Focus on Bend

Sunday, March 4, 2012

Real Etate Market Trying to Level Off

Flat but not flatlining.

That might be a reasonable assessment of the Central Oregon real estate market for 2011 and the early months of 2012 as indexed by sales of single family homes.

In fact by a remarkable coincidence the number of 2011 single family home sales in Bend, by far the largest regional sub-market, were dead even with 2010—at 1,690 for each year. Bend accounts for nearly 60% of all regional single family sales followed by Redmond with 22.68%.

Sales of distresed properties throughout the reigon continue to dominate, ranging from nearly 70% (68.09%) of Redmond sales to a low of 14.29% in the small Sunriver sub-market. In Bend, there were 883 short sales or bank owned single family sales, or 52.25% of the total.

Even more dramatic, as of March 1 distressed properties accounted for more than 80% of pending or contingent sales in Crook County (Prineville and the area); LaPine and Jefferson County (Madras). The percentage was 68.93% in Bend; 75.66% in Redmond and 55.56% in Sisters.

Sunriver had the lowest rate of pending/contingent distressed properties at 41.18% as well as in 2011 total sales, at 14.29%.

Sunriver leads and Sisters lags the market over 10 years

Looking at price trends year-to-year, median prices declined in all but one sub-market (LaPine up 1.75%). Bend’s median at year end had fallen by only $1,000, from $191,000 to $190,000, or minus 0.52%. The largest drop was in Sisters, where the median slumped to $201,000 from $233,750 in 2010, or 14.01%.

Going back to a longer-term historical perspective, single family prices in three of the regional sub-markets have fallen below the median at the end of 2001. All seven of the submarkets were substantially off the 2006 bubble-year highs, by a range of 46% to nearly 60%.

Sunriver was the strongest market since 2001 with the median price up 29.53%, and had the smallest decline, off 34.78%, since the 2006 peak. Sunriver also topped the sub-market median price at $375,000 in 2011, as it has for every year since 2001.

The small Sisters market lagged the region for the past 10 years, with a median price at the end of 2011 of $201,000, or 14.47% below 2001. The past year also marked the second consecutive year that Sisters prices were below the 2001 level.

The largest drop from the 2006 peak was in Crook County, down 59.92%, followed by Sisters at 56.35%. The best price performance since the bubble burst was in Sunriver, a drop of only 34.78%, followed by Bend, down 46.01%

Distressed properties skew a "normal" market analysis

Perhaps one of the more surprising statistics in the current market is the existing inventory of active single family listings. In early March there were 439 active listings in Bend, which is only slightly more than a three-month supply when calculated by the industry standard of averaging the previous 12 month sales. By contrast as the market collapse accelerated in the 2007-2010 period the supply of active listings in Bend was more than 13 months at one point.

Interpreting the significance of the lower inventory level is a subjective process. In an otherwise "normal" cycle the low inventory would be considered a healthy sign of a recovering market. But in this abnormal cycle an important variable is the potential overhang of the widely-dubbed "shadow inventory" of distressed properties that could be hitting the market.
Another factor in the lower inventory could likely be homeowners who are not under any pressure to sell waiting for better market conditions.

One extreme example of the market drag created by the foreclosure process is an expensive home in a gated community near Bend. The owner paid $2,275,000 in 2004 with a loan of more than $1.6 million. The lender has issued three notices of default for a trustee's sale since the owner stopped payments of more than $9,000 per month in December of 2008. But all scheduled sales have been canceled, the last in November of 2011.

Meanwhile as the owner essentially walked away without winterizing the home it's now in disrepair with at least tens of thousands of dollars needed to bring it back to original condition.

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	2009	2010	2011	2010-2011	2011	2011	Mar 1 2012	Mar 1 2012	Mar 1 2012	Mar 1 2012	Mar1 2012
Bend	1,419	1,544	1,690	1,690	0.00%	883	53.25%	428/295	68.93%	439	83	19.39%
Redmond	519	629	727	658	9.49%	448	68.09%	152/115	75.66%	152	41	26.97%
Sisters	90	70	88	95	+7.95%	28	29.47%	18/10	55.56%	71	5	7.04%
Sunriver	170	80	92	98	+6.50%	14	14.29%	17/7	41.18%	117	7	5.98%
Crook Co.	127	163	221	204	-7.69%	127	62.25%	40/32	80.00%	85	17	20.00%
La Pine	17	71	64	59	-7.81%	36	61.02%	16/14	87.50%	31	15	48.39%
Jefferson Co-Madras	NA	113	120	97	-19.17%	59	60.82%	24/20	83.33%	60	23	38.33%

Town or area	MEDIAN PRICES							MEDIAN PRICE CHANGES
	2001	2005	2006	2007	2008	2009	2010	2011	% change 2010-2011	% +/- from 2006 peak thru 2011	% change 2001-2010
Bend	168,950	279,900	352,500	345,000	289,450	212,637	191,000	190,000	-0.52%	-46.01%	+12.46%
Redmond	125,000	198,818	262,524	250,000	216,000	147,500	123,900	116,000	-6.38%	-55.81%	-7.20%
Sisters	235,000	394,250	460,500	415,000	367,450	286,250	233,750	201,000	-14.01%	-56.35%	-14.47%
Sunriver	289,500	462,500	575,000	548,547	555,738	402,000	417,500	375,000	-10.18%	-34.78%	+29.53%
Crook Co.	106,524	149,275	197,000	199,450	177,500	111,875	91,100	78,950	-13.34%	-59.92%	-15.89%
LaPine	86,000	148,500	183,250	215,000	160,000	109,000	102,450	88,200	-13.91%	-51.87%	+2.56%
Jefferson Co-Madras	NOT REPORTED	NOT REPORTED	165,080	177,950	139,950	89,900	68,700	69,900	+1.75%	-57.66%	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.

Monday, January 23, 2012

DesCo Planning Commission to discuss agri-tourism policy—Again!

The Deschutes County Planning Commission has again delayed action on recommendations for dealing with regulation of events on agricultural land.

In protracted discussion at a Jan. 12 meeting the commissioners decided not to decide and rescheduled another session for Jan. 26, again to consider “text amendments” to the county code to recommend to the three-member county commission.

For the past several years the county has tossed around the hot potato farmland events policy. The new urgency comes as the result of Oregon Senate Bill 960 which opens the way for more “agri-tourism” events on land zoned Exclusive Farm Use.

The county has the option through the county code text amendments to place certain restrictions on events. These can address traffic safety and security, sanitation, and noise levels, the latter which has become a significant point of contention in public testimony and the planning commission’s discussion.

Saturday, December 10, 2011

Bullish Bovine Busts Banquet--Cow Pies join Canapes

A new kind of wedding crasher ?

To some county residents attending a recent planning commission hearing it could have made front page in a supermarket tabloid. Or maybe one of those humorous YouTube teasers that pop up in e-mails or online news pages.

But the speaker earnestly outlined the “smelly” scenario she warned could evolve if an errant cow marauded through a wedding on farmland.

The comment was among an opening salvo in a back and forth dialogue Dec. 8 as the Deschutes County Planning Commission wrestled with planning staff recommendations for new “text amendments” that would allow commercial events on land zoned for exclusive farm use (EFU).

For the most part supporters and opponents of the recommendations found some common ground in at least one idea—that it’s time “to get it done” one way or another. “It” has simmered for a contentious four years on the county’s planning agenda.

Besides the potentially malodorous outcome laid out in the opening comments a number of those speaking against the proposed text amendments said noise from amplified music and traffic were their main objections. Some wanted no part of commercial events on farmland while others left open the door for compromises to accommodate neighbors.

As for noise, one speaker who has held weddings on his EFU property reminded those present that “farming is noisy, dusty and smelly.” He asked how a permit for six events as proposed in the “agri-tourism” amendment to the county code would create more impact than the typical farm activity.

“Underlying the message in my testimony,” the speaker summarized, “would be to just adopt it.”

A spokesman for the conservationist group 1000 Friends of Oregon’s regional office outlined the position that any event activity be “subordinate” to agricultural activity and “not disrupt the stability of the property.”

Pam Hardy said 1000 Friends favored events such as “farm dinners” using agricultural products, and would like to see different standards for large and small events. Noise levels, she suggested, should be controlled by having amplified sound set back 1,000 feet from neighboring property lines or there should be a requirement that sound at the property line be no more than at conversation level. She also suggested that obtaining “waivers” from neighbors might be an option.

Several speakers who plan or promote events, or supply equipment catering services, advocated adoption of the amendments as a way to encourage economic recovery in difficult times for business and agriculture.
An event planner and manager emphasized that by “this going on and on we’ve lost many event based businesses,” and that events have gone elswhere, including across the Cascades.

      The text amendments proposed by county staff follow guidelines established in state legislation, SB 960, applying to “agri-tourism, HB 3280, events at wineries, and conditional uses for private parks and events connected to home occupations.
      Weddings have been the focal point of most controversy in the county's long discussion of events on EFU land. The language of SB 960 is unclear as to whether weddings would come under the definition of "agri-tourism."
      The staff proposal for agri-tourism would allow up to six events under a two-year limited use permit renewable after review to assure conditions had been met. Up to 18 events would be allowed on a four-year permit that would require public notice and comment for renewal.

Events on EFU land with wineries are allowed as an “outright use” by HB 3280, The county has required that no more than 25% of a winery’s revenue be from events. The county can also require standards for “health and safety.”

The other options to hold events on farmland would be under state legislation pertaining to private parks and home occupations, both of which would require the county to issue a conditional use permit.

At issue with the private parks option is the definition of “recreation” use required by state law. County planning director Nick Lelack noted that the state Department of Land Conservation and Development has recommended that the county “tighten” any amendments so that events would not be permitted under more than a single measure.

Should the county proceed with allowing events under the private parks method Lelack noted it could become a statewide “test case.” Crook and Benton counties have approved events in private parks without having the decisions appealed to the state level.

Lelack said DLCD has suggested in requested comments on proposed text amendments that the county “don’t pursue” allowing events under the private parks or home occupation provisions.

After closing nearly three hours of staff presentation, public comments and discussion, planning commissioners voted to close the oral comment period but leave open the opportunity for written comments until Jan. 5.

During that time commissioners will weigh public testimony and written comments along with suggestions from the state Department of Land Conservation and Development in an attempt to fashion a final version to consider at their next session Jan. 12. From there the commission decision would go to the Board of County Commissions for action, which could include additional hearings.

Summary documents submitted by the county planning staff:

Saturday, October 1, 2011

First 100% Central Oregon single grape wine now in the bottle

This summer has been a busy time for Central Oregon’s viticulture industry.

For the first time a commercial-quantity wine made from a 100 percent single varietal local grape is in the bottle.

And the favorable reviews point to a promising future for regional wine grape growers and vintners who have been working to diversify the local agricultural economy.

In an appropriate christening of the new all-Central Oregon wine a small group of Ranch at the Canyons residents popped the cork at a picnic along the Crooked River Aug. 27.

All of the Le Crescent variety grapes in the new wine were grown at the Ranch’s Monkey Face Vineyard under the tutelage of vineyard manager Kerry Damon, and made for Faith Hope & Charity winery in the Lower Bridge area of Terrebonne.

“Wow, look at that intense color,” was the prevalent first-glance reaction of the Ranch residents as their wine glasses were held against a backdrop of the late afternoon sky. Then the comments shifted to “nice balance, clean wine.”

And there was an obvious pride that the juice came from Monkey Face Vineyard, the first in the region to grow commercial quality grapes.

It was the Le Crescent color that prompted Faith Hope & Charity owners Cindy and Roger Grossmann to select a clear bottle for the wine, which was made by Linda Donovan at her custom crush facility, Pallet, in Medford.

Just a few days later the Grossmanns put their new wine before a group of real estate brokers gathered for a continuing education class followed by a tasting at their winery-vineyard in the Lower Bridge area west of the Deschutes River.

Attorney Laura Cooper of Ball Janik LLC in Bend followed her presentation on Oregon land use law with a tasting of the Le Crescent and other wines that are blended with some French-American hybrid varieties from Central Oregon.

Cooper also teaches a wine appreciation class in connection with the Culinary Institute of Central Oregon Community College and writes a wine column for the Prineville newspaper.

Again, the Le Crescent led off the tasting and, once more, the reaction was uniformly favorable.

When asked about food that would go with the Le Crescent she suggested proscuitto, perhaps a Caprese salad of tomato and mozzarella and even a chicken entree. Cooper will be working with the Culinary Institute on a series of wine pairing meals this Fall.

Also tasted at the class were Volcano Winery’s Bend White and Bend Red, the latter which also includes a small amount of the Le Crescent grapes from Monkey Face. Scott Ratliff of Volcano blends Marechal Foch grapes, another variety gaining strength in Central Oregon, in his Bend Red.

Earlier in the month, on August 12 the Old Winery Clubhouse at Ranch at the Canyons was the venue for a meeting of the Wine Growers Association of Central Oregon that featured presentations by Chris Lake, director of the Southern Oregon Wine Institute associated with Umpqua Community College’s Department of Viticulture, and Dr. James Osborne of the Oregon State University Department of Viticulture.

Lake highlighted the “opportunities” and “threats” that face a nascent viticulture industry in Central Oregon, emphasizing some of the factors that local growers well-recognize.

Weather extremes, fewer growing degree days, higher elevations, soil conditions and only 8-12 inches of annual precipitation are substantial challenges, Lake noted.

But Lake said the formative stage of the Central Oregon industry also has a major advantage.

“In a new wine region you have great opportunities to harness it and do what you want to do,” he stressed.

Growing red wine grapes will present the most challenges while whites will be more consistently pest resistant, Lake said.

Comparing the French-American hybrids being grown to those in Arkansas where he formerly worked in the viticulture industry, Lake said in the Razorback state there was one overriding principle:

“We had a baseline. The wine can’t suck,” a pithy observation that elicited guffaws from the more than 50 growers and others attending the session.

Dr. James Osborne of Oregon State focused on the expectations from hybrid grapes grown in Central Oregon and vitis vinifera grapes—such as Cabernet, Syrah or Chardonnay—that are better known on the West Coast.

Hybrids tend to be higher in acid and low in tannins more common to vinifera grapes that give wine the “mouth feel and astringency.”

“You’re not going to be making big huge cabernets with these hybrid grapes due to the lack of tannins,” Osborne said.

However, there is substantial potential to blend hybrids with vinifera grapes to achieve characteristics that appeal to wider markets and the addition of oak can also increase tannins, he noted.