DROUGHT: The glass lower than half empty made even worse with a June heatwave

             Everybody is talking about it, the weather that is.
            The first week of June began chilly as some nightly temperatures dropped into the 30s and days barely made it out of the 50s. And several days were marked with heavier rain and higher humidity.
            Then came a dramatic change, as the final week of the month brought Bend’s hottest day on record June 30 at 107 degrees, preceded in the previous two days by 102 and 104 readings with heat advisories daily going into the July 4^th holiday.
            Early July also saw much of the center of Oregon from the California line to Bend and Deschutes County rated either in “extreme” of “exceptional” drought, the latter being the federal Natural Resource and Conservation Service’s most hazardous parched category.

            Several newer wildfires broke out after a spectacular band of thunder and lightning cells moved across the region the final week of June. Together with larger fires in the Warm Springs area north of Bend and in northern California, Bend’s “smoke season” has gotten an early start.
            The continuing drought exacerated by a heatwave have forced regional irrigation districts to cut back water distribution from the Deschutes as natural flows continue to drop.
            On July 2 the Central Oregon Irrigation District, which manages senior water rights for 45,000 acres in the basin, announced it would be cutting back distribution to member irrigators.
            “The flows in the Deschutes River are continuing to drop and with that the COID delivery rates must decrease,” COID management informed members in a June 18 notice posted on its website.
            “Currently we are at a 65-70% delivery rate in our system. The river flows are being closely monitored and we will keep you updated as the flows and the COID deliveries decrease.”
            The COID notice said the district would begin providing 100 cubic feet per second (cfs) of its entitled senior rights to the North Unit Irrigation District, Arnold and Lone Pine districts that manage junior water rights in the basin.
            Already the North Unit had begun major reductions of water flowing to its members, who grow 55% of the region’s most productive cash crops on nearly 60,000 acres in Jefferson County north of Bend.
            The level of Wickiup Reservoir, which stores water for the North Unit is at all time lows for this time of year at 18% of capacity. On July 4 that translated to only 33,157 acre feet, 54% less than at this time in 2020, also a drought year, and 74% less than average.
    Note in the real time "Hydromet" teacup graphic available from the US Bureau of Reclamation that Crane Prairie Reservoir, which impounds water for COID, is in the best shape of any reservoir in the region. That reflects COID's standing as a senior water rights holder in the basin. 

            In a July 1 announcement on its website the NUID manager began with a dire observation:
            “It pains me to write this letter, as I am fully aware of the difficult situation that we find ourselves in,” began general manager Josh Bailey.
            The announcement then continued to inform irrigators that in an emergency meeting June 30 the board of directors had approved another reduction of water distribution. That follows an earlier ramping down only days earlier on June 21.
            The latest NUID reduction emphasizes the dramatic and accelerating basin conditions, contradicting the district's early predictions that it hoped to maintain a 1 acre-foot distribution of its Deschutes River rights and .50 acres for water from the Crooked River throughout the season.

            In its earlier June cutback, the district reduced distribution to .90 acre foot per acre (af/pa) for the Deschutes water right and 0.40 ac/pa for the Crooked River impoundment at Haystack Reservoir in Jefferson County. Starting July 3, the distribution decreases to 0.80 ac/pa and 0.50 respectively.
            The goal, Bailey wrote, is to reduce immediate system demand and, “extend the available water through the end of August.”
            Although difficult to quantify, the drain on water availability in the greater Deschutes watershed is attributed to a confluence of several other factors joining drought conditions that have existed for several years with escalating and detrimental effect.
            For the past several irrigation years irrigators have been bound by terms of a Habitat Conservation Plan, negotiated by the districts, federal agencies, conservation groups and other stakeholders. The HCP agreement regulates river flows to protect the Oregon spotted frog, listed on the federal Endangered Species Act.

 Equipment sits idle as fields dry out

            Together with lower snowpacks, the requirement that extra water be released into the river system at certain times in the frog’s life cycle has resulted in some loss of storage in area reservoirs.
             Even with cooperation among COID, NUID and the other smaller basin irrigation districts there is the overarching issue of balance between senior and junior water rights holders, one that exists throughout the structure of western water law.
            In most western states water rights dating back to the 1800s are based on the doctrine of prior appropriation, simply translated as “first in time, first in line.”
            In Central Oregon, the water rights aggregated through the Central Oregon Irrigation District in the Bend area were recorded and used on the land ahead of those implemented later by the neighboring farmers and ranchers to the north in Jefferson County.
            The paradox emerges when the North Unit providing nurturing water for typically higher value crop production has a lesser claim to the resource than COID, with fewer cash crops.
            In some cases, smaller operations are put in a position of growing hay or alfalfa in  order to maintain the lower taxes on land zoned for exclusive farm use (EFU). Also a factor is the “beneficial use” requirement that a water right must be used at least one of the past consecutive five years, giving rise to the warning to “use it or lose it.”
            Irrigators in districts who do not plan to grow crops in a  given year have the option to place to temporarily return their rights to improve river flows, or to effectively lease it to others in their district. But thus far few appear to have made that decision this season.
            COID’s gesture to release 100 cfs of its water right to benefit NUID users is no doubt welcome but will likely provide little significant relief for Jefferson County growers.
            Already many have either scaled back this year’s crops by fallowing some fields, or entirely thrown in the towel for the growing season. Some say that even trying to plant and maintain non-cash cover crops to staunch erosion will be too costly.

Measuring irrigation water: From cubic foot per second to acre feet 

    It may be easier to understand how much water is used for irrigation by doing the calculations, starting with a cubic foot per second, or cfs, diversion.
    A cubic foot per second is the amount of water that would pass a given point in one second, or7.48 gallons. An acre foot is the amount of water needed to cover one acre to a depth of onefoot.
     In one hour, a 1 cfs diversion would cover an acre of land with one inch of water. In one day or 24 hours, then, 1 cfs would cover one acre with water two-feet deep—or 2 acre feet of water.
     Therefore, 2 acre feet per day is equal to a 1 cfs irrigation diversion.A 1 cfs irrigation diversion would result in 448.8 gallons in one minute (usually rounded to 450gallons per minute, or gpm). That would amount to 26,928 gallons in an hour, 648,000 in a dayand 236,520,000 gallons in a year.

  PREVIOUS

Another drought season in the works: Low snowpack and reservoirs

 Snowpack, water and endangered species - A complicated calculus

Fact Sheet of Draft EIS for the Deschutes Basin HCP

https://www.fws.gov/oregonfwo/Documents/DeschutesHCP/deisFR/mtgs/Deschutes%20Fact%20Sheet%20-%20WEB.pdf

Complete DRAFT HCP as of August 2019

https://www.fws.gov/oregonfwo/Documents/DeschutesHCP/deisFR/DBHCP%20Entire%20Document%20August%202019.pdf

A Timeline of the Spotted Frog ESA listing in the Deschutes Basin

https://bendisbetter.blogspot.com/2016/02/spotted-frog-esa-listing-creates.html

 

Tourism and neighborhood nightly rentals: Bend struggles with the issues

           You’ve been enjoying your home in an established Bend neighborhood, with very little traffic and minimal noise except for kids playing and the intermittment buzz of mowers and lawn edgers.
            You’re happy you researched the neighborhood before buying here.
            Then you get a notice from the city. The new owners of the home next to you or maybe a few doors away plans to make their property a nightly rental for visitors. The application for a short term rental, or STR, has been filed. Now the city is giving you a two-week window to weigh in on this.
            Your first reaction is, “Can they really do this? I recall that there was something in the documents when we bought the house that said only rentals of more than 30 days are allowed.”
            You dig out your closing papers from years back. There it is, clearly stated in the Convenants, Conditions and Restrictions, or CCRs: There under section 4.14 Transient Rental Use. “No owner or owners of any unit within (Happy Acres – a pseudonym) subdivision shall be permitted to rent their unit to any person or person for transient occupancy which shall be for a period of 30 days or less.”
            So, shouldn’t that solve the issue for this application?  The city wouldn’t allow this if it goes against the CCRs, you think. Well, not exactly. And the relationship of CCRs to Bend's processing of nightly rentals has become a flashpoint in established single family neighborhoods.
            As Bend becomes ever more popular with tourists – boosted by pentup pandemic travel demand – more residential property owners are seeing a potential revenue stream in nightly rentals. And among these are out-of-area and out-of-state buyers seeing an opportunity to stake out a place in Bend.

            In 2020, a Bay Area website that focuses on Airbnb posted an article titled, "Should you invest in Airbnb in Bend in 2020?"
            The conclusion, after discussing all the the upside of property appreciation and rental revenue, "All in all, Bend is one of the best markets for Airbnb on the West Coast....a must-invest for out-of-state and Oregon Airbnb hosts."

A balloon festival in Bend

            Local opinion is mixed. Facing an outcry from some residents beseiged by noisy parties and parking issues arising from tourist rentals, the city responded a few years ago with a series of public meetings, eventualy distilling the results into a new section of the development code.

Several types of short term rentals

            The new code provisions distinguish STR permits by several categories.
            A Type III permit applies to a development that clusters nightly rentals in areas outside of residential single family zoning.
           One Type I, permit allows a property owner to have “infrequent” nightly rentals of no more than 30 nights. Another Type I permit limits rentals to fewer than 30 consecutive nights and two rooms, without a kitchen, while the owner occupies the dwelling. These are allowed in single family zoned neighborhoods.
            Perhaps the most controversial STR is a Type II that allows for a “whole house” rental of unlimited days and nights each year in typical single family residential neighborhoods.
In an effort to mitigate having multiple nightly rentals on a single street, the code requires a distance of 250 feet separating Type II STRs.
            The permit mandates a certain number of offstreet parking spaces, limits guests according ot the number of rooms, requires the owner to post regulations and to provide 24-hour contact information for neighbors to complain about noise or other problems. STR owners must also pay fees of slightly over $2,000 for a permit and $275 each year to renew an operating license, as well as an 10.4% lodging tax.
            However, the city will not act on neighbor complaints until they reach the level of a code violation related to the permit, such as excess parking and too many guests in a STR.
            In both Type I and Type II permits the city merely requires property owners to verify by signature that they have read their neighborhood CCRs as applicable to nightly rentals. The applicants do not have to affirm the nightly rental would not violate the CCRs.
            Therein is the crux of a festering issue that has divided Bend neighborhoods.            With the city’s hands-off position, residents must act through homeowner associations or independently to enforce CCRs.

Mirror Pond on the Deschute River in Bend

            In many older, mature neighborhoods with long-time homeowners the developer may have ended involvement in the community. There may be no homeowner association. And most residents may have forgotten the CCRs, absent major problems in the neighborhood.
            However, CCRs typically remain valid for 30 years, with automatic 10-year extensions unless a percentage of homeowners vote to terminate them.
            Enforcing a CCR provision, such as limitation of nightly rentals, could well require legal action. The situation in turn may result with some homeowners claiming the STR is a property right and others arguing it destroys the integrity of the neighborhood.
            Another issue gaining atttention is a section of the STR code that prohibits transfers of permits issued after April 15, 2015 at the time of a property sale. Although specifically stating a permit “does not run with the land,” a loophole allows an existing permit holder to void it, and apply for a new permit on behalf of a buyer before a property sells.
            This circumvention of the no-transfer provision creates an attractive incentive for sellers and real estate brokers to entice buyers with the promise of acquiring an immediate income producing property.

Short Term Rentals, CCRs and legal action 

 
            A couple of recent STR applications—one that was withdrawn and another that went through and perhaps heading for litigation—are illustrations of how CCRs have become part of the nightly rental discussion.
            As reported by The Source weekly, residents of the Tanglewood subdivision of southeast Bend mobilizied to amend their CCRs after a homeowner applied for a STR, perhaps with the intent of making the house more attractive for a buyer.
            The application was withdrawn after the amendment passed with a majority vote, likely with some ill will from the applicant when the property sale fell through. Although the CCR amendment to limit rentals to more 30 days may have blunted the homeowner’s plans, under the current city STR regulations it would not in itself have scotched the permit.
            Another, more complicated STR application has brought into sharper focus the issues of transferring a permit, and the place of CCRs in the equation.

STR types explained

            A homeowner with a Type II whole house permit voided it, then applied to the Community Development department for a new permit on behalf of a prospective buyer – before the property had changed hands.
            Although there was at that time no written authorization for the seller to act for the buyer, the city recognized the application process – and only weeks later had the buyer and seller complete the authorization.
            More than a dozen neighbors in that subdivision and nearby objected, citing prior noise, parking and traffic problems experienced with the property as a STR. But the application met city offstreet parking and other requirements and the permit was approved. Later the property buyer applied for and was given an operating license as needed to rent the property nightly.
            Many of the neighbors objecting to the new permit cited the previous parking and noise problems, none of which the city considers in review an application. Instead the regulation puts the onus for complaints with neighbors to contact the STR owner-operator.
            In this case, however, several objections were raised as to the loophole allowing transfer of the permit, and violation of CCRs that don’t allow rentals of fewer than 30 days.
            Now a neighbor immediately adjacent to the STR property has decided the only option is to consult an attorney, who has tactfully informed the new owners by letter that the CCRs prohibit nightly rentals.
            For now, it’s a wait and see strategy for the neighbor, with advice from the attorney that the first nightly rental – none as yet – could trigger action to prevent further rentals.
            Meanwhile other neighbors are raising problems with the city regarding the STR permit transfer loophole and ineffective language addressing whether a STR would violate the neighborhood CCRs.
            In a reply, a top city official wrote regarding the transfer loophole that, “This is a known issue that we have documented and staff can be ready to recommend changes to the Development Code when/if Council desires to make changes to the STR portion...”
            As to the tightening permit language related to CCRs, the official noted the, “...idea to have STR permit applicants acknowledge that they have read and understand their CCRs as well as that the CCRs are not violated by the STR Permit application sounds reasonable.”

Another drought season in the works: Low snowpack and reservoirs

             The headgates of irrigation ditches in Central Oregon have been open for only a few weeks. But the seasonal availability of adequate water for agricultural use is already in doubt for several irrigation districts, with another low snowpack and water storage deficit in several reservoirs.
            In its May 1 report, the Natural Resources Conservation Service, a division of the federal Department of Agriculture, noted that the Upper Deschutes and Crooked River basins snowpack was 64% of normal. This represented a precipitous drop in a single month from April 1, when the snowpack was 108% of normal.
            As of May 20, basin reservoir storage recorded by the Bureau of Reclamation ranged from a low of 23% full at Ochoco Reservoir to 87% at Crane Prairie. Wickiup Reservoir, which impounds water for the region’s largest cash crop acreage served by the North Unit district, was only 39% full.
            Wickiup’s 77,865 acre feet stored as of May 20 was 54% below average and 30% under the same date in 2020, which was also a dry year.
            Prineville Reservoir, which holds water behind Bowman Dam in the Crooked River Basin was the lowest since 1974, according to a report from the Bureau of Reclamation’s Bend field office. The inflows as of the second week of May were at 37% of normal.
            Several counties, including Jefferson north of Bend and Deschutes County, have already pleaded for the Governor to declare a drought emergency. Others include Klamath – long a flashpoint for the debate involving endangered fish and water for crops – along with Lake, Baker, Douglas, Gilliam, Morrow, Umatilla and Wheeler.
    The Central Oregon Irrigation District has issued a drought notice to its members warning that many may not have their full allocation of water, noting that, "Deschutes County is experiencing it's driest spring in 127 years... We recommend you being planning now for potential water shortages this summer."
    In its capacity as the umbrella group representing basin irrigators, conservation groups and other stakeholder, the Deschutes Basin Board of Control has also asked for a drought declaration for the region.

     Much like 2020, this year at a point in mid-winter held hope that the water deficit might not be as dire, with a burst of mid-winter storms pushing the snowpack to better levels. In early February 2020, Mt. Bachelor ski area reported its base at the highest level in 12 years.
      But the optimism was short-lived, then as with this year, when early runoff did little to recharge reservoirs that have suffered from low levels for several years running.
            The listing of the Oregon spotted frog under the federal Endangered Species Act has further complicated the water equation in Central Oregon.
            Various stakeholders in the Deschutes Basin, including environmental groups, have signed on to a “habitat conservation plan” that adjusts water releases from Wickiup Reservoir to provide more flows at certain times. This includes winter releases, which draw down storage, and early spring flow reductions that occur at the start of the crop growing cycle.
            The overall impact of the frog’s ESA listing on agriculture may take time to fully assess. But coupled with impending drought conditions, balancing water use for the species and agriculture will be a challenge well into the future.

PREVIOUS 

Snowpack, water and endangered species - A complicated calculus

Fact Sheet of Draft EIS for the Deschutes Basin HCP

https://www.fws.gov/oregonfwo/Documents/DeschutesHCP/deisFR/mtgs/Deschutes%20Fact%20Sheet%20-%20WEB.pdf

Complete DRAFT HCP as of August 2019

https://www.fws.gov/oregonfwo/Documents/DeschutesHCP/deisFR/DBHCP%20Entire%20Document%20August%202019.pdf

A Timeline of the Spotted Frog ESA listing in the Deschutes Basin

https://bendisbetter.blogspot.com/2016/02/spotted-frog-esa-listing-creates.html

 

 

Where to now: Interest rates, inflation and the housing market?

             As the housing market explodes with demand and tight inventory, the natural question arises of whether this is another housing bubble like the one that popped in the “Great Recession.”
            Some of the supply and demand factors are similar although inventory during the earlier pre-recession pricing boom generally remained higher than today in most areas of the country, including Bend and the rest of Central Oregon.
            Another key difference is that lax lending standards have largely disappeared with many buyers in today’s market coming in with all cash or solid loan prequalifications.
            Interest rates may be playing a larger role in today’s housing trends than in the previous boom and bust cycle.
            In the runup to the 2008 housing market peak and collapse, 30-year fixed rate mortgage interest rates averaged 6.34% in 2007 and 6.03% in 2008 according to charts of the federal FreddieMac database. Over the decade ending in 2020 rates fluctuated in a range from mid to higher 3% to 4%.
            As of May 13 this year the Bankrate benchmark survey of the nation’s largest mortgage lenders showed the 30-year fixed mortgage rate at 3.050% with an APR of 3.270%
            On May  12 the Dow Jones Industrial Average fell more than 600 points and the S&P 500 Index dropped a proportionate percentage, before rebounding to recover about two-thirds of the losses by the next day’s market close.
            Much of the drop was attributed to a rise of 0.8% in the April Consumer Price Index, the most in a single reporting period for more than a decade and 4.2% above April 2020. That raised concerns of rising inflation with government stimulus spending and a recovering economy. There’s apprehension this could in turn force the Federal Reserve to back away from its prolonged pattern of “quantitative easing,” or lower interest rates.
            However, barring a major shift in the Fed policy it doesn’t appear likely that gradual increases to tweak inflation fears would significantly blunt the continuing demand for housing. One analysis is that the largest segment of the CPI price increases was used cars and trucks, spurred by computer chip scarcity holding back new car sales.
            Another factor, the thinking goes, is that the dramatic upswing in new housing prices is-- besides pandemic demand--also due to pandemic related timber harvest and mill operation reductions pushing lumber prices to new levels.
            A local and regional snapshot is available from statistics provided by Beacon Appraisal, and derived from the MLS of Central Oregon database.

            At the March 31 end of the first quarter of 2021, only 61 single family homes on less than an acre were listed in all of Bend and outlying areas of Tumalo to the north and Alfalfa on the eastern edge. That translates to less than 0.30 months inventory.
            Another way of parsing the inventory is to translate the low inventory of listings to the pace of sales as determined by the time a home is on the market. Consider that most homes in the Bend area have gone from listing to pending sales in barely four days for the past four months.
            At the end of the Q1 2021, the median price for a single family home on less than an acre in Bend that sold in March was $590,000, more than 28% higher than the same month of 2021.
            For the period from March of 2018 through May of 2020 monthly median prices had held in a range from a low of $415,000 in May of 2018 to a high of $475,000 in August of 2019.
            Then came what might be logically called the “pandemic inflection point,” as the May 2020 median price of $445,000 jumped to $529,000 the next month, hit $560,000 in October, dipped to $524,000 in December and rose to $580,000 in January this year.
            When calculated over a 12-month period ending in March, the median price was $535,000, an increase of 16% over the $460,000 median for the 12-months ending in March of 2020. A comparison of median prices for the first quarters of 2020 and 2021 shows a 26% increase from $460,000 to $580,000.

            For April this year the Bend median hit $590,000 according to statistics in the Beacon Appraisal report. In emailed comments, Beacon’s Donnie Montagner noted that 40 of the 236 Bend sales in April closed at $1 million or higher, or 17% of the total. That compared with April 2020 with only 10 sales over $1 million out of 146 closings, or 7%.
            “After reviewing the data several times, I noticed the median was heavily influenced by the number of sales in the 1Mill+range, which had increased significantly," Montagner wrote.
            Nevertheless, he explained, “While sales in the (million plus) range have an impact on the median, the overall SFR (single family residential) price trend in Bend is significantly trending upwards when compared to the past several years.”
            The housing demand has veteran brokers competing for scant inventory. After capturing a listing the frenzy usually begins with multiple offers, often above the listed price. That in turn has given rise to “offer review days,” often only several days after a home is posted on the MLS. In many cases those offers are in hand even before the listing is known to the general public.
            More  often than not the offers are all cash, with no financing contingency. And even with the financing contingency the offer will likely have to substantially top others to even be in the running.
            Another trend has been a decrease in contingencies for inspections – with some buyers willing to take the risk that a problem may require additional investment, rather than be left in the cold in a hot market.
            Driving the housing market for at least the near-term could the delicate balance of consumer response to current low interest rates against potential higher rates resulting from rising inflation—along with uncertainty over the choppy economy as it emerges from a tough stretch.

Bend housing sticker shock: Manic level multiple offers for some homes

             A longtime friend from our river guide days in Jackson Hole recently wrote that his wife was ready to leave the far northern California town that has been their home for decades.
            Seeking a new location, she turned to cruising Zillow for listings in Bend and Central Oregon, trusting that a new home could be on the horizon.
            “She was aghast at the real estate prices,” the friend wrote. “She was fantasizing about a small amount of acreage within shouting distance of Bend...," he added
            “She asked me to ask you (to)... deliver the bad news and revel in the fact you were smart enough to find Bend before the world found Bend.”
            Unfortunately, I could only reply to the friends--she a professional social services director and he an attorney--that many of us who have been in Central Oregon for some time are also perplexed at the “sticker shock” facing potential newcomers.
            “Expatriate Californians, Portlanders and Seattleites are driving prices to new levels. Many are able to work remotely, or they are taking advantage of good stock portfolio performances to retire. Or a combination of both,” I offered.
|            The friends are only one snapshot of a growing album of Bend wannabes. They soon  realize that an outdoor-friendly lifestyle, generally temperate weather, and other attractions that are magnets for newcomers have a companion effect—a pricey real estate market. Some soon realize that yet another “last best place,” as various locations around the country have also been called, is more out of reach.
            A casual look at housing reports from other locations confirms the trend. Bozeman, Livingston and Whitefish in Montana, and Prescott, AZ; Sandpoint, ID; Walla Walla, WA; and Austin, TX are just a few places where “discovery” has long passed the cachet of finding a hidden gem.

A Significant Jump in Million Dollar Sales

            One measure of Bend housing cost escalation, albeit a narrow one, is the past three years of in-city sales that closed above $1 million. In 2018 there were 100 sales above $1 million and none above $1.8 million. The figures come from the Beacon Report of Beacon Appraisal Group, based on the Central Oregon MLS database.
            In 2020 the number had leapfrogged to 231, with 35 sales crossing the $1.8 million mark, as framed in Beacon’s graph of sales by segmented price ranges. And, already in 2021 there were 15 closing in January, double the six during the same month of 2020.
            Another broader look at price ranges below the “million dollar club” also shows the upwardly migrating price points in Bend.
            In 2018 most single family homes in Bend sold in the range of $300,000 to $350,000, with the second highest category from  $350,000 to $400,000. In 2020 the largest price range was $350,000 to $400,000, and in second, $400,000 to $450,000.
            An illustration of the sizzling Bend housing market is captured in the history and recent sales in the  popular, mater planned Northwest Crossing neighborhood.
            The developer is Brooks Resources, a highly-respected company that evolved from the timber industry that once led the region’s economy. Brooks launched Northwest Crossing in the late 1990s with a mix of smaller city lots and craftsman-style homes and townhomes.
            An elementary school and pocket parks around a grid of legacy Ponderosa pines meshed with new landscaping make it one of the most attractive urban neighborhoods, with a feeling of suburbia.
            Initial sales of new homes were brisk, with prices generally in the higher $300,000s to upper $400,000s, with a few in the $500,000 and greater range. But, as throughout Bend and the rest of the country, the “Great Recession” fueled by easy lending standards followed by an economic crisis with mortgage defaults hit hard.
            Bend, center of a larger three county statistical area, went from the top of home price appreciation tracked by a federal housing monitor to nearly last on a list of 300.
            At one point, in the depth of the housing downturn, more than two dozen developer controlled lots in Northwest Crossing were put on the open market in the $50,000s. Prices edged higher as the recession faded with a recovery noticeable by 2013 and later. Builders returned to absorb lot inventory and begin new construction.

Multiple Offers Before Buyers Visit

            A recent pending sale in the neighborhood is a watermark for the current market trajectory beginning with a local builder seeing the opportunity as lots were available. He bought the lot for $84,000 in January of 2010, then built a 2,100 square foot, 3 bedroom, 3 bath home, selling it for $434,782 six months later.
            In late February 2021, after 11 years the owner listed the home for $969,000. A person familiar with the transaction noted the home was on the market for barely a week, before going into a sales contract. There were 20 showings, many of them local agents videoing the home for out of state buyers, seven offers over the listing price and three of more than $1 million, all but one of them cash with no financing contingency.
            The prospective buyers are both medical professionals, one a doctor the other a Phd in nursing, who lost two homes to fires in California within the past four years. They had not visited the home until after their offer was accepted by the seller.

            And, as a snapshot of the neighborhood, the current owners of homes on either side of this one also own residences in Seattle.
            As of the first week of March there were seven other pending sales in Northwest Crossing, at the lowest listed price of $725,000 for an attached townhome to $1.3 million for a 3 bedroom, 3 bath home of nearly 3,000 square feet.
            Although Northwest Crossing is hardly the most expensive neighborhood of Bend, pricing in other less pricey and formerly “more affordable” sections of the city have also experienced dramatic price increases—driven by a chronic lack of inventory for sale that has hovered under a two-month supply for the past few years. In January of this year was a scant 0.30 months based on the average of the previous 12 months sales.
            With a median household income of $65,662, according to US Census figures for 2015-2019. Many jobs have been slashed during the pandemic and days or hours reduced for others, moving the cost for entry level home buyers further out of reach.
            The squeeze of fewer homes and rising prices has resulted in the city and community groups pushing for more mixed use development within the current city limits. One target area is immediately east of the downtown core extending to the main north-south arterial of old US Highway 97/3^rd Street with its mostly commercial businesses including auto dealerships, motels and shopping centers.

A Trend to Density Over Traditional Larger Lots

            This movement is contradictory to what many residents – and some builders – maintain is what made Bend attractive in past decades. From a traditional residential core of older stately homes and smaller cottages, residential development had extended outward with larger homes on larger lots, some a half to one acre in neighborhoods such as Awbrey Butte on the city’s west side.
            Brooks Resources also developed Awbrey Butte before downsizing the lots year later at Northwest Crossing. And perhaps a sign of the future, the company is also eyeing construction of a mixed use retail and condo or apartment project on a former commercial site east of downtown.
            The trend to mixed use projects and considerable new apartment construction is partially the result of Bend’s urban growth plan as approved by the Oregon Department of Land Conservation and Development, which implements the state’s 1970s era growth management statute, SB 100. The law requires municipalities to project land needed for development 20 years into the future to identify land for an urban area reserve that could be brought within the urban growth boundary, or UGB.
            With the approval of its growth plan in 2016, after several unsuccessful plans were rejected by the state over a decade, Bend agreed to focus on “infill” development of existing land within city limits. Further development extending outward within the UGB footprint is for communities that include higher density, such as multi-family housing, along with single family residences, and land for business to create jobs.

            Altogether the state approval allows Bend to expand its urban growth boundary by approximately 2,400 acres. There could be more than 17,000 homes on half the acreage, with 800 acres for development related to employment facilities.
            But the future of Bend growth is vastly more complicated now as substantial population growth has already compressed the time needed for another look at potential expansion.
            In the nine years since 2010 the city has grown nearly 25% from about 85,000 in 2010 to 106,000 as estimated by the Bureau of Census. The Population Research Center of Portland State University estimates the 2020 population of Deschutes County at 197,000.
            One of the largest tracts of land in decades to be brought within the city would be what has been called the Stevens tract on Bend’s southeast boundary. The formerly state-owned land of 382 acres south of Reed Market Road and east of 27^th Street was bought in 2020 for $22 million by Lands Bend Corp., whose officials include former California Republican Rep. Gary Miller.
            The purchase has initiated discussion of how the property, now called Stevens Ranch, will be developed and the process to bring 370 of the acres into the city through annexation in compliance with the urban growth plan. Another 12 acres already lie within city limits.
            The number of residences including single family homes, affordable housing and multi-family residences, business sites and parks will be initially defined in a master plan submitted by the development group for public comment and city review.
            A bill proposed in the 2021 state legislature would facilitate the city's effort to include the Stevens tract within current boundaries. Some city councilors are pushing for a significant part of the development to include affordable housing.
            Miller and other investors have in recent years been involved in new Bend subdivisions, mostly in east and southeast areas of the city.