Real estate market booms in Sisters

Construction and real estate sales are booming in Sisters -- and inventory is shrinking. photo by Jim Cornelius

While home prices skyrocket in Sisters, Realtors struggle to maintain enough inventory.

Sisters has attracted national attention in two different sources this last month. A feature on Sisters appeared on the front page of the travel section in The New York Times. Then Sisters was listed in a top ten of emerging second-home markets on the internet at MSN Money.

Regardless of the recent recognition, Realtors agree that property is already scarce in Sisters.

"Over the last 20 years, demand has slowly eaten up lots outside of the urban growth boundary in Tollgate and Indian Ford and Black Butte Ranch and Crossroads. In places that were previously developed, those lots are quickly disappearing," said Rad Dyer of Ponderosa Properties, LLC.

The amount of public land in the Sisters area puts a restriction on the availability of private land.

Mike Reed of Reed Brothers Realty agreed, "Everybody's running out of inventory. I know that. We're seeing Bend Realtors come out here with their clients trying to find something."

Peter Storton of RE/MAX Town & Country Realty said that in 2000 there were 51 sales in the Tollgate subdivision and in 2003 there were only 20 sales due to lack of inventory. Fortunately for sellers in Tollgate, "everything is selling within 98 percent of its listing price," said Storton.

Housing and acreage has seen dramatic appreciation in the last five years here in Sisters. According to data obtained from Ponderosa Properties, the average house on a lot sold for $260,013 in 1999 and by 2003 it averaged $317,400. In 1999 a land sale in Sisters averaged $99,865. Last year it averaged $154,304.

The only region with higher average sales amounts in Central Oregon is Sunriver. Last year the average home in Sunriver sold for $363,488.

Home sales have been moving at a brisk pace in the Sisters area, despite a slow economy.

"In my experience and the company's, this year our closed sale volume is double any preceding year that we've ever had," said Dyer.

Storton said sales were brisk, but would be more brisk if the inventory was available.

"This week especially (March 22-28), we get a lot of people coming through the door and they get excited and see this little town and think what a great place to live," Storton said.

Several factors fuel this hot real estate market. One is low interest rates.

"I've been in the business for almost 30 years and they've (interest rates) never been as low," said Dyer.

Reed offered the insight that after the stock market crash, "people are revisiting their investments and understanding that there's more than one option of where to put one's money and it's a safe investment."

Real estate is the only sector of the economy that was really thriving in the down time, Reed said.

According to Reed, 80 percent of the buyers are second-home buyers from Portland.

Dyer has noticed a different trend at Ponderosa Properties:

"A third of our business comes from locals in the community moving around. About a third of our business comes from the Willamette Valley. A lot of that is vacation ownership." The last third of Ponderosa Properties' buyers are split into people from Washington, California and "anywhere in the world."

At RE/MAX, most of the buyers are second-home buyers from the Willamette Valley.

Sisters could see a more diverse influx of buyers in the future due to the recent publicity.

"The phone rang the other day ...and it was a lady from Florida who'd seen the article in The New York Times and was asking questions about Sisters and thought it might be a good place to invest," Reed said. "She said she was in a position to spend upwards of $2 million. I would imagine that as widely read as that paper is, that it's going to have an impact," said Reed.