Central Oregon News Digest - January 2015 Edition

HOUSING

The view from Bend: home prices up nominally,sale numbers sluggish as year comes to an endThe end of 2014 closes out our monthly year-to-date comparisons for the Bend residential market with full-year figures that tell a familiar story to ob-servers: sales activity is flirting with negative territory while prices are up by a margin that would be considered healthy except when compared with the previous year’s double-digit price gain. The average sale price in the Bend area calculated over the full year came to 8.5% above the year before, a less volatile gain than the 20% run-up in prices experienced in 2013 over 2012. When all was said and done, the number of closed transactions last year trailed 2013 by a margin of only 1%. Availability problems continue to restrict buyer choices and suppress mar-ket activity in Bend. The absorption rate at the beginning of January calcu-lated to 2.4 months of inventory. The rate was 2.6 months at the same time a year ago. New construction represented 23.7% of total home sales in 2014, about the same ratio as 2013. The average sale price in NorthWest Crossing increased 12% over the year before and exceeded the average for the greater Bend area by 54%. New construction represented 46.0% of the home sales in NorthWest Crossing last year. Of 24 active listings on Jan. 6 of this year, 18 were new homes. NorthWest Crossing developers released lots in the Discovery Park area and along the west side of NW Mt. Washington Dr. during 2014. Several homes are under construction and lots are available.

Bend area residential 2014 2013 Gain (loss) (Full year 2013, except as noted) Active residential listings 1/6/15 469 496 (5.4%) Number of residential sales 2241 2269 (1.2%) New construction sales 532 483 10.1% Average sale price $344,710 $317,719 8.5% Average price per sq. ft. $175 $158 10.8%

NorthWest Crossing 2014 2013 Gain (loss) (Full year 2013, except as noted) Active residential listings 1/6/15 24 17 41.2% Number of residential sales 87 111 (21.6%) New construction sales 40 47 (14.9%) Average sale price $531,470 $474,319 12.0% Average price per sq. ft. $250 $232 7.8%

MEDIA RECOGNITION

NYT travel list includes BendThe New York Times Travel Sec-tion placed Bend as No. 30 on a diversified international list of 52 Places to Go in 2015, published Jan. 9. “This picturesque city of 80,000 is a seductive spot for travelers who are into craft brewing and the great out-doors,” wrote Dave Seminara. In addition to a list of breweries, wineries, cideries and distill-eries, “Bend has nearly 300 miles of single-track mountain bike trails, a soon-to-open fat bike trail, world-class skiing at Mount Bachelor; and an embar-rassment of riches for hikers, fishermen, climbers, stand-up paddle boarders and kayakers.” No. 1 on the list? Milan, Italy.

HuffPo picks Bend as travel destinationBend was listed among Five Up-and-Coming U.S. Tourism Cities in a Dec. 29 Huffington Post travel blog. The five cities in the USA “are gaining traction in the areas of fine arts, fine food and fine beverages,” wrote Leah Still of Sherman Travel. About Bend: “Pushing yourself to the limit in Central Oregon’s great outdoors and rewarding yourself with the area’s incredi-ble variety of locally-made craft beer, cider and spirits is how things are done in the friendly mountain town of Bend.” Also listed: St. Petersburg, Fla.; Kansas City, Mo.; Salt Lake City, Utah; and Bentonville, Ark.

The Garner Group Real Estate

Central Oregon News DigestCompiled by Harcourts The Garner Group Real Estate

JANUARY 2015

Harcourts The Garner Group Real Estate, 2762 NW Crossing Drive, Suite 100, Bend, OR 97701 541 383-4360 • thegarnergroup.harcourtsusa.com

Calculations are based on Central Oregon Multiple Listing Service data. They represent single-family detached homes on less than one acre in the greater Bend area extending from Tumalo to Alfalfa.

MLS figures for 2014 show howthe real estate market has improvedStatistics for 2014 compiled by the Central Oregon Multiple Listing Service trace a familiar pattern: a healthy bump in home prices accompanied by a plateau in sales activity in the Bend market. Dollar volume for home sales in major residential categories (single-family homes on lots and on acreage plus townhomes and condominiums) in Bend

Residential Sales, Full Year 2014 vs. 2013 2014 2013 Gain (loss) Bend Sales Volume Homes on lots $772,804,240 $718,717,325 7.5% Homes on ac. $141,809,904 $135,535,622 4.6% TH/Condo $77,871,103 $56,945,290 36.7% Total $992,485,247 $911,198,327 8.9%

Sales Homes on lots 2,242 2,262 (0.9%) Homes on ac. 269 292 (7.9%) TH/Condo 259 208 24.5% Total 2,770 2,762 (0.3%)

Median Sale Price Homes on lots $289,950 $269,000 7.8% Homes on ac. $459,999 $389,500 18.1% TH/Condo $259,500 $236,750 9.6%

Redmond Sales Volume Homes on lots $166,423,156 $129,635,849 28.4% Homes on ac. $29,815,904 $36,445,332 (18.2%) TH/Condo $10,367,450 $9,645,350 7.5% Total $206,606,511 $175,726,531 17.6%

Sales Homes on lots 766 658 16.4% Homes on ac. 83 102 (18.6%) TH/Condo 54 58 (6.9%) Total 903 818 10.4%

Median Sale Price Homes on lots $196,275 $175,000 12.2% Homes on ac. $332,000 $327,750 1.3% TH/Condo $195,000 $167,750 16.2%

Local golf courses on ‘greatest’ listThree Central Oregon golf courses are included on Golf Digest’s list of America’s 100 Greatest Public Courses for 2015-2016. They are Pronghorn Club’s Nicklaus Course, No. 33; Crosswater Club at Sunriver, No. 51; and Tetherow Golf Club, No. 54. The list is restricted to courses that allow public access.

PROJECTS

Assisted living facility expandsMt. Bachelor Memory Care LLC, which opened in 2013, will un-dergo a signification expansion beginning this year. The owner, Frontier Management LLC of Portland, will add 76 assisted living units and 24 memory care units, adding 73,500 sq ft to the current 28,200 sq ft. The project will extend the current facility at SE Powers and Parrell roads westward to SE 3rd St.

Jeffco courthouse funding completePlans to build a new Jefferson County courthouse in Madras received a boost in December when officials learned the state of Oregon would release $4 million in bond revenue to help fund the $14.9 million project. The county will borrow $8.9 million and contribute $2 million from savings. Construction should begin in May, with com-pletion scheduled for July 2016.

Sunriver Lodgeupgrades continueTwo principal restaurants in the Lodge at Sunriver Resort

Central Oregon News DigestPage 2

Harcourts The Garner Group Real Estate • 541 383-4360 • thegarnergroup.harcourtsusa.com


increased nearly 9% from the year before while the number of sales was virtually flat, decreasing 0.3%. Median sales prices varied with subcategory but were uniformly higher--7.8% for homes on residential lots below an acre. Only when Bend sale numbers are compared with 2013 does the market seem flat. The sales total in 2014 was 33% above 2010 and 2011 and ex-ceeded 2013 by 13%. Dollar volume in 2014 was 87% greater than it was in 2010. The Bend market accounted for 50.5% of transactions in Central Oregon last year, representing 63% of the dollar volume sold. Redmond turned in some impressive percentage gains for the year. Homes on lots smaller than an acre increased 16.4% in number of sales and 28.4% in dollar volume, with the median sale price up by 12.2%. Redmond home sales number about a third as many as those in Bend and prices are lower. The median price for homes on residential lots in Redmond is $196,275 ver-sus $289,950 in Bend. Sales in all localities and categories covered by Central Oregon MLS were counted at 6,286, down 5.8% from 2013. Sold volume slipped 0.8% to $1,700,548,751 but the median sale price increased 10.8% to $230,000.

No extreme changes in monthly figuresHome prices in the Bend area coasted along above the $300,000 mark in December. The median sale price of $310,000 was slightly softer than No-vember’s figure but 12.7% ahead of December 2013. The median was above $300k in seven of the last eight months. The number of homes sold in Bend recorded an uptick in December after a drop the previous month. NorthWest Crossing prices dipped in December after a sharp spike in November. The relatively small number of homes in the planned neighborhood exacerbates the statistical ebb and flow. Charts presenting monthly levels for the past year are derived from Central Oregon MLS data and may be viewed on Pag-es 7 and 8 of this newsletter. Figures represent sales of detached single-fam-ily homes on less than one acre in the greater Bend area.

As national housing statistics waver,signs point to improvement in 2015Housing activity at the national level hit a slack period in November but economists are optimistic about prospects for 2015. The median sale price for existing homes in November was 5% above the same month in 2013. Other statistics lined up on both sides of the zero mark (see table). Perfor-mance in November generally trailed the preceding month as well.Starts and permitsWhile November housing starts were 1.6% behind October, the National Assn. of Home Builders points to rolling three-month averages for total and single-family production that were at their highest levels since the great recession. “Over the course of the year, the number of houses under con-struction has been on an upward trajectory, signaling that housing is moving forward,” said NAHB chief economist David Crowe. “With strong demand,

have closed to permit a major renovation that is part of a $50 million capital improvement pro-gram started in 2012. Meadows at the Lodge and the Owl’s Nest will reopen this summer. Mean-while, other dining facilities are available. The renovation program so far has included upgraded guest rooms, a beer garden, Beeson Commons rec-reational area and a $3 million aquatic center for guest use.

Evergreen remodelcontract authorizedPlans to convert the historic former Evergreen School into Redmond’s city hall gained traction last month when city council members voted to sign a $9 million renovation contract with Skanska USA. The city pur-chased the 35,000-sq ft build-ing from the Redmond School District after it closed in 2010. Plans to renovate the building were tabled by the recession but revived last year.

PARKS AND RECREATION

Proposed site purchase puts SE park on radarPlans to establish a communi-ty park in southeast Bend are coming into focus. The Bend Park & Recreation District has agreed to purchase a 37-acre tract near SE 15th St. and a future extension of SE Murphy Rd. for more than $3.6 million, bringing the park one step closer to reality. Funding for the land purchase will come from a $29 million bond issue ap-proved in 2012. Park improve-ments should require another $9 million. Public hearings will be conducted in 2015 and 2016 to help shape the specific nature

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Central Oregon News DigestPage 3



affordable home prices and favorable interest rates, we should see housing production continue to grow into 2015.”New home salesNationwide new single-family home sales in November were also 1.6% be-low October, however new home sales in the West shot upward by 14.8%. “Builders are reporting confidence in the market and are increasing their inventory in anticipation of future business,” declared NAHB chairman Kevin Kelly. “As the labor market and broader economy continue to strengthen, we can expect the housing sector to gain momentum heading into 2015,” Crowe observed. Sales have trended upward in the second half of the year from a low point in July.

Existing-home salesAfter hitting their highest level of the year, existing-home sales plunged 6.1% from October to November but remained ahead of November 2013. Sales to first-time buyers increased from 29% in October to 31% in November, the highest level since October 2012. The median existing-home price in November for all housing types exceeded the same month a year ago by 5% and marked the 33rd consecutive month of year-over-year price gains, according to the National Assn. of Realtors.

Optimistic observationsThe Wall Street Journal points out that November is a slow month for new-home sales as builders work to complete pending home sales before the end of the year. The month traditionally ranks 11th in contract volume, ahead only of December, according to NAHB. “Even so, several builders reported an increase in contract volume in November, with some citing the slowly im-proving economy and increasing consumer confidence,” writers Josh Mitch-ell and Kris Hudson observed. 11/14 vs 11/13 Nov 2014 Gain (Loss) Housing starts, all types 1,028,000 (0.2%) Housing starts, single family 677,000 (4.6%) Building permits, all types 1,035,000 (0.2%) Building permits, single family 639,000 (0.9%) New home sales, single family 438,000 (1.6%) Existing home sales, all types 4,930,000 2.1% Existing home sales, single family 4,330,000 2.4% Existing home median sale price, all types $205,300 5.0% Existing home median sale price, single family $206,200 5.6% New home median sale price, single family $280,900 1.4% Existing home inventory (11/30) 2,090,000 2.0% Pending home sales index 104.8 4.1%

Luxury builder Toll Brothers Inc. reported a 16% increase in contracts in November and the first half of December compared with the same period last year, following a 10% gain for its fiscal quarter ending Oct. 31. Taylor

of the park. The district’s capital improvement budget calls for construction to begin in 2018.

SE canal trail system under considerationBend park district officials are revisiting a plan to create a des-ignated trail along the Central Oregon Irrigation District canal in southeast Bend. The route extends from the Deschutes River to a point east of SE 27th St. Most of the distance is canal right-of-way; some sections will require negotiated access.

LAND SALES

School district lists downtown parcelTroy Field, a 35,000-sq ft parcel of bare land on the edge of Bend’s downtown district, has been listed for sale by the school district at $2.62 million. Declared surplus by the district, the half block on the edge of downtown was first offered for sale to eight public organiza-tions but all declined.

State plans to sell forest land in countyThe Department of State Lands has begun a lengthy process aimed at selling four parcels of forest land in northern De-schutes County. The Fremont Canyon parcels, totaling 357 acres, are part of the Central Oregon Area Management Plan adopted in 2011 by the State Land Board. Land must undergo inspection for arche-ological sites, burial grounds and endangered species habitat before being approved for sale by the State Land Board. Target auction dates are fall 2015 to spring 2016.

Central Oregon News DigestPage 4The Garner Group Real Estate




Morrison Home Corp., which operates in five states, reported sales in Octo-ber and November were up 30% from the same period a year earlier, accord-ing to The WSJ. Bloomberg.com writer Victoria Stilwell noted that strict bank lending standards and rising property prices “have bridled the industry this year following a pickup in 2013. Further growth in employment opportunities and persistently low borrowing costs may help provide a spark for the housing market in 2015.” Housing “will get back in tune in 2015 with these contin-ued low mortgage rates and more job growth,” agreed Stuart Hoffman, chief economist at PNC Financial Services Group Inc., Pittsburgh. Sustained labor market improvement, pent-up demand and a growing population will lure buyers into the market in the coming year, according to Stephen Stanley, chief economist at Amherst Pierpont Securities LLC, Stamford, Conn. In a note to clients quoted in the Bloomberg article, Stanley declared “2014 was close to a lost year for the housing recovery. With the pace of household formation beginning to creep back toward normal, the demand for homes is likely to firm.” Figures in the table on Page 4 originate with the U.S. Census Bureau, Na-tional Assn. of Home Builders and National Assn. of Realtors. Starts, permits and sales are seasonally-adjusted annual rates for November 2014 com-pared with the same for 2013.

ENERGY

Bowman Dam hydro plans back on the tablePresident Barack Obama signed the Crooked River Collaborative Water Security and Jobs Act into law on Dec. 17 following unanimous passage by both houses of Congress. The measure outlines a management plan for Prineville Reservoir that provides for the release of unallocated water to ben-efit the city of Prineville and area farmers and ranchers, specifies flow levels beneficial to fish habitat, and opens the door to possible future hydroelectric power generation at Bowman Dam. Two companies have been studying the feasibility of hydropower gener-ation at the site. Prineville Energy Storage, an affiliate of Gridflex Energy of Boise, was granted a three-year preliminary permit by the Federal Energy Regulatory Commission in 2013 to study feasibility of a 150-mW pumped storage system. Portland General Electric Co. has been studying the feasibil-ity of hydropower at Bowman Dam since 2011 and filed a preliminary permit application with the FERC in December to explore more conventional turbine generation in a 6-mW plant. Construction of either project is years away due to a lengthy application, study and permitting process.

COMPANIESHaggen Inc., a grocery chain based in Bellingham, Wash., is buying the two Albertsons stores in Bend. The deal is fall-out from the planned purchase of Safeway Inc. by Albertsons and a Federal Trade Commis-sion requirement that the two grocery giants sell off 168 prop-erties as an antitrust measure. Haggen will grow from 18 to 164 stores in the process.

Helping hands at Christmas timeAgents and staff of Harcourts The Garner Group prepared 75 Christ-mas stockings for distribution at the Bethlehem Inn homeless shelter in Bend this holiday season. Contribu-tions enabled purchase of personal hygiene items, transit passes and laundry detergent to further the efforts of men and women at the shelter as they prepare for job searches. Marketing staff member Lindsay Griffin and Santa’s helpers Sara Jo Reece and Jeanette Kight produced 75 knit stocking caps as well. The non-profit Bethlehem Inn provides sleeping accommodations, meals and job skills training to over 1,000 adults and children annually. Pictured, from left: Janis Grout, Rob Davis, Lindsay Griffin.

To receive this monthly newsletter by E-mail, please contactHarcourts The Garner Group Real Estate at [email protected]



NEIGHBORHOOD PROFILE

Hidden Hills Update:From Concept to RealitySince the first new homes were sold last May, one of Bend’s newest neighborhoods has redefined the character of res-idential subdivisions on the east side of town. The devel-opers of Hidden Hills borrowed a concept from NorthWest Crossing, the planned mixed-use community on the opposite side of the city: individual lots are purchased by multiple builders, assuring a diversity of home sizes and architectural styles. It is more common in moderately-priced east side subdivisions for a single builder/developer to roll out pro-duction homes that share common architectural characteristics, though sizes and floor plans may vary. The current residential mix consists of three- and four-bedroom Craftsman and Mid-Century Modern homes ranging from 1,277 to 3,220 square feet. The average size is 1,925 square feet. Homes feature upmarket fin-ishes and materials. Current active listings range in price from $324,900 to $459,900. Plans must conform to design guidelines and gain approval of an Architectural Review Committee. Ap-proved builders are qualified to buy lots and build in the neighborhood. One of the available dwellings is a distinctive Zero Energy home that uses green building technology to achieve zero power consumption over the course of four seasons. Unusual among subdivisions is the absence of a homeowners’ association, thus there are no HOA fees. Long-term neighborhood eye appeal is assured by Conditions, Covenants and Restrictions (CC&Rs). Hidden Hills occupies approximately 30 acres, leaving room for future expansion. It is on the east side of Brosterhous Road, south of the right-of-way for an eventual extension of Murphy Road eastward to SE 15th Street. The road project dovetails with Bend Park & Recreation District plans to establish a large community park near SE 15th Street and Murphy Road. Long-range plans by Bend-La Pine Schools call for a new high school west of Hidden Hills near the Bend Golf & Country Club. The first phase of Hidden Hills was platted with 30 lots on 3.9 acres. The first four homes were sold in May 2014. This number has since increased to 10. Another three homes are under contract with sales pending and nine more homes are either complete or under construction. Lots are being released in phases. Eventually there will be 157 homes on the 30-acre parcel. Some homes look over the top of the adjoining terrain to a view of the Cascade Mountains. Terraced building sites and var-ied topography enhance the exposure. The Hidden Hills undertaking brings together three well-known Bend property development visionaries: Michael Tennant, Clifford Curry and Thomas Bahrman. Tennant companies have placed a positive imprint on the Bend residential landscape with neighborhoods that have helped define the city’s character. Architect and urban planner Curry founded Little Fish Investments LLC in 2009. Bahrman is a practicing attorney in Bend and a real estate con-sultant for Foreterra LLC, a land use planning and development company. Harcourts The Garner Group Real Estate is marketing the development and represents several of the individual builders in Hidden Hills.



Market WatchCharts on this page and the next provide an overview of sales and price trends in the Bend real estate mar-ket. Figures are derived from statistics compiled by Central Oregon MLS. Bend figures represent single-family homes on less than one acre in the Bend area, extending from Tumalo to Alfalfa. NWX is the abbreviation for NorthWest Crossing. Experienced real estate agents at Harcourts The Garner Group can help buyers and sellers interpret home values and market trends. Their knowledge of local real estate markets and market niches provides clients with the insight needed to make informed decisions. These charts may also be viewed on our web site, www.thegarnergroup.harcourtsusa.com, click Market Watch on the navigation bar.



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Central Oregon News Digest - January 2015 Edition

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