One other quick note.
Obviously the starting home market with the tax deduction is moving well.

Bend is not in the conforming loan limits for a Jumbo and was just added to the high risk list.

So if one thinks the market is competitive right now for qualified buyers from 400,00 up it is only going to get worse.
I have already seen a few homes I was tracking come back on the market due to no financing available to the buyer at a jumbo.
This throws a whole new wrench into the market.

Well I wrote a long answer and it disappeared.
I guess the best thing for all to do is really spend the time researching not only the particular house on your own- as much can be hidden and will not be disclosed at closing. (LIKE PERMIT ISSUES) But also on the internet sources. Again even Trulia and others are found to be way off oftentimes. Just watching some of the sites you pay for will give you a much clearer picture of the pending market.
Not only are defaults as well as auction notices flying daily- and I'm not talking one or 2 or 10- but as you follow them you begin to track the shadow market pending that so many refuse to achknowledge.

Also note SS on MLS is not the picture- many owners do not choose or qualify for this option.
There are some great realtors in Bend- however the market is difficult for even the best to keep up with it and I imagine since it is their communitty it is difficult to really non-emotionally access the situation. Their home values as well as livelyhood is hurting as well.
You have to be your own advocate.
My realtor was shocked at the debth of the issue at hand and now is a joy to work with as we make bets and watch which houses fly out the doors and which sit and sit and go to auction to never be seen again or fly out the door priced to sell.

Dennis Olson (see below) answered this question in a very simple, but very relevant way. His answer is very similar to my own experiences. Entry level homes in Bend are about $100/sq ft+-20%; Homes with some nice upgrades, in my very recent experience are $140 to $170 per sq ft.; Homes with _good_ mountain views or river front views are going for about $200-$250/sq ft.

An illustration: I toured the "Denton Home" (Google: bend denton Merenda restaurant) a few weeks ago before it was off the market. This is in a nice west-side location with a large lot. It was listed for $430,000. It was originally double that about 3 years ago (listed at over $700,000 just a couple of months ago before the huge bank-owned reduction). It is about 2700 sq ft ($156/sq ft). It was a modern looking home with the most impressive kitchen ever! The stove setup (stove/backsplash/hood) is the most expensive model Viking sells (about $20,000), same with the fridge. It was something too be seen. The home had many other upgrades like in-floor heating, and outside they had a killer outdoor heating system for the back patio. We missed our opportunity on that by hours.

On the lower-end there are nice 1400 sq ft townhomes built by Pahlisch that are selling for about $95/sq ft over on Schaeffer - right now none are for sale, but there are about 10 in foreclosure.

As a buyer that has been watching this market for the last 6 months my feeling is that there is a lack of reality of just where the true market is.
I agree with the folks that said the market is what the market will bare. The problem comes when foreclosures and shadow inventorys are piling up and many realtors apprasials are still at days long gone.
Generally speaking IMO- is a higher quality home is now selling at 150- 160 per sq foot in the over 400,000 price range and higher end are dropping quickly. 100.00 a sq foot for lessor quality areas and building materials.
Also be aware that sadly all realtors do not have the same high ethics as in yesteryear with the market being so competitive. I have found 2 homes with serious permit issues that are not being disclosed- so make sure to not count on disclosure in this market and do serious homework before making an offer.

Those are some great answers below.

Using current solds in the same neighborhood with comps of houses the same size or close to the same size is the best way to get the real value today. A couple of years ago, everyone had a friend or relative in the industry. I hear clients say, my friend or my relative from 600 miles away said, North side prices are so much a square foot.

To be realistic, you have to take the same area or subdivision. Here in my area, the homes in Spanos will fetch a different price than the homes in Spanos West. The homes in Beck 1, will fetch a different price than the homes in either Spanos. All are in a desiarble North area. If you lifted the home from Spanos West, and moved it to Beck 1, it would fetch less money. This is why I always tell clients, you have to use the area where the home is. Make sure the square footage is within a 100 sq. ft. if you can't find the same model. Same as the same size lot. Are you on a corner? Do you back up to the levee, school, park, youth sports complex? All these items come in to play when trying to figure out what a good price is.

What is the economy like in your area? Are you in a working class neighborhood? Are there jobs or is the unemployment high?

In the early 2000's, prices were going crazy. People got hung up on all the friends being in the business and making money by flipping the houses before they even moved in that most forgot reality. In our area, homes have come back down to reality. The price of a home should increase with the amount of inflation at the most. Not 100 times the amount of inflation. I said 8 - 9 years ago, there is no way I would buy a house in this area for the prices they were going for. I said, look at the area we live in. People are going crazy and when this thing tops out, it is going to fall faster than it rose. I didn't buy than but I would love to buy more now.

No one really knows when the best time is. Have we hit bottom? Most say no. Is there more REO's to come? Most say yes. I say, if you are realistic, your debt to income is truthful, if you lose your job for a couple of months and can still pay ALL your bills, you will be paying less than your rent is now, than it is a great time to buy.

Be realistic. A house is an investment, not an ATM. Remember that and you should be able to know what is the right price for you and when is the time for you.

I base my valuation off of the appraisal, CMA/BPO, and an income analysis (for investment properties).

I liked Ya's answer. He is on the right track.

For myself, I look at historic trends. Prices went out of whack around 1998-2000. So get a value from that time. Maybe add the inflation since then and there is a close to real value for what it will be. Do not confuse todays overpriced-price with its real value. I figure if a house sold in 1999 at $70,000 and we have had 30% inflation since then its real value would be about $91,000. The $400,000 high price and the $225,000 now price do not change the fundamentals. Let the repos go and the government policies die and see where prices go.

In addition - you will always pay more than anybody else would pay, that's why your offer got accepted!

"Ya" is 110% correct, I'm a builder so he speaks the truth. Job well done!

The answers given below by agents are somewhat correct. Here is the real answer: It is what the market will bear using the CORRECT data for "comps", augmented by the rate of change.

Basically in Bend, the $8000 tax credit is keeping the price of low-priced homes steady. Homes below about $400K are selling fast, and the prices are holding; homes above $400K and about a million are not selling fast, and the prices are dropping; homes above about a million are dropping, and faster than the mid, but not as fast as the low-end.

As for pricing, and "comps" do this: get an agent to give you raw data of the last three months of sales in the area the you are considering (don't mix NW Crossing with "Old Bend", for example). USE ONLY SOLD for comps. Do NOT use "pending" or "active". Only SOLD.

Finally, make sure the comps are in about the same square footage. A smaller 1700 sq ft home will come in at a higher $/sq ft than a 3000 sq ft home.

The important thing is do the numbers yourself!!! Use only SOLD homes in the past three months with similar square footage in a similar area.

Trust yourself. Do not get lazy and turn this process over to anybody who can benefit from a sale.

Finally, if the market is dropping by 10% a quarter (which it was this past summer in the low and mid-range) a "fair" offer based upon today's comps, may be too high in another quarter or two.

Finally, agents have said, every time when asked: "Now has never been a better time to buy". They say it now, they said it three years ago at the peak. If you bought a home 3 years ago for $800,000 it is roughly worth about $400,000 today in Bend. That $400,000 home *MAY* be worth $360,000 in a year.

The bottom is coming to Bend, but things will remain on the bottom for a while. Bend's REAL unemployment is about 25%, and people, generally, are not buying seconds homes. They are still dumping them. When the bottom comes, it will nor be like a ball bouncing back up. Things in Bend will remain low for years to come - the data backs this up.

Finally, watch the agents write replies to this posting refuting what I am saying. Perhaps, I am wrong. Just do the simple work yourself, and make your own conclusions.

Hello,
I agree with the answers below. The best thing to do is have your agent complete a CMA for you on recent sold properties in the area of the home you are interested in. If you are not already working with an agent then please feel free to give me a call or send me an email. I would be happy to complete a Comparative Market Analysis for you and help you with your searches. I also have some very interesting statistical reports that I can email to you on Central Oregon.
Have a great day!
Selena

Selena McNeill, Broker
Century 21 Gold Country Realty
550 NW Franklin Ave Suite 188
Bend OR 97701
Cell: 541-390-0595
Direct Fax: 1-541-982-2243
Email: selenamcneill@yahoo.com
Website: http://www.selenamcneill.com

Licensed Realtor in the State of Oregon, since 2004

Prices are based on supply and demand. Right now there has been a increase in the demand for entry level housing because of the first time home buyer incentive the Gov is offering. I market exclusively bank owned properties and am seeing a trend of multiply offers many selling at full price or over.

A property is only worth what consumers will pay. If you have a Comparable Market Analysis done around the area of a home you are considering and the home's price falls within the price of the recent solds (3 - 6 months or less), then it is probably a price that will deviate little in the coming months.

With both winter coming on and a halt to the first time home buyers incentive, the market may once again start into a gradual decline. If the Feds extend the FTHB incentive, then I think the real estate market winter slow down will milder and we will have a robust spring market.

The Feds are working on more programs to keep existing home owners in their property which will also help to decrease the inventory making prices more stable. Last week in both Bend and Redmond there were around 144 bank owned properties but over 300 short sale properties.

A house is worth what the market as of TODAY says its worth. Look at the houses that have recently sold (the more recent the better) in the area you are interested in and use that as a gauge to determine value.
A house's condition and location as well as the prices of sold comparables and average days on the market, in the neighborhood you are interested in, all help determine a house's value.