Growth in Crook County pressures housing market

By Rachael Scarborough King / The Bulletin
Published: November 06. 2006 5:00AM PST

PRINEVILLE – When Stacey Middleton and her husband, Steve, decided to move to Prineville last year, they looked a long time before finding a house as nice as the one they left in Bend.

Eventually they settled on a new subdivision under construction in Prineville, Ochoco Pointe, and were the first family to move in last year, Stacey Middleton said.

“I came out here kicking and screaming, I’m like, ‘No Prineville,’ and you couldn’t get me out of Prineville now for anything,” she said. “We love it here, it’s nice to be back into a small community like Bend used to be.”

The Middletons, who moved to Prineville because Steve Middleton started a teaching job there, are part of a growing demographic in Crook County: newcomers looking for higher-end housing in a small-town environment.

Just a year after buying their first house in Ochoco Pointe, the Middletons have put it on the market and upgraded to a larger house in the subdivision.

Several developers right now are hoping to appeal to other potential homeowners seeking more upscale subdivisions and destination resorts in Crook County.

Cabin homes at Brasada Ranch, a destination resort under construction in Powell Butte, sold out in October for prices between $459,000 and $699,000, and two new higher-end subdivisions are in the works within the Prineville city limits.

While the supply of housing is increasing, so are prices – transforming Prineville from a rural, affordable community to a place where larger, more expensive houses are increasingly the norm.

“Prineville used to be the easiest place in Central Oregon for young people to come in and get a brand-new three-bedroom, two-bath home with an attached garage, and they thought it was normal, we all thought it was normal,” said Mary Thurman, a broker with The Associates Real Estate in Prineville. “We don’t have the brand-new homes that are affordable for the majority of entry-level buyers (anymore).”

Higher pricing

The median cost of a home in Crook County is now $191,695, which is up 30 percent since 2005 and 96 percent since 2002, according to figures from the Multiple Listing Service of Central Oregon. But home sales also have cooled in the last year, with the number of residential properties sold down 13 percent.

Mark Nyman, a real estate broker with Brooks Resources Realty in Prineville, said that of the 138 properties currently on the market within the city limits of Prineville, the least expensive is listed at $115,000 and the median price for all 138 is $259,950.

While the average income in Crook County has grown steadily, the rate of increase has not kept up with the rise in housing costs. Per capita personal income in the county was $22,719 in 2004, up 4 percent from 2003, according to a poverty report recently released by Oregon Housing and Community Services, the state’s housing finance agency.

Prineville Mayor Mike Wendel describes land costs as “skyrocketing.”

“A year to six months ago we were doing pretty good in that we had beginning homes in the $100,000 to $110,000 range and then we had higher-end homes in the $350,000 range. And I think that what has happened is that the entry-level homes have escalated to probably in the neighborhood of $170,000,” Wendel said. “So it’s narrowed, the gap has closed.”

Like in Bend and the rest of the nation, the Prineville market has experienced a slowdown in the last few months, but real estate agents said that the drop has not been as dramatic as in other areas.

“Our swings, pretty much all across the board, are just smaller than what Bend has experienced,” Nyman said. “Having said that, we are off from what we did last year, but again it was so high that it was just unprecedented, (we had) huge spikes.”

Subdivisions move in

The increase in the median cost of a house in Crook County is partly due to more high-end housing coming on the market in recent years, several real estate brokers said.

“If you want to spend more for a house you can definitely do it here in Crook County, a lot of the developments have gone just another step up (in quality),” said Mike Warren, of Crook County Properties.

But Warren added that people looking for expensive homes in Crook County are still more likely to buy land and custom-build a house, because there continues to be plenty of land available for residential development in the area.

“If you’re looking for $500,000 homes, what we’re finding is people just look for the land and build what they want because you can still do that in Crook County and get exactly what you want,” Warren said. “The houses that have been built … they’re competing with other houses on the market so they have to be actually worth it.”

Several new developments are in the works in Crook County and Prineville right now that could fill a niche for higher-end houses, apartments, townhouses and condominiums.

Bend-based Pahlisch Homes recently began selling houses in a new subdivision, Ochoco Pointe, near Barnes Butte in northeast Prineville, said Vice President for Corporate Communications Brian Bergler.

Bergler said that the range of prices in Ochoco Pointe – which will eventually include about 250 homes – starts at around $180,000 for a two-bedroom, one-bathroom cottage and goes up to around $475,000 for a five-bedroom, 3 1/2-bathroom house. Bergler said similar houses in Bend are $75,000 to $100,000 more expensive.

“One of our successes has really been in creating diversity in our communities, meaning that we have a wide range of home styles (and) lot sizes,” Bergler said. “We really feel very positive and confident in where our pricing is and right now is just an amazing time for homeowners to purchase (in) Ochoco Pointe and Prineville in general.”

Lots and houses in another new development near Barnes Butte, IronHorse, will go on the market early next year. Randy Jones, project manager for Brooks Resources, which is developing IronHorse next to Ochoco Pointe and is behind other mixed-use developments in Bend, said he estimates that many homes there will be in the $215,000 to $279,000 range. IronHorse, a mixed-use community, will eventually have over 2,900 houses, as well as shops, parks and a school in the next two decades. The development will almost double Prineville’s overall housing supply.

“I think we’ve understood for some time that there’s been a general lack of additional quality housing choices in Prineville,” Jones said. “As a result of price escalation in the Bend and Redmond markets, for instance, people are looking either for a more affordable or palatable price point, or they’re looking for that livability that maybe Bend (had) 25 or 30 years ago.”

Jones added that there are many people – including himself – who live in and commute from Bend or Redmond to work in Prineville because those cities have more amenities. Prineville does not currently have a movie theater or municipal indoor pool.

“I’m looking forward to living in Prineville one of these days,” Jones said.

The bottom end rises

Even though the median price for a house in Crook County is still about $160,000 lower than Bend’s median and $60,000 lower than Redmond’s, officials are worried that homeownership could become increasingly difficult for some segments of the population.

“There is not a corner of the state where the affordability of housing is not on the agenda – it is a problem everywhere right now,” said Scott Cooper, the head of the Crook County Court. “While we have the same problem everyone else does, we’re having more luck with managing it than other communities in the region are. The gap between what people can afford and what’s out there on the market is not as big as, say, Bend, which is the most severely cost-burdened community in Central Oregon.”

Ida Settlemyer, transitional housing coordinator for the Prineville branch of NeighborImpact, formerly known as COCAAN, said the number of affordable rental units in the city is shrinking.

“With the population growing, there’s not enough to go around,” Settlemyer said. “I’ve had families screened in (to the low-income housing program) now for at least a month that have not been able to find housing.”

Settlemyer said that the $500 a month she has available for emergency housing help is usually gone by the first of the month and after that she starts a wait list for the next month. She said she turned away 21 people in the first three weeks of October.

Cooper said he is worried about rental costs in the area.

“The rise in rents is of concern, rental costs are definitely up compared to where they were, say, five years ago and that makes it really hard on the bottom (10 or 20) percent of income,” Cooper said.

Christine Lewis, of Housing Works, formerly known as CORHA, said the number of federal Section 8 vouchers in Prineville has risen in recent years. The vouchers subsidize housing for low-income residents so that they are not paying more than 30 percent of their incomes for housing.

Cooper added that he thinks the city and county have both done well in planning for growth and the need for affordable housing.

Wendel, the mayor, said he is working on an economic development position for the city that would help coordinate government and private groups to work on creating more housing and job opportunities.

“Prineville has been aggressive about allowing additional development of housing, making sure there was a ready supply of residential land both within the city and outside the city,” he said. “Housing is a market-driven issue and the best we can do is try and help the market do what it needs to do. I’m not in favor of a policy where the government goes out and builds a subsidized unit for everyone who could possibly need one.”

Nyman, of Brooks Resources Realty, said that while properties are spending longer times on the market now, prices in general are significantly higher than one or two years ago.

“We were very well represented in the affordable homes, but that bottom end has really just kind of been snapped up,” Nyman said. “We are still in the region looked upon as the more affordable area, but the prices that are truly affordable for average wages, those homes have kind of disappeared.”

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