Friday, August 26, 2016

Is Bend knocking on the urban growth expansion goal line?



            With Fall on the horizon is it time to dust off football buzzwords and ask if Bend could be in the "redzone" with the city’s much-delayed and expensive attempt to gain state approval of a new Urban Growth Boundary and plan?
            On August 25 the city and Deschutes County held a nearly all-day joint session to hear public comments on the almost final plan that has been years in the works since the state Land Conservation and Development Commission bounced an earlier effort back “on remand.”
            That decision by LCDC, the agency in charge of overseeing state-mandated growth management under SB 100 passed in the 1970s, essentially determined that rather than growing outward Bend must plan for higher density with its current boundary. Part of that effort should be building on as-yet undeveloped “infill” land.
            For some residents, higher density runs contrary to what they consider Bend’s charm as a smaller urban center with elbow room, characteristics that in some cases have attracted urban refugees and retirees who have fueled the real estate market.
            However with a population that has boomed from about 20,000 in the late 1980s to an estimated nearly 85,000 in 2016, the municipal hub of Central Oregon may already outrun the “small-town” niche.
            As summarized in a staff report the current UGB proposal calls for expansion of about 2,300 acres, compared with the 8,900 acres proposed in 2009. LCDC returned that plan in late 2010, thereby triggering a multi-year effort which the city estimates has cost nearly more than $2 million in planning and related expenses.
            Of the expanded city acreage, the staff report says 1,142 acres would be for new residential land, including schools and parks, 815 for development of employment sectors, 285 for public facilities and 138 in existing rights of way.
            A key feature of the UGB proposal would be development of areas that would integrate higher density residential, such as apartments and condos, with businesses. It would encourage apartments or condos above retail shops, as one example. This type of development has already gained some traction within the Bend downtown core.
            Looking out to 2028, the target date for the plan to be implemented, the city could conceivably gain about 17,000 new homes and 21,000 jobs, nearly three-fourths of those within the current urban boundary.
            As for the timing, assuming the plan is adjusted slightly in the near-term then submitted to the state, it may still be many months or even years before actual development of identified infill and expansion land begins. In many cases, development would require rezoning, new public and private infrastructure investment, permits and—not insignificant—favorable economic conditions.

Expansion areas identified in the 2016 UGB plan

Previous posts on Urban Growth Boundary

Thursday, August 25, 2016

Single family home or stock market - the 5-year results



            It makes for good conversation over breakfast, lunch, wine, beer or dinner- and could be preferable to discussing the contentious, borderline absurd trajectory of the current presidential campaign.
            The question is: how’s real estate performing in relation to other investments, specifically the stock market?
            As a micro-microcosm of broader national market, Bend real estate as measured by the median price of a single family home has performed admirably since reaching bottom in 2011.
            At the low of the market for a single full year in 2011, the median price of a single family home stood precisely at $200,000. By the end of June this year it was $370,000, an 85% increase.
            By comparison the broad S&P 500 stock index on January 2, 2012 when the market opened for the year closed at 1,277. On June 27 of this year the index read 2,102, a 64% climb.
            Of course, it’s all a question of market timing and few investors or anyone just wanting a roof over his or her head could have picked the precise moment that either real estate or stocks would begin to recover.
            In fact, the stock market had already begun to emerge from the recession depths before Bend housing. The lesson may be that the real estate or stocks question is simply good conversation among friends.

Bend Median Price Trend




S&P 500 year-end 2011 through June 2016

Wednesday, August 17, 2016

Bend median price at mid-2016 tops previous record


            As the first six months of 2016 came to a close Bend’s real estate market marked a milestone as the median sale price of a single family home hit $370,000, $5,000 above the all-time high of $365,000 recorded in 2006 before the recession collapse.
            And a look back five years to the depth of the slump reveals Bend has rebounded more than 55% since the end of 2011 when the median cost of a single family home had dropped to $200,000 after the 2006 peak.
            Also indicating demand for housing, new homes sold as a percentage of all sales rose to 23.26% in the first six months of 2016, compared with only 12.54% in all of 2012 as the market began to recover. At the market bottom in 2011, new homes sold acconted for only 7.45% of total single family sales. (*New homes are defined as those completed and sold within a two-year period).
            Other points of interest in the mid-year 2016 statistics, as shown in the accompanying chart:

  • Although only a small slice of all Bend sales, homes that closed at more than $1 million in the first six months of 2016 grew to 3.18% (43 units) against 2.07% (27 units) in the same six months of 2015.
  • Sales of homes in the $200,000 to $299,999 range decreased by 23.21% year to year as prices moved upward.
  • The largest gain in any range of $100,000 was in the $600,000 to $699,000 category, with a 71.19% boost in unit sales.