Story by Rob Spooner
No one expected the red hot market that held sway on the Oregon Coast until early 2006 to keep on forever at the same pace. Nationally, real estate has swooned. Fewer homes are being built and those that are being sold fetch lower prices. The Oregon Coast has not been completely immune.
Still, as Mike Cocciolo of Prudential Pacific Properties in Florence put it, "If this is as bad as it gets, it's still pretty good." Asking prices are dropping a little, but nothing dramatic has happened yet. Fewer deals are closing and the inventory of listed homes is triple what it was in 2005, but not many owners appear to be distressed. The glut of subprime mortgage foreclosures has not spread to the Oregon Coast.
Much of this is due to simple issues of supply. The coast remains a desired place for many people to retire or buy second homes, and the combination of land use laws, extensive public ownership, and simple geography has kept the supply of homes limited.
For those with long memories, the idea that the "low end" of the housing market consists of homes for under $300,000 is still jarring, but that seems to be the case. And the "low end" is holding up better than the top of the spectrum. In July 2006, Oregon Coast ran a story on the most expensive homes on the coast, all of which listed for $1.8 million or more. I've checked on several and none of them actually sold. Bruce Birt, who often gives us advice on the state of real estate in Lincoln County, says that the number of deals that have closed in Lincoln County above $1.5 million is a tiny handful. It has never been easy to sell above that figure and in 2007, that has become almost a ceiling.
The exception to the principle of tight supply has been condominiums. Just 10 years ago, they were relatively rare along the coast. As buildable land close to the ocean became more scarce, developers have responded by increasing density.
Condo developments are popping up all along the coast. Most are definitely not low end, with prices between a half million and a million dollars being common. For people with this much money for what is usually a second residence, the appeal is great. These are units with the same attention to detail as would be found in fine metropolitan homes. They usually have spectacular views of the ocean, and they don't require that the owners devote their few hours of relaxation time to maintenance.
Sometimes they come with features that would be difficult to match with new detached homes. Shoreline Ridge provides oceanfront living within walking distance of historic Nye Beach. Bandon Commons has been designed along the same architectural lines as Bandon Dunes, and in fact by the same architect.
The question regarding condos is not whether they represent a sustainable trend. Clearly they have gained acceptance and will be a feature of the coast for the foreseeable future. In the short term, the issue is supply. A great many developments are in the pipeline, putting the real estate market in "uncharted waters," as one broker put it. The ones that are successful in the next 12 months will probably be those with some special edge.