News and Opinion from Sisters, Oregon
News and Opinion from Sisters, Oregon
After enduring the deepest and most prolonged trough since the early 1980s, the real estate market in Sisters Country is getting back in fettle.
The market finished 2012 stronger than it has been in a good five years, and the first quarter of 2013 appears to be continuing the trend and perhaps picking up the pace.
According to Central Oregon Association of Realtors statistics for the fourth quarter of 2012, there were 98 residential sales in Sisters for the year, up 3.16 percent from last year and well over the paltry 70 sold in 2009. While short sales (15) continued to pace last year, bank-owned sales dropped off by 50 percent, from 14 to seven.
The median sale price was $245,000, up 21.89 percent from the $201,000 of 2011, and average prices climbed 18.64.
Peter Storton of RE/MAX Revolution likes Tollgate as a handy reference point.
"I've always used Tollgate as a measure of what's going on in the community," he told The Nugget.
That subdivison west of town came in at a median of $258,958, and sellers got an average of 93 percent of the asking price.
Storton notes that the Sisters market has now become part of an international market. He has been working with clients from China.
Inventory has shrunk, leaving Realtors happy to see a rebound, but scrambling to find properties for clients.
"I'm working with a client now (last month) who's looking for something in the under $300,000 range," said Phil Arends of R.A. (Dick) Howells Central Oregon Real Estate Sales. "There's literally nothing available."
Lack of inventory could actually impede action in the marketplace.
"There would be more health if there was more inventory," Storton says. "Because that would create competition for price and increase opportunities for people to move to the community."
Statistics aside, there seems to be a sea change in attitudes.
"What's really telling is buyer behavior," Mike Mansker of Coldwell Banker Reed Bros. Realty told The Nugget. "Everyone who wanted to time the bottom of the market now realizes that opportunity is passing quickly.
"Buyers who were sitting on the fence are now competing with each other for the best deals on the market. Showing activity is way up on my listings, and pending transaction numbers have been rising."
Mansker says he's calling the bottom of the market as landing in late 2011.
Buyers are still looking for deals, however.
"They expect to make a good buy, especially at the high end," says Dick Howells. "They negotiate fiercely."
Jeff Jones of Metolius Property Sales notes that the low-end inventory is low; those homes were often snapped up by investors.
"We're seeing strength in the middle part of the market," he said.
Access to funds is helping.
"Lending has stabilized as well," he notes. "We had an issue a couple of years ago with buyers being able to qualify for loans, and that's eased up."
Jones sounds a couple of notes of caution:
"Unemployment is still too high," he said. "It's too high in our area."
Jones is concerned about demographics.
"We don't have enough young families, first-time homebuyers, in Sisters," he said. "We need more young families. That's a critical issue."
The question of homes and jobs is an equation that has proved difficult for Sisters to solve. It's difficult to attract young families without the potential jobs, yet first-time homebuyers are key to stimulating the local economy. New construction is a boon to the economy, and it also provides jobs for those young families. But construction may be slow to follow the market up.
Kevin Dyer of Ponderosa Properties notes that, "We are now seeing construction activity occurring at levels not seen for many years. But the cost to build generally remains higher than prices of existing housing. Most new construction in Sisters is now custom activity for owners of existing homes or lots. This activity usually doesn't lead to an immediate increase in homes for sale. Inventory of homes for sale will remain low until existing home prices rebound further in the Sisters area. And I believe, until that happens, developers of spec housing will continue to be hesitant to participate."
Mansker noted that, "shrinking inventory will definitely spur new construction, but there are still plenty of homes that will come available from two sources. There are still a lot of foreclosures that will be coming on the market in 2013. There are also a lot of non-distressed sellers who didn't want to compete with distressed sellers. Many would-be sellers just gave up while the market was sliding, but I expect the uptick to result in a lot of new listings."
The Realtors interviewed by The Nugget are all cautiously upbeat. They see a clear upward trend, but they caution that it may be a long time before prices resemble the heady days of the mid-2000s. And economic forces outside of Sisters could easily derail the chugging train.
"I expect the average selling price to rise again in 2013, but rising interest rates could slow that down in a heartbeat," Mansker said. "Once we establish fair market value for non-distressed properties, I expect prices to stay flat for a while, and then start to slowly rise. I am hearing economists predict that it could be as long as 10 years, or even longer, before prices get back to where they were at the peak of the market."
That tracks with Storton's assessment. He says he tries to encourage his clients to adjust their expectations to the current reality, not to what things once were.
Dyer, too, sees 2013 as a year for reestablishing what the market really is.
"We are now out of the bottom of the real estate bust," he said. "This year should help us re-establish what a baseline of value is for our homes and properties. After that, I believe we will see a strong, yet healthy appreciation of values as more and more people act on their desire to live in one of the best places to be found anywhere."
Jim Cornelius is editor in chief of The Nugget and author of “Warriors of the Wildlands: True Tales of the Frontier Partisans.” A history buff, he explores frontier history across three centuries and several continents on his podcast, The Frontier Partisans. For more information visit www.frontierpartisans.com.
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