Thursday, April 14, 2011

First Quarter 2011: single family sales up & prices down

            Closing out the first quarter of 2011 Central Oregon’s real estate market continued to show some signs of stabilizing but sale prices continued weak across most sub-markets and property categories.
            Distressed properties continued to grab the bulk of single family sales in Bend and Redmond, which together comprise nearly 80% of total sales among the eight sub-markets that also include Sisters, Sunriver, Jefferson and Crook counties, Three Rivers South and LaPine.
            Single family sales edged higher in Bend through the first three months ending March 31 as compared to the same period of 2010. But median prices slipped by 7.89% fdrom $190,000 to $175,600.
            Total unit sales, including distressed properties, increased by 9.14% year to year. The share of total sales in Bend that were either short sales or foreclosures was almost dead even, at 63%, in the first quarters of 2011 and 2010. 
            In Redmond total sales declined by 6.39% in the comparable first quarter and prices also dropped by slightly more than 5% to $119,500 from $125,816. Distressed sales increased from 71.5% of the total in the first quarter of 2010 to 77% in 2011.
            Of the 221 pending sales in Bend as of mid-April, there were 130, or 58.82%  recorded as short sales or foreclosures. In Redmond, 57 of 74 pending sales, or 77%, were distressed properties.
Broader market reflects Bend and Redmond
            Altogether in the eight sub-markets of Central Oregon, there were 711 single family homes sold in the first quarter of 2011 at a median price of $145,000, compared with 666 sales at a median of $162,000 in the same quarter of 2010--a 6.76% rise in unit sales but a continuing decline of 10.49% in median price.
Distressed properties accounted for 459 sales in Q1-2011, an identical share of 65% after rounding to the 431 out of 666 total sales in Q1-2010. Median prices of distressed properties  in the broader eight-market area declined by 11.81% from $144,000 to $127,000.
            Of the 379 pending single family home sales in Q1-2011 listed on the Central Oregon MLS on April 14, there were 238—or 62.80%-- that were either short sales or foreclosures.

First Quarter 2011-2010 Single Family Home Sales
Q1 Market Statistics Bend and Central Oregon Single Family Home Sales
Source: MLS of Central Oregon (click to enlarge)
 

Saturday, April 9, 2011

From vine to bottle: vineyards are a growing trend in Central Oregon agriculture


Vineyards in Central Oregon?
There are skeptics, as often happens with new ideas germinated from thinking “out of the box,” or maybe “out of the bottle,” in this case.
 It’s too cold; the soil won’t work; it’s too dry; the growing season is too short; it’s “experimental” are among the misgivings.
Yet a small group of agricultural entrepreneurs are tilling a new frontier of viticulture in Central Oregon that is already showing substantial promise. Experimentation, they believe, is the mother of invention—or perhaps fermentation.
In northern Deschutes and southern Jefferson counties several vineyards are either in the early planting phases or have already produced grapes that have been transformed into bottled wine.
These homegrown viticulturists can point farther north to Washington state and British Columbia for examples of how similar agricultural diversification  has succeeded remarkably in areas once thought inhospitable to growing quality wine grapes.
Beyond creating a viable and sustainable crop that has enjoyed steady demand even in a difficult economy, the Central Oregon vineyard growers also want to be an integral part of a larger effort to support the region’s critical visitor industry through what is now widely known as  “agri-tourism.”
 The initial investment in vineyards and associated wineries can be substantial. One of the Central Oregon vineyard owners estimates their startup costs at nearly $25,000 per acre. But the potential per acre yield of $2,500 - $3,000 or more can be significantly higher than hay, a traditional Central Oregon crop which produces under  $1,000 an acre.
Veteran viticulturists say it takes adequate capital and considerable patience to succeed.  It will typically take up to five years for a vineyard to produce 2.5 to 3.0 tons of grapes per acre at today's prices of about $1,000 per ton. 
In the Spring of 2011, four vineyards are in progress in northern Deschutes and neighboring Jefferson County. Two of these now produce grapes nearby each other on acreage east of Highway 97 near Terrebonne.
Another vineyard is entering it’s second year in the Lower Bridge area south of Hwy 126 near the Deschutes River with full production of wine grapes anticipated in 2012.
 A fourth is in its third growth year just above the Deschutes River on Lower Bridge Road at Borden Beck State Park.
Much smaller hobby-type vineyards have sprung up near Madras and even around Fossil in Wheeler County.
None of the local vineyards will make a noticeable dent in Oregon’s estimated $76 million viticulture industry (not including retail sales) concentrated largely in the Willamette Valley and  along the Interstate-5 corridor, and to the north near Hermiston and the Columbia River. Altogether in Central Oregon there are fewer than 50 acres in current grape production with 40,200 acres in 2009 statewide, according to industry statistics. In fact the 2009 Oregon Vineyard and Winery Report, a combination state and federal agency data, doesn’t list any vineyard acreage for Central Oregon.

Vineyard rows at Monkey Face mid-April
 Leading the way at Monkey Face
            The pioneer established vineyard in Central Oregon is Monkey Face Vineyard in the private 1,700 acre Ranch at the Canyons community. It benefits from a spectacular location along the Crooked River that draws on the heat radiated from the adjacent towering Smith Rock State Park. On some days vineyard workers can hear rock climbers ascending the namesake Monkey Face spire across the river.
Kerry Damon came to Monkey Face in 2005, bringing many years of experience in the California grape industry. It was something he had dreamed of years before on first seeing the location.
Prior to Damon’s arrival a small vineyard had been planted with Concord, Reisling and Cabernet Franc varietals, but had not done well. Damon replanted the existing vine acreage, and added more in 2006, emphasizing hybrid grapes in the French-American category. There are now about 5 acres in production with the possibility of more being added in the future.

Kerry Damon prunes Marechal Foch
vines at Monkey Face Vineyard
 Going into 2011 Monkey Face has four red wine grapes known to tolerate colder climates including Marechal Foch, St. Crois, Leon Millot and Frentenac, along with three whites, Vignole, Le Crescent and a small planting of Frontenac Gris.
In 2010 Damon sold some grapes on contract to Faith Hope and Charity vineyard, which is just getting established and also has an application pending before Deschutes County to begin a winery at its site off Lower Bridge Road. Monkey Face has also sold grapes to Maragas Winery.
Of the varietals he has planted, Damon says, “Marechal Foch is definitely going to be a wine of choice in Central Oregon.”
Maragas vineyard and winery, along Hwy 97 in Culver just south of Terrebonne and only a few miles from Monkey Face  is the first onsite winery located in a vineyard in Central Oregon.
Doug Maragas began making wines with grapes from California and elsewhere in Oregon in 2003 and later opened a tasting room at the corner of Colorado Avenue and Bond Street between downtown Bend and the Old Mill District. It now doubles as his in-city tasting room and a Greek -inspired restaurant.
Maragas purchased 40 acres in Jefferson County in 2004 and planted approximately two acres in grape varietals to test which would fare best in the location. His winery opened in the Fall of 2006 in time to celebrate his first crush using grapes grown elsewhere in Oregon.
The winery faced some issues in the permitting but won approval from Jefferson County under state law allowing a commercial operation on farmland that complements agricultural use.
Maragas says his sole mission is to grow grapes and make wine, which distinguishes it from vineyards that are operated as amenities in projects with real estate for sale.
Today Maragas has more than 40 grape varieties planted on 2.5 acres and acknowledges he is experimenting to find varietals most adaptable to his location. Maragas has planted European style vitis vinifera varietals such as Merlot, Cabernet Sauvignon and Chianti, and also has purchased Vignole grapes grown at neighboring Monkey Face. He plans to plant another 15 acres.
            Among other varietals Maragas has planted Reisling, Chardonnay, Gewurtztraminer, Pinot Noir, Pinot Munier, three Muscats.  
Thus far he has bottled one wine made from the local grapes, a red dessert wine, known as Beet Red. Several of Maragas' wines made from outsourced grapes have been recognized at the San Francisco Chronicle wine competition, including bronze medals in 2007 and 2008 for his Legal Zin, a name play on the founder's previous career as an attorney.  A Pinot Gris has also bested in a competition one bottled by Kings Estate, one of the Willamette Valley's oldest estate wineries.
State law sets winery standard 
Cindy and Roger Grossmann of Faith, Hope & Charity have planted a 15- acre vineyard on 164 acres of their farmland off Lower Bridge Road west  the Deschutes River and only a few minutes drive from Maragas and Monkey Face vineyards.
        Thus far the vineyard includes four red wine grapes, Marquette, St. Crois, Leon Millot and Marechal Foch, and four whites, Le Crescent, La Crosse, Frontenac Gris and Traminette.
The Grossmann’s are awaiting a hearing officer’s decision on their application to establish on onsite winery as part of their business plan. One issue in the process is a determination by Deschutes County planners that the vineyard must have grapes in production to qualify for having and onsite winery.
Faith, Hope & Charity is the only Deschutes County vineyard to date that would meet the minimum 15-acre standard under ORS 215-452  to have a winery associated with a vineyard on agricultural land.
            The Grossmanns now have wine in barrels that was processed by a Medford vinter with grapes purchased from Monkey Face, and plan to do the same in 2011 as their own vineyard gets established. The first crush from their onsite grapes would come in 2012, by which time they hope to have all permits in place for an integrated vineyard-estate winery operation.
            At a recent Deschutes County hearing on the Grossmann’s winery application a neighbor expressed some concern over additional traffic that might be generated. But he praised the effort the couple has put into the project.
 “I’m on both sides of the fence. I hope it works out for them. And if it does, I’ll plant bananas,” he quipped. 

The DoubleEagle vineyard near
the Deschutes River
 The fourth vineyard has been started by Doug and Betty Dunn on a south facing slope on the north side of Lower Bridge Road as it  crosses the Deschutes River. The Dunn’s now have seven acres planted and altogether could have 15 acres in production, which would qualify them under state law to have a winery on site.
Doug Dunn says he’s approaching the venture step by step, as with his fellow growers experimenting to see what works at his site. As with the others he’s aware temperature is an important issue and takes measures to blunt the effects of potential frost.
In addition to a Marquette varietal, Dunn and wife Betty have also planted Pinot Gris and Pinot Noir and a white varietal from Portugal that has produced well in the foothills of the Pyrennes in conditions similar to Central Oregon.
The Dunns farm more than 400 acres in the lower bridge area, the bulk of it in hay and pasture for livestock.
“We’re in the experimental stage trying a bunch of different varietals,” Doug notes.
Eventually the Dunn’s effort, on their DoubleEagle Ranch, could be joined by his daughters and their husbands. Each couple has purchased separate acreage around Terrebonne with an eye to planting grapes.
“This could be a family-type development to include making wine at some location we have here,” Doug says. “it all depends on how things go on growing. We don’t have the confidence as yet to go ahead with that part of a master plan, where to locate (a winery) and handle all the business processes.”
Dunn credits Damon at Monkey Face with being a driving influence among the local vineyardists.
“He’s a champion to all of us who are trying to do something. He puts in his own time to help people. He’s our mentor.”
Events at wineries an unresolved issue
With the county’s consideration of the Grossmann’s winery application another issue has surfaced regarding the type of events, and their frequency, that should be allowed on land zoned for Exclusive Farm Use, or EFU.
It’s a conflict that emerged in Deschutes County and the Willamette Valley where many wineries were hosting weddings and other events as part of their operation. Increased scrutiny has forced counties to begin requiring special use permits, and several proposed bills that would address the issue have circulated in the state legislature.
For the most part counties have been left to interpret the language of state law governing activities on agricultural land. The interpretation promises to be a major issue as Deschutes County works through an update of the county comprehensive plan expected to conclude by this summer.
At the crux of the conflict is what type of activity meets the standards of state law for activities on EFU land. In January the state’s Land Use Board of Appeals addressed the issue by noting that a nonfarm activity “must be either exclusively or primarily a customer or supplier of farm uses in the area and essential to the practice of agriculture.”
Although the LUBA opinion related to food service at  wineries the implications of the decision could influence counties as they address the type of events on all farmland.
Even with the various issues confronting their efforts, the groundbreaking Central Oregon viticulturists are finding cooperation and potential strength in numbers with formation of the Winegrowers Association of Central Oregon.          
The regional grape growers might also take comfort from the experience of their counterparts in the Lake Chelan area of Washington and Okanagan country of southern British Columbia.
Both of those areas were not considered prime growing areas for vitis vinifera grapes that comprise the bulk of European-style varietals most popular in wine outlets, restaurants and private cellars.
The Chelan area and the BC Okanagan experience temperature swings similar to those of Central Oregon. Each is on the “dry side” of mountain ranges that protect them from drenching rains and clouds of coastal Washington and BC. Each is an area where other crops have long been the dominant agriculture.
In both of the northern areas, which also have a common link along Hwy 97 with Central Oregon, existing agriculture was struggling financially when decisions were made to try something new.
In the 1980s, the British Columbia government provided subsidies for growers to remove old style hybrid grape vineyards and replant with vitis vinifera vines more conducive to growing seasons with cool nights and warm days.
The Okanagan Valley Designated Viticulture Area (DVA) encompasses nearly 100 vineyards and wineries, today producing such well-recognized wines as Cabernet Sauvignon, Cabernet Franc, Merlot, Syrah, Chardonnay, Pinot Gris and Pinot Noir.  The Okanagan area has also carved a reputation for superb ice wines, made from grapes frozen on the vine.
The southern Okanagan Valley  accounts for 50 percent of all BC wine grape production on an estimated 10,000 acres throughout the province.
To emphasize the tourism benefits of the viticulture industry, in the late 1990s several wineries from the Okanagan region of Canada participated in a winemaker’s dinner at Sun Mountain Lodge,  in Washington’s spectacular Methow Valley near the Canadian border and north of Lake Chelan. Similar cross-border events have continued even as the viticulture industry has developed 50 miles south of the Methow Valley around Lake Chelan.

    Matching grapes with mesoclimates
In Chelan it was unreliable prices of apples that prompted orchardist Steve Kludt of Lake Chelan Winery to tear out some of his apple and cherry trees and plant grapes in 1998. Today the Chelan area now boasts its own American Viticultural Association, or AVA, designation, and has nearly 20 producing vineyards and associated wineries.

A vineyard that replaced
orchard trees at Lake Chelan

Among grapes now grown for Chelan AVA wines are Chardonnay, Viognier, Pinot Gris, Syrah, Pinot Noir, Merlot Cabernet Franc, Sangoivese and Nebbiolo.
In an early April conversation with Kludt the temperature in Bend was 35F  with intermittent snow flurries, while at his winery in Chelan it was 51F and sunny. Even with that disparity, there are similarities in the climates as both areas are at risk for late Spring and early Fall freezes that can affect grape maturity. A early Fall freeze before vines go dormant can immediately wipe out a season’s production, Kludt says.
Growing degree days (GDDs) are one climatic measure of a vineyard’s potential and are generally computed from April 1 through October 31 using a baseline, such as 50F for wine grapes. The Chelan area has about 2,300 GDDs, almost comparable to Napa Valley, Kludt notes. But Chelan degree days are greatest in the heat of summer, and much lower in Spring and Fall.
            Chelan and the BC Okanagan benefit from large lakes that act as heat sinks, absorbing warmth during the day and acting to moderate nighttime temperatures. 
Kludt’s success with his Lake Chelan vineyards has been with Pinot Noir and Pinot Gris, both cooler climate varietals, although the winery has won praise for its Cabernet Sauvignon from grapes grown in another vineyard at Benton City, in southern Washington. Last year the industry publication Wine Press Northwest rated Kludt’s Pinot Noir as the only outstanding bottling of that varietal in Washington state.
 “You can grow anything but you have to make them mature,” Kludt says. “They have to be ready to pick with the acids, the ph, all balanced out. You can grow grapes in Seattle but you can’t mature them.”
Kludt says that among the warmer climate varietals Syrah would be “about as far out” as he would want to test the climate potential in the Chelan area.
A guide for prospective wine grape growers published by Oregon State University specifies a range of  climate growing degree days for different varietals: 1,800 – 2,500 for Pinot Noir, Pinot Gris, Riesling, Gewurztraminer, Muscat and Chardonnay; 2,500 – 3,000 GDDs for Cabernet Sauvignon, Merlot, Viognier, Tempranillo and others; and more than 3,500 GDDs for “hot climate” varietals for table grapes and sweet dessert wines.
The guide’s author,  Dr. Patty Skinkis, viticulture extension specialist and assistant professor in the Horticulture Department of Oregon State University, has reviewed some of the Central Oregon vineyard efforts. She cites climate as a  challenge but perhaps not an insurmountable obstacle.
Central Oregon faces climate issues being on the lower end of the scale to grow wine grapes. It’s highly experimental at this point,” Skinkis observes.
As with vinter Kludt in Chelan, Skinkis emphasizes the risk of frost during Spring “bud break” and the critical Fall harvest period.
“It’s highly unlikely the warmest climate grapes, Syrah and Cabernet for example, would grow well in Central Oregon,” Skinkis says.. However, she qualifies that, “there could be mesoclimates that could vary significantly” to make growing them more feasible.
In viticulture a mesoclimate is considered unique to a specific vineyard site. A macroclimate would apply to an entire region, or AVA, and a microclimate to areas as small as a row of vines.
At Monkey Face Vineyard, manager Damon concurs that temperature—especially the threat of Spring or Fall frosts—is a sensitive component in growing grapes in Central Oregon.
“It’s paramount that you have some form of frost protection in your plans, on both ends, not just the Spring but also Fall,” Damon emphasizes. At Monkey Face Damon draws water from lakes at Ranch at the Canyons to mist the vines at the threat of frost. It can be a tense time, especially with a Fall frost that could wipe out the entire season’s production.
Up north in Chelan, Kludt stresses that specific sites can have much different growing climates.
“If I were in Bend (the area) or even in Chelan, and someone came to me with a site looking for what grape is going to be best, it could be different across the road or the river,” Kludt says.
After Kludt’s vineyard and winery were established, he says a second and a third followed.
“With the third one, people saw things to do on a tour. We accomplished our goal. We wanted to establish an industry.”
And that would be a goal the Central Oregon viticulturists would  like to reach.
“We will be a wine region because we have the right climate and the right soil, in pockets.” Doug Maragas believes.

Wednesday, April 6, 2011

Report finds potential Bend water system savings

            An engineering firm contracted by Bend officials has determined several ways to cut costs on an initally estimated $58 million water system upgrade.
But the firm’s report did not consider the feasibility of switching from a surface water to all groundwater well project given study “constraints” stipulated by the city. A group of local business and professional leaders have argued the wells would be less a less expensive and more environmentally-sensitive alternative.
            The “value engineering” or VE draft report by Robinson, Stafford & Rude Inc. of Florida dated March 11, 2011 says Bend could save $12.3 millon on the project by making several changes.
            Among the most prominent of these would be to reduce the size of a new 10-mile surface water pipeline from 36 inches to 30 inches and to continue using the other, newer of two lines that was built in the 1950s.
            Not replacing the newer pipeline would also mean the city would be under less time pressure to build it concurrent with planned construction work by the US Forest Service on Skyliner’s Road in the Tumalo-Bridge Creek watershed. Bend has been informed by the federal Environmental Protection Agency that it needs to upgrade the water system by 2012 to meet Clean Water Act requirements, although it’s possible that deadline could be extended.
            The city and the engineering firm that designed the project have previously supported replacing both pipelines, in part to facilitate construction of a hydropower power project estimated to add another $15 million to the $58 million upgrade budget.
            RSD Inc. suggested the city reevaluate the proposed hydropower project given such variables as potential income from the sale of power to offset development costs.
            In a statement addressing “project constraints,” the RSD report noted it did not consider “aspects of the project that the city does not want scrutinized by the team, because they represent project elements that, in the opinion of the city, cannot be changed.
            “Constraints may result from a variety of political technical, or environmental issues,” the report said.
            Included in the list of constraints were requirements that the point of water withdrawal not change; that there must be a surface water supply and a membrame filtration system.
            Going into the future, the RSD report said Bend should continue to rely on a “two-source, integrated system” that combines surface water withdrawal and transmission and wells “in a complementary fashion, rather than viewing each supply as an independent system.”
            Either groundwater wells or surface water sources could face quality or quanity problems, according to RSD. 
            But having both sources, “provides the City of Bend with a substantially improved level of confidence in water availability.”

Saturday, April 2, 2011

The Outdoors: So much to do


            The Central Oregon Spring dilemma…What to do?
            It’s still March. Last night the temperature dropped into the 30s but it will reach 70 by mid-afternoon.
Time for a quick 25-minute trip up for a few runs at Mt. Bachelor? There’s a 150-inch base at Mt. Bachelor.
On the way out to “the mountain” Widgi Creek is open with an early season discount on green fees for 18 holes.
Phil’s Trail on the edge of Bend is snow free and firming up for some mountain biking.
Fly fishing at Fall River is really good for nymphing and chasing some midday BWO hatches. 
What to do? Maybe try a little of everything. That proposal can wait another day. Will make those calls tomorrow.  
Rather than the exception these possible scenarios are commonplace in the Bend area as winter merges into Spring, sometimes hesitantly with a sunny 70s day followed by a few snow flurries the next.
On the first day of April  2011, the mercury topped 70 in Bend while less than a half hour away at Mt. Bachelor there were great Spring conditions—as well as excellent cross-country skiing out of several closer-by SnoParks on the way there from Bend.
Just this week PowdrCorp., owner and operator of Mt. Bachelor, announced it would extend grooming of its cross-country trails until late June, following earlier announcements that downhill runs would be open through May 29. And a new $149 Springtacular pass will cover a week of lifts for an adult and any “kid” under 18—for those who act before April 4.
As for golf, most of the area courses except Sunriver and Crosswater, at slightly higher elevations south of Bend, are now playing. Included are such premium courses as Tetherow, the links-style course on Bend’s west side, and Pronghorn, with courses designed by Jack Nicklaus and Tom Fazio.
Altogether there are nearly 30 courses in Central Oregon, about 20 of  these open to the public and most within 25 miles of downtown Bend.
  

Spring ski deals from Mt. Bachelor

Mt. Bachelor Ski Resort - Mt Bachelor: "Springtacular Spring Season Pass Spring skiing & riding until May 29th for only $149. Pine Parties 5 scheduled Pine Parties. Lift tickets will be valid 4pm-7pm and priced at $20 for all ages. Concert Series Afternoon spring concert series on the mountain presented by Deschutes Brewery."