What will the price of The Oregon Dream look like in 10 years? (Bend: real estate)

[grapeguy]

Seems safe to conclude the price of rural real estate has increased rapidly in most areas of OR within the last 5 years, at least any areas most people would like to live. For example, a particular nice 5 acre piece of land near Roseburg (but miles out of town) was bought by the current owners in 2003 for $73,000, and is/was recently on the market for $249,000. And this price is not too far off the going rate, by what I've been seeing advertised.
What is this piece of land going to sell for in ten years?
I'd like to hear opinions, and your rationales behind them.

How many more people from California (and elsewhere that $249K looks like an attractive price) still want to move to OR, compared to those that already have moved? (How long will demand sustain these kind of prices, or indeed this kind of price inflation?)

Rural Oregon zoning is quite tough, so supply seems pretty much static.
There's a lot of BLM land, but it seems regulations basically prevent the selling of land (unless there's some exceptional reason). So as they say "they're not making any more land".

Is this the time to buy, regardless of the inflated prices, or is the market in the process of plateauing, or even beginning a decline, as some people think?

[Clear2land]

Real property has always been a hedge against inflation. There are several factors that play in the price of real estate. The biggest is the buyer’s ability to pay for it based his or her income. Payments are usually limited to 1/3 of a person’s annual income, which is largely driven by interest rates. Interest rates were at a 50-year low. Banks got creative with interest only loans and loans requiring no money down. All this creative stuff has driven prices sky high not to mention investors buying property for investment purposes and those trying to make a buck by fixing up a property and then flipping it. A myth is that Californians are the primary cause of high real estate prices in Oregon. If that were the case, Californian’s would have to move out of the state for real estate prices to go down. Prices are tied to interest rates more than any other single reason. In my opinion, over time, interest rates will find equilibrium between 7 to 8%.

The supply of real estate is growing and prices are already being reduced based on higher interest rates, which are beginning to slow the economy. Gas prices are falling along with commodities, which gives consumers more money to spend, which can be inflationary if spent.

You would need a crystal ball to forecast the future prices of anything. Personally, I think real estate prices will bottom some time in 2007 and that would be the ideal time to step up to buy. You have to buy when everyone is dumping their real estate and sell when they a begging to buy it. I intend to return to my home state of Oregon some time in early 2008 with the purchase of our home somewhere near the bottom of the market in 2007. To answer your question, prices will be higher in 10 years. They could be a lot higher depending on what you paid for the property you bought.

From 1995 to 2000, the largest inflow was from California and the largest outflow was to Washington. There were 399,328 moving to Oregon and 324,663 moving to other states.

[Roma]

Yes, all that is true and the Feds did not raise interest rates today.

[socadje]

Being one of the Californians tired of "this way of life" here--d/h and I are planning to move in the next couple of years to Oregon (looking North Bend coast to maybe Roseburg). We aren't quite the retiree age--we will work and contribute to the community etc. But on to my question--yes the prices may be inflated for you and attractive to us b/c of where we have come from. Doesn't mean that our high prices are fair for what you get here either! But if you are selling to us californians--making a nice profit--where are YOU going to move?? Do you leave Oregon?? Where would you go???
Just curious....
As far as Realty prices--its what the traffic will pay for that area....Where I live (been in my home for almost 30 years! ) my house was originally like $22k (1969) when it was built. We bought in 1978 at $94k---its been way up and way down--right now I dont even know b/c its has gone down and up again???? In turn the area has changed--much more crowded and newer houses (mini castles w/no yards! yuck) have built all around our area.
So, Tell me where are YOU going to go???
Thanks!