How is the Bend real estate market? Well, that depends on whether you are a buyer or a seller.

If you're a buyer, our inventory is still high and there's a good selection of homes in all price ranges. Add to that the fact that the median sales price is roughly back to what it was in 2005 and interest rates are still low, it's a pretty good time to be a home buyer. There are plenty of foreclosures and short sales to consider as well, although many of them that I've seen are in rough shape.

If you're a seller, it's tough out there. Depending on when you purchased your home, you might not have any equity and in fact, you might be upside down. Even if you do have equity, you have to compete with the foreclosures and short sales and that might mean not being able to realize any of that equity if you're serious about selling.

Here's a graph that reflects the changes in median and average sales prices from 2003 to 2008:

As you can see, the median sales price for 2008 is roughly back to what it was in 2005. Here's a table with the exact figures:

I also looked at bare land values. Land prices have come down even more than home prices. I initially ran these numbers because I know a couple that wants to buy a homesite in Shevlin Commons, one of my favorite neighborhoods in Bend. We're looking at a few lots on the market that were purchased in 2004 or later and they are listed at nearly twice what the owners paid for them. Yes it's a fantastic neighborhood but it's not immune to depreciation.

What I initially thought was most alarming was the dramatic change in the median sales price in 2008 alone. The median sales price in December 2008 was down 29% from January 2008. I dug a little deeper and found that this can largely be attributed to the fact that fewer homes sold in the higher price ranges, and by higher, I mean $300,000 and up. That's not to say that home values didn't decline in 2008, it's just not accurate to say that home values declined by 29%. We have to be very careful looking at the median sales price for just one month in particular because it's drastically affected by even one additional sale. For example, in December 2008, there weren't any sales over $575,000. If even one million dollar home had sold, that could increase the median home price by about $25,000. It is helpful in allowing us to look at the overall trend though.

Notice that from April to June the median price increased then declined from July forward. That does not mean that home values went up, it just means that more homes sold in the higher price ranges. In the 1st quarter of 2008, 150 homes sold over $300,000 (9 of those sold for $1 million of more). In the 2nd quarter, when the median price went up, 225 homes sold over $300,000 (12 were over $1 million). In the 3rd quarter, 187 homes sold over $300,000 (12 were over $1 million) and in the 4th quarter, only 108 homes sold over $300,000 (5 were over $1 million). Obviously the median sales price is determined by what is selling, and not as many homes over $300,000 are selling.

Click on your desired month to view detailed statistics for Bend Real Estate.

I recently performed a CMA for a homeowner and determined a list price in the $225,000 - $250,000 range. The homeowner was surprised the value was so low because her most recent tax statement provided a "real market value" (RMV) of $290,000. She was under the impression that the RMV that the county assigns is fairly accurate and occasionally, even low. She is certainly not the only homeowner that believes this to be true.

The RMV is determined with an appraisal of the property by the county in January of the current tax year. By the time you receive your tax statement in October property values have usually changed and in our case in Deschutes County, they've probably gone down. Furthermore, the RMV determined by the assessor usually lags behind actual sales prices. For example, in 2005 and 2006, homes were selling for about 25% more than the RMV. Now they're selling for roughly 75% of the RMV. I found it interesting that the RMV in the higher price ranges tended to be more accurate. The table below includes Bend homes sales in October 2008 and compares the sales price to the RMV determined by the county. I randomly selected properties in all sections of Bend but most of the sales seemed to be in NW Bend. None of these sales were short sales or bank owned properties.