The Oregon Office of Economic Analysis puts out some interesting information and insights, and a recent blog addressed the housing shortage. One would think that with job growth, increased demand for owner-occupied and rental housing, population growth and rising home prices, that there would be a construction boom to meet the supply the market is demanding. As we know in Bend and in other areas of the state, new construction is lagging behind.
The blog addresses five factors often cited as reasons behind the housing shortage, and aims to dispel some common myths.
Confidence-Some people say that builders are not confident and they're risk averse, and that this is holding them back. The report cites this is not likely, as there are studies showing builder optimism has returned to previous peaks.
Labor-While many construction workers changed careers during the recession, this was due to lack of demand for their labor. We often hear that there's a shortage of construction labor to build homes. While a lack of workers puts a limit on the ability to increase production, the report also reminds us that labor is tight over all in many fields and not specific to the construction industry.
Land Use Laws- Land use laws and the need to increase the Urban Growth Boundary are common reasons given for the shortage. It's understandable that restrictions on the availability of buildable land help with creating a shortage, which leads to higher prices and unaffordability for middle income wage earners, but there are other areas with much less restrictive land use laws that are experiencing the same problems. The article cites the Boise market as an example as to why this is not an Oregon-specific phenomenon.
Lots-While the lack of buildable lots is clearly a factor, the lack of land is due to tight financing, which makes it more difficult for developers to borrow money to develop land.
Financing- Lending restrictions due to the recent recession tightened lending standards for all, from developers to home-buyers. The report cites that banks loosened lending standards for multi-family projects, which are apparently starting to impact rents, so lending standards are again starting to be tightened. Credit appears to be loosening, but it's important to remember that the recent years of tightening likely impacted our current situation.
The blog makes a good argument that the housing shortage dilemma it is not just specific to Central Oregon or the state of Oregon, but rather a symptom of other problems in the national economy.
Source: https://oregoneconomicanalysis.com/2017/04/12/causes-of-the-great-housing-shortage/
LOW
63177 Boyd Acres Rd., Bend, OR 97701
3 beds, 2 baths, 1,222 square feet, .14 acre lot
Built in 2004
$244,900
Listed by Homesmart Central Realty
MID
20677 Foxborough, Bend, OR 97702
4 beds, 3.50 baths, 2,220 square feet, .16 acre lot
Built in 2000
$399,000
Listed by Preferred Residential
HIGH
3492 N.W. Braid Dr., Bend, OR 97703
3 beds, 3 baths, 3,418 square feet, .52 acre lot
Built in 2004
$1,079,000
Listed by John L Scott Central Or Bend
Photos and listing info from Central Oregon Multiple Listing Service
