I ran a search on the Multiple Listing Service of Central Oregon earlier today. What I found was pretty amazing.
What made me think to run the search in the first place was a recent article in the Wall Street Journal discussing the number of investment property loans that are now in default.
What made me think to run the search in the first place was a recent article in the Wall Street Journal discussing the number of investment property loans that are now in default.
According to the WSJ article, 27% of all "home purchase" loans in 2005 in the U.S. were to people buying investment properties. In addition, 28% of all mortgage loans in default as of June 30 were for non-owner occupied properties. Coincidentally (?) these two numbers are nearly the same as the percentage of non-owner occupied, existing houses listed for sale today in the greater Bend area (Bend-Tumalo-Alfalfa).
The results of my MLS search showed that 41% of the residential properties currently listed for sale in Bend are vacant. Of these, just under half (47%) are existing homes - not newly built construction.
When coupled with currently rented homes also listed for sale, non-owner occupied existing houses account for close to 26% of all the residential properties listed for sale in the Bend area today. This number would be even higher if recently built new homes bought by speculators looking to flip them for a quick profit were included.
So approximately 1 in 4 residential properties for sale in Bend today are owned by investors. That's not usually an indication of a vibrant real estate market.
On the bright side: Buyers looking today have a lot of houses to choose from. Job markets, both regionally and nationally, are still historically strong. People still want to move to Central Oregon. It is easier now than ever before for people to keep their current jobs in higher paying areas, move to Bend and telecommute. Interest rates are still low, though the crazy easy money days of the recent past (which was a big part of the problem) are history. And median prices locally are still relatively low compared to most of the big cities in California.
Let's hope that California and other more expensive markets start to see some pick up in sales activity soon. If they do, I think we'll be able to work off the excess inventories without too much pain and get back to a more healthy, sustainable market that's not too hot and not too cold, but just right.
The results of my MLS search showed that 41% of the residential properties currently listed for sale in Bend are vacant. Of these, just under half (47%) are existing homes - not newly built construction.
When coupled with currently rented homes also listed for sale, non-owner occupied existing houses account for close to 26% of all the residential properties listed for sale in the Bend area today. This number would be even higher if recently built new homes bought by speculators looking to flip them for a quick profit were included.
So approximately 1 in 4 residential properties for sale in Bend today are owned by investors. That's not usually an indication of a vibrant real estate market.
On the bright side: Buyers looking today have a lot of houses to choose from. Job markets, both regionally and nationally, are still historically strong. People still want to move to Central Oregon. It is easier now than ever before for people to keep their current jobs in higher paying areas, move to Bend and telecommute. Interest rates are still low, though the crazy easy money days of the recent past (which was a big part of the problem) are history. And median prices locally are still relatively low compared to most of the big cities in California.
Let's hope that California and other more expensive markets start to see some pick up in sales activity soon. If they do, I think we'll be able to work off the excess inventories without too much pain and get back to a more healthy, sustainable market that's not too hot and not too cold, but just right.
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