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What is the Prediction on Bend Oregon New Construction Prices in 2021?
Bend Oregon New Home Prices Expected to Rise
The demand for Bend Oregon housing over the past year has broken records. With less than a month supply of single family homes for sale, builders have been working hard to bring new product onto the market. However, the demand has not kept up with the supply and more and more buyers are not able to purchase a home they can afford.
Besides the changes that great demand has made to Bend new home prices, there is another important issue connected with housing affordability - the price of lumber. Since the beginning of the pandemic in March when lumber prices dropped initially, the price of lumber has climbed at a tremendous rate, reaching a high of almost $1000 per thousand board feet in September before prices dropped in October. However, with decent weather and great demand, builders continue to build into the late fall and lumber prices are rising again. Traditionally lumber prices drop to their lowest levels in the winter, but the trends do not appear to be following suit which can be a problem for the affordability of new homes.
The Price of Lumber is Impacting the Affordability of Bend Oregon Real Estate
"Framing lumber makes up roughly a fifth of the materials cost of building a home," said David Logan, director of tax and trade analysis at the National Association of Home Builders. "When we see a price increase this large over such a short period, it's going to have negative effects on affordability for prospective home buyers."
The National Association of Home Builders estimated earlier this year the spike in lumber prices increased the price of a single-family home by over $16,000.
When the hard cost of building a home rises that dramatically and is coupled with prodigious demand, home prices must follow suit. We anticipate that Bend new home prices will be up in 2021.
*Chart from Trading Economics. https://tradingeconomics.com/commodity/lumber