Soaring home prices are back.

A report released Thursday by the Federal Housing Finance Agency ranked the Bend-Redmond Metropolitan Statistical Area fourth in the country for yearly home price increases.

Median prices in the Bend-Redmond metro area, which covers all of Deschutes County, increased 16.73 percent in the second quarter of the year compared with the second quarter of 2012.

The FHFA’s quarterly house price index tracks median home-price gains in each of the nearly 400 metro areas in the United States.

Only three metro areas in the country — Stockton, Calif., Phoenix and Las Vegas — had higher year-over-year appreciation rates than Bend-Redmond.

In the last four quarters, Deschutes County has made the agency’s top-20 list for price gains three times.

Prices are still significantly lower than their pre-recession levels; the FHFA report said the metro area’s median price was 27.2 percent lower than in the second quarter of 2008.

But the recent gains have come as Bend’s supply of available homes has dwindled.

“Consumers want to buy homes, but sometimes there just isn’t anything for them to buy,” said Lester Friedman, a broker with Coldwell Banker Morris Real Estate.

Demand for new homes in the city has shot up in the last year, after several years of declines following the 2008 housing market collapse.

The high demand and low supply are combining to put upward pressure on prices, Friedman said.

Bend’s median home price has risen about $50,000 in the last year, according to data from Bratton Appraisal Group. The city is issuing permits for new homes at nearly twice the pace this year as last year.

But those permits aren’t turning into new homes quickly enough to meet the demand, Friedman said, especially at the low end of the price scale — homes valued at $250,000 or less.

“Supply is up, but it isn’t ramping up fast enough,” he said. “We’d like more homes to sell.”

Bend officials want to take a new approach to updating the city’s growth plan, and include more of the community in decision making.

“One of the lessons that I’ve learned in my work on (urban growth boundaries) and observing this process is it’s really important to involve as many people, with as many opinions, as possible, and to allow the citizens of Bend to have a direct say and stake in this big planning effort,” said Principal Planner Brian Rankin.

“It’s a different approach than what we have been taking for years, and I think it will pay off in the long run.”

Bend recently relaunched an effort to fix problems in a 2009 plan to expand city boundaries. The city likely needs to hire a consultant in order to improve the public process and finish the growth plan update by April 2016, according to planning officials.

At a Sept. 18 City Council meeting, a task force is expected to recommend that the city ask consultants to submit proposals for this outreach and planning process. The cost is unknown at this point.

In Oregon, the urban growth boundary is the limit around a city beyond which urban development, such as new housing, businesses and related water and sewer lines, is not allowed. The state requires cities to prove the need to expand their boundaries.

Bend began this process in 2004, according to the city’s website. City councilors approved a plan to expand the boundary by approximately 8,500 acres in 2009. But state officials rejected it in 2010, sending it back to the city to fix problems the state identified.

Earlier this year, a state commission gave the city until summer 2017 to correct the expansion plan.

So planners and elected officials must decide how much to update the 2009 plan, which now includes information that is several years old.

Rankin is researching how to include plans for a new Oregon State University-Cascades Campus in the urban growth boundary expansion. The 2009 expansion plan called for a new four-year university, but it was supposed to be north of the current city limits, in the city’s mixed-use Juniper Ridge development.

Depending upon how the city adds OSU-Cascades to its growth plan, it could slow the process because of additional work and public process.

It’s important to include the university in the plan, “but we need to do it in such a way that it doesn’t require additional work that will require additional resources,” Rankin said.

Assistant City Manager Jon Skidmore said the city is working closely with OSU-Cascades to plan locations for new interim and permanent campuses.

“It’s obviously something we need to blend into our (urban growth boundary) discussion, but I’m confident we’ll be able to do that without jeopardizing the remand effort,” Skidmore said.

Consultants might suggest strategies that the city has not considered, Rankin said.

In order to compress the timeline to complete the growth boundary project, Rankin said, the city might need to have several advisory groups — citizen committees that would research and weigh in on different aspects of future city development — meeting simultaneously. This would also increase the number of community members who give input on the growth plan.

A Seattle-area development company has bought 10 acres of land about a mile east of Shevlin Park, near the western edge of the city.

Shevlin Development LLC paid $2 million last week to buy the property on Shevlin Park Road, adjacent to Shevlin Sand and Gravel Co., which owned the 10-acre parcel for more than 15 years.

Washington state business records list Christopher Eadon as Shevlin Development’s owner. The company has the same Bellevue, Wash., address as homebuilder Polygon Northwest, where Eadon is listed as chief financial officer.

Specific plans for the Bend property, including a development timeline, aren’t clear. Polygon officials didn’t respond to requests for comment this week.

Polygon Northwest has built homes in 14 neighborhoods across the Seattle and Portland areas, according to its website. It has an office in Vancouver, Wash., that manages its four Oregon neighborhoods, each in the Portland metro area.

The Bend site makes up half of a 20-acre, undeveloped piece of land bordering a partly built neighborhood off Shevlin Park Road, near McClain Drive.

Several roads in the neighborhood could potentially extend to meet Polygon’s property, if the company decides to build, said Aaron Henson, a senior planner with the city of Bend.

A developer would have to clear a few hurdles before starting to build homes on the site, Henson said.

Trees are growing throughout the property, which is registered with the state as a forested area. A developer would likely face additional property taxes to re-zone the site for standard residential use, Henson said.

“The zone change would allow them to proceed with (developing) a subdivision,” Henson said.

They would also have to contend with the property’s terrain, which rolls away from Shevlin Park Road on an upward slope.

But those aren’t deal-breakers for the right developers. Bend’s NorthWest Crossing, just southeast of the site, was originally zoned with the same forest status, and was also built on sloping terrain.

Developers laid out most of the housing developments along Shevlin Park Road between Mt. Washington Drive and Shevlin Park between 2001 and 2008, according to city records.

A pair of developers have come forward with major apartment proposals in Bend that could add nearly 400 rental units to the city’s inventory.

Property management companies need all the property they can get; Bend’s rental vacancy rate has been below 2 percent all year, a critically low supply that’s putting upward pressure on prices.

On Aug. 12, Vancouver, Wash.-based Hoviss Development Group submitted a request for a pre-application meeting with the City of Bend. Pre-application meetings give developers and Community Development Department staff a chance to talk over a proposal before a formal application is submitted.

Hoviss wants to construct four apartment buildings totaling 241 units on a vacant Alstrup Road property, near Reed Market and Brosterhous roads. A blueprint submitted to the city shows plans for a combination of studio, one-, two- and three-bedroom apartments, as well as a name for the development, Aspen Heights.

Hoviss filed its proposal just five days after Bend resident Craig Studwell submitted a pre-application meeting request for a 144-unit apartment complex called Woodhaven, between Pettigrew Road and Daly Estates Road in southeast Bend. A blueprint filed with the city shows a proposal for 15 apartment buildings on the site, with a combination of one-, two- and three-bedroom units.

It’s unclear if the developers are committed to the projects or merely testing the waters. Neither the Aspen Heights nor the Woodhaven developers responded to requests for comment from The Bulletin this week.

But both are scheduled for Aug. 29 meetings with the city to discuss their plans.

If built, the apartments could at least keep the vacancy rate from dropping any lower, said Kevin Restine, general manager of Plus Property Management and the president of the Central Oregon Rental Owners Association.

“It’s definitely a good sign, good for the rental market and for Bend as a whole,” Restine said of the proposals.

One large apartment project is already underway in northeast Bend. Construction crews started building Sage Springs, a 104-unit apartment complex off of Boyd Acres Road, in April. It’s expected to be finished by the end of February.

Editor’s note: The Bulletin has partnered with the University of Oregon’s College of Arts and Sciences and Department of Economics to produce the Central Oregon Business Index. The index provides a regular snapshot of the region’s economy using economic models consistent with national standards. The index, exclusive to The Bulletin, appears quarterly in the Sunday Business section.

Spurred by booming tourism activity and an uptick in homebuilding, Central Oregon’s economy continued to improve in the second quarter, according to an economic index released today.

The index, compiled by University of Oregon economist Timothy Duy, tracks a variety of indicators measuring the economic health of Central Oregon.

Nine indicators make up the index, measuring trends like payroll, new filings for unemployment insurance, lodging tax revenue, home sales and tons of garbage delivered to the Deschutes County Solid Waste Department.

In the second quarter, which ended June 30, seven of the nine indicators moved in a positive direction. The overall index edged up to its highest level since late 2007, when the economy was sliding into recession.

“The trend is definitely up,” Duy said of the local economy as a whole.

Stagnant job growth is about the only thing holding back an even broader recovery. About 63,300 Deschutes County residents were employed in nonfarm jobs in the second quarter, down by about 100 from the first-quarter.

But employment figures are frequently revised, and could be adjusted higher as more precise data comes in.

The second quarter figures, however, show a net gain year over year of roughly 2,000 jobs.

“That would be considered real job growth,” Duy said.

Initial claims for unemployment insurance dropped to the lowest level since mid-2006 in the county, meanwhile.

In Bend, strong tourism numbers are propping up the economy. Revenue collected through the city’s lodging tax rose to its highest quarterly level since Duy started compiling the index in 2007.

A continued rush of tourists puts pressure on retail businesses to hire more workers and meet the demand, growing the county’s payroll in the process.

The second-quarter figures span from April 1 to June 30, so the uptick bodes well for July and August, Duy said.

“Bend must be having a strong summer,” he said. “People are coming to visit, and that category of spending has come back relatively strong.”

Real estate also seems to be coming back. Throughout Central Oregon, quarterly home sales rose to the highest level since mid-2006. Deschutes County issued 107 building permits, the most for a quarter since late 2007.

Homes sold in the quarter were on the market an average of 91 days, the lowest since the start of 2006, the height of the pre-recession housing boom.

Rising interest rates may dampen the enthusiasm a bit, though there hasn’t been much evidence of a slowdown yet.

“The housing market has been hopping, which is pretty significant given what we’ve been through for the past several years,” Duy said.

Like tourism, solid housing numbers tend to lead to new jobs, as more demand means building companies need extra workers to keep pace.

Deschutes County construction jobs were gutted when the market crashed in 2008. About 2,080 county residents were employed in construction jobs at any given time between 2005 and 2007, according to Oregon Employment Department data.

By 2011, the average was down to 776.

The recovery has been spotty across the nation. Many areas, including Central Oregon, are still grappling with higher-than-average unemployment rates.

But the key indicators are moving in the right direction, Duy said. Overall, the index has risen in six of the last seven quarters.

“Job growth has been a little sluggish lately, but not hugely so. I’m not terribly concerned about that,” Duy said. “I think as demand continues to grow, and the economy continues to improve, we’ll see more upward pressure on the job numbers.”

A group of Southern California investors that includes a U.S. congressman bought more than 50 acres of undeveloped land in Bend late last month, and plans to build homes on the site.

U.S. Rep. Gary Miller, R-Calif., along with investment partners David Langmans and Harry Crowell, paid $5 million for three parcels of land just south of Reed Market Road and the Central Oregon Irrigation District canal, between Southeast Fifth Street and Centennial Boulevard.

The group has made a big splash in Central Oregon’s real estate scene since the 2008 housing market crash, buying eight subdivisions in Bend and several in Redmond after a wave of foreclosures caused the values of each neighborhood to plummet.

But the Reed Market Road-area purchase is one of its biggest. The group finalized the purchase July 31, a deed filed with Deschutes County shows.

A combination of single-family homes and some multifamily development like apartment buildings or townhomes is likely for the property, said Darrin Kelleher, a broker with Coldwell Banker Morris Real Estate who represents Miller’s group. Businesses on the site aren’t out of the question, though the land is currently zoned for residential use.

“We’ve spent some time with the city and will continue to discuss our plans,” Kelleher said, adding that the group could release a master plan outlining its proposal in the coming weeks. “It has the makings of a wonderful neighborhood and a great addition to that side of town.”

The property is made up of three parcels of adjoining land, totaling 50.3 acres.

It was one of the largest pieces of development-ready land within Bend’s urban growth boundary, said Peter Lowes, principal broker with The Lowes Group, which marketed the property. The land was listed at $6.5 million when it came onto the market in October.

Deschutes County residents Charles and Linda Anderson had owned the land since the mid-1980s, county property records show. They sold it to a pair of Eugene developers in January 2012 for $2.2 million.