Property Values Spring 2014 (Portland, Salem, Bend: sale, foreclosure, rentals)

[redguard57]

I don't expect prices will rise as much as they did from 2005-07 and crash as badly as in 2008-11.

The kinds of mortgages people could get in the early to mid 2000s are not available now. What the banks offered me are conservative & reasonable numbers. Pretty much all of them are capping payments at 1/3rd of income and offering fixed rates. Much more reasonable than what happened during the housing boom.

[kapetrich]

Originally Posted by redguard57

I don't expect prices will rise as much as they did from 2005-07 and crash as badly as in 2008-11.

The kinds of mortgages people could get in the early to mid 2000s are not available now. What the banks offered me are conservative & reasonable numbers. Pretty much all of them are capping payments at 1/3rd of income and offering fixed rates. Much more reasonable than what happened during the housing boom.

This is a really important distinction between now and pre-recession. Thanks for highlighting it.

Originally Posted by oregonwoodsmoke

I can't see where the UGB has anything to do with it. There are lots of houses at reasonable prices for sale outside the UGB. There is plenty of land available to build on inside the UGB.

The only way the UGB keeps prices up is by making the area more attractive instead of being miles and miles of uncontrolled sprawl with all the farms paved over.

OP, what you are seeing is traditional Bend real estate market. It has always been this way. The prices cycle and the cycles are deep.

When the economy in California is good, the Californians sell and buy up here (equity immigrants) and the prices fly upwards. When the economy in California is bad, the Californians can't sell and move up here and real estate prices crash, and really crash.

This is not anything unique to this latest market crash.

My prediction is that prices will get back up to what they were before the market crashed. Just because that is the way it has always worked in the past. Of course, if the Big One earthquake hits California and slides it all into the ocean, that will stop the increase in prices for awhile.

A lot of people want to retire in Bend and they could not afford to after this latest market crash. Now, they are starting to be able to retire, and there is a lot of pent up demand for housing in Bend. That means prices going up.

Any time you restrict/regulate a commodity (especially more than the average) it will effect that commodities price. How much weight you choose to give this economic principle is up to you.

I definitely agree there are a ton of reasons why Bends property values are raising quickly and it is without a doubt WAY oversimplifying it by blaming it on the UGB's. My fault, didn't realize that was how I was coming across. You listed a bunch of good reasons too!

[BendLocal]

Originally Posted by oregonwoodsmoke

I can't see where the UGB has anything to do with it. There are lots of houses at reasonable prices for sale outside the UGB. There is plenty of land available to build on inside the UGB.

Exactly!

[skypros]

I am pretty sure I put an offer in on the same home in Redmond (off Indian ave) I offered just above asking price. The place was not on the greatest street and it realistically needed $5,000 in repairs. It went into a bidding war with back-up offers.... I think the 1st offer they accepted was for over $140,000
All parties backed out and It just came back on the market for 3 days and I think it is pending again.
I decided it wasn't really a property that was worth what the bank was asking..... But apparently other people think it is worth every penny

Originally Posted by redguard57

I've been looking since November, and my price range is $150K or less. Imagine how hard THAT is.

Some places that were acceptable - mostly in Redmond - that were in the $120s to $130s sold in days, because at that range investors are willing to pay cash. A townhome that was under foreclosure with a list price of $131K was on the market for 2 weeks and by the time I considered it, it already had 18 offers.

[redguard57]

Originally Posted by skypros

I am pretty sure I put an offer in on the same home in Redmond (off Indian ave) I offered just above asking price. The place was not on the greatest street and it realistically needed $5,000 in repairs. It went into a bidding war with back-up offers.... I think the 1st offer they accepted was for over $140,000
All parties backed out and It just came back on the market for 3 days and I think it is pending again.
I decided it wasn't really a property that was worth what the bank was asking..... But apparently other people think it is worth every penny

I know what you mean. Cars parked all over the road.

I'm also not a fan of HOA dues. Those Indian Ave townhouse HOAs charge something like $200 a month. Ridiculous. There's hardly an advantage to owning at that rate.

There are so few properties at that price range. I'm now kicking myself for not putting offers in on properties that I deemed unacceptable a couple months ago. If prices continue to rise at the rate they are, I'll be priced out of almost everything even halfway decent.

I'm looking at another house that has potential but looks like it might need $40K or more in repairs & remodel. If everything's wrong that could be wrong, it might need $100K over time.

At my price range, that might be what I have to accept. I'm going to have to make choices between repairs or sketchy neighborhoods.

[grassfeeder]

Originally Posted by redguard57

At my price range, that might be what I have to accept. I'm going to have to make choices between repairs or sketchy neighborhoods.

I'd take repairs any day of the week over sketch....

[BendLocal]

What neighborhoods in the area do you guys consider to be sketchy?

[redguard57]

What neighborhoods in the area do you guys consider to be sketchy?

The area near downtown Redmond east of 6th, south of Antler. Saw more than one meth house there, homeless people squat in any houses that are not occupied. South Redmond near Canal st & 97, south of the Safeway. More meth houses.

Bend - Deschutes River woods is hit or miss. Some places down there range from okay to nice, but others are trashy places where you see the rusted out cars half taken apart in front.

Imagine a triangle with the points at Kiwanis Park, the intersections of SE Railroad & 3rd, and SE Roosevelt & 3rd. Behind the Grocery Outlet and that series of 2-3 cheap motels. That area I would avoid. Lots of trashy renters. I went and talked to two potential neighbors over there and they were stoned out of their minds.

That area south of St. Charles with lots of multiplexes that appear to receive declining clientele by the day, although it has good pockets and bad pockets.

Any apartment complex that costs less than $950 (I currently live in one).

The problem is not so much the places. Ie: when I first moved in, my complex was decent. Over time, rents went up, and more people started doubling, tripling, quadrupling up into rentals which causes a host of problems.

[Steve Pickering]

Todays headline is Home sales are down by 3.3%

[dymnback]

Originally Posted by Steve Pickering

Todays headline is Home sales are down by 3.3%

This surprises me. I have a home in Redmond I currently rent. I bought at the very bottom of the crash. Unfortunately I had to leave for a better job opportunity, but fell in love with the area and want to return. The FMV of that home I bought in the low 100's has more than doubled in the last 3 years. I have realtors calling me asking me for a listing. I have people who want to move to the area and here that I have a rental there coming up and begging me to rent to them. Are sales down because people just aren't selling? Is it because renting is so lucrative?

as a sidenote:

I have been lurking these forums for a while. I hope to move to Redmond in a couple of years. I'm in healthcare and I really like the fact that everyone I have met in Redmond has been friendly and seems relatively happy with their choice to live in the Bend-Redmond area. I have actually stopped people in the Walmart and asked them what they thought of the town, their co-workers, etc. Some of the other places I have visited don't seem to be this way. No disrespect, but I just returned from Klamath Falls and the general vibe was depressed, unsmiling. This dispite more sun, lower cost housing, and just as many opportunities to hike, fish, etc. Then we stopped in Redmond on the drive back and had great conversations with the girl at the coffee stand (in all fairness...ALL Dutch Bro employees seem to be so dang happy and chatty...perhaps its something in the coffee?), the market and getting gas. That's really a huge tell to me. I haven't really met anyone yet who isn't happy living in Central Oregon. Except maybe the real ol' timers who hate all the growth of course, which I totally understand as well.

So my thoughts are this: Are sales down because rentals are up. And is that because people want to stay there no matter the cost, and would rather rent than move somewhere cheaper if it means giving up their current lifestyle? Also, with such a run-up in prices, and what seems to me a very limited pool of listings for such an area of its size, will this trigger a huge start in construction again, and will THAT trigger and even greater boom...much like the last run-up. My home is in NW, around a mile from the hospital. When I bought in 2011, there were 4 vacant lots on a cul-da-sac just down from me. In the last two years they have all had homes built, although smaller more moderate homes than previously being built.

Interested in how you see the markets in general, the economic impact, and the effects on quality of life in Redmond. Also interested, since I am currently out of the area, in what kind of changes to the area, ie new business, downtown growth, culture, taxes etc.

Thanks and keep up the great posts. Excellent reads!