Central Oregon News Digest - March 2015 Edition

HOUSING

Bend year-to-date housing statistics move solidlyinto positive territory; inventory remains lowThe Bend housing market is gathering momentum as the year moves into its third month with year-to-date figures as of March 5 comfortably above 2014 in all categories other than active listings. The number of residential sales in the period was nearly 7% above the comparable 2014 mark, a welcome reversal of fortune after several months of lackluster performance. New construction sales in the first two months of 2015 were 13% ahead of the same period in 2014. New construction sales represented 24.3% of the total number. It comes as no surprise that sale prices continued to keep comparable 2014 figures at arm’s length. Average sale price for the year-to-date period outpaced last year by 21%. Active residential listings trailed 2014 by 10%, illustrating a continued in-ventory shortage that limits buyer choices and depresses sales activity. The absorption rate (months required to sell out inventory at the current sales pace) calculates to 2.8 months of inventory, down slightly from 3 months a year ago.

Bend area residential 2015 2014 Gain (loss) (Year to date, except as noted) Active residential listings 3/5/15 438 489 (10.4%) Number of residential sales 251 235 6.8% New construction sales 61 54 13.0% Average sale price $378,766 $313,042 21.0% Average price per sq. ft. $187 $163 14.7%

NorthWest Crossing 2015 2014 Gain (loss) (Year to date, except as noted) Active residential listings 3/5/15 31 15 106.7% Number of residential sales 7 9 (22.2%) New construction sales 2 4 (50.0%) Average sale price $625,714 $483,421 29.4% Average price per sq. ft. $270 $237 13.9%

NorthWest Crossing year-to-date figures are beginning to become statis-tically relevant as the year progresses. As this report has pointed out in the past, the small number of homes relative to Bend as a whole causes move-ment in any category to create a large percentage swing. This is mitigated as the year moves along and more data are accumulated. The average sale price in the planned neighborhood year-to-date is nearly 30% above last

PROJECTS

Market of Choiceconstruction beginsCrews have broken ground for the 35,000-sq ft Market of Choice grocery market in the blocks separating Colorado and Arizona avenues. A parking lot will separate the grocery store from two other retail buildings of 8,000 and 3,200 sq ft in size. Work is expected to be com-plete by September.

New church focuses on sustainabilityThe Unitarian Universalist Fel-lowship of Central Oregon has begun holding services in a new 18,000-sq ft building on Skyline Ranch Rd. in west Bend. The $7.9 million structure houses a sanctuary, gathering space, conference room, classrooms and a common area. Empha-sis was placed on sustainable building practices and mate-rials; after final touches are completed it will receive Earth Advantage Commercial Plati-num certification.

Sub shop franchise adding second storeAn 8,000-sq ft building under construction near NE 3rd St. and Franklin Ave. will house Bend’s second Jersey Mike’s Subs shop and two additional tenants, according to reports. The new shop and a Jersey Mike’s on SW Century Dr. are owned by franchisee Jim Mc-Gaha. The company is head-quartered in Manasquan, N.J.

The Garner Group Real Estate

Central Oregon News DigestCompiled by Harcourts The Garner Group Real Estate

MARCH 2015

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

year and 65% higher than Bend as a whole. Get ready for another surge of new homes--new construction accounted for 22 of 31 total listings for sale in NorthWest Crossing when these statistics were compiled March 5. Activity is centered in the panhandle near Skyliners Rd. and the Discovery Park area west of Mt. Washington Dr. 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.

February retreat leaves prices well ahead of 2014Selling prices for Bend homes settled back in February after a spike the month before. Monthly readings fluctuated over the past year, with the me-dian sale price in February 2015 a comfortable 17.2% above February 2014. Our rolling 12-month survey in this issue began in February 2014 with a median of $274,000 and registered a median of $321,000 this February. The high point was $338,000 in January, followed by $334,000 last August. The NorthWest Crossing median sale price in February settled back to $588,000, a healthy gain of 14.4% over February 2014. Charting the number of homes sold in Bend offers promise that the erratic fall in monthly numbers since last summer may be arrested by unseasonably mild weather and the promise of spring. The comparison with January was nearly flat. Charts presenting monthly levels for the past year are derived from Central Oregon MLS data and may be viewed on Pages 5 and 6 of this newsletter. Figures represent sales of detached single-family homes on less than one acre in the greater Bend area.

Price increase rate 10th in nationDeschutes County home prices in the fourth quarter of 2014 registered an 11.25% increase over the same period in 2013. This placed the Bend-Red-mond Metropolitan Statistical Area in tenth spot among MSAs in the nation in terms of year-over-year price appreciation, according to the Federal Hous-ing Finance Agency. Bend area home prices increased 28.51% over the past five years. Merced, Calif., topped the list with an appreciation rate of 14.84% on the agency’s House Price Index.

Despite monthly dip, national figures exceed 2014On the national scene, housing numbers in January were solidly in positive territory compared with the same month a year ago. Month-to-month perfor-mance in some categories was inhibited by the severe winter weather expe-rienced throughout the Midwest and East Coast. Pending home sales in January were pushed to their highest level since August 2013, according to the National Assn. of Realtors. “Contract activity is convincingly up compared to a year ago despite comparable inventory levels,” observed NAR chief economist Lawrence Yun. Single-family housing starts were 16% above January 2014 despite a dip

Credit union to build La Pine branchBend-based Mid Oregon Credit Union will build a 3,000-sq ft branch office on a 1.62-acre site in La Pine. Currently in the design stage, the branch is ex-pected to be open for business in late fall.

Rural fire station under constructionLake Chinook Fire and Rescue has broken ground for a new $660,000 fire station in the Three Rivers Recreation Area west of Lake Billy Chinook. The station, on 2.78 acres donated by the Three Rivers Landowners Assn., will include a 7,200-sq ft apparatus bay and 2,200 sq ft to house dorms, training rooms and meeting space. Completion is scheduled for June.

TRANSACTIONS

Bend’s Riverhouse changes ownershipThe Riverhouse Hotel and Convention Center, a Bend landmark, has been sold by the Purcell family to Vesta Hospitali-ty LLC of Vancouver, Wash. The new owners are planning a ma-jor renovation of the 220-room hotel to begin this fall and reach completion in the spring of 2016. The Riverhouse opened its first phase of 94 rooms in 1974 and has grown in stages since that time, constructing the 36,000-sq ft convention center in 2006. The Purcells are retain-ing ownership of the adjacent River’s Edge Golf Course and surrounding residential property. Vesta Hospitality is a private-ly-owned hotel management and development firm with a

Central Oregon News DigestPage 2The Garner Group Real Estate

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of 6.7% from December. “After a strong single-family report in December, it is not surprising to see some pull back in January,” commented David Crowe, National Assn. of Home Builders chief economist. “With continued job creation and a growing economy, single-family production should make gains in the year ahead,” he said. Single-family building permits in January were nearly 6% ahead of the same month a year ago. New single-family home sales in January were virtually the same as De-cember and 5% ahead of January 2014. “The fact that January sales num-bers maintained the gains we made in December is encouraging news, especially considering harsh weather affecting certain parts of the country,” said NAHB chairman Tom Woods. Crowe said to expect continued upward movement in the housing market this year. Sales in January exceeded De-cember in the $150,000-$300,000 and $400,000-$750,000 ranges. As first-time buyers enter the market, sales growth should occur in the lower price ranges, according to NAHB. 1/15 vs 1/14 Jan 2015 Gain (Loss) Housing starts All types 1,065,000 18.7%% Single family 678,000 16.3% Building permits All types 1,053,000 8.1% Single family 654,000 5.8% Homes completed All types 930,000 9.4% Single family649,000 6.6% New home sales Single family 481,000 5.3% Existing home sales All types 4,820,000 3.2% Single family 4,270,000 3.9% Median sale price Existing homes, all types $199,600 6.2% Existing homes, single family $199,800 6.3% New homes, single family $294,300 9.1% Existing home inventory (1/31) 1,870,000 (0.5%) New home inventory (1/31) 218,000 15.3% Pending home sales index 104.2 8.4%

Sales of existing single-family homes in January were 4% above the same month a year ago despite numbers that were down from December. “January housing data can be volatile because of seasonal influences but low housing supply and the ongoing rise in home prices above the pace of inflation appeared to slow sales despite interest rates remaining near historic lows,” Yun commented. Median sale prices for new and existing homes were roughly 9% and 6%, respectively, above January 2014 levels.

portfolio of 12 properties in the United States and Canada.

Offshore investor buys forest landWhitefish Cascade Forest Resources, a Singapore-based company registered in Oregon, has purchased 197,000 acres of forest land in Deschutes and Klamath counties from Fidelity National Financial Ventures. FNFV received a cash distri-bution of approximately $63 million that covered assets of its portfolio company, Cascade Timberlands LLC, which was formed as a holding company in 2004 by creditors of the bank-rupt forest products company Crown Pacific Partners LP. Property includes the former Bull Springs Tree Farm, 33,000 acres west of Bend that the De-schutes Land Trust is attempt-ing without success to acquire and preserve as the Skyline Forest. TRANSPORTATION

Alaska adds flightsAlaska Airlines will add two daily flights from Roberts Field in Redmond, one to Portland and one to Seattle. This increases the carrier’s schedule to four daily flights to Seattle and five to Portland. The new flights will begin June 7.

Madras project beginsThe Oregon Department of Transportation has embarked on a $4.5 million project to realign northbound lanes of U.S. Highway 97 at the south end of the one-way couplet in Madras. The first of two phases should be complete by October. The project will alleviate an awkward situation for cross traffic.

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The table on Page 3 shows national housing figures for January 2015 com-pared with the previous January. Figures originate with the U.S. Census Bu-reau, National Assn. of Home Builders and National Assn. of Realtors. Starts, permits and sales are seasonally-adjusted annual rates.

COMMERCIAL ACTIVITY

Industrial, office vacancies tightenVacancy rates for commercial properties in Bend continued to shrink in the fourth quarter of 2014, reflecting a general improvement in the economy. “Buyers and tenants no longer hold all of the cards, as landlords and sellers now have equal or greater leverage in negotiations,” wrote principal broker Erich Schultz in the latest edition of Compass Points, issued quarterly by Compass Commercial Real Estate Services. Schultz is vice president of finance and a founding partner of the company. Rents in Bend industrial and office markets have not increased at a rate commensurate with rising land and construction costs, Schultz noted. “In addition, the supply of land in Bend remains constricted as a wearisome seven-year effort to expand the Urban Growth Boundary continues.” Commercial Property Vacancy Rates 4th qtr 2014 3rd qtr 2014 4th qtr 2013

Bend office market 10.5% 11.3% 16.0% Bend retail market 6.7% 8.3% 8.6% Bend industrial market 6.7% 8.0% 12.3% Redmond industrial market 10.5% 16.0% 18.2%

Reduced vacancies coupled with a lack of significant new construction will keep applying upward pressure to rents in 2015. “Price conscious industrial space users may have to give Redmond or Prineville serious consideration,” he wrote. Figures in the accompanying table compare vacancy rates in the four sec-tors tracked by Compass Points. Rates in three of the four markets dropped by over five percentage points, with Bend retail bringing up the rear. Details at www.compasscommercial.com.

EMPLOYMENT

Job picture brightens in Central OregonCentral Oregon finished 2014 with a strong increase in employment, accord-ing to the latest report from the Oregon Employment Dept. Deschutes Coun-ty registered a seasonally-adjusted unemployment rate of 7.1% in January compared with 7.6% in December and 8.5% in January 2014. Deschutes is adding jobs faster than initial estimates indicated. Non-farm employment added 4,550 jobs, or 7%, over the past year. A predicted loss of 1,640 jobs in January failed to materialize; jobs were down by 600. This was due largely to normal seasonal declines in retail trade and leisure and hospitality. An increase in construction jobs attributed to unseasonably warm

MEDIA RECOGNITION

‘Best’ list tags local employersThree Central Oregon compa-nies were included in this year’s 100 Best Companies to Work For survey conducted annually by Oregon Business magazine and OregonBusiness.com. Win-ners were announced in Febru-ary. They are: • G5, Bend, No. 22 among large companies (100-plus Ore-gon employees.) • Energyeering Solutions Inc., Sisters, No. 32 among medi-um-sized companies (35-99 Oregon employees.) • Redmond Dental Group, Redmond, No. 8 among small companies (15-34 Oregon em-ployees.) Companies with branch operations in Central Oregon and headquarters elsewhere included Directors Mortgage, Lake Oswego, #18 among large companies, and Consumer Cel-lular, Portland, #20 among large companies. The 100 Best list recognizes Oregon companies for excel-lence in work environment, management and communi-cations, decision-making and trust, career development and learning, and benefits and compensation, according to the journal. Survey responses came from 11,000 Oregon employees of 271 companies.

COMPANIESAgere Pharmaceuticals Inc. of Bend has been acquired by Patheon, a global provider of high-quality drug development and delivery solutions. Based in Durham, N.C., Patheon is a unit of DPx Holdings B.V.



weather helped take up the slack “The county only needs to add about 420 jobs on a seasonally-adjusted basis to match the peak employment month prior to the recession,” wrote regional economist Damon Runberg. The Crook County unemployment rate in January was down less than a percentage point from December and January 2014. Jefferson County’s un-employment rate of 8.7% in January was down from 9.2% in December and 9.8% in January a year ago. Crook added 80 jobs in the past year, up 1.5%. Jefferson added 190 jobs, up 3.3%.

Companies (continued)

Deschutes Brewery has installed a new German-made bottling line that increases pro-duction from 384 to 567 bottles per minute.



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 - March 2015 Edition