| FEBRUARY
7, 2007
By the end of 2006, the housing market
in some parts of the metropolitan area and in Bend didn’t
feel much like it did at the beginning, admits Renaissance
Homes President Randy Sebastian looking back on a year
when it seemed like there was a steady drum beat negative
news about the new home market nationally.
Still, Sebastian’s Renaissance
Homes had its biggest sales year ever, selling 307 homes
and nearly doubling the 165 homes closed in 2005 and
Sebastian was forecasting big things for 2007. “First
of all, it’s important to realize that the reports
of a slowdown came from national sources and there were
definitely parts of the country where things cooled
dramatically. I have builder friends around the country
who said things just shut off,” said Sebastian.
But, they didn’t have an Urban
Growth Boundary controlling the supply of land available,
pointed out Sebastian, who said that the more desirable
locations in Portland were relatively unaffected because
the UGB governs the amount of housing coming on line.
“The better close-in west side
locations cooled a little but remained good throughout
2006. Family-sized homes on large lots in good close
in locations continued to sell, just at a more normal
clip. The red hot market cooled off a little even here.
That overheated market wasn’t good for builders
or for the public and, at least for us, things have
returned to a more normal situation.”
Renaissance and other builders have
reacted to the more normal market by concentrating on
pre-selling their homes and by more competitive pricing
and marketing techniques.
Sebastian’s recently announced
incentive program offering a new Mercedes Smart Car
at some of his neighborhoods with move-in ready inventory
may be the most visible and aggressive move in that
direction, but most larger builders have added “sweeteners”
of some sort to parts of their inventory, he said
Overheated markets hurt home affordability
and, during the last couple of years, “investors
were buying unfinished homes, jacking up the price and
reselling them causing rapid home inflation. We didn’t
sell to investors, who have left the market now. Our
competitors who built expecting investors to take a
lot of their inventory were left with a lot of finished,
unsold homes.”
Sebastian believes that a slower market
benefits Renaissance because “we put more high
end finishing touches into our homes. When people begin
to look more closely at the product, we compare very
favorably to the competition out there.”
Because Renaissance sells into the high end ($300,000's
to $900,000's) end of the so-called “production”
housing market, Sebastian said his customers also are
less likely to cyclical. “Most of our buyers may
be a little more affluent than customers at a lot of
Portland’s other large builders which means that
if they want a home they can go out and buy one,”
Sebastian said.
As with other builders, Renaissance
said Portland’s close-in west side locations and
pockets on southwest Washington remained strong during
2006 while southeast Portland’s Happy Valley slowed
down more. In late January, Camas and Salmon Creek near
the confluence of I-5 and I-205 near Ridgefield remained
active while Vancouver slumped. Overall, southwest Washington
had a 14 month supply of homes for sale while Portland’s
west side had seven.
Bend, where Renaissance announced a
major commitment during the year, also saw home sales
decline as new home prices skyrocketed, propelled by
the 36 percent annual inflation–2nd only to Naples,
Fla.
“Last year may have been an inopportune
time to enter the Bend market. It may take 12 or 18
months to come back, but the buzz on Bend is still there.
Prices, including ours, have dropped a bit there and
people don’t know what’s going to happen.
There are plenty of lookers, but people are waiting
to buy,” Sebastian said.
As for 2007, Sebastian is predicting
Renaissance Homes will sell 400 homes. While interest
rates may go up a bit, he pointed to improvements in
the overall national economy, continued job creation
in Oregon and indicators that even the the national
housing market may be turning around.
Here, he is betting on the strength
of some of Renaissance new neighborhoods.
The firm has neighborhoods underway
in some of the area’s most popular west side spots–West
Linn, Wilsonville and Sherwood–, has available
home lots on one of the area’s only actively selling
golf course communities–Tukwilla on the Oregon
Golf Association golf course between Aurora and Newberg
and just announced opening of sales at Pacific Crossing
in Forest Grove, near the Pacific University campus.
The firm’s Rosemont Pointe in
West Linn sold 20 homes during the first three weeks
in January and there were 14 reservations in the 300-home
Pacific Crossing, historically Forest Grove’s
largest residential development in at least 20 years
and currently Washington County’s biggest.
Sebastian also pointed to eight reservations
before the model was completed at The Lakes, an upscale,
gated townhome community in Vancouver’s Fishers
Landing area and four reservations the first weekend
at Hunter Ridge in Camas as fueling his optimism for
2007. The Lakes is based on Peterkort Woods, the firm’s
popular upscale townhome neighborhood off NW Barnes
Rd at NW Valeria View Rd.
“I know this may sound like sales
hype, but I really think the signs all point to a very
soft landing here for the housing market. I think 2007
will be a banner year, at least for us,” Sebastian
said.
Renaissance Homes
16771 Boones Ferry Road
Lake Oswego, Oregon 97035
Voice: 503-636-5600
Fax: 503-635-8400
Emergency Service: 503-496-0711 or 866-567-6225
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