The Central Oregon News Digest, Dec. 2014 Issue

HOUSING

Year to date: Sales upturn, further price gainsput roses in the cheeks of the housing marketThe Bend area housing market is gathering momentum as the year’s end nears. Our monthly year-to-date survey shows a 7.6% increase in the num-ber of sales for the first eleven months of 2014 compared with the same period a year ago. With three exceptions (including a 0.1% increase), YTD sales tabulated monthly were either flat or trailed the comparable period in 2013 by as much as 5.9%. New construction sales accounted for 20.5% of the total through Novem-ber. This percentage was about the same as last year although the number of sales was 6.0% greater. Looking back to the beginning of the year, the number of sales for the full year in 2013 exceeded 2012 by 14.2%. The average sale price in Bend for the year to date was 15% ahead of last year, supported in part by a 13.3% gain in the average price per square foot. The housing inventory in Bend continues to be tight. The number of ac-tive listings as of Dec. 2 was 18.7% above last year at this time. This raised the calculated inventory based on the current rate of sales to 2.4 months compared with 1.9 months at the same point last year. By comparison, the national figure is 5.1 months for all types of existing dwellings. Bend area residential 2014 2013 Gain (loss) (Year to date, except as noted) Active residential listings 12/2/14 629 530 18.7% Number of residential sales 2309 2145 7.6% New construction sales 473 446 6.0% Average sale price $365,179 $317,570 15.0% Average price per sq. ft. $179 $158 13.3%

NorthWest Crossing 2014 2013 Gain (loss) (Year to date, except as noted) Active residential listings 12/2/14 20 18 11.1% Number of residential sales 85 103 (17.5%) New construction sales 39 41 (4.9%) Average sale price $535,059 $467,648 14.4% Average price per sq. ft. $250 $231 8.2%

The average sale price in NorthWest Crossing for the year to date was 14.4% above the comparable 2013 figure and 46.5% greater than the aver-age sale price for Bend as a whole. New construction accounted for 45.9% of sales in the planned neighborhood. 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.

PROJECTS

McMenamins to enlargeOld St. Francis complexMcMenamins Inc. is planning a substantial increase in lodging accommodations at McMenam-ins Old St. Francis School in Bend. East and West Lodge buildings totaling 19,368 sq ft will contain 43 rooms. The buildings will be located on the Lava Rd. side of the proper-ty and will require removal of three guest cottages. These will be sold to a buyer who will transport them intact to Sunri-ver for use as vacation rentals. The brewpub, restaurant and hotel currently offers 19 rooms for overnight lodging, most of which are in the renovated school building. The Parish House, now a guest house, will remain on the site. City approval is pending and completion is targeted for the end of 2015. McMenamin’s Inc. owns 56 hospitality properties in Oregon and Washington.

Groundbreaking slatedfor Market of ChoiceGroundbreaking for the construction of retail buildings between downtown Bend and the Old Mill District that will accommodate a Market of Choice outlet is scheduled for March. The Eugene-based grocery chain will occupy a 35,000-sq ft building on 2.6 acres inside the Arizona/Colorado avenue couplet. Two smaller buildings on a 1.5-acre site across the parking lot from the market will be leased to retail tenants.

The Garner Group Real Estate

Central Oregon News DigestCompiled by Harcourts The Garner Group Real Estate

DECEMBER 2014

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

Price gains lead monthly statisticsMedian home sale prices in the Bend area crept upward in November, ad-vancing 0.9% above October but registering a 6.3% gain over November 2013. Prices peaked in August, retreated in September and have moved up-ward in the ensuing two months. The median sale price in NorthWest Cross-ing took a big leap in November, exceeding October by 16.5% and passing the $600k mark for the first time in our rolling 12-month survey. Charts derived from Central Oregon MLS data may be viewed on Pages 5 and 6 of this newsletter.

Local prices up 16% in a year, say fedsHome prices in the Bend-Redmond Metropolitan Statistical Area (Deschutes County) increased 16.18% in the year ending Sept. 30, placing eighth on the Federal Housing Finance Agency’s House Price Index. Vallejo-Fairfield, Calif., was first with an 18.26% gain. Local sale prices in the third quarter of this year increased 2.8% over the second quarter. Deschutes County home prices increased 22.63% over a five-year period. The index is calculated using home sales price information from mort-gages sold to or guaranteed by Fannie Mae and Freddie Mac. Home prices nationally increased 4.5% from third quarter 2013 to 2014.

National figures strengthen in OctoberNational housing figures for October produced significant gains over the same month a year ago. Single family housing starts and new home median sale prices were up over 15%. New and existing home sales were in positive territory, as were building permits and existing home median prices. Sales of existing homes in October increased for the second straight month and exceeded year-over-year levels for the first time in a year, accord-ing to the National Assn. of Realtors. October’s level of 5.26 million repre-sented a 1.5% gain over September. Single-family sales increased 1.3% from September. October was the 32nd consecutive month in which year-over-year median sale price increases were recorded. “Sales activity in October reached its highest annual pace of the year as buyers continue to be encouraged by in-terest rates at lows not seen since last summer, improving levels of inventory and stabilizing price growth,” said NAR chief economist Lawrence Yun. “Furthermore, the job market has shown continued strength in the past six months. This bodes well for solid demand to close out the year and the likeli-hood of additional months of year-over-year sales increases,” he said. The NAR predicts existing-home sales this year will dip to 4.9 million, climbing to 5.3 million next year and 5.4 million in 2016. Sales last year totaled 5.1 million. Median sale prices for existing homes should increase by 4% in 2015 and again in 2016. Single-family housing starts in October reached the highest level since November 2013, according to the National Assn. of Home Builders. “The

Silver Moon brewery plans to expandSilver Moon Brewing is planning to increase production capacity coincidental with expanded distribution into Washington state. The 10-barrel system at the brewpub on Greenwood Ave. will remain in service but owners are reported to be looking for a location to install a 30-barrel brewhouse, to be operational by next April or May.

Bend council sets20-year sewer goalsThe Bend city council has approved a 20-year plan for updating and expanding the city’s sewer system at a cost of $89 million. The Wastewater Collection System Master Plan outlines steps for bringing sewers to portions of the city currently without service, requiring that new and existing structures are connected, and mitigating sewer overflows onto city streets and the Deschutes River. An important element is the Southeast Interceptor Project that will allow home construction in the southeast quadrant of the city.

Rec pavilion workgets underwayConstruction of the Bend Park & Recreation District’s Simpson Pavilion in southwest Bend has begun. The 29,000-sq ft structure is being built on an 11-acre site bordered by SW Simpson Ave., hence the working name. It will contain a seasonal ice rink, multi-sport courts and a support building with lobby, customer service area, restrooms and changing rooms. A 120 by 240-ft shed

Central Oregon News DigestPage 2The Garner Group Real Estate

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increase in single-family starts shows that the housing market continues to recover at a steady, gradual pace,” observed NAHB chief economist David Crowe. 10/14 vs 10/13 Oct 2014 Gain Housing starts, all types 1,009,000 7.8% Housing starts, single family 696,000 15.4% Building permits, all types 1,080,000 1.2% Building permits, single family 640,000 2.4% New home sales, single family 458,000 1.8% Existing home sales, all types 5,260,000 2.5% Existing home sales, single family 4,630,000 2.9% Existing home median sale price, all types $208,300 5.5% Existing home median sale price, single family $208,700 5.6% New home median sale price, single family $305,000 15.4% Existing home inventory (10/31) 2,220,000 5.2% Pending home sales index 104.1 2.2%

Figures originate with the U.S. Census Bureau, National Assn. of Home Builders and National Assn. of Realtors. Starts, permits and sales are sea-sonally-adjusted annual rates for October 2014 compared with 2013.

Increased demand from millennials and boomersshould push the market toward smaller homesChanging demographics among prospective home buyers should produce Increased demand for smaller and less expensive homes, according to speakers at a recent National Assn. of Realtors forum. Adult millennials aged 18 to 33 will be competing with baby boomers to shape the nature of the housing market. “With millennials searching for new homes, baby boomers downsizing and groups with historically lower incomes entering the market, an increased demand for smaller, less expensive homes will begin to emerge,” said Lisa A. Sturtevant, vice president of research for the National Housing Conference. Demographics among primary residence home buyers have shifted dra-matically, according to Jessica Lautz, NAR director of member and consum-er research. The share of market by first-time home buyers has dropped to its lowest level in decades, Lautz said. “We have also seen an increase in the median age and income of the average buyer, as well as in multi-generation-al household formations as adult children and elderly family members move back in with their families.” Adult millennials saw 60% better job growth than the U.S. overall and a drop in unemployment to 6%. “Millennials are the largest generation of peo-ple in the U.S. and represent 60% of first-time home buyers,” said Jonathan Smoke, chief economist for realtor.com. “They are also more likely than any other group to purchase a home in the next year.” Millennials represented 37% of home shoppers this summer, and over

roof will be fabricated of steel trusses in a wood envelope. The estimated $11.35 million cost includes on-site and off-site improvements and was included in a $29 million park district bond issue approved in 2012.

Affordable housing units planned by agencyHousing Works will build an income-restricted 28-unit apartment complex in Northeast Bend with funds from the city’s affordable housing fee program. The project will cost $1.1 million. Completion is scheduled for May 2016. The city collects 0.2% of the value of building permits issued to fund the program.

Changes upgradecounty branch officesDeschutes County is upgrading facilities in Redmond. Health services have moved from a 1,000-sq ft building on SW Canal Blvd. to 6,500-sq ft quarters on W. Antler Ave. Next February, the building on SW Cascade Ave. that houses parole and probation and juvenile departments will be thoroughly renovated at a cost of $755,000.

MEDIA RECOGNITION

Bend named No. 1Beer City in AmericaBend is the No. 1 Beer City in the nation according to Livability.com, an on-line journal focusing on livability of small-to-medium sized cities. The site’s Ten Best Beer Cities list is based on beer consumption, beer preference, award-winning breweries and breweries per capita. “Can beer really make

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the next five years this generation will make up two-thirds of household formations, Smoke said. “Between June and September 2014, over half of adults aged 21-34 visited real estate web sites or mobile apps. And this is the cusp--get ready for the millennial wave to drive the housing market for decades,” he continued. “Many of the reasons millennials are not forming households or making purchases are economic, so as the economy improves we should see this group become more of a force in the housing market,” Sturtevant noted.

POPULATION

Bend area paces Oregon’s population growth rateDeschutes County led the state in percentage of population growth between July 1, 2013 and the same date in 2014. The 2.4% gain was achieved with the addition of 3,875 people, bringing the county’s total to 166,400. Figures are from annual population estimates developed by the Portland State Uni-versity Population Research Center and released Nov. 18. Oregon’s population grew by 1.1% to 3,962,565. Jefferson County in-creased by 0.7% and Crook County by 0.4%. Net migration accounted for 74% of Oregon’s population growth in the one-year period. Cities of Bend, Salem, Beaverton, Eugene and Corvallis each added over 1,000 persons in the past year. Bend recorded a 2.2% increase to 79,985. July 1, 2014 July 1, 2013 Gain (Loss) Bend 79,985 78,280 2.2% Redmond 26,590 26,590 - Prineville 9,385 9,270 1.2% Madras 6,260 6,255 (0.1%)

Deschutes Co. 166,400 162,525 2.4% Jefferson Co. 22,205 22,040 0.7% Crook Co. 20,780 20,690 0.4%

Oregon 3,962,565 3,919,020 1.1%

Market WatchCharts on the following pages provide an overview of sales and price trends in the Bend real estate market. 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 knowl-edge 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.

a city more livable? Without question,” it asserts. About Bend: “To many people living in Bend, the city’s thriving beer scene is as important an amenity as bike trails, hiking paths, ski resorts and parks. On a per-capita basis Bend has one of the nation’s highest concentration of breweries. The more than 25 breweries located in and around Bend give residents easy access to high-quality, locally made beer. It’s factors like these that make Bend the best beer city in America.” Denver and San Diego were second and third, respectively. Bend also ranked No. 76 on Livability.com’s list of 2015 Top 100 Best Places to Live.

Unusual Bend breweryon web site ‘bucket list’First We Feast, self-described as an on-line journal that sees food as an illuminating lens into pop culture, music, travel and more, included Bend’s Ale Apothecary among an international group of 12 Bucket-List Breweries That Every Beer Lover Should Visit. “For a beer adventure unlike any other you’ve got to drive west into the conifers of the Deschutes National Forest where you’ll find a wooden garage/barn that’s home to Paul Arney’s eccentric sour-beer project,” the site observes. Arney’s beers have “a distinct sense of place, borne of the mystical interaction between local raw ingredients, the microflora of the surrounding woods and the brewer’s naturalistic, purposely primitive methods.”






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The Central Oregon News Digest, Dec. 2014 Issue