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Central Oregon Is Overpriced

The Bulletin has this story (updated with link to Web archive version, as the Bulletin's redesign killed the link) about how many Central Oregonians are getting priced out of Central Oregon.

For anybody who's lived here for as long as I have, this is old news. I've lived here for all 26 years of my life, and I've watched Bend go from a small town with about 10,000 people it in to a tourist-driven economy with more than 60,000 people. When my family first moved here, they bought five acres of land on the river south of Sunriver for a steal. We lived in a trailer while my dad built a house. We ended up moving into Bend when I was 12, and sold the house for $250,000 or so. I've since seen the house sold a few times in the last decade for upwards of $500,000+, and it's the same old log house. My parents now live in a nice house on the West side of Bend that they'll probably be able to sell for twice what they paid for it.

My in-laws are in the same boat. They bought their home and land on the West side of Bend when land was far cheaper. They technically own two adjacent lots on that side of down, and the land alone is worth a crapload of money, let alone there's a house on one of them.

And then there's folks like our wife and I. When we moved back to Bend, we were lucky to get the house we did eventually move into, as getting 1800+ sq. feet for less than $150,000 (at the time) was impossible. I worked for an out-of-town company, as I couldn't find work here that paid decent, so I was able to (barely) pay for the house. With all the problems with my neighbors, I considered moving, and you know what? I can't afford it. Despite the fact that I could probably sell my house for at least $175,000, finding a house to move into for that price that is of decent size on a decent lot that won't drive my monthly payment through the roof is going to be damn near impossible.

So where am I going with this? I'm saying I already know how expensive it is to live here. The cheapest comfortable place to rent for a family of four starts at $750 (at the least), and is in a house that's falling apart. Meanwhile, developments are getting built up all over Bend, screaming how their "affordable homes" start in the low $220s. An affordable home for $220,000?!? They're usually 1400 square feet with no land.

I guess what bothers me the most is the disparity between the incomes levels in Bend, and because the rich outnumber the poor, the home prices are getting driven up. And the locals, generally speaking, aren't the rich ones (unless they've been here long enough that they've been able to sell of land for huge profit), it's the transports from the various valleys (Silicon, Willamette, etc...) that are buying up these larger homes, or it's guys with money like Jason Adams from Creative Real Estate Solutions here in Bend (a guy I went to high school with) who is making unsolicited offers on my in-laws house in the hopes that he can buy it cheap, rebuild/bulldoze it, and sell it for a ton of money.

Since we have a tourism-driven economy (I know it pays my paycheck), my worry is that we're going to become the next Aspen where all the locals that have lived here for years will have to move to make way for the emigrants from other areas. So don't be surprised that if sometime down the road my GeoURL information and my ORBlogs listing suddenly doesn't show me in Bend.

OK, I'm done now.

Posted by Jake on 07/20/04 @ 12:23 PM
Posted in Local, Obvious, Rants | 20 Comments | Permalink
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20 Comments

foobario said on 07/20/04 @ 03:01 PM:
This is happening everywhere... though it is more noticeable (and perhaps more lamentable) in a 'smaller' town or city. The problem is that 'the people' (in the 'Grapes of wrath' sense) are part of the problem... you even mention it in your post, how the rich locals got that way by selling off their land. So clearly not *everyone* is upset about the rising prices... the landed gentry are always delighted to see property values skyrocket.

>all the locals that have lived here for years will have to move

Will they be made to move, or will the appeal of cashing out the old homestead become too great? Rising taxes can force some people out, but from what I've seen the major exodus comes from people who realize that the house gramps paid $3K for back in 'ought-6 is now worth 100X that. It sounds like a lot of money, until you realize that things are getting rough all over.

(That said, I see houses in Douglas County, run down a bit but sitting on a half acre of land, for $35K. So what if your neighbors can't read, you never see a street sign that doesn't have a rifle hole in it, and you've always got 'Dueling Banjos' playing in your head...)

I'm in Portland, but when I moved here I was working in Beaverton, which is a cultural cesspit but is home to all of the engineering companies. To accomodate all of the engineers, they are building 1300sqft crackerjack-boxes they call houses (with yards so small they need to get permits to break the easement laws) and charging upwards of $200K for them. And the engineers buy them...

I would ride my bicycle to work every morning, past 15-acre fields that had deer and raccoons in them. Then one day they had Deere and Caterpillar in them, and a sign that said "Coming soon: affordable living in an 800-unit housing complex". 800 'units' on 15 acres? What is this, New York?

(And wtf is a 'unit'? Like it wasn't bad enough we stopped living in homes and started merely living in houses, now we have to live in 'units'? No thanks.)

We finally had to move just far enough out of town that a commute wouldn't be too painful and the housing would be cheaper, yet close enough that when the 'valley people' get too saturated they'll come run up the property values in our neighborhood. We're still in for almost a quarter of a million (ouch), but then again we have 8 times the yard and 3X the square-footage of a similarly priced house in Beaverton, and the land alone will be worth that in a few years. (Tax records show that this house sold for 60K ten years ago. Talk about inflation.)

In the past few years they've built $500K-$1M *apartments* right downtown, and the few houses that have sold in this neighborhood since we moved in have sold for what we paid for this house, but they were smaller houses on single lots. I'm in no hurry to move, and land is the one thing they aren't making any more of.

Can you turn this to your advantage? Find a cheap parcel of land outside of town, bide your time, wait for them to come to you instead of waiting for them to shut you out? "If you build it, they will come"... actually, the bastards will come either way, it's just a question of what sort of hand you are hollding when the game goes down.

Best of luck to you in what I know is a bad situation,

-- foobario

kasey said on 07/20/04 @ 05:33 PM:
it will bottom out ... look at san fran ... prices are finally dropping.

in omaha i could buy a mansion for 220K, here i can buy a shack.

Richard Laycock said on 08/22/04 @ 09:54 AM:
Living east of San Diego our 1/2 acre & house is worth 1/2 a million now. Having family in Sunriver and a yearning for enough room for horses I'll be heading your way in a few years, God willing. We'll find it a bargain.

I lived near Seattle in '69 & '70. What do you think I'd find in Woodinville now?What you're experiencing is normal as an area grows and prospers. Get a grip. You're in for a ride.

RCL

Richard Laycock said on 08/22/04 @ 10:03 AM:
One more thing... Re: bottoming out.

There's always a flattening and even a pullback. I've seen it over 50 years in California. It's never going to fall back that much. Average prices in San Diego were about 25K in the 60's; 75K in the 80's; 250K by 2K and now 500K. There were plenty of consolidations over those 40 years but the trend is more than obvious.

RCL

Bruce in Powell Butte said on 08/28/04 @ 07:36 AM:
Part of the BIG PROBLEM in Central Oregon is that on the City Councils for both Redmond and Bend they have people who are either Real Estate types or Contractors or are in BED with these people. The zone and parcel off the land as fast as they can, acting in their own interest. That is why the Schools are so overcrowded and are lacking money because no fees for all these new "affordable" high density homes starting in the 1/4 million range are being charged to help build new schools.

Jason Adams said on 02/21/05 @ 10:54 AM:
Hello Jack Ortman-

Jason Adams here. I am reading your comments here about Central Oregon and the over-pricing and income disparity of residents here. And I hear your concern about people like me who are redeveloping the old parts of town. I am interested to hear what other concerns you have about what I and people like me are doing. Central Oregon is being discovered by the world and people are coming here for the same reasons our families came here - yet at much a faster pace now. Our community is grappling with what to do. The price of houses and land is a function of supply and demand. There is only so much of Central Oreogn and more people want a piece. We don't have any right to say "no, do not come" nor is there any way to do that. I am committed that we can work together - new and old to make this an extraordinary place to live!

Now about me, I moved back to Bend after 4 years at OSU with NO MONEY. I looked at how I can make a living for myself in a way that can express my creativity. I chose renovating older homes and land. And yes, the market is tight and I have been able to make a way by being ambition. And yes, I sent an offer to your in-laws (I don't know exactly who they are) but I am responible for that. If they had an distasteful interaction with me, I apologzie and can clean it up. Otherwise, I am living in the freedom of this country to be ambition - to be an entrepenur - to be a solution to certain peoples problems. That is a little about me.

Now what about you? What do you have to say about what is possible for this community? How about stop resisting the change and find a way to make it work? I know that your dad (and I think you) made an inquiry into purchasing one of the properties that I was subdividing/redeveloping for resale. And I knew you were money conscious and looking to make a profit. There is nothing wrong with that!

Jake said on 02/21/05 @ 11:37 AM:
First of, Jason, my name isn't Jack. I went to high school with ya, so you'd think you know who I was ;-)

My biggest concern to what people like you are doing (and I know you're doing this as I've seen your name on letters) is that you're repeatedly sending unsolicited offers to folks in the "old parts" who have no intention of selling. You refer to their homes as fix-er-uppers, hoping you'll be able to con folks who don't know better into selling for a dirt cheap price so you can bulldoze their home, subdivide their property into the smallest lot size allowed, and build a couple of homes with no yard, make a huge profit by selling to an out-of-towner who doesn't know any better, and then move on.

My mother-in-law has gotten at least five letters from you for her two-lot property on the West side (up on Gavleston). Next time, don't bother sending one unless you send a check along with it for $750,000.

And your story about moving back to Bend from OSU is really sweet, but I don't buy it. Both your parents are huge in the real estate community here, so I don't buy it for a minute that you didn't have any help. I remember reading a story in the quarterly OSU Biz School publication about you and your smart business practices. While they are no doubt smart from a business perspective, from a perspective as somebody who's lived here as long as you have, they're annoying.

Yes, you are right: My parents used your mom for a real estate purchase 15 years ago. They've been looking around for a piece of land to build on for the last couple years, and may have looked at one of your properties at one point, but probably decided it was too expensive for what it was. Personally, I've never dealt with you in the real estate arena, and considering I can't afford a damn thing here, I probably won't be dealing with anybody anytime soon.

I'm happy that business is good for you Jason, but I know how you were brought up, have known you for a long time, and I just, really, don't think you live in the real world sometimes. Most real estate folks don't, and there's a reason they're considered one of the top 10 most overpaid professions.

rich said on 03/23/05 @ 02:14 PM:
Bend is now being built on greed, I only hope that a mass infecting virus kills everyone (even if it gets me) so we can destroy the "better breeding program" that moves like a plague through these and other small towns. Does property really have to be bought for 40,000 and later sold for 500,000. NO, if you think it should sell for that you are either on crack or you need to be exterminated, sorry about your yuppy puke luck. When people like this do this they single out themselves and create barriers that make them that much more of an ass then they arleady appear. When you work hard you should se benifits, but when you staple your greed to something you only lifted a finger on, then you are a pig (I CANNOT TYPE WHAT I REALLY THINK). I only hope that you get eboli and your flesh rotts off, That goes to any ass in Real estate who thinks that their sh#t don't stink, and is looking for an easy 20,000. Here is an idea really work for it, bleed pounding nails into the frame, get your feet cold from working in our fun climate, and put some sweat into it if you really want your damn "prize money" I just wish it were legal to hunt yuppies, if there will be a hunting season you can count on me to clean my blade with your polo shirts. I don't think that I am better than anyone, and if you get that kind of message from this you need to evaluate your stance. Or someday, someone like me will stand over your corpse laughing, when you die that greed money won't be there for you 'cause the funeral company will be there to establish their greed! I am done with this, till I stand over your high priced rotting corpse!

Ben Hinchliffe said on 03/31/05 @ 01:42 PM:
Hi Jake,

You have some very strong opinions concerning growth in Central Oregon. Certainly, as a productive member of this great nation, you have every right to voice your opinion. Now, if you'd allow me, I'd like to express mine.

Serious analysis of any real estate market should involve review of past performance, current conditions, and future trends. You've lived here for over a quarter century and have witnessed substantial changes in Bend over that time. So, you probably know that during the late 1970?s and early 1980?s, Bend experienced a substantial deflation in Real Estate value. The combination of sky-rocketing interest rates, poor local planning, and the collapse of the timber industry created a poisonous cocktail for the local economy. As a result of these market conditions land prices took it on the chin. In fact, land prices are the first to show signs of weakness in situations such as this. Land prices fell to prices that builders could afford, the market started to look like an attractive bargain to developers, and prices started to rise. Since the early 1980s, prices have risen consistently with a minor plateau in the early 1990s. Low interest rates have made Real Estate commensurately affordable, and they have helped to fuel the latest spike in prices.

Currently, several factors have combined to sustain this high rate of price appreciation. When looked at from an outsider's perspective, Bend looks like a bargain. Folks from the Bay Area, East Coast, and Nevada look can sell their homes and move into one of equal or greater value in Bend and have money left over to sock away into a retirement account. And, more people than ever before are striking the age of retirement. Why would they want to come to Bend?

Well, Bend happens to be ranked by several major U.S. news/opinion purveyors as one of the best places to live and retire in the U.S. Other than second home buyers and investors, thousands of people each year choose to move to Bend because of its clean air, outdoor recreation, employment opportunities, small town friendliness, and natural beauty. Bottom line? more people move here than leave. These people need employment, and our local economy is beginning to diversify and create needed jobs. We have a new four year university, increasing cultural diversity, a population that puts us on the map with large retailers, ample environmental resources, and a good base of small entrepreneurial companies.

Trends point toward continued growth. Perhaps interest rates will sky-rocket again, in which case land developers and real estate speculators will be the first to get hit. Land developers take risks with their capital over long periods of time, profit largely when they're successful, and fail miserably when their not. Somebody developed the land that you live on, work on, and may someday be buried in. Even in the worst markets, someone will always see an opportunity in Real Estate development and find a creative way to profit from it.

This brings me to my final point about the macroeconomics of Real Estate: Nobody is manufacturing new land. Take a look at land values in Japan or Hawaii and you'll quickly see what I'm getting at. Through political and bureaucratic channels, new land is released by our government to deal with growth. If too much land is released at one time, then the local economy suffers. If too little land is released then the local economy suffers. The challenge for the County and City is to release the right amount of land at the right time so as not to create affordable housing crises and conversely avoid creating a deflationary economic environment.

As supply is outpaced by demand, the market will continue to be strong. For this reason, investors like Jason Adams will find opportunity with infill projects within Bend City proper. The fact that he sees an opportunity in your folk's property shouldn't be a surprise. Sending them mail asking them if they have an interest in selling is a necessary part of his business. Marketing through mail has been going on since mail service was invented. No one is forcing your parents to sell, and if they are rational people they will sell for the highest price possible while factoring in the market conditions at the time that they choose to sell.

Before dragging an individual person and their family through the mud, take a step back and look at the big picture. It is much more complex than you make it out to be. Tens of thousands of individuals and organizations participate in and make a living on real estate in Bend. Should they be ashamed of buying low and selling high? Should they not be rewarded for the calculated risks that they take? Perhaps we should focus on maintaining the environmental and cultural beauty of Central Oregon as inevitable growth continues.

Sincerely,

Ben

Jake said on 04/04/05 @ 11:15 AM:
Ben: I think we'll just have to agree to disagree :-)

Mostly, you have valid points, and I won't go into an in-depth debate on this as it's an issue that I don't have time to get a debate started on (because I'm not really in the mood to start a debate on a topic such as this because it could just go on for years).

My biggest concern with real-estate around here is the packing of homes into such a small area. Honestly, I'd love to move into one of those nicer, newer houses (assuming I could afford one) but none of them have a decent size yard or plot of land. Many of them are built on the minimum lot size allowed by county ordinances and the developers are more concerned about profit and not about livability.

(Obviously, there are neighborhoods that are expections to this rule, but for the most part, it's like I've described).

The reason they can get away with this? Because so many people are moving to Bend from other areas where they were happy if they had any grass at all. Compared to where they're coming from, the lot/property sizes here are huge. That doesn't mean that any of us locals have to enjoy it.

Robert said on 08/04/05 @ 03:44 PM:
Unfortunately, I live in Beaverton. I RENT in Beaverton because the good Lord provided a nice, cheap duplex to rent. But I don't see how we're EVER going to afford a home anywhere near here. It's going to be a miracle! And I completely agree with Jake's stance on the lot size - it's despicable! It's 1/4 mil for a house I wouldn't consider a home.

Too sad.

RacingMoose said on 04/13/06 @ 02:13 AM:
This comment is directed towards Ben Henchman....I mean, Henchcliffe....
At one time, not too long ago, car insurance was not mandated by law. Insurance companies, like every other company out there that is publicly owned, when they cannot increase their sales, they have to turn to shadier methods of increasing profits, to show some kind of improvement for stockholders. What was done? Insurance industry lobbyists bought off lawmakers all across the land, forcing Americans to pay for car insurance, whether they chose to carry it or not. You know what happened, at exactly the same time, when the laws were enacted? In addition to the millions of people that now had to pay for something they may or may not need, they now had to pay a INCREASES IN PREMIUMS, INCREASES AT MINIMUM OF 157% AND HIGHER.
Where is this going? Be patient.

Now, of course, with you being a paid lobbyist of the real estate industry, I am absolutely certain that you have had absolutely zero contact with anyone in local or state government, in order to either get laws passed, zoning regulations changed, or some other legistlation passed in order to generate larger windfalls for your industry. This is something that you can swear to, on a stack of bibles? Please make note, I am being sarcastic. Actually, there is nothing that I am seeing from you that tells me this; everything that you have typed is the same sort of corporate koolaid that is passed out by PR firms nationwide, to cover up and obfuscate what is really going on: which is buying off the goverment to reap more profit.
Since you have absolutely no problem fleecing idiots that move here from California....wait, before I go on, I shall explain that statement. You state that Californians are getting a good deal, by selling their hideously overpriced homes down south, where incomes are up enough to cover it...and then you decide that maybe half of what they sold their house for should be used to buy something similar here? Especially when the incomes of the majority of Oregonians CANNOT support it? Let me guess: I am going to hear another speech on how these incredibly overinflated housing prices are a boon to oregonians....oh excuse me, I meant to say your friends in local and state government. You don't seem to have a problem parceling up land within city limits, but then pay off city and state officials to set up "growth boundaries" to artificially increase land value, but won't allow parceling outside of towns, because that would drop property values? Why don't we just cut through the PR B.S., and explain what is really going on: Real Estate and State/Local goverment working together to maximize profits. Real Estate pays off goverment to get them to pass laws to artificially raise property values, usually to well beyond what local people can afford, to where even a fire hazard of a house will sell for $300,000, and in return, the government gets artificially high property taxes, to pay for more garbage programs, especially after measure 5 passed some years ago, which limited how much the state could fleece the taxpayers. Anyone who brings this up, however, is shut down, or simply ignored by the media, as the media are pretty much bedfellows with state and local government.
So, according to you, it's okay to displace one group of people, for another, as long as you can make money doing it?
For those of you other than these real estate people: Please keep in mind that they spend years in school being trained to speak to the public....as you read their replies...oddly enough, I am not trying to sound paranoid, but you would be surprised how things are marketed these days...

Hayduke said on 04/26/06 @ 11:56 AM:
Central Oregon is overpriced, overrated, overhyped, etc., etc. Bend seems to have become the Botox capitol of the Northwest - you can see them walking downtown, usually getting out of a Hummer, their expressionless faces frozen in place, only their mouths move, like some weird cartoon. But you can hear them talking too loudly at the BBC and other watering holes in their attempt to see and be seen (and heard). They live in newly developed "structures" - not homes or even houses - that reflect their characters perfectly: outwardly ostentatious, inwardly empty and lacking soul, just a place to put stuff randomly acquired in pursuit of some perverted American dream. You'll see their offspring out on their bikes or skis, always with the latest and greatest equipment, grimfaced, won't acknowledge other's presence, certainly wouldn't stoop to saying "hi" to a fellow skier or biker. The town is being developed, or should I say undeveloped to resemble this new Bendonian - gone are the mom and pop stores that once graced downtown, replaced with faceless absentee-owned chain stores carrying overpriced crap that no one with any good sense would want. Bend reminds me of that old British TV spy show, The Prisoner, where people are imprisoned on an island resort and must conform or be killed - I half expect loudspeakers to be set up around town with that female voice saying, "Good morning Central Oregonians, it's another beautiful day in Bend. Be sure to spend lots of money." I remember, just before I left, the historical Old Crane Shed being knocked down in the middle of the night by developers coveting the land it stood on. No one really did anything - the city feigned shock, the local rag The Bulletin (specializing in weather stories and chocolate chip cookie recipes, it's editorial staff bending over backwards and frontwards to accommodate local developers) only did some reactive stories and even the Oregon DEQ did little despite the fact the shed was full of asbestos. I didn't hear how that all turned out because, despite the fact that I can live anywhere I want, I finally had enough of the craphole called Bend and got the heck out. If you're thinking of moving there, all I can say is you better get yourself Botoxed if you want to fit in.

Looloo said on 07/20/06 @ 07:35 PM:
don't worry it will all be over soon. The ecnomy is about to crash. There will be plenty of cheap Real Estate soon. Take your pick.

carol said on 08/08/06 @ 08:34 PM:
How true it is racing moose, I have also relocated. And am very happy I did. We have a beautiful home, and I plan on living in it till I die, and I do not care how much it is worth. People are so much nicer, and I pray everyday that the developers just keep on raping Bend, so they will leave other beautiful places to hell alone. If the working class was smart they would pack their bags and get out too. Let those rich california developers and transplants wait on them selves.

Sue said on 10/08/06 @ 06:17 PM:
After analyzing the Bend real estate market for some time it looks like they are currently undergoing a significant correction in housing prices; especially evident when builders start dropping their prices by as much as 25%!

Not surprising in a small city where there is no real industry. It is a difficult task to sustain prices based on self admiration. As one blog put it 1/3 of the working population is selling property, 1/3 is building it, and the final 1/3 is involved in supporting the others...interesting.

Unfortunately for those old timers who "had to leave" things may be returning to an earlier era. It would not be surprising if those popular chain stores started pulling up their roots and moving to more fuitful locations.

Although the realtors are keeping a stiff upper lip, with more than 2,000 homes on the market and buyers waiting for the correction to occur, it will be nearly impossible to sustain the prices (and profits) that they've seen in the past. Too bad, greed is not an admirable virtue.

judgecolt6 said on 06/16/07 @ 09:36 PM:
crybaby

Mark Cowart said on 06/30/09 @ 12:27 AM:
Dumbass BEN HINCHLIFFE is a member of the Bend 2030 Board Mission: "Inspiring, guiding and strengthening partnerships that make our community's vision a reality - Keeping Bend an amazing place to live." WHATEVER!!

Don't listen to Ben Hinchliffe. He's a dumbass and lives in a dump of a house right next to the Pilot Butte, just up from the 7-11 off Greenwood, and is unfortunately married to my Dumb Blonde sister, Elizabeth. She's such a loser!! Actually, they're both losers, and I'm glad I don't live in that overrated ghost town of Bend, or the awful boring State of Oregon period!!

Ben works for Inference
(Blue Reference) Computer Company in Bend Here's his number if you want to call the loser: 541-316-2343
his email: Support@BlueReference.com

Jason X said on 07/01/09 @ 02:48 PM:
Mark,
I went to school with Ben's wife, Liz Hinchliffe at Mt. View years ago. I think her maiden name is Coward or Cowart. She was dumb as a rock, but back then she was actually kind of cute, not so much now. Still though, I can't believe as her brother you'd slam her and your brother-in-law on the internet. Don't you know they'll probably end up seeing this eventually? Sounds like a dysfunctional, whitetrash family to me!

Liz Hinchliffe said on 06/05/10 @ 11:33 AM:
Jason.......Hmmm......interesting.....My brother (Mark) did not write those comments about me and Ben. To the "fake Mark," nice try on the attempt to portray him-classy. I'm the in the process of tracking you down and my attorney will in touch. You didn't even get the phone # right. Anyway, I saw this and had to comment because it is clear that Jason either does not know who I am/ what I do and appears to have severe memory issues. I'd be very careful before making accusations about ones intelligence, appearance, and family. Slander is expensive.

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