Focus on Bend: May 2013

Friday, May 24, 2013

Briefly updating the region

Back in the top 20

After ascending the summit of national home appreciation in the “bubble years,” then plummeting to the bottom in only two years, the greater Bend area is back in the top 20.

Just released numbers from the Federal Housing Financing Agency for the first quarter of 2013 rank Bend as number 20 among single family home appreciation for 2012, with a rise of 7.69%. For the first quarter of 2013 prices rose 3.71%. But prices are down by 34.30% for the past five years.

An earlier post in 2011

From the top 20 to the bottom 20...

Region’s leading bank in recovery

With a portfolio weighted down by troubled development loans Bend-based Bank of the Cascades went on a federal watch list for at risk lenders. But with it’s recent report of $1.7 million in net income for first quarter 2013, along with gains for the previous four quarters, the bank appears poised for growth along with the housing recovery. Deposits for the quarter rose by 11%.

Following the reports BOTC officials noted the bank has shrunk from an asset base of $2.5 billion in 2010 to $1.5 billion. Now the lender will concentrate on growing through acquisitions in selective markets and cost cutting by closing some branches.

Population growth ramps up

Maybe Bend city officials can postpone correcting the population signs entering town if the current influx of new residents continues.

New federal census figures estimate the city’s population at 79,109 as of July 1, 2012, a 3.2% increase from the same date in 2010. That ranks Bend as the fourth fastest growing city of more than 50,000 in Oregon, behind Hillsboro, Portland and Beaverton.

Bend grew by about 20,000 residents between 2000 and 2007, but added fewer than 2,000 residents from 2008 through 2010. Another 2,500 were added in the 2010 through 2012 period.

For some years the small green population signs entering town have pegged the city’s population at more than 80,000, a number that Oregon State University’s population forecast center has questioned.

Construction to start on Old Mill hotel

Site preparation has begun for a planned 114-room Hampton Inn & Suites on a 4-acre property at Columbia Street and SW Shevlin Hixon Drive in the Old Mill District adjacent to the Les Schwab Ampitheater.

Boise-based AmeriTel Inns will develop the property and is the joint permit applicant along with William Smith Properties, the Old Mill District Developer.

AmeiTel also operates the Hilton Garden property on the ridge above the Old Mill District retail area on the opposite side of the Deschutes River. The company had earlier put on hold plans for the site as the economy headed downward following contruction of the Hilton Garden, originally known as AmeriTel Inn before rebranding in 2012 under the current name.

Thursday, May 23, 2013

Region avoids explosive farm and ranch prices

Ranch owners come in a number of categories: those who would just like the open space setting, others who want a mostly passive investment perhaps with recreation potential and the truly hands-on rancher in it for the long haul.
For those with their hands off day-to-day operation the phrase “All hat and no cows,” might fit.

Some 10 years ago I recieved a call from a woman in Florida saying she and her husband were considering a move to Central Oregon. She added with apparent skepticism, “my husband thinks he’d like to grow some hay.”

Neither of the couple had any family background or experience in ranching. They wanted a place with elbow room and a good site to build a home, which they realized by buying in a gated estate property with irrigated hay fields and a vineyard run through the homeowners association. In effect, it’s a taste of ranch life without the work.

The neighboring property to their gated environment is a working hay and livestock ranch owned by the founder and chairman of a well-known international athletic equipment and apparel company.

Several years ago I listed a 550-acre ranch far from the nearest grocery or retail stores. A buyer put much of his retirement plan into the acquisition, which included irrigated hay fields, livestock and a nice view home. A few years later he sold out after raising cattle for Kobe beef and returned to a more urban setting.

Recently I had another call from a hedge fund manager looking for investment ranch land--no value in a home, horse facilities or livestock, just irrigated land in crop production. He has never been a rancher but wants the potential benefits of productive land with a tax-friendly conservation easement potential.

A farm and ranch price boom in some areas of country

Some of the current interest in ranch properties stems from a reported national rise in agricultural crop land prices. But the runup in farm and ranch land prices is giving rise to warnings from some quarters that prices may not be sustainable, and even concern of a possible boom to bust scenario.

And, in what may be fortunate considering Central Oregon's lengthy real estate troubles, with a recovery in sight, the region's farms and ranches don't appear to have experienced an unreasonable spike in values.

In late 2012 the Los Angeles Times reported Prudential Financial Inc., subsidiary of the insurance company, had acquired crop land with avocados, lemons, mandarin oranges and almonds in California.

In California the average cost of farmland rose to $7,200 an acre in 2012 with properties in almond-growing areas ranging into the $15,000 to $19,000 according to the Times report.

The demand for farmland has spawned a number of independent investment and hedge funds including Agriworld Fund Inc. and Famland LP in addition to funds such as Prudential’s.

A recent report in the American industry publication noted farm land in the midwest “corn belt” and the high plains appreciated from 15% to 26% in 2012 according to Federal Reserve studies. Some of the demand is being driven internally by existing farm & ranch owners who are less comfortable with stocks when allocating investment capital and also weary of low returns on cash equivalents and bonds.

An April report by the Kansas City Federal Reserve Bank raised concerns that some farmers are using inflated land sale values as collateral to take on debt that may drag them down in a demand slump. Commodity prices have reached all-time highs and are due for significant drops, according to various reports.

No frenzy in Central Oregon ag land market

Also part of the downside equation is expansion of competing world-wide agricultural production and drought conditions in much of the country’s most productive regions.

Although sales of farm and ranch property are picking up in Central Oregon there is an absence of frenzy such as reported in other areas of the country--and likely the less chance of a major bust.

The region does not have the highly-productive food crop land found in areas of the midwest. Most land is in hay production with other crops such as mint, garlic, wheat and chickpeas to name a few. Most of the larger ranches for cattle grazing lie farther east toward Burns and beyond to the Idaho border.

Most of the properties included a residence, farm buildings and irrigation or other equipment, making it difficult to separate the price for productive acreage from the total assets sold.

Throughout Central Oregon in the period from January 1, 2012 through May 19 of 2013 there were a total of 30 sales of farm and ranch properties listed on the regional multiple listing service at a median price of about $3,849 per acre. The median for land with no value assigned to a home was $3,499 and the average was $3,780. Total sales volume for the period was $27,185,850.

Thursday, May 16, 2013

"Luxury" home sale trend not evident in Bend area

Central Oregon appears to be lagging any trend of mega-priced home sales as reported in recent weeks in such areas as New York, Miami and California.

The theory in analyzing the home buying appetites of the market’s “one percenters” is that money is moving from the sidelines with a slowly improving economy. Low interest rates are less a factor among this group for which a loan is less important than the opportunity to acquire a trophy property.

And the buoyant stock market of the past few years has also created gains that can be deployed into other asset classes such as real estate.

But a look at the greater Bend-Central Oregon market indicates a mostly lackluster performance in sales of homes at more than $1 million. (which in New York might be just enough for a small apartment on the upper East Side).

For the 16-month period from January 1, 2012 through April 30, 2013 there were 30 single family homes sold for more than $1 million according to the Multiple Listing Service of Central Oregon’s database. The top price was for a 5,114 square foot home built in 2008 on 1.2 acres in Black Butte Ranch west of Sisters. The median price in the $1 millon plus category was $1,325,000 and the size 4,750 square feet with 4 bedrooms and 4.5 baths.

By comparison, 28 homes sold for more than $1 million in the comparable 16-month period from January 2011 through April 2012 at a median price of $1.2 million for 4,782 square feet, 4 bedrooms and 4 baths. The maximum sale price for the earlier period was $2.35 million for a 6,500 square foot home with 3 bedrooms and 4 baths in Broken Top built in 2002.

In mid-May there were 107 active listings above $1 million, the top priced home at $5.5 million with 4 bedrooms and 5.5 baths, more than 10,000 square feet on more than an acre in North Rim of Awbrey Butte. The median of the active listings was $1.45 million for 4 bedrooms and 4 baths and 4,683 square feet.

The active listings exclude a 7,500 acre ranch with a small home in Powell Butte east of Bend.

$1 Million plus sales Jan, 1 2012 through April 30, 2013

Date sold	Price sold	Area	Bdrm	Bath	Lot size	Home sf
2/20/2013	1,000,000	Bend	5	4	1.35	4306
3/26/2013	1,000,000	Bend	3	3.5	0.43	3057
8/3/2012	1,050,000	Bend	4	5.5	0.47	5509
7/20/2012	1,050,000	Terrebonne	3	4	76.56	4876
4/30/2013	1,080,000	Bend	4	4.5	0.412	4363
10/31/2012	1,100,000	Bend	3	2.5	0.52	3410
10/16/2012	1,100,000	Sunriver	3	7	39204	6987
9/20/2012	1,195,000	Bend	4	3.5	1.6	4600
4/20/2012	1,200,000	Bend	3	3.5	1.01	3227
2/11/2013	1,260,000	Bend	3	3.5	0.24	3280
12/4/2012	1,275,000	Bend	4	3.5	2.17	5680
10/18/2012	1,300,000	Bend	3	2.5	10	4639
2/29/2012	1,300,000	Redmond	4	4.5	124.7	4096
5/7/2012	1,300,000	Black Butte Ranch	4	4	0.42	3835
10/16/2012	1,300,000	Black Butte Ranch	3	3.5	1.56	3340
1/31/2012	1,350,000	Bend	5	4	2.08	4675
7/24/2012	1,350,000	Bend	4	5	1.16	6674
12/21/2012	1,350,000	Bend	4	4.5	1.09	5507
2/3/2012	1,350,000	Bend	3	3.5	2.42	4724
4/16/2013	1,375,000	Bend	4	5.5	27.55	4129
9/12/2012	1,390,000	Bend	4	4.5	1.92	5499
4/22/2013	1,399,000	Bend	7	8	0.32	5317
11/8/2012	1,500,000	Bend	5	6	0.87	6118
4/24/2013	1,502,874	Bend	5	6.5	0.58	6020
7/9/2012	1,625,000	Bend	4	5	5.83	6869
9/13/2012	1,750,000	Sisters	4	5.5	80	7189
7/11/2012	1,850,000	Sisters	3	3.5	38.57	4215
5/10/2013	2,000,000	Bend	5	5.5	0.85	6865
9/6/2012	2,195,000	Bend	4	5	43.28	4777
4/16/2012	2,200,000	Black Butte Ranch	4	5.5	1.25	5114

4-Year OSU Cascades campus moves into site location phase

As the funding for a new four-year OSU-Cascades campus appears on track the location of an expanded campus moves up in the “to do” list.

A Portland-based consultant on May 15 presented recommendations that a range of 41 to 65 acres would be needed to meet campus development requirements, depending on whether the emphasis would be on an “urban” or “suburban” oriented campus, respectively.

An urban-oriented campus would be comprised of existing and newly built space within areas of current Bend retail and other development. A suburban-style campus would be largely self-contained in a specific larger campus mostly built from the ground up.

A representative of SRG Partnerships Inc., the Portland architectural consultant, estimated that in an early phase through 2015 the new campus would need approximately 200,000 square feet, including 22 classrooms. The current campus, which shares a site with Central Oregon Community College, currently has about 62,000 square feet.

Build-out for 5,000 students has been estimated to occur in 2025 with nearly 80 classrooms.

Compass Commercial of Bend is the real estate brokerage contracted to identify and negotiate for space to accommodate the expanded campus.

For some years Bend officials have included a potential college campus in the master plan for the 1,500 acre Juniper Ridge project on the northeast edge of the city. However, most discussion of a location of the new four-year OSU-Cascades campus has focused on sites closer to the city core.

The approximately $20 million in funding for the new campus is expected to include $16 million from the state legislature, $4 million in funds raised within the Bend-Central Oregon area and $4 million from the college budget.

Beaver nation to expand in Bend? 4-Year OSU campus effort gaining strength

Thursday, May 9, 2013

Bend bags beer berg booyahs

It’s been difficult for anyone not to be swept into the frothy (sudsy?) wave of hype swirling around Bend’s reputation as one of the country’s best beer bergs.

Now that CNN has weighed in on the matter maybe it’s best to grab a local brew and enjoy the attention. Much like Seattle became the coffee capital of the country (world?) Bend is vying for a top place in the universe of barley, malt and hops.

The latest accolades from CNN rank Bend among the “...top eight cities in America for beer explorers,” along with Portland, San Francisco, Boston, San Diego, Denver, Philadelphia and Asheville.

“With one brewery for every 9,111 people, descriptors for Bend include “beervana” and “Beer City, USA,” CNN gushes.

Deschutes Brewing appropriately gets a toast as the “godfather of local craft brewing...” Also mentioned are relative newcomers Crux and Worthy Brewing Company and the Bend Ale Trail with nine participating breweries that offer to stamp your passport to win a prize.

Among Bend milestones, CNN continues, is, “...the world’s first organic, non-alcoholic brew made for dogs, Dawg Grogg.”

Another acknowledgement is Bend’s “Cycle Pub,” loved by tourists and some locals but less popular with many drivers as the people-powered vehicle plods it’s way on city streets with very merry passengers guided by a “designated pilot,” so to speak.

Going beyond the cycle pub, there are other possibilities if you’d rather take more conventional transportation to punch the passport. Several local companies offer motorized alternatives, including the Bend Brew Bus, Cowboy Carriage Company, GETTIT Shuttle and Bend Adventure Tours.

Map your own trek on the interactive Bend Ale Trail:

http://www.visitbend.com/Bend_Oregon_Map/Maps/Bend-Ale-Trail-Map/

http://www.visitbend.com/Bend_Oregon_Activities_Recreation/Bend-Ale-Trail/

McMenamins Old St. Francis School Pub

Phone: 541.382.5174

Address: 700 NW Bond St, Bend, OR 97701

http://www.mcmenamins.com/OldStFrancis

Deschutes Brewery

Phone: 541.382.9242

Address: 901 SW Simpson Ave, Bend, OR 97702

http://www.deschutesbrewery.com/splash/default.aspx

Worthy Brewing