Thursday, October 30, 2014

Resort land sales rebounding--Caldera Springs leads among new resorts



            Not that long ago Bend resort sales reached peak levels, driven in part by out-of-state buyers flush with accumulated real estate equity complemented by often lax  lending standards.
            Beginning in 2005 several new resorts came to market, joining the existing legacy ones -- Sunriver, Eagle Crest and Black Butte Ranch -- that had established Central Oregon as popular vacation and getaway home area.
            Among this “new era” of resorts were Pronghorn, Tetherow, Brasada Ranch and Caldera Springs, the latter an expansion of the existing Sunriver resort complex south of Bend.
Since 2005 this group of properties has accounted for a total sales volume of $213,617, 292 according to statistics extracted from the Multiple Listing Service of Central Oregon database.
Of the four newcomers to the resort-vacation home market, Caldera Springs has led the pack through the third quarter of 2014 with a total of 375 sales and volume of $108,909,449, more than half the historic volume of the group.
Over the period Brasada Ranch and Pronghorn weathered the most trouble in the form of short sales and foreclosures. At  Brasada Ranch more than 40% of MLS reported sales through third quarter 2014 were short sales or bank owned, and  35% at Pronghorn.
As for recent performance, Tetherow, just outside Bend's west boundary, has led all unit sales in 2013 and 2014 with 80 closings on volume of $20,448,313--more than double the volume of each of the other three projects in the “new era” group. Median price at Tetherow thus far in 2014 is $258,742.
Brasada Ranch has recorded 83 sales in the 2013-2014 period, at a median of $125,450, as the resort under fresh ownership of Northview Financial has mounted aggressive marketing programs to attract visitors and potential owners.
Note: Table 1 is for newer resort-vacation home projects. Table 2 with the bar chart includes all Central Oregon properties in the resort-vacation home category.

TABLE 1



TABLE 2
Dislaimer: Information provided is deemed reliable but not guaranteed. Contact me at leemvnews@aol.com should there be a significant error that needs correction.

Friday, October 10, 2014

The Fall vineyard harvest in Central Oregon-on the way to wine



            The sun rose over the rust-colored, jagged spires of Smith Rock State Park on a day in what had been an unusually warm Fall.
            A diverse collection of mostly volunteers with work gloves and pruning shears were snipping ripe grape clusters and carrying them in buckets to a bin pulled by a small tractor.
            And on this October day Kerry Damon, the man generally considered the godfather of Central Oregon viticulture,  was breathing more easily. It would be the final harvest of the section of Frontenac grapes. It is one of several varietals he has nurtured over seven years to establish Monkey Face Vineyard as the cornerstone of a nascent wine industry in this high desert environment.
Picking the Frontenac vines
            For the past few days Damon had sampled grape clusters to determine the “brix,” or sugar content, that would be most ideal to complete the final harvest day. He had shared the information with the winemaker at Pallet, a custom crush facility about 180 miles away in Medford. And together they had decided the optimal day to pick.
            This had been a good grape year for Monkey Face. An unusually early and warm growing season had extended well into Fall, with only a couple of evenings where the grapes had to be protected from frost by an overhead misting system.
            Birds were more of a challenge. And Damon had been busy checking the netting that would provide some barrier from the avian intruders.
            Also retarding some of the growth had been leaf hoppers, a gnat like insect, that can sap nutrients from the leaves. The brix readings for sugar and PH for acid were slightly less than usual, but cooler and potentially rainy weather was forecast.
            “Timing is everything,” observed Damon. And it was time to pick the last section of the vineyard.
            All-in-all Damon expects the all of Monkey Face’s production to reach 8.5 tons, about a half ton more than the 2013 crop. 
Damon and Robert Dunkelburger discuss the harvest
 Blending hybrids with vinifera grapes
            The vineyard name derives from the  Monkey Face rock formation, an imposing 350-foot semian-like pillar that is a legend among accompished technical climbers for its variety of difficult routes. The climbing rock rises from its base in Smith Rock State Park, just across the Crooked River from the vineyard.          
Initially planned as an amenity for the gated Ranch at the Canyons luxury home community, the influence of Monkey Face Vineyard has reached beyond the residential “working ranch”   to become the nexus of a growing regional industry.
            Until 2014, the Monkey Face grapes had been mostly purchased by  commercial winemakers, who would often blend it’s cold-hardy French-American hybrid varietals with more well-known vinifera grapes, such as cabernet, syrah or chardonnay.
            In the immediately past few years, Monkey Face owners-- the Ranch at the Canyons homeowners association--had sold most of its harvest to another winery-vineyard operation, Faith Hope & Charity, the latter still a year or two away from maturity of its 15-acre vineyard.
            The result was an award-winning, 100% Monkey Face white varietal, La Crescent, bottled with the Faith Hope & Charity label.  Now Damon is following the same path as FHC by having Pallet in Medford turn Monkey Face grapes into wine bottled with its own label relecting the Ranch at the Canyons location.
            Among the other hybrids grown at Monkey Face are Marechal Foch, Frontenac, Frontenac Gris and Vignole, most of these familiar in colder regions of the upper Mid-west and Finger Lakes region of New York than in warmer climes of California, Oregon and Washington--the nation’s leading vinifera growing states. 
The answer is "Yes, Yes and Yes!"
            The importance of tolerance to frigid weather in Central Oregon was dramatically illustrated in the winter of 2013-2014. Then a protracted cold snap of sub-zero temperatures essentially wiped out the new vinifera vines of Maragas vineyard and winery, a Monkey Face neighbor a few miles to the north.
            From Damon’s perspective, Monkey Face and a few other growers have answered the questions--Can you grow wine grapes in Central Oregon? Can you nurture them to maturity? and Can you make good wine from them?.
The answer, he repeats often, is “Yes, yes and yes!”
            Cindy and Roger Grossmann at Faith Hope & Charity have bought into Damon’s positive attitude for the potential of a Central Oregon viticulture industry.
Lunch after the harvest
            Their 312-acre farm property is home to the first winery permitted on exclusive farm use zoned property in Deschutes County by virtue of planting a minimum of 15 acres as required by Oregon law.
In 2015 the Grossmanns plan to harvest their first “estate wine” grapes, a crop with many of the same cold-hardy varietals already established at Monkey Face Vineyard.
Meanwhile, FHC hosts weddings and regular music, food and wine events in its scenic setting with views of the Three Sisters Peaks, and only a couple of miles to the Deschutes River.
In order to comply with wine sales requirements of the country land use permit, FHC for now offers wine bottled with its label and sourced elsewhere in the Columbia River AVA appellation bordering Oregon and Washington.
The Grossmanns and Damon have been leaders in the Winegrowers Association of Central Oregon, which also has members that include Scott Ratcliff's successful Volcano winery in Bend and labels by OJ Merrill, Naked Winery and Maragas. None of these have high-production vineyards in Central Oregon although Volcano and Maragas have blended some of their wines with Monkey Face varietals.
Other smaller vineyards are also in various stages of development, including Double Eagle by the Dunne family along the Deschutes River just a few miles between Monkey Face and Faith Hope & Charity.
(See Vineyards and Wineries for previous posts)

Tuesday, October 7, 2014

Slicing the market by price-clues to demand and trends



            One of the best measures of the characteristics of  a real estate market is the concentration of sales by price segments.
            Analyzing unit sales in various price ranges can reveal demand trends and provide clues to future market direction.
            As examples, these “metrics” can answer such questions as to whether the luxury market is growing, static or declining. Or they can identify the price ranges attracting the most sales activity.
            Builders, brokers, lenders, home sellers and buyers all benefit from the information in making real estate decisions.
            So what do the price ranges show in Bend and Central Oregon for the first nine months of 2014? (see the table below)
·        More than half of all sales in both Bend (59.81%) and all of the region (52.42%) are homes in the $200,000 through $399,000 category.
·        By far the the most sales in Bend (39.60%) and all of Central Oregon (34.85%) are in the $200,000 to $299,000 price range.
·        But the numbers diverge for the next highest sales range. In Bend 20.81% of sales are from $300,000 to $399,999. In all of the region, including Bend, the 2nd highest category is $100,000 to $199,000. 
            Moving farther up in the pricing ladder sales in Bend alone account for another 24.04% in the $400,000 through $699,000 range, but only 17.83% for all of Central Oregon.
            And, significantly, sales beyond the $700,000 level to the highest priced closings in the region (three above $2,000,000) only amount to 5.63% and 4.24% in Bend and the region, respectively.
            The number of sales above $1,000,000 are a very thin slice of the overall market, with only 1.65% in Bend and 1.25% throughout the area in that range.
            Altogether there were 31 sales in Bend at more than $1,000,000 through the third quarter of 2014, compared with 25 in the comparable period of 2013 -- a nice percentage gain but a relatively small number of units. Of the Bend sales, two were in the Pronghorn resort between Redmond and Bend, which has a Bend address.
There were another 10 sales in 2014 above $1,000,000 elsewhere in the region--three near Sisters, two each in Crosswater and Sunriver and one each in Black Butte Ranch, Aspen Lakes and Vandevert Ranch.
The three sales of more than $2,000,000 were a 560 acre property on Wychus Creek north of Sisters, at $3,335,444; a 342 acre property bordered by Forest Service land west of Sisters, $2,400,000;  and a home in Crosswater, $2,100,000.




Monday, October 6, 2014

Regional recovery continues - Bend tops $300K median



            As the 2014 third quarter ended the Central Oregon real estate market showed continued strength in its long recovery with single family unit sales and price appreciation especially robust in Redmond year-to-year.
            And for the first time since 2007 the median price of a single family home was on track to top the $300,000 threshold in Bend, by far the largest regional sub-market with more than 55% of homes sold.
            The tables below (click to enlarge) provide a comparison of the first nine months of 2013 and 2014. Note that Table 1 if for single family sales on all acreage and Table 2 for more urban homes on less than an acre (up to 0.99 acre).
            Some trends that emerge:
·        Total regional sales volume has already topped the $1 billion mark for the third consecutive year since 2012.
·        Median prices for all homes in Bend increased by 6% while units sales were flat, dropping by 3% for the period
·        As the second largest sub-market, Redmond had gains across the board with median prices up, unit sales 12% and total dollar volume an impressive 22%.
·        Although it accounted for only 6.4% of sales in the region, Jefferson County-Madras posted the largest gain of all sub-markets in median prices, up 24%; unit sales 22%; and sales volume, 41%.
·        Sisters was the only sub-market to show a loss in median sales price, down 10% for homes on all acreage, and was off 7% for homes on lots on less than an acre.
·        Of the 2014 sales through the third quarter, 551 were completed in 2013 and 2014, indicating strong demand for new construction.
·        Assuming that real estate commissions would be at least 4% (possibly up to 6%), the total personal and business  income for real estate brokerages and agents would range from more than $42,000,000 to $63,000,000.
·        Factor in construction related jobs and the multiplier impact of an improving market is substantial for the in terms of buying power across the regional economy for retail and other sectors.

Additional Q3 reports for other market segments will be posted in coming days, including a breakdown of sales by price range.



Thursday, October 2, 2014

Bend and Whitefish...distant cousins in real estate investment



  A recent trip to Montana illustrates that real estate investment capital tends to share connections that reach across regions--especially in areas that have similar natural, demographic and other characteristics.
 In this case I had a first hand experience in Whitefish, Montana, a scenic historic town north of Flathead Lake and only 30 minutes from the entrance to Glacier National Park and in sight of the massive Bob Marshall Wilderness complex.
Although still a major economic factor, the region’s timber industry--with companies such as Plum Creek Timber--is now facing environmental challenges that have reduced forest harvesting and related employment, as elsewhere across the West.
Whitefish Mountain ski runs as seen from downtown

The economy, according to the Flathead County web site, is now experiencing “attraction development” with recreation and tourism creating more service jobs.
With a population of only 6,357 according to the 2010 Census, Whitefish is dwarfed by Bend’s approximately 80,000, although the Flathead County officials estimate its population increases by 40% from June through August.  
As a recreation and vacation home hub, Whitefish has a thriving downtown with clothing boutiques, specialty retail shops, antique stores, galleries, bookstores, a brew pub, local coffee roaster and cafe, a range of casual and fine dining and a weekly farmer’s market in the central town park.
Expanded shopping in “big box” stores such as Costco, Best Buy, Bed Bath and Beyond and others is only a 15 minute drive from Whitefish to Kalispell, the county seat and commercial hub with more than 20,000 residents. 
Whitefish is also situated on a namesake lake with views into Glacier National Park from several vantage points. And like Bend and Mt. Bachelor, Whitefish also has a major ski mountain, Whitefish Mountain Resort, formerly known as Big Mountain.
Although the total 2010 census reports only 90,928 residents in all of Flathead county air service and the Amtrak line running through Whitefish link it to major population centers. As such the area is easily accessible to international travelers visiting Glacier National Park and its neighbor Waterton Lakes across the border in Alberta, Canada.
Fall in Glacier National Park
Glacier International Airport between Kalispell and Whitefish offers nonstop or direct flights by major carriers, including Alaska, Delta, United and affiliates, to Los Angeles, San Francisco, Seattle, Salt Lake City and Denver. Amtrak’s Empire Builder has regular service from Seattle through Sandpoint, Idaho and on to Chicago.
In my trip to visit a friend and float-fish the Flathead River and its tributaries I took time out to tour downtown Whitefish and stopped by the Glacier Sotheby’s International office.
While chatting about the comparative real estate markets with a Sotheby’s broker, who visited Bend some years ago, I inquired as to who owned the local Sotheby’s franchise.
And at that point I heard the bell ring, so to speak, for a Bend-Whitefish nexus.  
The Whitefish Sotheby’s franchise, and those throughout Montana, are owned by companies connected to Bill Foley, (William P. Foley II) founder and chairman of Fidelity National Financial, a publicly-traded Fortune 500 company, and parent of Fidelity National Title company, the nation’s largest group of title insurance companies, and other subsidiaries.
Foley also has a hand in Cascade Timberlands LLC, the company that bought out creditors in the bankruptcy of Crown Pacific LP thereby acquiring the prized 33,000 acres of commercial forest that protects the view corridor to the Three Sisters Wilderness between Sisters and Bend. Altogether Cascade Timberlands purchased more than 290,000 acres of the Crown Pacific holdings, extending all the way down the Cascades spine to the California border.
According to a 2008 SEC filing, Fidelity National Financial, the parent of Fidelity National Financial www.fnf.com and other companies, controls nearly three-quarters of the Cascade Timberlands forest lands portfolio.
The original plan for the Bend to Sisters land was to develop a few thousand acres of the property as an estate lot community, leaving more than 30,000 acres available for purchase by the Deschutes Basin Land Trust. Although negotiations are periodically said to be still alive, there has been no recently announced movement on the plan.
In the Whitefish area, a Foley company purchased the former Big Mountain ski area in 2007 and rebranded it with some local controversy as Whitefish Mountain Resort.
View from road to Whitefish Mountain Resort
Besides the Sotheby’s franchise and  ski area, through another company Foley, a West Point graduate with an MBA from Seattle University and law degree from the University of Washington, also owns four Whitefish restaurants. One restaurant has a wine bar featuring a dozen labels under the Foley Family Wines company, among those Firestone, Sebastiani, Merus, Lincourt, Kuleto, Foley Estates, EOS, Chalk Hill and Altvs in California, Three Rivers in the Walla Walla area and several in New Zealand. www.foleyfamilywines.com, based in Sonoma, California.
By membership in the Foley Food & Wine Society, members can participate in wine events related to Foley’s holdings, order wines, stay at affiliated lodges and resorts, or ski Whitefish Mountain. www.foleyfoodandwinesociety.com.
Down the road from Whitefish in Deer Lodge, MT a Foley company is developing the 30,000 acre Rock Creek Cattle Company, www.rockcreekcattlecompany.com, described as a historic working ranch, with 240 gated home sites and Tom Doak-designed 18-hole  golf course. And the Foley portfolio also includes the Glacier Jet Center with charter and other aviation services based at Glacier International. www.glacierjetcenter.com.
As is often the case, the highly mobile top tier of the demographic ladder often divide their time between several residences.
Although Foley has a 10,000 square foot plus home on Whitefish Lake, and locals consider that his primary residence, he also has ties to the Santa Barbara, CA and Jacksonville, FL areas.