Elon Glucklich / The Bulletin

Real estate has been a bright spot in Central Oregon’s economic recovery this year, with homes selling at a pace not seen since 2006, prices rising, foreclosures falling and building activity rebounding.

But talking to a half-dozen local real estate officials will yield a half-dozen different opinions about the state of the market today and the near-term outlook. Not all of them are rosy.

“Things have without a doubt slowed down,” said Kip Lohr, owner and principal broker of Lohr Real Estate in Bend. “There was a point even two months ago where I could put a property on the market, and in two or three days it would have five offers and end up selling for $10,000 above the listing price. Now, almost like a light switch, we’re seeing very well-priced properties stay on the market.”

Nationwide, home sales, including those pending, declined each month between June and September, according to the National Association of Realtors. The association’s chief economist said late last month that higher interest rates along with tighter lending standards and a low supply of homes could drag the slowdown into next year.

Several local Realtors said those factors are in play across Central Oregon. In particular, rising interest rates and a lack of inventory could sap the housing market’s rally in 2014.

“I’m worried interest rates will continue to climb,” said Jim Mazziotti, owner and principal broker of Exit Realty Bend.

Interest rates on a 30-year mortgage have risen a full percentage point, from 3.34 percent to 4.35 percent, since the start of the year, according to data from Freddie Mac. Fifteen-year rates have risen nearly as much,

That 1 percent increase could mean an additional $100 to $500 per month in mortgage payments on a new home, Mazziotti said, an increase first-time buyers in particular may balk at.

Still, he said, the market is on solid footing. A slowdown this winter could just be seasonal. Typically, few homebuyers make a purchase during the Thanksgiving and Christmas seasons.

Another factor could be a decline in the buying of foreclosed properties by investors who stormed the Bend market in the years after the 2008 housing collapse.

“I think what some people think is a red flag is really a false indicator of the drop-off in investor activity,” Mazziotti said.

Others said Central Oregon, and Bend in particular, could buck the national slowdown.

“The market is still really strong,” said Wendy Adkisson, principal broker of Cascade Sotheby’s International Realty.

In October, 219 Bend single-family homes sold, the sixth straight month of sales rising above the 200 mark, according to data from the Bratton Appraisal Group. Before that streak started, Bend hadn’t seen a 200-sale month since August 2006.

At the same time, though, the median home price in Bend dropped to $256,000 in October, an eight-month low.

“It’s not a scary slowdown by any means,” Adkisson said, adding that, for the first time in as much as a decade, Realtors are seeing a traditional market, with activity peaking in the summer and declining in the fall and winter months. She said the biggest issue moving forward could be the lack of development-ready land within Bend’s urban growth boundary.

Recent sales show the impact of declining land inventory on prices. In mid-September, a Salem-area developer bought 19 of the 99 home lots in a northeast Bend subdivision for about $1.38 million, or $72,500 per lot. Three years ago, a local developer paid $1.92 million for 60 of the lots, or $32,000 per lot, meaning the value of the land rose 127 percent in three years.

Available lots are being developed at a rapid pace. The city of Bend issued 610 permits for single-family homes between January and October, up from 367 during the same period last year.

Other Realtors said the depressed market from 2008 to 2011, and the frantic pace between mid-2012 and the middle of this year, may be in the rearview mirror.

“There isn’t a frenzy right now,” said Bruce Dunlap, principal broker with Redmond-based Central Oregon Realty Group. “Earlier this year, if I saw a good property, I’d tell a buyer they needed to be in my office that afternoon ... In the last 90 days, it has shifted a little bit, to the point where it’s not that frenzy — except for the lower price points.”

Indeed, 72 percent of the Bend homes sold in October were priced at $350,000 and under, Bratton figures show. Just 13 percent of the sales were $500,000 and above.

The lower end is dominating the local market, said Lynnea Miller, principal broker with Bend Premier Realty. Still, buyers looking for higher-priced homes came back in a big way this summer after largely staying away for several years.

“We’re seeing a really active second-home market,” Miller said. “We’re talking to a lot of people from Portland, California, even Colorado and Vermont, people who came out here for vacation and loved it so much they thought maybe they’d make Bend home.”

But Lohr said there’s some concern that prices could continue to drop over the next year, driven by a state foreclosure mediation law that prompted banks to hold off on thousands of pending foreclosures, creating a backlog.

A Eugene-based firm that tracks foreclosure activity across the state issued a report last week forecasting “a spike in foreclosure filings in 2014,” as a result of the law.

Foreclosures and short sales have dropped significantly across the High Desert, but still accounted for 198 transactions in Bend during the third quarter of the year and 97 transactions in Redmond, according to Central Oregon Association of Realtors data.

Lohr said his office has counted roughly 1,600 homes across Central Oregon that have received a notice of default on their mortgages or notices of judicial foreclosure, but haven’t come onto the sales market. Some of them have been in limbo since 2009, he said, with the owners giving up hope on keeping the home years ago.

“We’ve got a backlog of these distressed homeowners. I think a lot of them have just abandoned their homes,” Lohr said. “I think we’re going to see a lot of distressed inventory come onto the market” into 2014.