The growth, and potential building boom in the Prineville real estate market is not coming from any one demographic or geographic area, fueling speculation that the area is truly being discovered.

Leslie Beard, managing principal broker with RE/MAX Out West Realty in Prineville, vividly remembers the real estate boom times of 2005.

“I earned my license in October of 2005. For a new broker it was overwhelming at first because of how many transactions you were involved in all at one time. New subdivisions were going in left and right. A lot of new families and retirees were drawn to our area because of affordability. Our little gem of a town had been discovered,” she said.

According to the Central Oregon Association of Realtors® (COAR), for the 12 months ending November 2005, 571 homes sold in Prineville with an average selling price of $169,000. Boom times had arrived.

By 2007, however, the “great recession” hit and the Prineville real estate market began a quick descent. Unemployment approached 20 percent, the city lost residents, and foreclosures dominated the Central Oregonian’s classified section.

Confidence in the Prineville market collapsed, builders and developers moved on to more lucrative markets like Bend.

“It was almost surreal how fast things went from boom to crash when the market finally hit bottom,” recalled Beard.

According to data collected by COAR, the three-month average sales from December 2007 to February 2008 hit a low of 12 units. From December 2010 to February 2011, 25 units sold. And Prineville did not rebound from the recession as quickly as other areas of Central Oregon.

City of Prineville’s Planning Director, Phil Stenbeck, recalled those days. “Our housing market really bottomed-out in 2011. Through about 2014 people were really sensitive about investing in this real estate market. There was a confidence loss,” he said.

But thankfully Facebook, followed by Apple, chose Prineville for their massive data center investments. Facebook broke ground during January of 2010 and by 2022 will have a total of five operational data centers totaling nearly two million square feet.

Apple built a 10,000 square foot data center in 2012, followed that with a 335,000 square foot building, and is in the finishing stages of an additional 335,000 square foot center.

By late 2014 the community was getting excited about a new elementary school, a new hospital, new affordable apartments, and media exposure that showcased the community’s small-town, family values.

Brokers started seeing increased interest in the real estate market as Prineville began growing again — in part fueled by skyrocketing real estate prices in Deschutes County and low mortgage interest rates.

“Crook County saw positive net migration in 2017. Meaning more people moved into Crook County than left. Most of the net migrants are moving from other parts of Oregon. There was even a rather large net migration from Deschutes County, which makes sense when considering the trend in Bend and Redmond housing prices,” said Damon Runberg, regional economist for the State of Oregon.

Sales of residential homes in Prineville from December 2016 through November 2017 totaled 437 units with an average selling price of $238,000. While that’s 134 units less than those sold during the 2005 boom year, the current average selling price is $69,000 more per home than in 2005. And the positive upward trend is expected to continue into 2018.

Remembering that builders and developers moved on to more lucrative markets during the recession, Beard welcomes the increasing sales but cites a challenge with available inventory.

“Even with the slow down this summer due to high levels of smoke, coupled with the eclipse, we’re experiencing high numbers of sales with a low volume of inventory to choose from,” she said.

The large influx of temporary data center construction workers gobbling up available housing is often cited as a contributing factor to low inventory.

The Prineville City Council has been aware of this situation for about two years and residents have been complaining, especially on social media, about the lack of rentals and affordable housing.

“Two years ago I was pretty concerned, as was the city council, that there wasn’t enough going into the pipeline, so they instructed (city) staff to do whatever it takes to increase the housing inventory. We’re in a different place than we were two years ago, we’ve added capacity,” said Stenbeck.

Stenbeck believes that, given the influx of people to the community, the city has planned appropriately.

Over the last two years the city has approved four subdivisions totaling 90 lots. Additionally, temporary data center workers seeking rentals now have a unique downtown boarding house, and two RV parks totaling 130 spaces have been approved for workers.

“The state of Oregon says we’ve grown by about 200 people this year and last year so the capacity that we’ve added over the past two years fits nicely with those numbers,” said Stenbeck.

“We’ve added five percent to our housing inventory over the past two years and we’ve got another five percent in the pipeline. A healthy housing inventory vacancy rate is about five percent,” added Stenbeck.

So is the Prineville housing market ready to boom as it did before the great recession? Stenbeck believes so.

“I wouldn’t be surprised if we see a major building boom going on here next spring. I think the inventory is moving in the right direction.”

Building firms such as Pahlisch Homes and Arbor Builders have been steadily building homes in Prineville over the past several years, with average prices ranging from $200,000 to $480,000.

The demand for rental housing in Prineville is high, with average rents between $1,200 and $1,300.

A recent Lending Tree study showed that between 2011 and 2016, rental prices in Prineville have risen 45 percent.

And with rents in Prineville remaining high, and inventory of rentals still low, this may well push renters into buying.

Nationally, sales of existing homes in November reached their strongest pace since December 2006, according to the National Association of Realtors. And recently mortgage rates on 30-year fixed-rate mortgages averaged 3.94 percent, down from 4.30 percent a year ago.

The growth, and potential building boom in the Prineville real estate market is not coming from any one demographic or geographic area, fueling speculation that the area is truly being discovered.

“We are seeing a mixture of buyers, some local move-up buyers, some first-time home buyers, some investors, and some moving in from areas where they may have been priced-out, or they are attracted to our beautiful, friendly, little community,” said Beard.

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