For the first time since September 2005, the median home price for single-family residences in Bend has dipped below $300,000, according to a report released last week by the Bratton Appraisal Group.

Bratton’s monthly report, which analyzes Multiple Listing Service data for Central Oregon and is sold to subscribers, also said that home sales jumped more than 64 percent from February to March and that Bend homes spent fewer days on market, falling from 193 in February to 137 in March.

Bend’s median home price in March was $292,000. In September 2005, it was $289,000. The median price means that half of the 92 homes sold during the month of March, according to the report, were more than $292,000 and the rest were less.

The new median price continues a downward trend in Bend since median prices reached their peak of $396,000 in May 2007. In the 10 months since, median prices in Bend have fallen more than 26 percent.

Ruth Lindley, the marketing manager for Economic Development for Central Oregon, a nonprofit whose goal is to recruit employers to the region and retain existing ones, said the median price drop benefits the community.

“It means that when people are looking at the area, and hearing about utility costs, land costs, the availability of incentives, and then looking at what it would be like for employees, (Bend) becomes a community that doesn’t get crossed off,” said Lindley. “We can stay on that short list.”

The Bratton Report cites the sale of single-family residences only and does not include condos, townhouses, manufactured homes or acreage. It differs from a recently released report from the Central Oregon Association of Realtors, which summarizes quarterly data. That report gave a quarterly median price of $306,500 for Bend.

The Bratton Report also broke out monthly data for Redmond. There, the median home price in March dropped to $225,000 on sales of 38 homes. In February, the median home price was $230,000 on sales of 30 homes. Days on market also dropped, to 123 in March from 198 in February.

A year ago, in March 2007, Redmond’s median home price was $259,000. It reached its peak of $289,000 in November 2006.

Doug Farmer, a Realtor with Village Properties in Sunriver, said national concerns about credit and stricter lending guidelines are making it harder for would-be buyers to enter the market. Although home sales in Bend climbed in March, Farmer believes most of those were due to cash buyers without traditional financing needs.

“I think people were holding out for a while … and prices are coming down, but it depends probably more on the people that are in the market. A lot of them are cash buyers and are not real dependent on banking right now,” said Farmer. “There are some deals going through, but … I think the market will be back, particularly in Central Oregon, because we have a desirable location.”

In Bend, 257 houses were listed for sale in March that were priced between $250,000 and $300,000 and within range of the median price. Twenty-three of those sold, according to the report.

The price range with the most sales, 25, was the $200,000 to $250,000 range. It had 141 listings during the month.

Jessica Dickinson, the principal broker at Bend Real Estate, said houses that are accurately priced are selling.

“I think people are becoming more realistic in their expectations,” said Dickinson. “Houses priced right will sell.”

Dickinson said the housing market in Bend was overinflated for a time, but she doesn’t believe home prices will continue to decline for long.

Dickinson predicted population growth will continue to eat away at existing inventory. A slowdown in the building of new homes — only 17 building permits for detached single-family residences were issued in Bend in March, according to the report — coupled with ongoing delays in the city’s expansion of its urban growth boundary, means demand will soon outpace supply again.

“I think the oversupply of homes will be drawn back into the market, and when that is depleted, prices will be on the other side, because there are not enough homes being built in time,” said Dickinson. “I think we are going to run out of land way before the UGB maneuverings reach any type of a solution.”

Andrew Moore can be reached at 617-7820 or amoore@bendbulletin.com.

Housing Starts Post Surprise Rise

WASHINGTON -- Home construction turned up unexpectedly in April and showed surprising vigor, making the biggest increase in two years. However, the increase was driven by a surge in multi-family housing, while single-family starts dropped.

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Housing starts increased 8.2% to a seasonally adjusted 1.032 million annual rate, driven higher by a surge in apartment building construction, the Commerce Department said Friday. Starts plunged 13.8% in March to 954,000, the data showed; Commerce initially estimated March starts down 11.9% to 947,000.

Economists surveyed by Dow Jones Newswires expected April starts to drop by 1.4% to a 934,000-unit annual rate. The 8.2% increase was the largest monthly climb since a 14.0% jump in January 2006.

But year over year, housing starts were 30.6% below the level of construction in April 2007.

"The headline increase in starts means nothing; it is all due to a rebound in the hugely volatile, but essentially trendless, multi-family sector," said Ian Shepherdson of High Frequency Economics.

April single-family housing starts decreased 1.7% to 692,000. Construction of housing with two or more units soared 36.0% to 340,000; within that category, groundbreakings of homes with five or more units -- or multi-family -- were 40.5% higher.

Builders have been reluctant to build because demand for new homes has plunged and the supply of unsold property remained high. The latest data show new-home sales, for March, were down 36.6% from a year earlier. On Thursday, the National Association of Home Builders reported its index for sales of new, single-family homes slipped to 19 in May from 20. The gauge is based on a survey of builders asked about prospects for sales.

"The magnitude of the housing bubble was unprecedented, and the corrective process promises to be a long and painful one," MFR Inc. Joshua Shapiro said of the NAHB data. "Hence, it is hardly surprising that builder sentiment is still languishing very near its all-time low."

Earlier this week, luxury-home builder Toll Brothers Inc. released preliminary results of its fiscal second quarter and reported a 30% drop in home-building revenue. Its chief, Robert I. Toll, said current customer traffic is "the worst we've ever seen" and characterized would-be buyers as "scared."

Lehman Brothers analyst Michelle Meyer on Thursday said, "We think home sales won't bottom until the end of the third quarter, leaving builders gloomy and cutting construction through the end of the year."

Yet Friday's data showed building permits rose in April by 4.9% to a 978,000 annual rate in April. Analysts expected a drop of 1.8% to 910,000. March permits decreased by 5.0% to 932,000. Permits are a precursor to actual building.

Regionally, housing starts increased 24.4% in the Midwest, 3.6% in the South, and 18.5% in the West. Starts in the Northeast fell 12.7%.

Nationwide, an estimated 92,400 houses were actually started in April, based on figures not seasonally adjusted. An estimated 89,000 building permits were issued last month, also based on unadjusted figures.

Write to Jeff Bater at jeff.bater@dowjones.com