Rising Building Costs in Central Oregon: How They’re Impacting Lot Desirability in 2025

Building your dream home in Bend or elsewhere in Central Oregon? You’re not alone—but you’re also not immune to the rising construction costs that are reshaping how buyers and developers evaluate raw land and building opportunities across the region.

In 2025, lot desirability isn’t just about location and views anymore—it’s about how much it will cost to actually build.

📈 Why Are Building Costs Rising?

Several key factors are driving construction costs up across Central Oregon:

• Labor Shortages: Skilled trades are in high demand, but short supply. Higher wages = higher total build costs.

• Material Prices: Though some supply chain disruptions have eased since 2021–2023, prices for essentials like lumber, concrete, and roofing materials remain volatile.

• Interest Rates: Financing a construction loan is more expensive today, raising the total cost of building from the ground up.

• Regulatory & Permit Fees: Local jurisdictions have increased impact fees, particularly in Bend, which adds thousands to the cost of starting construction.

🏞️ What This Means for Land Buyers

When construction costs rise, the true value of a lot becomes more about feasibility than potential.

In other words:

• Buyers are more cautious about lots that require significant prep—like tree removal, grading, septic systems, or long utility runs.

• Steep or rural lots may look affordable upfront, but could cost tens of thousands more to develop.

• Flat, shovel-ready lots with infrastructure in place are commanding premium prices.

🧠 How Buyers Are Adjusting

More and more, we’re seeing prospective buyers take a “total project cost” approach before purchasing land. That means factoring in:

• Cost to clear and prep the lot

• Driveway or road access

• Utility connection or well/septic installation

• City permitting and SDC (system development charges)

• Construction bids from local builders

This diligence is turning what used to be “dream lots” into high-risk investments unless the math works out.

🏘️ Shift Toward Turnkey or ADU-Ready Homes

Given all this, many would-be custom home buyers are instead turning to:

• New construction homes already underway (to lock in today’s prices)

• Lots with plans and permits in place

• Existing homes with room for ADUs to generate income and offset mortgage costs

Rising building costs are changing the way Central Oregonians approach land purchases. If you're hoping to build in 2025 or beyond, your smartest move is to get informed, partner with local professionals, and analyze total cost—not just asking price—before committing to any parcel.

Thinking about buying land or building a custom home in Central Oregon? I’d be happy to connect you with trusted builders and offer local insights tailored to your goals.

FAQs

Q: Why are some affordable lots sitting on the market?

A: They may require expensive prep work—like excavation, septic installation, or long utility trenching—which turns buyers off once they do the math.

Q: Is it still worth buying land to build in 2025?

A: Yes—but only if you’re well-informed about all the costs involved. A flat, ready-to-build lot with infrastructure is still highly desirable.

Q: How can I estimate total build costs?

A: Work with a local builder or construction consultant early. Many offer pre-purchase feasibility studies to help you avoid costly surprises.

Q: Are any areas more affordable to build in?

A: Redmond, La Pine, and parts of Powell Butte still offer better land value, and some have fewer permitting hurdles than Bend or Sisters.

Q: Will construction costs go down anytime soon?

A: While material costs may soften slightly, labor and regulatory fees are expected to keep rising in the near future—so waiting may not help.