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The real estate sector in Bend and Central Oregon is alive again after six uncertain years, but faces challenges in the two years ahead, speakers said Tuesday at the annual Real Estate Forecast Breakfast.
“Bend is back,” said Nick Lelack, director of the Deschutes County Community Development Department. “Bend is back, and that is great news for us to be able to share with everyone this morning.”
By nearly every measure, residential and commercial real estate regained much of its value. The number of new single-family homes in Bend climbed from less than 200 in fiscal year 2009-10 to more than 800 this year, so far, according to Mel Oberst, director of the city Community Development Department. The city’s fiscal year runs from July 1 to June 30.
The department predicts it will be issuing more than 250 building permits, on average, per month by early 2015.
But developers are building faster than the city can create new lots, Oberst told the crowd of 380 at The Riverhouse Convention Center. And demand for building contractors and laborers is greater than the supply, said Gary North, vice president of R&H Construction Co. North estimated $400 million in work in Bend awaits contractors this year and in 2015. But, he added, the recession trimmed the workforce by 45 percent.
“We’re going to have a collective challenge in how we execute all this work,” North said.
Wendy Adkisson, president of the Central Oregon Association of Realtors, noted the low inventory of homes available for sale in light of increasing demand. Less than five months’ inventory exists for homes priced below $600,000 in Bend, and less than two months for homes priced at $250,000 or less, she said.
Meanwhile, Bend should expect a population surge as economic conditions improve in California, Washington and Idaho, said speaker Darren Powderly, a partner with Compass Commercial Real Estate Services. He predicted another 2,000 people in 2014, just from people moving into the city from other places.
Lelack predicted nearly 100,000 people in Bend by 2025 and 250,000 in the county.
“Overall, we’re projected to grow by another city of Bend in the next dozen years,” he said.
To meet that surge, the city must have land on which to build, Oberst said. The city overall creates 400-500 new lots each year while developers are consuming nearly twice that number, he said.
“It doesn’t take a mathematician, and I’m not one, to figure out we’re not bringing on enough lots to equal the depletion of our resource,” Oberst said.
Completing the southeast interceptor, an extension of the Bend sewer system, would open hundreds of acres to home building, he said. The City Council stopped work on the line in May 2012 to reassess the costs, $150 million to $180 million, at the time.
“This is fairly critical in here,” he said. “There are 700 to 1,000 acres of vacant, buildable land in that (southeast Bend) area, which has not been platted because there is not sewer there.”
The city expects to resume construction on the sewer line this summer, and may finish in three years, he said.
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