Hayden Homes is prepping nearly 22 acres in southeast Bend for an 85-home subdivision the company expects to begin marketing this summer.

The project, called Deer Ridge, will feature homes priced for first-time homeowners, said Geoff Harris, Hayden Homes regional director in Central Oregon. Homes will range from three-bedroom, two-bath units up tosix-bedroom, three-bath units. The site is along the west side of Brosterhous Road between Murphy and Knott roads.

“Primarily, our target is the price-conscious, value-driven homebuyer,” Harris said Tuesday. “There’s plenty of sparkle in NorthWest Crossing and Tetherow, and we don’t build homes in neighborhoods like that. That’s a very specific buyer with a lot of resources. Those homes aren’t affordable to people that make somewhere around median income, plus or minus.”

Median household income in the Bend Metropolitan Statistical Area in 2013 was $53,027, according to the U.S. Census Bureau. The Deer Ridge homes will range from about $250,000 to more than $300,000, Harris said. The median price for a single-family home in Bend reached $327,000 in March, according to the Beacon Appraisal Group.

Work began Monday to install a sewer line beneath Brosterhous Road that will connect the subdivision with the city sewer line at SE Marble Mountain Lane, said Chad Swindle, project manager for Taylor Northwest LLC, the contractor. Brosterhous will be closed for four weeks to through traffic between SW Marble Mountain and Windsor drives. Local traffic may access neighborhoods from Murphy and Knott roads, said Kyle Thomas, city of Bend construction and right of way manager.

Kim Ward LLC sold the site to Deer Ridge LLC in October for $2.125 million, according to records in the Deschutes County Clerk’s Office. However, Ward holds a trust deed as security on a $2.025 million loan to Deer Ridge Investment LLC. Hayden Watson is manager of both Hayden Homes and Deer Ridge Investments.

The development plan on file with the city indicates a five-phased plan with phase 1 scheduled for completion this year and the remainder each year until 2020. The property includes a city-designated Area of Special Interest, a forested area with rock outcroppings along the property’s eastern edge. Hayden may not develop that area, although the plan proposes a short, secondary access road through it, which is permitted in some cases.

Building the road would mean the loss of one juniper tree, according to the development plan. The access road is needed to complement the main access road because the property is long and narrow and bordered to the southeast and west by other properties, according to the plan. The Burlington Northern Santa Fe Railroad borders the property on the south.

Other developers have said recently that homes they built with first-time homebuyers in mind often went to retirees, downsizing baby boomers or investors, instead. Harris said he sees the market beginning to shift.

“Investors and cash buyers are a relatively small slice of the transactions we’re seeing right now,” he said. “We’re seeing (an) owner-occupied, … good, first-time homebuyer uptick this spring. It’s satisfying, honestly; that’s who we outwardly state we’re trying to serve.”

Hayden Homes builds in Oregon, Washington and Idaho. It has seven projects in Central Oregon, with another three to come in the next six months, Harris said.

— Reporter: 541-617-7815,

The State Land Board approved the sale Tuesday of a 36-acre Redmond subdivision with 63 ready-to-build lots to a Bend homebuilding company.

Under the deal, Palmer Homes will pay $3.33 million in phases over 18 months for the Forked Horn Butte development, which the state acquired in a 2009 property exchange.

Palmer, builders of Bend housing developments including Foxborough, Braebern and Stonehaven, gets half of the developed lots immediately, according to the Land Board agenda. Within 18 months, Palmer will get the remaining lots and 19 additional acres of undeveloped bare land.

The entire 36 acres was valued at $2.75 million in 2009, according to the Land Board information. The state took ownership of Forked Horn Butte in a property exchange with Giustina Resources, a private timberland owner based in Eugene.

Giustina received 620 acres of forestland in Lane County, and the state got the subdivision, which is east of SW Helmholtz Way and south of SW Yew Avenue, about a half-mile north of Ridgeview High School.

Forked Horn Butte sits on a west-facing slope with unobstructed views of the Cascades, according to a state description. It has paved streets, sidewalks, streetlights and prepared home lots on 17 acres.

The Department of State Lands began exploring a sale of the subdivision in June. But after getting two widely different appraisals on the property’s value, the state decided to solicit proposals on the best way to sell the property and held a community meeting in December in Redmond.

In the end, the state decided to accept two types of offers: full cash or phased purchase.

Two cash offers were submitted, one at the 2009 appraised value and the other at $2.21 million, according to the Land Board information. Two other phased-purchase offers were also received. One was at a lower price, and the other called for a seven-year purchase timeline, according to the information.

A development firm plans on building nine luxury condominiums on a half-acre lot in Bend overlooking the shops in the Old Mill District, with views of the Deschutes River and the Cascades.

Construction at the site, 291 SW Bluff Drive, could begin in the next month, said David Waldron, a partner with James T. Paul of Bigwater Ventures II LLC. Paul said Bigwater sold the property in the past month to another firm that was created to develop it, 291 Bluff Investments LLC.

The project, called The Atrium at the Old Mill, calls for six 2-bedroom and three 1-bedroom condos, and could be complete within nine months, Waldron said Wednesday. The units range from 1,000 square feet to 1,800 square feet, he said.

“We’re going to release four right now, three on the first level and a one-bedroom on the second level,” he said. “The one-bedroom will start at $500,000.”

Condominiums are not as popular with homebuyers as single-family homes, and they don’t appreciate as quickly, but for certain people they make sense as a home purchase, real estate brokers said.

“A lot of the reason for that is that people are looking to simplify their lives,” said broker Michelle Mills, of Re/Max Key Properties in Bend.

Downsizing baby boomers and young entrepreneurs looking for low-maintenance homes, a Bend lifestyle, or both, are interested in condos. Some buyers are looking for a primary home in Bend while maintaining a second home in a place like Costa Rica or Ecuador, she said.

Waldron said a young businesswoman from Florida has already reserved one of the Atrium units.

“We haven’t really put it out to the public, but we’re getting a lot of unsolicited interest,” he said.

Still, condominiums represent a fraction of the Bend real estate market, said Lynnea Miller, principal broker at Bend Premier Real Estate. She said the Multiple Listing Service shows 137 condominiums, of which 37 are active, 13 are pending and 87 have sold over the past year. Many are listings at Seventh Mountain Resort and Mount Bachelor Village. Some of those are fractional ownership vacation homes, and many are less than 1,000 square feet.

In The Plaza, a condominium building adjacent to the Atrium site, a 1,938-square-foot, 3-bedroom condo is listed for sale at $789,900.

“It definitely does fit a certain demographic,” Miller said.

Waldron said he designed the Atrium units with enclosed garages, climate control, energy efficiencies and sound insulation.

— Reporter: 541-617-7815, jditzler@bendbulletin.com

Deschutes County’s population grew to an estimated 170,388 people last year, making it the seventh-fastest-growing metro area in the country, according to new U.S. Census Bureau figures released Thursday.

The population increased by 2.67 percent between July 2013 and July 2014. The influx of new residents has made Deschutes County the fastest-growing county in Oregon for the second year in a row. Between 2012 and 2013, the county grew by 2.6 percent.

Multnomah County, the largest county in the state, grew 1.4 percent last year. Crook and Jefferson counties grew 1 percent and 1.7 percent, respectively.

Deschutes County Commissioner Tony DeBone, who also sits on a steering committee for the city of Bend’s urban growth boundary expansion process, said he senses the increase in construction activity and demand for workers to build homes.

“It’s good to know that the numbers are measurable, because it does feel like a lot of things are happening at the same time,” said DeBone.

In 2010, the county’s population was estimated to be 157,733. An estimated 4,433 people moved to the county last year.

The increased population comes at a time when many have called the lack of affordable housing in Bend a crisis. The city was estimated in 2013 at having a population of 81,236.

City leaders formed an Affordable Housing Advisory Committee and has sought advice from Bend 2030, an organization studying livability.

The city advisory committee has recommended a break in system development charges — known as SDCs, which pay for roads, sewer upgrades and parks — to entice developers to construct affordable housing. The committee also recommended changing the city code to create incentives for development of smaller single-family “cottages” on a lot around a common open space.

— Reporter: 541-617-7820,

WASHINGTON — Janet Yellen, the Federal Reserve chairwoman, said Friday that the Fed planned to raise interest rates more slowly than during past recoveries because of the unusually fragile condition of the U.S. economy.

Fed officials, who have held short-term interest rates near zero for more than six years, have indicated that they plan to start raising short-term rates this year. Yellen’s remarks, delivered at a conference in San Francisco, are part of an effort to prepare markets for the end of that prolonged era.

And her message was that the return to normal conditions is likely to be very slow.

“The average pace of tightening observed during previous recoveries could well provide a highly misleading guide to the actual course of monetary policy over the next few years,” Yellen said.

Yellen emphasized that the economy was improving. She highlighted particular progress in labor markets, and said she expected the economy to gain steam after a slow start to 2015 as consumer spending increased.

“With continued improvement in economic conditions, an increase in the target range for that rate may well be warranted later this year,” she said.

That, however, is a more cautious formulation than the recent comments by some of her colleagues that they expect the Fed to raise rates by September.

Yellen said the timing of the first increase was less important than the pace of subsequent increases, which will determine borrowing costs in coming years. And she offered three reasons the pace is likely to be quite slow.

First, the economy remains weak: “If underlying conditions had truly returned to normal, the economy should be booming,” Yellen said.

Second, the Fed sees the potential costs of tardiness as smaller than the costs of moving too quickly, because if it tightens too quickly and the economy swoons, the Fed has substantially exhausted its ability to stimulate a recovery.

Finally, pushing economic growth above a sustainable pace could help to push up inflation and perhaps reverse some economic damage caused by the recession.

Empty nesters, retirees and new arrivals are snatching up homes in Bend that builders thought would attract entry-level buyers, some brokers and builders say.

“We noticed a shift in the demographic make-up of, particularly, the new home sales in NorthWest Crossing a couple of years ago,” said David Ford, general manager at the subdivision. “Probably as much as 60 percent of our sales” went to the older demographic.

Jay Campbell, president of Woodhill Homes, and real estate broker Tim Buccola have had similar experiences at two developments in southeast Bend: Reed Pointe, at SE 15th Street, and IronStone, on Sonata Way east of Parrell Road.

Prices were set with first-time homebuyers in mind, Campbell said. Two homes in IronStone, both 1,468 square feet, are listed by The Buccola Group of The Hasson Co. at $279,950. Three Reed Pointe homes range from $249,950 to $276,450 and from 1,400 square feet to almost 2,000 square feet.

“Ideally, we were building them for entry-level, first-time homebuyers,” Campbell said. “But, we’re finding there’s a lot of retirees and empty nesters; we ended up with a lot of single stories.”

The median price for a single-family home in Bend stood at $297,000 in February, down from $322,000 the month prior, according to the Beacon Appraisal Group, of Redmond.

At McCall Landing in northeast Bend, Hasson Co. real estate broker Rhianna Kunkler said the builder, Pahlisch Homes, set a price to attract first-time homebuyers. A 1,400-square-foot home there starts at $235,000. Entry-level buyers showed up, but so did older buyers looking to downsize or be free of maintenance chores. Investors buying with cash are in the mix, too, along with retirees, Kunkler said.

“It wasn’t what I expected,” she said.

First-time homebuyers still appear hesitant to rejoin the market as it recovers from the Great Recession, Buccola said. They remain wary in light of the housing bubble that burst and hastened the recession.

“Many of them are still shy,” he said.

Chris Starling, a mortgage broker and vice president at Arbor Mortgage Group in Bend, said he sees many empty nesters and retirees moving to the area and looking for homes, as well as homeowners looking to buy up into a larger home. First-time homebuyers are active in Central Oregon, but the median home price in Bend may be pushing them to Redmond and elsewhere, he said.

“A lot of what’s in my pipeline are folks who moved here a year ago,” Starling said. They rented until finding the right home to buy, he said, and now they’re pulling the trigger.

Woodhill and Buccola may be pricing their homes for what the market demands in Bend, he said. Nonetheless, a homeowner in the city needs to earn about $66,000, annually, about 25 percent more than the median household income for Deschutes County, or face a tough time paying anything other than the mortgage, Starling said.

Ford, Campbell and Kunkler all said homes are selling in their developments about as fast as crews can build them.