new home construction, and prices have all put pressure on the market, squeezing inventories on existing homes and lengthening waiting time for new home construction. Active listings on homes for sale in May were 18 percent lower than 2012, pushing prices up around 27 percent over last year. The median sale price of homes in Central Oregon is now $250,000.
New homes sales pacing at housing boom levels.
New home construction has increased almost 65 percent, and is accounting for one out of every five homes purchased. New home construction activity in NorthWest Crossing, in particular, remains brisk, and a surge in sales is predicted. Homes in NorthWest Crossing are pacing at sale prices almost 44 percent above Bend as a whole.
New home construction costs are rising to keep up with demand.
Unable to meet the demand of this new housing “micro-boom”, building material costs have skyrocketed and new home construction prices are rising to keep up.
Second homes on the rise.
Vacation home sales across the country and in Central Oregon are growing. Sales are showing an overall increase of 10.1 percent since 2011, according to the National Association of Realtors. The news gets better: 46 percent of those buyers paid cash, and of those who financed, the average put 27 percent down.
While 80 percent of the buyers intend to use their second home as a vacation home, 27 percent are considering the property for future retirement or as a future primary residence, meaning more permanent residents of Central Oregon.
All of this is good news for the Central Oregon housing market, which greatly suffered after the collapse of the housing bubble. Central Oregon’s recovery is responsible for a variety of projects which will add economic value and quality of living to the Central Oregon landscape such as the Prineville Hospital, Tetherow Lodge, the Old Mill Hotel, and a handful of retail buildings throughout Bend.
*Statistics and research provided by the Garner Group’s May Newsletter.