Bend is the county seat of Deschutes County in Oregon. Surrounded by lakes and peaks of the Cascade Mountains, the city is an ideal place for hiking, skiing, and other outdoor recreational activities. With its stunning mountain views, vanilla-scented Ponderosa pine forests, and high quality of living, the city continues to attract a population within its limits.
According to the U.S. Census Bureau, Bend recently passed a population milestone, surpassing the 100,000 mark in 2021. The increase in population has prompted the construction of new homes in the city. Bend, however, is struggling to meet the high demand due to the rate of population growth. A recent study on the country’s housing underproduction lists Bend at the 30th spot with a shortage of around 3,400 units.
The Cost of Building a Home in Bend
The limited movement during the pandemic has caused major labor shortages and supply chain disruptions that have affected the cost of construction. As a result of the pandemic issues, many people became hesitant to invest in new homes. Bend’s median home price has been increasing substantially over the pandemic. From $460,000 in March 2020, the median home price increased to $722,000 in June 2022. Nonetheless, industry reports indicate that a shift is taking place. Inventory supply increased by 47% in May 2022, at a rate close to 6% month over month.
The cost to build a home in Bend ranges between $175 to $350 per square foot. The national average to build a home is $207 per square foot. Many factors affect the total cost of constructing a new home including the location, the size, the design, the finishings, and more. Luckily, the costs can be further divided into two, the hard costs and the soft costs. All costs associated with the physical aspects of the construction, such as materials, equipment, and landscaping, are called hard costs. Soft costs, on the other hand, include all expenses such as land costs, architecture, permits, and labor fees.
Hard costs are all the expenses that are associated with the physical construction of the home. These costs are tangible and can be seen as the construction of the home progresses. A build-conscious home in Bend could cost homeowners $175 to $275 per square foot. A middle-range home with more features and better finishings could cost homeowners $275 to $350 per square foot. A luxury-build home that uses premium materials could cost homeowners $350 per square foot and above. These estimates may increase or decrease depending on the complexity of the build and the trend of the market.
Installation of framing can cost around $3,619 – $5,283. Framing labor can cost $2 to $12, while materials can cost $3 to $12 based on the size of the home and lumber prices. Roofing installation costs $5,128 and $6,583 in the county. This estimated roofing cost includes the material and labor costs. Siding installation costs an average of $3 to $4 per square foot.
The installation of heating, ventilation, and air conditioning (HVAC) in Bend costs $5,500. For plumbing services, typical services cost around $319 to $459. If the house is new, the cost to install plumbing is $200 to $1,000 per fixture. Homeowners should also take into account the cost of the monthly and annual maintenance of these utilities. To further understand these costs, homeowners are encouraged to talk to local homebuilders for insights about their planned projects.
Soft costs are all the expenses that are not associated with the physical construction of the house. These costs are usually needed to be settled before the building starts. Land, permit, and architecture fees are among the fees that fall into this category.
Figure 1. Soft cost percentage and average price range of additional fees, determined from the overall cost of custom home building in Bend, Oregon.
Cost of the Land
Research by the Portland State University (PSU) Population Center shows that the population of Bend will increase to 100,922 in 2021. However, a recent estimate by the U.S. Census Bureau exceeded the number PSU’s research first estimated. According to the U.S. Census Bureau, the city grew by 2,500 more people in 2021 amounting to 102,059 residents. As a result of this larger increase, demand for new housing rose, and lot prices skyrocketed.
According to the listing website Zillow, the average cost of land in the city is $327,153 with an average of $19.79 per square foot. Currently, the land with the highest selling price is $589,000 with 24,829 square feet of land located on Northwest Brickyard Street, near Shevlin Park. The cheapest land on the listing is $100,000 with 29,621 square feet of land located on Island Loop Way.
Permits and Other Fees
Permit application forms in the city can be applied through the local government’s online permit center portal. Users must register first to be able to access the different application forms for their projects. According to the city’s schedule of fees, building permits are determined based on the construction valuation. The minimum permit fee in Bend is $153.31. The city’s valuation is as follows:
Architecture and Design Fees
Architects typically charge based on the total construction of the house. In Deschutes County, the average cost to hire an architect is $1,235 to $12,363. The cost may vary depending on how the firms bill their clients and the complexity of the project. Some architects may charge by percentage, some may charge hourly, and some may charge by a combination of both. The same goes for interior designers, in addition to the earlier types of billing, they can charge based on the cost per room. In the county, the average cost to hire an interior designer is $822 and $12,347
How do the custom home building costs in Bend compare to other nearby cities?
According to the Beacon Report, the median sale price of single-family homes in Bend is $722,000 in June 2022. It shows a slight decrease from the previous month’s median home sale price which is $740,000. The drop in prices has increased the number of permits issued by the local government increased from 55 in May to 71 in June.
In comparison, La Pine’s median home sale price of single-family homes is $460,000. Redmond, which has only released 31 building permits for single-family homes in May, has a median home price of $530,000. Sisters has a median home price of $690,000. Prime vacation destination Sunriver has the highest median home price at $1,605,000.
The Future of Bend’s Residential Construction Industry
Bend, Oregon offers a small-town vibe with a number of recreational activities perfect for families and outdoor enthusiasts. With the population increasing, many developments are underway in the city, and on top of the local government’s priorities is affordable housing.
According to the local government, Deschutes County will sell 7.12 acres of County-owned land on the west side of Bend for the development of affordable housing units. The development aims to construct 110 housing units, which will include a combination of multi-family and single-family homes. Moreover, 32.75 acres of land are being developed into residential rental properties. This housing plan will have 574 units, which include walk-up apartments, townhomes, single-family homes, and duplexes. The development is set to begin construction in late 2023.
According to an analysis of the housing market, national home prices will rise by 5% between May 2022 and May 2023. One important note the analysis shows that not all markets will increase. The study, which looked at 392 regional housing markets, shows that 41 markets have a 50 to 70% chance of decreasing the price of homes. Four of those markets, which include Bend, have over 70% probability of a price dip.
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