Today was a day for statistics, a class I didn’t particularly enjoy in college. Real estate statistics are a breath of fresh air compared to epidemiological statistics. How is the Bend real estate market? Well, that depends on whether you are a buyer or a seller.
If you’re a buyer, our inventory is still high and there’s a good selection of homes in all price ranges. Add to that the fact that the median sales price is roughly back to what it was in 2005 and interest rates are still low, it’s a pretty good time to be a home buyer. There are plenty of foreclosures and short sales to consider as well, although many of them that I’ve seen are in rough shape.
If you’re a seller, it’s tough out there. Depending on when you purchased your home, you might not have any equity and in fact, you might be upside down. Even if you do have equity, you have to compete with the foreclosures and short sales and that might mean not being able to realize any of that equity if you’re serious about selling.
Here’s a graph that reflects the changes in median and average sales prices from 2003 to 2008 (click to enlarge):
As you can see, the median sales price for 2008 is roughly back to what it was in 2005. Here’s a table with the exact figures:
I also looked at bare land values. Land prices have come down even more than home prices. I initially ran these numbers because I know a couple that wants to buy a homesite in Shevlin Commons, one of my favorite neighborhoods in Bend. We’re looking at a few lots on the market that were purchased in 2004 or later and they are listed at nearly twice what the owners paid for them. Yes it’s a fantastic neighborhood but it’s not immune to depreciation.
What I initially thought was most alarming was the dramatic change in the median sales price in 2008 alone. The median sales price in December 2008 was down 29% from January 2008. I dug a little deeper and found that this can largely be attributed to the fact that fewer homes sold in the higher price ranges, and by higher, I mean $300,000 and up. That’s not to say that home values didn’t decline in 2008, it’s just not accurate to say that home values declined by 29%. We have to be very careful looking at the median sales price for just one month in particular because it’s drastically affected by even one additional sale. For example, in December 2008, there weren’t any sales over $575,000. If even one million dollar home had sold, that could increase the median home price by about $25,000. It is helpful in allowing us to look at the overall trend though.
Notice that from April to June the median price increased then declined from July forward. That does not mean that home values went up, it just means that more homes sold in the higher price ranges. In the 1st quarter of 2008, 150 homes sold over $300,000 (9 of those sold for $1 million of more). In the 2nd quarter, when the median price went up, 225 homes sold over $300,000 (12 were over $1 million). In the 3rd quarter, 187 homes sold over $300,000 (12 were over $1 million) and in the 4th quarter, only 108 homes sold over $300,000 (5 were over $1 million). Obviously the median sales price is determined by what is selling, and not as many homes over $300,000 are selling.
If you are curious about home values in your neighborhood, send me an email and I can run these same statistics for your particular neighborhood.