Does the housing recovery mean buyers in Central Oregon are turning to larger homes, or are equivalent homes merely commanding higher prices? Statistics show the median square footage of homes sold locally in the past five years is relatively flat, while median sale prices and dollar/sq ft calculations have been increasing dramatically.
The median square footage of homes sold in the greater Bend area has mostly registered in the high 1,800-sq ft range with one exception: the median home size in 2012 rose to 1,920 sq ft (see accompanying chart).
This is contrary to a national trend, both in size and stability. The National Assn. of Home Builders writes that the typical size of new single-family homes flattened in mid-2015 after rising steadily in parallel with the recovery. On a one-year moving average basis, the median size of new single-family homes increased 18% to 2,478 square feet since the bottom of the cycle. “Typical new home size falls prior to and during a recession as some home buyers cut back, and then sizes rise as high-end home buyers, who face fewer credit constraints, return to the housing market in relatively greater proportions,” writes Robert Dietz in NAHB’s “Eye on Housing” web feature.
In the greater Bend market, median sale prices rose faster than dollars per square foot, indicating that market forces (including low inventory levels and land and material costs) outweigh home size. Between December 2010 and December 2015, home sales generated a 77.2% rise in dollars per square foot while median sale prices more than doubled at 103.9%. (Based on figures for single-family homes on less than one acre in the Bend area.)
Content has become an important factor in new construction.. There is a philosophy among some buyers that bigger is not necessary better. This is particularly apparent in Bend, where many people subscribe to an ethos that includes sustainability, energy efficiency and conservation of resources. Combined with an aging population and an influx of empty nesters, this points the way to a market segment for homes that are small but nice. Builders are responding by going all out with upscale finishes, materials and appliances.
As the charts show, the Redmond area (including Terrebonne) and the master-planned community of NorthWest Crossing trace similar upward paths in dollars/sq ft and median sale prices, though at different levels. Redmond saw median prices rise 94.1% and dollars/sq ft increase 73.4% during the five-year period. Only in NorthWest Crossing, where higher prices are routinely supported by lifestyle appeal, were the ratios reversed by a small margin. Median sale prices increased 57.1%; dollars/sq ft 65.0%.
The housing, financial and real estate industries generate a cornucopia of statistics, facts, interpretations and opinions. The charts here provide a quick view of some factors contributing to a recovering local housing market. Information is derived from Central Oregon Multiple Listing Service data.