Bend’s commercial real estate market saw vacancy rates falling and lease rates increasing at the end of 2014, according to a quarterly summary by Compass Commercial Real Estate Services.

The vacancy rate for industrial property in Bend dropped from 12.3 percent at the end of 2013 to 6.7 percent a year later, Erich Schultz, principal broker with Compass Commercial, wrote in the latest issue of Compass Points. Lease rates went from 45 cents per square foot in 2013 to 65 cents for space in newer, smaller buildings in 2014.

The market for office space in Bend also improved for landlords. The vacancy rate fell from 11.3 percent in the third quarter of 2014 to 10.5 percent in the fourth, according to Compass Commercial. Lease rates today range from $1.20 per square foot to $1.70, Schultz wrote.

The vacancy rate for retail property citywide fell from 8.3 percent in the third quarter to 6.7 percent in the fourth. A total of 92,000 square feet of retail space was leased in 2014, according to the quarterly survey by Compass Commercial. Downtown Bend, at 3.16 percent, had the lowest fourth-quarter retail vacancy rate of seven market areas in the city.

In Redmond, demand for industrial space dropped the vacancy rate from 15.9 percent to 10.5 percent in the fourth quarter. Nearly 108,000 square feet was leased in Redmond, with another 154,000 square feet of industrial property still available, according to Compass Commercial.

The Bend area dropped to 10th place nationally in December on the list of metro areas with the greatest annual increases in home prices, according to the Federal Housing Finance Agency.

Housing prices grew by 11.25 percent in the area from the fourth quarter 2013 to the same period in 2014, according to an FHFA report released Thursday.

The Bend-Redmond Metropolitan Statistical Area, which comprises all of Deschutes County, ranked eighth on that list out of 276 metro areas in both the second and third quarters of 2014.

House prices have climbed 28.51 percent in the Bend-Redmond area over five years, according to the report.

In Bend, the median price of single-family home increased in January to $322,000 after a seasonal dip to $290,000 in December, according to a February report by the Beacon Appraisal Group. The median price in Redmond reached $218,000 in January, up from $189,000 the month before, the group reported.

Overall, house prices in the U.S. rose 1.4 percent in the last three months of 2014, according to the FHFA. Year over year, prices were up 4.9 percent.

“The key drivers of appreciation over the last few years — low inventories of homes available for sale and improvement in labor markets — likely played a role in driving up prices during the quarter,” FHFA Principal Economist Andrew Leventis stated in a news release accompanying the report.

Deschutes County added more than 3,000 jobs in 2014, the strongest gains in employment since 2006, according to the Oregon Employment Department. In August, the median price of a single-family home in Bend reached $325,000, according to Beacon. Afterward, the pace of home sales in Bend slowed, according to the same report. Redmond experienced a similar trend.

Prices increased in all but two states, according to the FHFA report. Oregon ranked 11th in 2014 with a 6.74 percent gain. The District of Columbia ranked No. 1 with a 12.53 percent increase. Vermont occupied the bottom, with a 2.03 percent decline in house prices, the FHFA reported.

The Merced, California, MSA saw the greatest increase in house prices year over year of any metro area in the nation at 14.84 percent. The Macon, Georgia, MSA occupied the bottom position with a 1.40 percent decline, the FHFA reported.

The median price for a single-family home dipped 1 percent in Bend last month, but jumped nearly 12 percent in Redmond, according to a report released in early December.

Bend’s median home price fell to $295,000 last month, $3,000 below October’s median, according to The Beacon Report, formerly called The Bratton Report. But the median price last month in Bend was the same as the price recorded in November 2013, according to the report.

The 156 homes sold in Bend last month represented a drop of 51 sales over October, according to the report by Appraiser Donnie Montagner, owner of The Beacon Appraisal Group in Redmond. In November 2013, Bend recorded 165 single-family home sales.

Redmond’s median price for a single-family home last month reached $210,000, a $22,000 increase over October’s median and a $10,000 increase over November 2013, according to the report.

Sales of single-family homes in Redmond increased by two, from 64 sales in October to 66 in November. The report showed 51 single-family home sales in Redmond in November 2013

Beginning early next month, two restaurants at Sunriver Resort will close for several months as the resort revamps its food and beverage service.

The makeovers at Meadows at the Lodge and the Owl’s Nest pub are among $50 million in capital improvements that began at the resort in 2012, Libby Nations, Sunriver’s director of sales and marketing, said Tuesday.

Officials continue to refine concepts for the restaurants, she said, so specifics were not available. But the transformed dining locations will be ready for the summer season.

“We’ll share more of the details of the project over the next few months,” Nations said.

Both restaurants will remain available through New Year’s weekend, she said. Meadows’ last day is scheduled for Jan. 4 and Owl’s Nest’s, Jan. 9.

On Jan. 10, the Merchant Trader Café will become the new dining area, open for breakfast, lunch, dinner and cocktails, Nations said. The resort also plans to open The Grille at Crosswater four days a week.

Resort-wide renovations began with the guest rooms two years ago, she said. They moved outside and became more noticeable in 2013 with the opening of the resort’s beer garden in May and the dedication of Besson Commons in September, according to resort information.

Located adjacent to the main lodge, the commons features fire pits and bocce ball courts. It’s named for Col. Frank. S. Besson, commanding officer of Camp Abbot, the World War II training base that preceded the resort on the land 15 miles south of Bend.

The capital improvements also include The Cove, a 75,000-square-foot $3-million aquatic project. Construction began in September, the project manager told The Bulletin in October, and its features include a 3,200-square-foot pool, hot tub, restaurant and bar, other water features and a pond intended to create a habitat for the spotted frog.

The Cove, which will be available only to resort guests, is scheduled to be finished by Memorial Day.

After years of slogging back from a stubborn recession in Central Oregon, Crook County looks poised to have lost more jobs in 2014 than it gained.

Continuing a trend that’s seen across rural Oregon, Crook and Jefferson counties struggled to add private sector jobs through 11 months this year.

While Bend led the state’s rebounding economy in 2014, Crook County may shed nearly 100 jobs by year’s end after data from the state’s Employment Department released this week show the county fizzled toward the end of the year.

“Once recent layoffs are accounted for in the December figures, Crook County will finish the year with fewer jobs than where it started,” Central Oregon economist Damon Runberg wrote in his monthly report.

The state added nearly 44,000 jobs at a rate of 2.6 percent, the data show. The Bend area added nearly 3,000 jobs in the last year, a 4.4 percent rate. The wages for jobs in Bend are also growing faster than the state average.

Crook County, which has a total of about 5,600 non-farm jobs, added just 100 jobs from November 2013 through last month. Its unemployment rate remains above 10.2 percent.

The new report didn’t account for the more than 200 layoffs at Woodgrain Millwork in Prineville announced in late November. Woodgrain officials said they’d shutter some operations at the site after a roof collapsed under heavy snow. The county also lost 110 jobs from October to November this year, the data show.

The November figures show Jefferson County added 230 jobs over the last year, though most of them were public sector, local and tribal government jobs. At 9.4 percent, the unemployment rate in Jefferson County is higher than the state average of 7 percent.

State economists, who forecasted a good 2014 and strong start to 2015, are now looking to a period of net expansion where the state has added the jobs it lost to the recession and will begin adding jobs before the next recession comes.

“We’re not there yet. It’s been a slow recovery. From here on out we’re gonna see how many more jobs we can add,” state economist Josh Lehner said last week.

Bend 2030 has laid out a wide-ranging list of recommendations aimed at the city of Bend for resolving the housing affordability crisis.

While some of the suggestions could take years before coming to fruition, others are likely within reach in the short term, leaders of the group said.

The nonprofit, which is studying future livability in Bend, presented results from an online survey and October forum to the Bend City Council last week.

Members of the group echoed recommendations that were made in September by the city’s affordable housing advisory committee and added other ways the city could address the problem moving forward.

“It’s our hope that these (recommendations) come before the council as quickly as possible so we can start to see some easing of this crisis,” said Erin Foote Marlowe, vice-chair of the Bend 2030 board.

The recommendations suggest adding or amending city development codes to allow for greater density within the city limits, a shift that was met with strong support in an online survey and forum.

“This is kind of new for Bend,” said Marlowe, adding that the city has changed. “We’re more diverse and not so afraid of the density that may be coming.”

The city defines housing as affordable based on area median income. Affordable housing was defined in multiple ways in the Bend 2030 survey. The majority of the 1,145 participants stated that living in an affordable home in a nice neighborhood represented affordable housing. Others said lower rents, and 52 percent said being able to afford a home near their work.

About 84 percent of survey participants said that the lack of housing in Bend is either critical or extremely critical right now. Nearly 90 percent said the problem would be worse in the future.

“Mostly what we learned is people want to see aggressive and creative approaches to alleviating the problem,” said Marlowe, about the survey.

The affordable housing advisory committee presented two options for greater density to the Bend Planning Commission Monday.

The first option would be to implement a so-called “cottage code,” which would streamline development of small, single-family detached units around a common area on a half-acre or more. The proposal would remove the requirement for a conditional-use permit and would require at least four cottages with a common open space and a maximum of 14 cottages per development.

Although the code wouldn’t necessarily guarantee affordable housing, the density could bring the price down for each unit. Jim Long, the city’s affordable housing manager, told planning commissioners.

The change would allow developers to get creative, and affordable housing developers are “intrigued” by it, Long said. The type of development is currently allowed by the city, but the process to gain approval is time-consuming because of the required conditional-use permit.

“What we heard when we went out into the community is they would love a housing choice like this, but unfortunately it doesn’t exist because it’s so cumbersome to go through,” said Andy High, chairman of the advisory committee.

The committee also presented a possible density bonus for developers if they provide 50 percent of the units they build as affordable housing. The bonus allows developers to increase the typically allowed maximum of residences for a particular property.

The committee has also recommended amendments to city code for accessory dwelling units, which are garages or other portions of a house converted to a living space or an addition to a house. The proposal would allow the units to be 800 square feet instead of the currently allowed 600-square-foot limit and would remove the requirement of a conditional-use permit.

In addition, to allow greater density within the city, the committee recommended exempting developers from paying system development charges if they create affordable housing units. The fees are used to fund streets, sewers, parks and water.

The Bend 2030 survey found moderate support for the idea, while the forum held in October with 80 participants showed very little support.

Marlowe said Bend 2030 is still encouraging the city to look at SDC exemptions even though there has been mixed support because the survey found that residents are willing to find other ways to fill the gap.

Participants in the survey showed strong support for a small housing-affordability fee tacked on to water and sewer bills.

“We really want to encourage the city to consider these proposals because we did find support for them, and some people see them as crucial,” said Marlowe.

The housing affordability advisory committee will present the two main recommendations to the City Council in February. The change to accessory dwelling units is being considered by the city’s Urban Growth Boundary Remand Task Force.

Long said the affordability committee will present the proposed SDC exemption to the Bend Park & Recreation District in January.