The same factors that have affected area real estate for the last few years—limited inventory and an influx of new people to the area—are still in play. According to Business Oregon's website, which gets its information from the Bureau of Labor, Bend's current median home price is $404,000 and the median household income is $60,404.
At a real estate forecast breakfast this week, put on by the Central Oregon Association of Realtors, Hayden Homes' Geoff Harris said that someone earning $60,000 per year is about $140,000 short of being able to afford the median house cost. Molly Brundage, with BrundageSmith real estate, said there's only one house in Bend that's currently for sale under $300,000, which is still too expensive for a standard household.
A survey conducted by the National Association of Realtors shows people still believe in buying houses, with 86 percent of Millennial generation agreed that buying a home is a good financial decision. However, data the NAR provided showed less than 40 percent of people 34 and under currently own homes nationwide. Part of the issue, according to the NAR, is debt—specifically, student loan debt—for first-time buyers. Over 50 percent of those surveyed said student loans are holding them back from saving for their first house.
Dr. Paul Bishop, vice president of research for the NAR, said to the audience during the breakfast the U.S. still isn't building enough homes, a problem that's been occurring since 2007. According to NAR statistics, 1.4 million houses annually nationwide is the benchmark for housing starts. Since 2006—the last time the U.S. hit the mark—the most was 1 million in 2007, and only a handful above 400,000 in both 2009 and 2010. At the same time, multifamily starts (apartments and condos) have surpassed the 350,000 benchmark since 2105.
According to Harris, there are a number of factors to why new homes are expensive in Bend. For starters, the average lot cost is $150,000. Add the $25,000 in permitting, and you're already at $175,000 without moving a piece of dirt. Another factor is the skyrocketing cost of labor. He said Bend lost most of the skilled labor force—electricians and plumbers—when the last real estate bubble burst and the skilled labor market has been slow to recover.
According to the NAR, the average impact of a home sale in Oregon is $80,000 for the local economy. Broken down, about $25,000 comes from real estate-related industries, just shy of $5,000 in furniture, appliances and remodeling, then $14,500 in a "multiplier" effect and over $35,000 in an "induced" effect.
The NAR says commercial and residential real estate account for about 20 percent of all U.S. economic activity.