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Bill Valentine, a Bend money manager who gained notoriety in 2006 for predicting the real estate bubble, is making the rounds with a new forecast, and it’s quite bullish.

“We are not in another bubble,” said Valentine, who gave his presentation Thursday at Brooks Resources Corp. in Bend.

Valentine, who owns Valentine Ventures, believes a recession would set prices back, but he said, “Looking out 12 months, the future looks pretty good.”

Valentine said he created his presentation, “The Real State of Bend Real Estate,” at the request of a client, a real estate broker who wanted to reassure fellow brokers that Bend’s housing market is not on the verge of another crash. Valentine, a former talk radio show host, said he’s given the talk to six groups of Realtors and homebuilders. While the investments he manages aren’t tied to real estate, Valentine could gain new high net-worth clients through referrals from brokers.

The median sale price of a single-family home in Bend was $379,000 in May, according to Beacon Appraisal Group’s Beacon Report. In March, the median price was $396,000, a figure not seen since May 2007, before the bubble burst and values eroded by 58 percent.

Speculative bubbles share five characteristics, Valentine said, and he hasn’t observed any of them in Bend’s real estate market. One that gets the most recognition is the difference in access to the market, or available credit.

Lending standards are much tighter than in 2006, he said. “We’re back to prices at the peak on half as much lending,” he said.

Bend gets an additional boost from a segment of buyers Valentine calls “stealth wealth,” people who’ve sold a successful business or technology elsewhere and decided to move to Bend. “They’re buying stuff with hard assets and cash,” he said.

Romy Mortensen, vice president of sales and marketing at Brooks Resources, said Valentine’s forecast squares with what she’s hearing from other real estate industry professionals. “I actually haven’t talked to anyone who thinks we’re in a bubble, and it’s because of the credit situation,” she said.

As a real estate development firm, Brooks Resources tries to forecast over several years, President Kirk Schueler said. “We will see softening at some point,” he said.

The company is trying to figure out which locations and price ranges would be most affected by an economic downturn, he said. “I happen to believe a $350,000 house won’t take a big hit.”

If the second part of Valentine’s forecast comes true, a $350,000 house will be a rarity in Bend. The eight metro areas in California, Colorado and Washington that send migrants to Bend have higher median home prices, Valentine said. Those medians range from more than $1 million in San Jose to $422,000 in Seattle-Tacoma-Bellevue, he said.

Valentine believes Bend is on track to become a luxury-priced mountain town like Ketchum, Idaho, or Vail, Colorado, where the median home prices are more than $800,000.

I’m not suggesting we’re going to be in the eights anytime soon,” Valentine said, but he believes the price trend will make it impossible to produce affordable housing without subsidies. “Affordable housing will not materialize in Bend,” he said.

Valentine acknowledges that most of the cities he’s comparing to the future Bend are extremely small, less than 10,000 in population. But there are larger cities, such as Asheville, North Carolina, and Santa Fe, New Mexico, which, like Bend, draw affluent people seeking an outdoorsy lifestyle.

The median home price in each of those cities is lower than Bend’s, according to Zillow. Asheville was at $235,900 in May, and Santa Fe was at $310,000.

—Reporter: 541-617-7860, kmclaughlin@bendbulletin.com

Bill Valentine believes a recession would set prices back, but he said, “Looking out 12 months, the future looks pretty good.”