For the first time, the Pulte Homes brand is appearing in the local-builder dominated Portland, Ore. market.
The builder recently bought 88 finished town-home lots in Tigard. The development, to be called Summer Creek, is on the west side of Washington County, two miles from Washington Square Mall. Sales are expected to start in January.
While the Pulte name is new to the market, the PulteGroup's Centex brand, which was merged into the company in August 2009, has been in the Portland market since 1992. Indeed, a presence in the Pacific Northwest was noted as an advantage Pulte would gain in the merger.
PulteGroup's Centex-branded product, with 113 closings between 2009 and Aug. 2010, was the No. 8 builder in the Portland-Vancouver-Beaverland, OR.-WA. MSA, according to Hanley Wood Market Intelligence data. The only other large public production builder in the area is D.R. Horton, which was No. 1 in the market, closing 426 homes in the same period,
Still, it's a market that has favored smaller builders. There were 273 builders in the area that pulled just one permit in 2009 through August of 2010, according to Hanley Wood Market Intelligence. Of the 766 builders in the market, 756 built fewer than 76 homes during that time frame.
Still, PulteGroup has confidence that the Pulte name will continue the success the Centex products started.
"This is a market we have experience in and are comfortable in," said Jacque Petroulakis, a PulteGroup spokeswoman. "One thing we definitely value is the long-term relationships we have in the Portland area with local municipalities, subcontractors, local land developers, etc."
So comfortable that PulteGroup is looking to expand more in the area. "We are definitely looking at the best opportunities in the Pacific Northwest for all our brands--Centex, Pulte Homes and Del Webb," she said.
Historically, Portland has not been ideal for large national home builders. It's a relatively small market with anti-sprawl land-use policies that make it difficult to assemble the large tracts of land national builders often seek. Though, with the market's retraction, more builders are looking for smaller tracts in prime selling areas that they can turn into cash quickly.
While small, the Portland market has some strong positives. While home permits have fallen to less than a quarter of the 17,251 issued in 2005 in the MSA, median home prices have barely budged compared to other national markets, moving down only 19% from a recent high of $295,200 in 2007 to $238,500 in 2010, according to Hanley Wood Market Intelligence data.
Single-family permits issued this year are expected to end the year up 36% over 2009. Multi-family permits, however, have taken a dip and are expected to be down nearly 6%. Total home permits are expected to be up nearly 26% to 5,050, according to HMI.
Unemployment remains at a historic high, significantly impacted by the fall in construction jobs. However, over time, it is expected to rebound, driven by the technology-based companies, such as Intel, with a strong presence in the area. Healthcare, too, is a strong employer in the market, as is Nike.
"Our (PulteGroup's) combined segment and brand diversity, streamlined operations and dedication to customer satisfaction allows us to capitalize on the opportunities in homebuilding that are now becoming visible on the horizon," Petroulakis said.
Learn more about markets featured in this article: Portland, OR.