Developers of Bend’s NorthWest Crossing are planning an expansion that would bring 60 new single-family home lots onto the market near Skyliners Road and Northwest 17th Street.

Separately, one of the neighborhood’s builders also plans to build 24 condominiums.

West Bend Property Co., which is developing NorthWest Crossing, wants to get 17 acres of bare land the company owns near Skyliners and 17th Street ready for future homebuilding.

The company is in discussions with Bend’s Community Development Department, but hopes to get started on roadwork for the new section next month, said David Ford, West Bend Property’s general manager.

The developers have been eyeing the site for homes as far back as 2008. But that plan hit a snag: The hilly area wouldn’t accommodate their street plan, which included creating two new intersections with Skyliners Road.

“We realized some of the street layouts in the tentative plan were not” feasible for the area, Ford said.

The new plan has only one connection to Skyliners. According to documents filed with the city last week, the revised strategy would extend four streets:

• Northwest Hartford Avenue, which would connect to Northwest Drouillard Avenue;

• Northwest Drouillard would connect to Northwest 18th Street;

• Northwest 18th would connect to Northwest Hartford, and

• Northwest Flagline Drive would be extended a short distance on the north side of Skyliners and connect to Hartford Avenue.

The home lots would be located around the extended streets. Ford said the new design would be more feasible than the previous proposal, and would lead to homebuilding on the new properties as demand dictates.

“We’re moving forward with the engineering approvals” for the new plan, Ford said.

Greg Welch, one of NorthWest Crossing’s select builders, is getting ready to construct 11 buildings that will contain 24 condominiums on about 1.3 acres he owns just north of High Lakes Elementary School.

The condos will be built in four phases and come onto the market for sale, Welch said. All 24 units could be on the market by mid- to late 2014, he said.

“We hope to break ground this spring,” Welch said.

A handful of developers have found opportunity in Bend’s housing market crash, buying up more than 900 home lots left vacant by the housing market crash.

They snatched up a majority of the lots in two-dozen subdivisions across the city of Bend between 2009 and 2012, an examination of Deschutes County deeds records shows.

In 18 of the 24 subdivisions, the previous developer lost the properties to foreclosure after the housing market fizzled and collapsed in 2008, according to the records examined by The Bulletin.

The crash followed a frenzy of new subdivision building to accommodate Central Oregon’s population boom. In Bend, 333 subdivisions were platted between 2000-09, according to the city. From 1990-99, 136 were platted.

Property values plummeted — sometimes to as little as 10 percent of a parcel’s pre-recession value — sparking a flurry of new activity by developers.

Chet Antonsen, owner of Group PacWest Homes in Bend, teamed up with Troutdale developer Guy Wolcott in March 2012 to buy 53 of the 91 lots in the adjacent subdivisions Northcrest and Southcrest, near Boyd Acres and Fred Meyers roads.

They paid $1.1 million for the lots through a short sale, county records show, or about $21,300 per lot.

“We kind of saw that we were starting to head out of the bottom” of the market several months into 2012, Antonsen said. He and Wolcott have received building permits on nine lots in the subdivisions since March, according to Bend Community Development Department figures, nearly the same number as during the previous three years combined.

“I saw the market turn about the first part of April last year,” Antonsen said.

Low mortgage rates and depressed home values have led to a surge in sales on Bend homes priced at $300,000 and under, several developers and real estate officials said.

More than 78 percent of the homes sold in Bend last year went for $350,000 and below, according to figures from the Bratton Appraisal Group.

Perhaps no buyer has been busier in Bend’s subdivision market than a collection of Southern California investors that includes U.S. Rep. Gary Miller, R-Calif., and Harry Crowell, a California homebuilder. They formed Long Term Bend Investors, LLC in July 2009, and went on a buying spree, spending more than $6 million to purchase nearly 400 home lots in seven Bend subdivisions, many out of foreclosure, according to county records.

A Canadian investor has gotten in on the buying, as well.

Ender Ilkay, a Vancouver, British Columbia, investor and founder of Cedar Coast Properties, jumped into Bend’s market last year. He paid about $1.6 million for 102 home lots in McCall Landing, a largely undeveloped subdivision off Northeast 18th Street.

Ilkay and Bend development partner Pahlisch Homes got 13 permits for new homes in McCall Landing last year, more than had been issued the previous five years, Bend building permit records show.

They plan to release 25 more lots in 2013, Ilkay said, meaning that as many as 25 lots could be permitted for home construction if they can find buyers.

“After evaluating real estate opportunities throughout the Western U.S., we ultimately decided that the most attractive destination for our investment dollars is Oregon,” Ilkay wrote in an email to The Bulletin, “with the Bend area being our first choice for recovery and future growth.”

The activity by the investment groups and others has started to shrink the supply of open lots in Bend — though plenty remain for single-home buyers, said Andy High, vice president of government affairs with the Central Oregon Builders Association.

Bend has between 2,500 and 2,700 planned-but-undeveloped home lots today, High estimated, down from about 3,500 in 2010.

Reducing the inventory has prompted prices to start creeping back up from the bottom, said Terry Denoux, owner and principal broker of GoBend Realty. They’re still fairly low — probably less than 50 percent of their pre-recession average — but the land prices are directly tied to housing inventory, Denoux said, and could keep rising if inventory drops further.

Bend had about eight months of housing inventory at the start of 2010, Denoux said, meaning it would take eight months to sell all the homes on the market based on the sales pace that year.

Inventory today is about 2.9 months.

“We’ve been at that level for the better part of a year now,” Denoux said. “That means prices are starting to creep up. Builders have been snapping up these subdivisions and are getting their toes back in the water.”

Bend has earned titles like Dogtown USA and one of America’s best ski towns. It’s home to the brewery that produces the World’s Best Beer. So it’s no wonder tourism is on the rise in Bend and Central Oregon.

Tourism, one of the region’s economic anchors, is returning close to pre-recession levels, according to economic and tourism experts.

“Tourism is critically important for the health of Bend’s economy,” said Doug La Placa, CEO and president of Visit Bend — the city’s tourism agency. “It generates approximately half a billion dollars annually for our region and impacts virtually every segment of our economy. Not only does tourism generate an immediate economic impact through direct visitor spending, but perhaps more important, tourism serves as the primary catalyst for in-migration of new residents and new jobs.”

Tourism has been rebounding for the last couple of years, said University of Oregon economist Tim Duy, the author of the University of Oregon Central Oregon Business Index.

“Estimated lodging revenue, adjusted for inflation, gained for the third consecutive quarter, reaching its highest level since the third quarter (July-September) of 2007,” according to the index of economic indicators released Sunday.

When adjusted for inflation, Duy said tourism has returned to levels last seen prior to the recession. This year’s third quarter lodging revenue totaled $1.6 million, nearly reaching 2007’s high of $1.63 million.

Along with lodging revenue, room tax collection for the city of Bend and Deschutes County also increased during the third quarter, according to data from Visit Bend and Central Oregon Visitors Association — the regional tourism agency.

Bend had the most room-tax collection in history this summer, La Placa said. In addition, he said citywide lodging occupancy during the 2012 fiscal year set a record high, exceeding 54 percent for the first time.

The majority of visitors are coming from Oregon, especially Portland, followed by Washington and California, based on the Bend Area Summer Visitor Survey. However, there have also been slight increases in visits from across the country and internationally since summer 2009, the survey shows.

Renita Patel, a 25-year-old Portland resident, said she came to Bend to escape the city for a night.

“Bend is just a really nice place to relax,” she said Saturday while leaving The Oxford Hotel. “It’s nestled in the mountains, it’s really gorgeous out here and it’s very welcoming to tourists.”

While vacationing closer to home has become a more popular trend, La Placa said it’s critical to continue to introduce Bend to new consumers and attract investment from larger economies outside the Pacific Northwest.

This year both Visit Bend and COVA launched aggressive regional and national advertising campaigns to drive tourism to Bend and the region.

“I believe the Bend tourism industry is positioned strongly for long-term growth,” La Placa said. “If we can continue to diversify our tourism offerings, continue to evolve our amenities, and more aggressively introduce our destination to new customers, I have no doubt that Bend’s extraordinary appeal will sustain long-term growth.”

While Central Oregon tourism rebounded over the summer months, Alana Hughson, president and CEO of COVA, said the upswing might not continue.

Advertising and public relations is effectively positioning the region, she said, but national economic stability will impact tourism locally and nationwide.

Hughson said Central Oregon experienced a slowdown of business in October and November, but she noted the room tax reports that help indicate tourism aren’t yet available for those months.

“The late-fall slowdown indicates that a ‘robust’ recovery is too optimistic and we may see things fall off quite a bit over the winter months,” she wrote in an email. “The state of the national domestic economy may have a big influence on travel trends through the winter and the conjecture about the ramifications of the ‘fiscal cliff’ appear to be impacting travel in a less-than-favorable way.”

When the economy collapsed in 2008, construction of new homes ground to a halt.

Evidence of the crash’s speed could be seen across Bend, and even more so on the east side of town.

New homes in northeast and southeast neighborhoods like Quail Crossing, Mirada, Gleneden and Eagles Park stood surrounded by empty lots, often with infrastructure — roads, electric and sewage — in place.

But some developers think now is the time to start testing the market. In several corners of Bend, homes are rising again, some in developments that haven’t seen activity in years.

Deacon Development Group, a Portland company developing the 15-lot Rabbit Hills subdivision off Boyd Acres Road, put 13 lots back on the market last month for the first time since 2008. Two homes were built in Rabbit Hills in 2007.

“We made the decision (to return to the market) just in the last 30 days,” said Pete Snook, co-founder of Deacon Development. “We’ve been watching Bend’s market for a couple of years, and just decided in the last month that we would start to move forward.”

Gardenside, a 72-lot subdivision near Southeast 27th Street and Reed Market Road, has received permits for 16 new homes this year. Thirty-five have already been built, though none since 2008.

Construction began this summer on six homes at South Deerfield Park, a 63-lot subdivision near Parrell Road, adjacent to U.S. Highway 97. Ten additional homes are under permit review there, and could be approved this summer, said Darrin Kelleher, a broker with Coldwell Banker Morris Real Estate. Kelleher represents investors at the Deerfield and Gardenside properties.

The 16 new homes that are planned or in construction at both sites mark the first building activity on the properties in four years. Those developers are looking to build this summer. But they’re really banking on 2013 as the year buyers start returning to the market in large numbers.

“It’s a calculated gamble,” Kelleher said. “Inventory is low, so we feel 2012 is the year to get ready for new activity.”

South Deerfield Park is one of more than a half-dozen Bend subdivisions bought by a group of investors that includes U.S. Rep. Gary Miller, R-Calif.

The congressman, who represents a district southeast of Los Angeles, is a longtime California developer.

Miller and development partners Harry Crowell and David Langmans pooled their funds in 2009 and 2010. They took advantage of depressed land values to buy seven stalled subdivisions around Bend, Deschutes County property records show.

“Even in a bad real estate market, Bend is a great community and a great long-term investment,” Miller said. “But we see the market turning. We’ve been waiting for a rebound, and we think that’s starting to happen.”

Bend’s real estate market has shown some signs of improvement recently, at least compared with the last four years.

Home sales in Bend in the first half of 2012 are up 12.6 percent from the same time last year, according to data released this week by the Central Oregon Association of Realtors. So far this year, 43 percent of home sales have been distressed — either short sales or bank-owned sales. That’s down from 58 percent through June 2011.

Yet median home prices in Bend are still well off their prerecession values, and lending standards are tight.

But the combination of low home inventory in Bend, and a slight increase in home values over the last few months, is renewing interest in development, said Snook of Deacon Development.

Bend had just three months of single-family housing inventory in May, according to figures from Bratton Appraisal Group. Without any new construction, all the available homes in the city would be sold in that span.

At the same time, median single-family home prices in Bend have risen in recent months. It reached $234,000 in May, Bratton data shows, the highest since late 2008.

Still, some developers aren’t sure whether home buyer activity will pick up fast enough to drive demand for a new wave of homes.

William Olsen, a real estate broker with Century 21 Gold Country, has been trying to sell lots at Island Park, a 38-lot development east of Brosterhous Road, since 2010.

“The streets are paved, electricity and sewer services are in place,” Olsen said. “All you need is a building permit.”

But just five homes are in place, and there hasn’t been any new building activity there in more than two years.

“I think the market has turned a corner,” Olsen said. “But there’s just not a lot of buyers out there looking for newly built homes.” Buyers instead are finding deals on property built before the market crash.

“I think there’s plenty of inventory,” he said.

Coldwell Banker’s Kelleher, who represents Rep. Miller’s investment group, disagreed. He called a lack of inventory here a major issue.

The decision to build at South Deerfield Park came after developers saw a dwindling supply push home prices up, he said.

“I’m still not sure when we’re going to fully recover, but I’m confident in saying we’re stabilizing,” Kelleher said.

In 2010, while Central Oregon’s housing market reeled from tumbling prices and rising foreclosures, 41 of the 99 homes sold on Awbrey Butte and its surrounding neighborhoods came from banks, re-selling foreclosed properties.

But 2012 may be the year of market correction, at Awbrey Butte and some of the other higher-priced neighborhoods on Bend’s west side.

Ninety homes have sold in developments on and around Awbrey Butte this year. As of Thursday, seven of the 90 were bank sales.

The construction of new homes and sales of existing ones in Bend’s higher-priced neighborhoods has some real estate officials wondering if the bottom of the market is in the rearview mirror.

Building permits are being approved more frequently in neighborhoods like Awbrey Butte and Broken Top in 2012 than in any year since before the real estate crash, Bend and Deschutes County records show.

And more deeds are also being recorded this year in neighborhoods like NorthWest Crossing and Tetherow than any time in the past three years, according to figures from the Deschutes County Clerk’s Office.

At Broken Top, the golf community off Mt. Washington Drive in west Bend, 44 homes or home lots have sold so far in 2012, up from 27 in all of 2011.

There were 41 sales in 2010, but 15 were bank-owned.Five of the 44 sales this year have come from banks.

Tetherow, a golf community adjacent to Broken Top, has recorded 14 deeds so far in 2012, up from eight in all of 2011 and five in 2010.

Officials with these developments pointed to an overall decline in distressed real-estate deals — short sales and bank-owned transactions — as part of a yearlong trend that has seen Bend median prices rise in seven of the last 10 months, according to figures compiled by the Bratton Appraisal Group.

“I think there’s a relatively increased level of confidence in the market right now,” said Mike Hollern, CEO of Brooks Resources Corp., the Bend company that developed Awbrey Butte. “I think we’ve worked off a good number of the foreclosed homes and bank-owned homes. Plus, there aren’t too many (home) lots left to build on.”

Building activity has indeed risen.

Since mid-2011, single-family home permits have been issued at a volume up to five times greater than in 2010 in many of these neighborhoods.

In the 19 months between Jan. 1, 2010, and July 31, 2011, three permits for new home construction had been issued for Broken Top and the adjacent Highlands at Broken Top neighborhoods.

From August 2011 through the present, almost 14 months, 15 have been issued.

Awbrey Butte and its surrounding neighborhoods tell a similar story: four permits for new homes between January 2010 and July 2011; 20 new home permits since then.

“I’m starting to see high-end people coming in that can’t find what they’re looking for on the market right now,” said Debra Tebbs, owner of Cascade Sotheby’s International Realty in Bend. “So they’re pulling building permits.”

Much of the sales activity is a result of lower prices on upper-end homes, Tebbs said. Sellers that have listed homes for several years without any bites have been encouraged by brokers to lower their prices. That has created a buyer’s market for those who can afford to purchase.

Tebbs said she sold an Awbrey Butte home this month that had been reduced in price from $2.3 million earlier this year to $1.6 million.

“The high-end buyer is feeling like there is really good value out there right now,” Tebbs said. “I was showing a couple a home last weekend, and they said they felt like they had missed the bottom” of the market.

In NorthWest Crossing, construction and sales activity have actually been the norm throughout the recession.

The 42 building permits for new homes to date this year is on pace with the 53 issued all of last year, and 55 in 2010.

There have been 96 home sales in NorthWest Crossing so far in 2012, up from 71 all of last year.

Developers envisioned a slow, steady pattern for new home construction and sales when the properties in the mixed-used neighborhood first came onto the market in the mid-2000s, said Sara LaFaver, managing principal broker with The Garner Group Real Estate, which deals largely with properties in NorthWest Crossing.

The biggest challenge in the short-term could be a lack of space for new homes. Of the 752 platted residential lots at NorthWest Crossing, about 690 have homes on them, LaFaver said.

Developers are planning to push the boundaries of NorthWest Crossing further west, with plans in the coming years to plat new lots in the western-most part of the neighborhood, on land just north of Summit High School.

“We’re working on it,” Lafaver said.

Some Realtors aren’t ready to perform cartwheels over the recent figures, which are still a far cry from the frenzied pace of boom years between 2004-07.

But a drop in bank-owned activity and a rise in traditional home sales in the higher end of the market is a positive sign, said Linda Schmitz, a principal broker with Brooks Resources Realty, which lists properties in the North Rim neighborhood of Awbrey Butte.

Two homes are under construction there, and one was just completed. It’s the first building activity in the North Rim neighborhood in two years, according to Bend Community Development Department figures. Permits show the estimated project values for the homes at $551,510 and $376,834, respectively.

“Things are so different from the boom time, when people were just simply buying because they were concerned prices were going to keep going up,” Schmitz said.

“We’ve been talking about bouncing along the bottom for so long. Now there seems to be just that slight little bit of momentum and gains in terms of pricing. Values seem to be trending upward just a little bit.”

The USA Cycling Masters Road National Championships held in Bend in the past two years may have attracted more than just visitors.

They may have also attracted future residents, according to a study released by Visit BendTuesday.

Nearly 900 people participated in the road-cycling championships held Sept. 5-9, according to the survey conducted for Visit Bend and USA Cycling by RRC Associates of Boulder, Colo. About two-thirds of them completed the survey.

Approximately 97 percent of the participants came from outside the region, with the largest percentage of out-of-state visitors from California, followed by Washington. Nearly half of those surveyed said they would consider relocating to Bend.

“A remarkably high 47 percent of those who had participated in the 2012 Masters Championships or another previous event in Bend had considered moving to Bend or purchasing real estate in Bend,” the study said.

In 2009, Visit Bend released a comparable survey conducted on competitors in a USA Cycling championship race. When asked whether they would consider moving or buying real estate in Bend as a result of their visits for the championships, 9 percent of event attendees answered “definitely yes,” and 45 percent answered “possibly yes.”

Doug La Placa, Visit Bend CEO and president, said the 2012 survey took the idea of relocating to Bend a step further by asking participants if they had taken action to move to Bend.

The report said 68 percent had pursued the idea in one or more ways including: looking at or purchasing real estate, checking job postings and discussing the idea with friends and family.

In the next survey, La Placa said Visit Bend would like to add the question, “Would you relocate your business to Bend?”

Carolyn Eagan, business advocate for the city of Bend, said the research company may have thought the percentage of people who would relocate to Bend was high, but she thinks it’s the norm.

“These events bring people whose interest and hobbies are what’s in line and easily accessible here,” Eagan said. “But we find anybody who comes to Bend, whether it’s to ski or just enjoy restaurants and breweries, will say, ‘Wow, I wish I could move to Bend.’ ”

While many want to move here, she said, they often can’t, in particular because there aren’t enough jobs.

“There’s so much opportunity for Bend to attract good, smart, interesting people,” she said. “It’s my job to figure out how to create the jobs so those people can start moving here.”

Referencing the report, she said 27 percent of the competitors earned an annual household income of $200,000 or more.

Deschutes County’s median household income last year was $46,894, according to the U.S. Census Bureau.

The total economic impact of the USA Cycling Masters Road National Championships in Central Oregon was $1.27 million.

Competitors averaged a five-night stay, with the majority booking lodging in Bend. They spent, on average, about $115 per person per day, the survey said.

“The larger your city gets, the more you can offer to tourists,” Eagan said. “Adding residents increases activity in town, so that adds to the value of coming to Bend for tourists.”

The competition for Central Oregon rental properties is getting fiercer, as available properties dwindle and homes on the rental market consistently see multiple applicants.

That competition means many rental homes cost 20 percent more today than just a year ago.

Former homeowners who lost their properties through foreclosure or short sale are adding to the region’s tenant pool, driving inventory down and prices up, local property management officials say.

The Central Oregon Rental Owners Association last week released its 2012 rental survey. Its findings, compiled over the first quarter of 2012, showed that just 4.4 percent of the more than 5,700 rental units surveyed were vacant over that time, the lowest rate since the real estate market crashed in 2008.

In addition to low vacancy rates, the 2012 survey showed price increases in rental homes over the last year, and slight jumps in apartment rents.

Of the 940 three-bedroom houses surveyed in Bend, for instance, rent averaged $1,231 so far this year. In 2011, rent on a three-bedroom home was $1,012. For a four-bedroom house, average rent jumped from $1,255 in 2011 to $1,489 this year.

Those increases can be attributed to a growing demand for rental houses — a demand that is outpacing apartments for the time being, said Kevin Restine, president of the rental association and general manager of Plus Property Management in Bend.

As foreclosures and short sales push more families out of their homes, many are looking to move into rental houses instead of apartments, because a house is what they’re used to, Restine said.

As a result, demand for rental houses has shot up each of the last few years, and prices have followed.

The rental market “will continue to be driven primarily by the foreclosures” that are still taking their toll on the for-sale market, Restine said. Though the number of default notices in Central Oregon is down notably from 2009 and 2010, “I think we’re going to continue to see people lose their homes, and continue to see people that used to be homeowners become tenants.”

The annual survey covers prices and vacancy rates for apartments, duplexes, triplexes and homes in Bend and other Central Oregon communities.

The whole region’s 4.4 percent vacancy rate is down from 5.2 percent last year.

As recently as 2009, more than 12 percent of Central Oregon’s rental properties were vacant.

Area-specific

Today, rental companies like Austin Property Management say up to twice as many prospective renters are coming through the door than in the years leading up to, and immediately after, the 2008 real estate crash.

Particularly on Bend’s west side, competition for apartments and rental houses is driving prices up, said Stephanie Kramer, co-owner of Austin Property Management.

“It’s area-specific,” Kramer said of price increases. West Bend rentals “are higher in demand than the east side, which is why we haven’t been able to raise (prices) as much on east-side properties.”

Across the board, most types of apartments have gotten a bit more expensive over the past year. A one-bedroom apartment in Bend averaged $549 in the first quarter of 2012, up from $521 last year.

Other units saw increases in the $10- to $30-a-month range.

Competition for apartments is just as tough as for rental homes, said Andee Jessee, co-owner of A Superior Property Management Co. in Bend.

“I would say there’s just more people moving to the area,” despite the recession, Jessee said. Her company is seeing multiple applicants for most of its rental units. When demand is as high as it is, she said, companies can get away with price increases.

In-migration

Kramer with Austin Property Management guessed that 50 percent of the prospective tenants coming through her company’s doors are people considering moving into the area — most of them from California.

A lot of those new residents seem to be looking at rentals instead of purchase properties, she said, adding that the trend could be a case of housing market jitters keeping them from jumping into an investment like buying a home.

“A lot of people who have the money (to buy) are just renting, because they maybe want to check the area out for a year or so,” Kramer said.

Restine with Plus Property Management pointed to a 6 percent vacancy rate as healthy for the local market. Anything significantly higher means property owners aren’t finding qualified applicants.

But when it’s lower, like the current vacancy rate at 4.4 percent, renters can hit the point where they’ll need to rely on new construction to replenish supply.

The low vacancy rate “could motivate people to build,” spurring demand for new construction, he said.