2024 Market Forecast for Bend, Oregon: Brace Yourself

Hey everyone, there's a lot of buzz about what the real estate market holds for us in 2024.

Will it be a slow year like the last one, a record-breaking frenzy like 2021, or something in between? Well, buckle up because here's your 2024 real estate market forecast, and let me tell you, it's not your typical story.

Introduction

Let's start with a reality check: the US is facing a shortage of about 4.5 to 6.5 million homes. Yes, you heard that right. Despite significant apartment construction, the housing deficit remains staggering. Why? A shortage of skilled labor, restrictive land regulations, and soaring housing costs are hindering new construction, leading to a 39% drop in inventory compared to five years ago, nationally.

And Bend? Well, we're in the same boat. Low inventory and scarce new construction define our landscape. The labor market struggles to keep up, and land availability comes at a premium. The vicious cycle of rising land prices makes building affordable homes a daunting task. Plus, don't hold your breath for an expansion of the Urban Growth Boundary (UGB)—we're looking at 2025 for any potential progress, and even then, it could be years before we see new homes on expanded land.

Interest Rates

Now, let's talk interest rates. Over the past 18 months, rates soared from 3% to a mind-boggling 8%, shocking the world. But here's the twist: interest rates are now on the decline since November 2023. And guess what? Buyers are cautiously returning to the market, realizing that 6% doesn't seem so bad after all.

Market Dynamics

But here's the kicker: despite rate hikes, prices didn't plummet as expected. Why? Enter the "locked-in effect." During the refinancing boom of 2020-2022, homeowners locked in historically low rates, making them reluctant to sell and lose their sweet deals. As a result, supply and demand remained relatively stable, and prices continued to climb.

So, what does all this mean for 2024? Brace yourself for an active market. While it might not reach the frenzy of 2021, it's shaping up to be busier than 2023. Multiple offers are becoming the norm again, and low inventory isn't budging. But with falling interest rates, expect a surge of eager buyers eyeing the limited housing stock.

Millennial Influence

Let's zoom out for a moment. Nationally, 72 million millennials are on the move, with 23 million still living at home. As first-time homebuyers, they're eager to secure their piece of the American Dream. And where are they looking? You guessed it—Bend. With remote work options, stunning views, and unbeatable amenities, Bend is a hot spot for millennial home seekers.

So, there you have it—the 2024 real estate forecast might not be what you expected. But hey, in the ever-evolving world of real estate, surprises are par for the course.