Bright spots in the area

Moving into 2011 there are a number of bright spots in Bend/Central Oregon to counter the steady drip (gusher?) of negative news that has swept across the region in the past few years.
 --Well-capitalized and experienced Northfield Hotel Group, with funds from Oakmont Capital, purchased long-time Jeld-Wen owned resorts Eagle Crest near Redmond, Running Y in Klamath Falls and the company’s fledgling Brasada Ranch, east of Bend, which came to market just before demand for resort properties collapsed. Northfield announed plans to upgrade convention facilities and lodging at Eagle Crest and to resposition Brasada. Some observers say it's a sign that investment capital is looking for long-term values in attractive locations that show substantial promise in a recovery.
-- Bend has gained a  reputation as one of the best towns to quaff a pint in the West. Deschutes Brewing Company, one of the West's leading craft brewers, is expanding its home base pub-restaurant to a new facility adjacent to its present downtown Bond Street site. Several other smaller craft breweries have opened in the past two years. One of the newcomers, 10 Barrel brewing, announced in early 2011 that it would embark on an ambitious expansion that would more than quadruple it’s brewing capacity.

--Sunset magazine's December issue highlighted the "10 Best" western ski towns, crowning Bend the best the “foodiest” among the group.”Bend is seeing a post-downturn recovery spurred by locavore dining and noveau food carts.” Sunset observed.

--Several technology based companies have emerged or expanded with products and services for national markets. GL Solutions announced in late 2010 plans to increase hiring as the result of a contract for its data processing software for a North Carolina state agency.

--Lodging revenue was on the upswing in 2010, with room taxes collected rising in Bend for 12 consecutive months through November and eight of 12 months for the county. For the fiscal year that kicked off July 1 Bend’s lodging tax collections rose nearly 13 percent over the same period of the previous period of 2009-2010.

--In early 2011 Cascades Bancorp, parent of Bend-based Bank of the Cascades, reported an infusion of capital from investors that raised the company’s capital ratio to a level meeting FDIC requirements, after suffering  loan losses tied to the bank’s heavy exposure to the local housing market.

--The Deschutes Economic Alliance bringing together business, government and other interests, announced in January an ambitious three-step plan aimed to “jumpstart” the region’s econmic recovery, develop marketing strategies to reposition the region and achieve an economic “transformation.”  The effort recognizes the areas strengths in building and construction, among others, and recommends leveraging those strengths beyond the region to attract talent and trading partners. The plan also suggests establishing an incubator-like entity for new businesses that would offer equity compensation for  professionals who provide expertise to help launch startup companies and new products.

--The social network giant Facebook has chosen Prineville in Crook County as the site of its first company-owned satellite data facility. The immediate effects will be hundreds of jobs during the construction phase in 2009 and 2010 and related multiplier effects for wholesale suppliers and retailers. Economic development officials will also have a “name dropping” tool when promoting Central Oregon to companies considering a relocation or expansion to the area.
--Downtown Bend Business Association reported that leased retail and restaurant occpancy in the business core held at 93% in early 2011 with the addition of eight new firms arriving to take over vacant space. Turnover, especially in restaurants--has been notably high in recent years. 

Ski in November, golf in January--what's up?

            Back in late November and December everyone around Bend was talking about a La Nina cold and snowy winter as frequent snows deposited as much as 8-10 inches around town while Mt. Bachelor’s base was pushed to more than 100 inches.

            Then came January, which started cold in single digits but as the month progressed warmed into 50s during the day. Golfers dug out the clubs and started making the rounds of such courses as Rivers Edge and Widgi Creek, the latter barely a 10 minute drive from Wanoga, Swampy Lakes and Meissner Nordic ski areas.

            Skiers—alpine and Nordic—would brag about getting in some early runs at “The Mountain” or on groomed trails between town and there,  then playing a round of golf on the way home.

            February brought much of the same weather. But then came the evening of February 14, with a Valentine’s Day surprise that lasted into the next morning as nearly a foot of snow blanketed the city. Mt. Bachelor reported 20 inches in a 24 hour period, boosting the mid-mountain depth at 7,200 feet to 111 inches and 95 inches in the 6,300-foot base village.

            All in all the upcoming President’s Day weekend was looking good with the storm expected to pass with clearing skies in the forecast.

            This winter’s unusual weather pattern aside, an adventurous sort would not find it out of the question  to golf, ski, mountain bike and fly fish in a single day in March or April.

            But January?

Early 2011 - Signs of improvement but don't break out the champagne

Better, worse or more of same?

Depending on how you analyze it -- or interpret the "metrics" in currently fashionable biz speak--an argument could be made that the Central Oregon market is slowly stabilizing. But there are lingering questions whether we’re in for another dip or a protracted period of bouncing along the bottom.

And the answers will be found not only in the pace of a reported, if elusive, national economic recovery but also in local conditions specific to Bend and Central Oregon.

In the nearly vertical climb of the region’s real estate market in the first decade of the 21^st Century unit sales, prices and sales volume were driven by forces in play throughout the country—escalating prices everywhere, easy credit for primary and secondary homes and the generally euphoric attitude that it wouldn’t end. Of course it did—with a thud.

Today’s realism has supplanted any thoughts that we’ll ever see a confluence of market events like the recent past, and the most rational among us probably think that’s a good thing.

As we emerge into a new decade there are a number of positive, if subtle improvements underway in Central Oregon.

--Home sales are up, although slowing after impacts of the federal $8,000 tax credit have largely been absorbed. Only the LaPine area out of seven area sub-markets failed to notch a gain in unit sales from 2009 through 2010.

--Notices of default on home loans and ELOCs (equity lines of credit) filed by lenders in Deschutes County declined by 7.3% from 2009 through 2010, after a phenomenal rise of 537% from 590 in 2007 to 3,762 in 2010.

--In early 2011 the “supply” of active listings of single family homes on the Multiple Listing Service of Central Oregon database was down to 4.5 months. At one time in recent years it was more than 13 months. (The supply is calculated by averaging the previous 12 months sales, then dividing current active listings by that number).
A caveat in the diminished supply, however, could be that with a healthy supply of distressed properties on the market some "traditional" sellers are holding back to wait for more favorable economic conditions.

--Median prices have leveled off after drops of as much as 45% in Bend from 2006 through 2010, and even higher in other sub-markets of Central Oregon such as Jefferson County.

 Apart from the positive numbers distressed properties have indisputably driven sales for the past few years. In the two largest sub-markets short sales or foreclosed properties (known as REOs, or real estate owned by lenders) claimed 57% of 2010 single family sales in Bend and 68% in Redmond. Moreover, distressed properties also comprised the overwhelming majority early 2011 pending or contingent sales—77% in Bend and 87% in Redmond.

Coming up:

The region’s appeal as a recreation, resort and retirement area continues to attract careful investors.

Vacation-second (3rd etc.) homes still drive Bend ...

The following chart provides an overview focusing on single family homes as the largest slice of the regional market. Statistics are derived from the Multiple Listing Service of Central Oregon and may vary slightly from reports of appraisal companies or other entities.

SINGLE FAMILY HOMES (on lots less than 1 acre) Central Oregon-Bend MSA*
TOTAL UNITS SOLD						SOLD as SHORT SALES/REOs		PENDING/ CONTINGENT SALES		ACTIVE LISTINGS	SHORT/REO ACTIVE LISTINGS
Town or area	Total units sold Including short sales and foreclosures (REOs)				% change total units sold	Short sales/bank owned (REO) units Sold	% Short/ REO units sold	Pending or contingent sales(all)  /PendContshortREO	% short& REO of total pending or contingent	Total active listings	Active short/ REO listings	% short / REO of active listings
	2001	2008	2009	2010	2009-2010	2010	2010	Jan 2011	Jan 2011	Jan 2011	Jan 2011	Jan 2011
Bend	1,419	1,123	1,544	1,687	+9.26%	964	57.14%	316 / 244	77.21%	508	184	36.22%
Redmond	519	446	629	727	+15.58%	494	67.95%	135 / 117	86.67%	272	138	50.74%
Sisters	90	77	70	88	+25.71%	36	40.91%	19 / 11	57.89%	71	16	22.54%
Sunriver	170	72	80	92	+15.0%	11	11.9%	11 / 4	36.36%	130	5	3.85%
Crook Co.	127	120	163	221	+35.58%	157	71.0%	40 / 32	80.00%	103	31	30.0%
La Pine	17	31	71	64	-9.86%	43	67.19%	9 / 6	66.67%	27	13	48.14%
Jefferson Co-Madras	NA	78	113	120	+6.19%	92	67.67%	27 / 21	77.78%	60	16	26.67%

Town or area	MEDIAN PRICES							MEDIAN PRICE CHANGES
	2001	2004	2005	2006	2007	2008	2009	2010	% change 2009-2010	% +/- from 2006 peak to 2010	% change 2001-2010
Bend	168,950	227,500	279,900	352,500	345,000	289,450	212,637	191,000	-10.18%	-45.82%	+13.05%
Redmond	125,000	158,500	198,818	262,524	250,000	216,000	147,500	123,900	-16.00%	-43.81%	-0.80%
Sisters	235,000	308,500	394,250	460,500	415,000	367,450	286,250	233,750	-18.34%	-49.24%	-0.53%
Sunriver	289,500	393,500	462,500	575,000	548,547	555,738	402,000	417,500	+3.86%	-27.39%	+44.21%
Crook Co.	106,524	114,928	149,275	197,000	199,450	177,500	111,875	91,100	-18.57%	-53.76%	-14.48%
LaPine	86,000	135,000	148,500	183,250	215,000	160,000	109,000	102,450	-6.01%	-44.23%	+19.13%
Jefferson Co-Madras	NOT REPORTED	NOT REPORTED	NOT REPORTED	165,080	177,950	139,950	89,900	68,700	-23.58%	-58.38%	NA-NOT REPORTED UNTIL 2006

This information is derived from the Central Oregon Association of Realtors MLS database. It is deemed reliable but not guaranteed. MSA includes three counties of Central Oregon.