The median sales price of a home in Bend, Oregon, rose 10.8 percent from December 2016 to December 2017. That followed increases of 9.9 percent in 2016 and 12.2 percent the year before. Many in the real estate industry, however, expect the recently enacted tax law to have an effect on the market.
The National Association of Realtors (NAR) produced a 2018 forecast for all 50 states, taking into account market conditions, projected ramifications from the tax law, an expected increase in the mortgage interest rate as well as employment and construction developments.
The NAR report projects a 3.8 percent increase in housing prices in Oregon, down from last year’s statewide 9.2 percent increase.
That much of a decline in the rate of increase might have some taken aback – or even fearful. But diving into the numbers, one sees that the NAR projections for Oregon might not account for Bend’s almost unique real estate market.
First, let’s examine the NAR report. It projects that the tax law – which drops a new homebuyer’s limit for making a tax deduction on mortgage interest from $1 million in debt to $750,000 – to affect Oregon’s home prices by minus-0.9 percent.
The NAR projects an increase in the mortgage interest rate of 0.50 percent, producing a minus-2.8 percent effect on the price of homes.
Oregon’s place
A drop from 9.2 percent to 3.8 percent looks stark. But relatively speaking, Oregon remains in a good place in the overall real estate market in the NAR report. The state’s projected 3.8 percent increase in the price of homes ranks ninth among the 50 states. Four of the top five states for highest projected increase – Colorado, Utah, Washington and Idaho – are also solidly Western states that have a lot in common with Oregon.
Specific to Bend, remember that this area is a high-performing part of the state when it comes to the real estate market. Bend is home to an increasing number of remote workers, whose livelihood isn’t necessarily tied to the local economic cycle. Bend remains a vibrant, highly attractive place to live with a constant influx of new residents.
Although the NAR report sees a slowdown in the rate that prices are rising in Oregon, that’s for all of Oregon. It wouldn’t be a surprise for Bend to outperform the state as a whole.
The roiling over the new tax law and fears of interest-rate increases shouldn’t discourage you. If you’re interested in buying a home in Bend or considering selling your property, I can help. My experience, knowledge of the market and client-focused approach will ensure an outcome you will be happy with. Please contact me at (541) 383-1426, or visit Bend Property Search to connect with me through my website.