Thursday, October 25, 2018
Central Oregon Housing Update

The Central Oregon housing market continued to see home price appreciation across most of the region in the third quarter of 2018. Other data points, days on market, sales volume, etc. varied from city to city. Altogether the region continues on a stable path forward through 2018.

Here are some of the economic highlights from the Central Oregon housinig update report for the third quarter.

Bend, Oregon: Bend recently updated the comprehensive and zoing plans to match, removing the need for property owners to pay for compliance. Bend has also approved planning funds for the UGB expansion area know as the Elbow in SE Bend.

La Pine, Oregon: In early 2019, La Pine will begin $25 millin in infrastructure improvements to connect tow neighborhoods to the city water system. The project will bring water and sewer to 275 developed homes and undeveloped lots.

Redmond, Oregon: A project in Redmond that aims to bring business, a fairgrounds expansion, and a new military rediness center moved forward with state approval. This includes lands for large lot industrial land, which has been seen as critical for growing Central Oregon employment land.

Sisters, Oregon: Although the company only opened in 2016, Laird Superfood is expanding rapidly. Their five year expansion plan calls for adding over 250 new employees.

Prineville, Oregon: Facebook annouced that two additional buildings will be constructed at its data center in Crook County. This represents a $750 million investment and approximately 100 jobs.

Price Index - 2018 Quarter 3
What is a price index?  A price index is an alternative measure to average sales price, utilized to measure price changes over time in a market. Our price index uses a repeat sales methodology to track the sales price of a home at two points in time to see how much the price changed. This approach controls for the changing quality and size of homes over time that are sold in a market. One drawback is that one can not track new construction in a price index, so it is helpful to use multiple metrics to track market performance.
Figure 1- is a repeat sales price index, this shows the relative value of a home through time. This index is created by comparing the difference in sale price of the same home between two sales. that price change is then divided by the number of years between sales to create an annualized change in value.  As shown in the index, prices fell after 2007 and on average didn't recover in value until 2014

Figure 2 compares the repeated sales price index approach to that of an average price change approach. The repeated sales price index is a preferable method of calculating the change in the average market value of homes. This is because it is not biased by the higher sales price of new construction and is  comparing the actual change in market value of the same homes through time. As shown on the chart, the average price change approach has more dramatic estimates, with decreases of more than 20% in 2009, along with a 20% increase in 2013. This is in contrast to the repeated sales index metholdology, where there was a 9% decrease in prices in 2009 and a 6% increase in prices in 2013. It is interesting to note that in the last three years the two methodolgies have produced very similar estimates of annual price changes.

Bend data for quarter 3 in 2018:
Bend, Oregon real estate showed consistency across most data points in the third quarter of 2018. Home sales volume, days on market, sales price to listing price all were practically unchanged from the same quarter this time last year. Bend homes do continue to see price appreciation. The median home price in Bend is up almost five percent from the third quarter of 2017. Bend stands out from other home markets in the region in several ways. In addition to having some of the highest priced homes in the area, there is also more new home construction in Bend than in any other city in the region.

Sunriver, Oregon in the third quarter of 2018:
Last quarter the median home price in Sunriver broke the $500,000 mark for the first time in years. This quarter the median home price has dropped back to $412,000. A level more in line with prices seen over the past year. The most notable data point change from this time last year is the almost 35% increase in sales volume. More homes were sold during the third quarter of 2018 than any other quarter since the beginnign of 2017.

Data incudes all residential sales, including sales of single family homes, manufactured homes, mobil homes, condos, deeded share, townhomes, and timeshares. All information is deemed liable but is not garunteed. Information provided by COAR

To view or print this report download here.