Bend Spec & Custom Homebuilders Report Uptick in Activity
Spec homes – i.e. residences constructed on a speculative basis without a sales order on the books – and custom-build projects have seen an upsurge of interest from a broad spectrum of buyers recently as increased demand and a relatively competitive environment combine to boost the real estate market.
The spike in activity has been particularly noticeable in niche areas on Bend’s westside, including the enduringly popular NorthWest Crossing development, as well as projects like Shevlin Pines just north of Shevlin Park and Marken Heights off NW Nordeen Way.
Reportedly, home sales in Bend actually increased 41.5 percent in March 2011 from the previous month, and are up almost ten percent compared to March 2010.
While still a far cry from the heady boom days of the mid-decade, when, for example, some 3,000 single family home building permits were issued in 2007, the trend is encouraging. The number of permits in the same category was up to around 1,100 by last year, with the first quarter of 2011 looking to increase the pace.
Greg Welch, owner of Greg Welch Construction, who has developed a successful formula in the spec and custom homebuilding sphere in NorthWest Crossing and beyond, can attest to the apparent rebound. He said, “There has certainly been an increase in building permits from the beginning of the year to now.
“People are still moving here and are looking for more updated plans associated with new homes including enhanced energy efficient elements utilizing emerging technologies.
“The City of Bend has also raised the bar recently regarding code requirements and we already build above those levels. Buyers are opening their eyes to the value provided in new construction and are buying into the sustainable green wave of the future.”
Welch has observed steady demand from the “empty nesters” (i.e. parents whose children have grown and left home) or the baby boomer generation looking for low-maintenance, high-quality homes. This category of homebuyer may have been monitoring the Bend market for some time before determining this as a good time to step in and invest.
But he has also seen a return of more family homebuyers to the market, looking for somewhat larger homes with more yard space.
And while the perception may have been that more opportunities exist in the glut of foreclosures locally, Welch has been able to provide a counterpoint to that argument.
He said, “If a potential client is looking at a foreclosure that needs remodeling versus new construction, I will walk through the house with them to help with comparisons.
“Often when they realize how much money may need to be invested versus what could be provided in a customized version with built-in efficiencies they step back and see where value can actually be derived, especially in light of today’s relatively attractive land prices and construction costs compared to a few years ago.”
LENDING IMPROVEMENTS
Welch said he was also encouraged to see a return of some lenders dipping their toe into the pool and making construction loans on spec houses, adding, “We have recently been through an approval process with Washington Federal and are excited to be partnering with them on a spec property in North West Crossing.
“Given the turbulence in the financial industry, banks have been tough for the last couple of years, so it is great to see a thawing on the lending side. Also, many builders have been utilizing private financing for projects, which obviously is relatively more expensive.
“We are branching out and working on more projects for a wider variety of buyers, so I think that bodes well for the future.”
Scott Bomstad, owner of Choice 1 Builders, concurs with Welch’s sentiments, adding, “Business has definitely picked up. We sold four spec homes in March, including one where we were approached during the framing stage, and are starting six more before the middle of June.
“We are doing a couple in NorthWest Crossing, but also a number in Shevlin Pines which often features larger homes and lots attractive to the family buyer.
“And we have seen buyers coming from a wider area, including Illinois, Washington DC, Atlanta, as well as the more traditional California customer. Our realtors have also reported an uptick in traffic.
“Another positive development is that money seems to be freeing up a little. We went through more scrutiny than any individual probably would to qualify for conventional bank lending with one institution for construction, and rates are still attractive for the qualified homebuyer.
“Also, recently when some foreclosures were stalled because of legal challenges and buyers looking at short sales for six to nine months they asked themselves what they were doing and looked at the viability of building new.
“Choice 1 Builders also offers the reassurance of a two-year mechanical and ten-year structural warranty, and all homes are built to Earth Advantage standards and above. People see the added value in that.
“And let’s not forget, this is a desirable place, and people still want to come here.”
Tetherow, the new 700-acre resort community on the west side of Bend anchored by a prestigious David McLay Kidd designed golf course, has also reported multiple sales jumpstarting 2011.
“So far, 2011 has been a very promising year for Tetherow,” said Project Developer Chris van der Velde. “With the sale of three homesites in the first quarter, one completed spec home and two additional spec homes slated for a summer completion, we are eager to see more and more people embrace Tetherow as their home this year.”
Site work is also underway on a number of townhomes within the destination resort development which features northwest urban design perspectives.
Other pockets of activity on the west side include Deschutes Landing, a townhouse development bordering the Deschutes River close to Bend’s vibrant Old Mill District, being built Pahlisch Homes.
