One of the nation’s largest homebuilders, D.R. Horton, is doing business in Central Oregon for the first time since 2011.
The Texas-based company bought 49 lots in the Stone Creek neighborhood in southeast Bend and has several homes under construction.
D.R. Horton’s return is noteworthy because the homebuilding scene in Central Oregon is dominated by local companies, though two of them — Hayden Homes and Pahlisch Homes — work in multiple states. D.R. Horton has sold eight homes in Stone Creek, a master-planned community near Silver Rail Elementary, since buying the lots in September, a company spokeswoman said.
New-construction home sales in Bend peaked in 2016, which raises the question of whether the high-volume builder with deep pockets is here to reinvigorate Central Oregon’s priciest market, or has mistimed the opportunity.
“They wouldn’t be doing this if they didn’t think it was going to be a good market,” said Rhianna Kunkler, a broker with Premiere Property Group who specialized in new-home sales for 11 years. She worked for D.R. Horton during the pre-recession housing boom, selling houses in River Canyon off Brookswood Boulevard and the first phase of Summit Crest in southwest Redmond.
Although Stone Creek was master planned in 2014, build out has been slow. The property is owned by Lands Bend LLC, a company backed by former California Congressman Gary Miller, who works closely with Franklin Brothers Homes.
Franklin Brothers built the first phase, 29 lots, over 1½ years, owner Darrin Kelleher said. He doesn’t think D.R. Horton’s arrival is necessarily a sign of a reviving market. “D.R. Horton was the last to show up last time in a good market, and the market crashed,” he said.
Uneven sales trend
Bend’s biggest year for new homes was 2016 with 754 sold, according to the Central Oregon Association of Realtors.
The total dropped to 729 in 2017 and again last year to 656.
Meanwhile, sales in Redmond surged by equal measure. There were 222 new homes sold in Redmond in 2017 and 305 last year.
Real estate brokers think the growth has shifted to Redmond because there aren’t enough homes available in Bend at a price most buyers can afford. The median price of a newly built home in Bend in the first quarter was $470,000, up 18% from the same period last year, according to the Realtors association.
Redmond’s first-quarter median price was $323,000, up 6.25% from the prior year.
Prices of D.R. Horton’s Stone Creek homes will range from $349,995 for 1,497 square feet to $429,995 for 2,474 square feet.
“If you’re a buyer’s agent, it’s good news,” said Kim Gammond, communication and public affairs director for the Realtors association.
Nationwide, sales of new homes appear to be rebounding from an interest-rate driven slump last fall, The Associated Press reported.
New home sales rose 4.5% in March, the third straight monthly gain. With 692,000 homes sold, March also recorded the strongest monthly pace since November 2017.
Despite all the home construction happening in Redmond, developer Tucker Mayberry said he doesn’t think the industry is working fast enough to meet demand. He and his partners in Dry Canyon Village, a 504-unit master planned community on the northwest side of town, hope to start work on the first phase this summer.
Mayberry said the plan is to finish 36 single-family homes, 30 townhouses and another 63 homes in the gated, age-restricted section, along with the clubhouse and park. “We’re going to be pretty aggressive because we think it’s going to be a good year,” he said.
Competition for land
D.R. Horton paid $6.185 million, or $126,224 per lot, for the land in Stone Creek in September, Deschutes County assessor’s records show.
Brent Landels, a broker who represents small homebuilders in Bend, said that indicates D.R. Horton is willing to operate at a low profit margin in order to plant a flag in the Bend market.
D.R. Horton plans launch another subdivision in Bend this fall, spokeswoman Marissa Awtry said.
Central Oregon companies that build fewer than 40 houses a year haven’t been able to buy land in Bend, said Landels, principal broker at the Cascadia Group of Remax Key Properties. He blames the lack of lots annexed since the city expanded its urban growth boundary in 2016. “If we had a 20-year land supply, a developer wouldn’t have the ability to sit on something for themselves.”
Kelleher said it’s true that Lands Bend would not sell lots to any builder but Franklin Brothers until D.R. Horton came along. “I don’t know of any other builders in the area that were willing or had the ability to put that kind of cash in,” he said.
Kelleher said he and Stone Creek’s developer aren’t sitting on lots to drive up the value. “We gotta be fairly cautious, and we gotta build what we can sell,” he said.
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