The year 2020 will not likely be remembered for many good things, although owners of residential real estate in Central Oregon may feel partially different.

The shift in workplace dynamics caused by the pandemic is likely to lead to an acceleration in the already strong fundamentals that continue to drive prices higher for real estate in our community, recession be damned. And we should prepare for a massive inflow of new residents, beginning this summer, and continuing into the foreseeable future.

Is this a good thing? Well, as mentioned, residential property owners can expect the values of their home and land to grow handsomely over the coming years — to the delight of those working in that industry.

Is it a bad thing? That depends on what you are looking at. And we’ll get to that in a moment.

In June of 2017, I was requested to speak to several real estate firms in Bend on my updated view of the residential property market for Central Oregon.

My presentation then centered around a few points.

• Central Oregon was not in a “bubble” like 2006 because that was caused by a credit-created inflation phenomenon that no longer exists.

• Interest rates were likely to stay lower for longer than most expected.

• Prices were headed higher because there are infinitely more people desirous of living in Central Oregon than the housing supply was able to absorb due to the urban growth boundary constraints around cities like Bend and Redmond.

As long as the average prices of real estate in our feeder areas (Bay Area, Seattle, Portland, etc.) remain higher than in Central Oregon, moving here would remain a compelling proposition for residents there.

Unless you’ve slept through the last six months — and wouldn’t that have been nice? — you can start to see how COVID-19 will further distort the supply and demand imbalance, to the benefit of price increases.

Huge numbers of workers have endured the shelter-in-place rules by working from home. In the process, the acceptance of virtual meetings has become broad-based. Co-workers and customers have become quite comfortable doing meetings online; at the same time, workers have gotten a taste of the benefits of working from their house or their favorite hangout spot. This is not a fad; it’s a trajectory.

When juxtaposing the work-from-anywhere trend with the downside of closely packed-in living — along with its congested commuter traffic, higher crime rates, high cost of urban living and the regulations and taxes that are disproportionately borne by urban residents—it doesn’t take a rocket scientist to see how a community with more space, nature, recreational opportunities and thriving culture makes for a persuasive alternative means of lifestyle and living.

Is this a good or bad thing? It’s both and everything in between, and largely dependent on your prospective.

The growth spurt, and price increases, are unequivocally positive for owners of properties and those who develop, build, appraise, lend-to and insure real estate and its owners. By extension, the local economy and business benefit from this wealth effect as greater capital is used for consumption and investment.

But it’s a stickier wicket when considering the burden placed on the infrastructure and labor force. Most of what I worry about is the diminishment in the workers who are the lifeblood of our community. With the increase in prices — which have also made renting more expensive — our teachers, civil servants, tradespeople, hourly workers and so on, are finding it increasingly difficult to have an opportunity to own a home and build a life here. They will continue to have to drive in from communities on our outskirts and farther away.

What’s the answer? I’ll leave that to those above my pay grade best suited to handle. But the elimination of the primary cause of the wealth gap in Central Oregon — the urban growth boundary laws — would be a great start (albeit a gargantuan task) to allowing the supply of homes to better keep up with demand.

Until then, prepare to meet your new neighbors.

William Valentine, CFA, is the president of Valentine Ventures LLC, a wealth management firm founded in 1997. He and his wife, Jessica, have lived in Bend since 2000, where they raised their four sons.

(6) comments


Bill Valentine here as he often does makes good points about the local housing market but also unfortunately takes an unfounded swipe at the UGB based upon the common oversimplification that constrained land supply inordinately drives up costs of residential homes. Our current statewide land use system provides for regular expansions in the UGB, after an analysis of the need, an inventory of buildable lands within the existing UGB, and consideration of impacts on rural lands. What part of the process, exactly, is such a huge problem: citizen involvement, careful analysis and urban planning, or conservation of agricultural land and open space? We could blow up Bend’s UGB to cover all of Deschutes County or eliminate the UGB altogether and it wouldn’t help affordability much but would result in unconstrained urban sprawl, extremely expensive extensions to infrastructure and services, and a marked decline in quality of life.


Its really sad because on both sides Central Oregon needed some growth, but on the other hand, it is pushing out some life long residences who cant afford the outrageous rental prices that are being asked from owners.


So eliminating the growth boundary is good for builders and tax dollars and Bend is great because there is less traffic, less congestion, and less crime than the big cities. But aren’t you advocating for factors that will just eventually (already) create all these things people are fleeing from? What growth rate is acceptable?


Thanks for your comment. This is William Valentine. In my view, deciding on the level of growth is academic. It’s driven by demand, an controllable force. The issue is how we respond with supply. Constraining supply will keep prices skyrocketing and the town will be the providence of small member of uber rich homeowner (think Ketchum, Aspen, etc) to the cost of diversified industry and wages. Lift the boundary and let people build to the north, east, and south and allow for stratified pricing and opportunities for all income levels. Don’t worry—the UGB isn’t going anywhere. We’ll see what unabated growth and demand does to town. But as I said, I don’t claim to have the solution. Thx again.


I hear this Aspen/Ketchum progression fear thing a lot here, but is it not a bit melodramatic? We already have over a hundred thousand residents. Those places never grew like that because they simply did not build at all. The more clear comparison for Bend is Fort Collins, Colorado (in the best case scenario) and Boulder, Colorado (in the worst case scenario). I just think the Aspen comparison is very misleading. Regardless, it is this Oregonian's perspective we need to build more to accommodate demand.


* uncontrollable force

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