Our once booming real estate market here in Central Oregon and across the nation has entered a new, more complex chapter in 2025. The good news we still live in a highly desirable place and the frenetic pace of the real estate market in the early 2020’s has softened.
Some would say we are returning to a more normal market. The days of multiple offers have become less common and buyers now have time to consider the properties available to them. When you review the Duke Warner Realty market trends and the Beacon reports they both show a market where homes are staying on the market longer but the sale-to-list price ratio is staying strong hovering just below 100%.
Top of mind for most buyers is the affordability (or lack of) of housing in Bend. For a lot of folks, especially those of us with kids who are now grown and looking to stay in Bend, the dream of homeownership has been and continues to be out of reach.
Wages for those just starting their journey are humble, there is a significant gap between what they will earn in Bend and being able to afford a mortgage down payment. Surprisingly in many cases their monthly mortgage payments times may be lower than what they had been paying for rent.
While most of us would not be able to substantially help our kids with a traditional down payment there are some great programs available that may help open the door. Most first-time home buyers will get their financing through the Federal Housing Administration (FHA), which has loan products suited to meet their needs. What really helps is that the FHA makes these loans available with down payments as low as 3.5 %.
To illustrate the advantage of a 3.5% down payment over a traditional 20% on a $550,000 home, 20% is $117,000 drop down to 3.5%, $20,475. 3.5% is still a good sum of money to come up with but this is a matter of someone getting their foot in the door to home ownership and the dividends it pays down the road as the home appreciates. Currently in Bend proper there are 53 homes available under $550K many of them are FHA eligible homes. The surrounding communities of Redmond, La Pine, Prineville and Terrebonne offer a broader selection of homes that are below that price point. As a parent who would want to help their kid get into a home this program is a game changer..
The Push for More Housing: New Construction and the UGB Debate
In an effort to address the housing shortage and affordability crisis, new construction is a major focus in and around Bend. Numerous housing projects are underway, with prominent builders like Hayden Homes, D.R. Horton and Lennar are actively developing new neighborhoods. These projects range from single-family homes to townhouses and multi-family units (apartments, ADU’s, duplexes, triplexes) are a visible sign of the city's push to increase it’s housing stock.
With the inventory of homes increasing and more competition for sales increases, several of these builders are now offering some very enticing programs to draw buyers to their homes. Many have their own mortgage operations and can provide below market rate mortgages, down payment incentives, upgrades to the home and/or yards. This makes competing against these products more difficult for the homeowner with a nice older home in the same price range. Unfortunately the homeowner just does not have the same tools to work with as the developers. This in turn will help fuel the softening of the market as those with older homes have to adjust their pricing expectations.
Of course, the question of where to build will always be a contentious issue. This brings the Urban Growth Boundary (UGB) to the forefront of real estate and local politics discussions. For those who are not up to speed the UGB is a line drawn around a city to limit urban sprawl, protect farmland and natural areas. The Bend City Council is consistently active in exploring how to expand Bend’s UGB boundaries, a move that pits developers and affordable housing advocates against those concerned about the environmental impact and the preservation of Bend's character. Recent legislative actions at the state level have provided a framework for expedited UGB expansions such as the Stevens Road, Caldera Ranch and Parkside projects, all are tied to affordable housing requirements. The city continues to move forward with identifying more areas for growth. The outcome and finished products of these UGB decisions will have a long-lasting impact on the future of Bend's real estate market.
