The median price of a single-family home in Bend vaulted forward to $529,000, an increase of $59,000 compared to the same time the year before, according to the Beacon Appraisal Group.
The 12.5% increase in price in July is being driven by out-of-area buyers whose pockets are stuffed with cash from having sold property in higher-priced markets, said Donnie Montagner, owner of the Beacon Appraisal Group of Redmond. Typically sales rise by about 5% to 9% during the summer months.
While an increase of one month doesn’t set a trend, Montagner said, it indicates just how hot the Bend market is.
“My suspicion is we’re seeing a lot of purchases taking place from buyers out of town, wanting a better quality of life,” Montagner said. “This happened before the recession. You have a lot of folks who have property in other places and come here, pay cash for a bigger, better home.”
But prior to the recession, many areas in the region saw rising prices, he said. This time modest gains were seen in Redmond.
In July, there were 318 sales in Bend, according to the report. Last year during the same period there were 239 sales, according to the report. In addition, in July there were 84 sales for homes $700,000 and up, compared to June with 54 sales, Montagner said.
Sales data and trends were far more stable in Redmond, he said. The median sales price in Redmond was $345,000, a 2% increase over the same period the year before. Redmond too has a limited supply of homes for sale, with just about a 1 -month supply, according to the report.
“You’ll likely not see the same spike in Redmond,” Montagner said.
Low interest rates, combined with the urge to move out of more-dense communities and maintain a work-life balance, are combining to drive up the market, said Lester Friedman, a broker with Coldwell Banker Bain of Bend. Some single-family home sales in Bend have been 5% to 10% above the asking price, which is due to the lack of inventory.
”With low-interest rates, you can afford to spend a bit more,” Friedman said. “You can buy more when your interest rate is 3%, so you have more buying power.”
And with a shortage of property on the market, it puts pressure on the prices, pushing them upwards, he said. On Aug. 1, there were 618 properties pending sales that have not completed the sales process yet, Friedman said.
“It’s all supply and demand. If you have demand and no supply, that’s when the prices go up,” Friedman said “ It’s hard to keep up with the market and the rising prices.”