Has the Bend real estate market hit bottom at last? It’s too soon to say, but at least it looks like home prices here have finally reached a realistic level.
IHS Global Insight, which maintains huge databases of all sorts of economic data, reported back in March that as of the end of 2009, real estate in the Bend Metropolitan Statistical Area was overvalued by only 2.3%. (At the end of 2005 Bend real estate was among the most overvalued in the country – 44% above what Global Insight considered fair value based on market history, local incomes and other factors.)
And prices here have continued to fall. The real estate tracking site Zillow reports that the median Bend home value in the second quarter of this year was a mere $176,000. That’s an astonishing drop of almost 60% from the market’s peak on June 1, 2006, when the median was $374,000. During the past year the median value has dropped 18.9%, leading (if that’s the right word) the nation.
Is the local market poised for a comeback? “Just last week … a Bloomberg Businessweek report forecast that Bend would have the nation's second-strongest housing rebound by 2014, with a 33.6% uptick in prices,” The Bulletin wrote Tuesday in a story about the Zillow data.
Bend financial adviser and blogger Jesse Felder isn’t ready to uncork the Dom Perignon just yet, though.
“Prices can and usually do decline well below fair value after a bubble bursts,” he notes. “Still, we've come a long way in working off the massive excess in local home prices and current buyers can feel good knowing that they are no longer paying a premium above fair value.”