Homebuilder Bets on Market turnaround

Workers with RK Concrete Construction work on the foundation of the first of several upscale homes planned in the Sea Crest community in Otter Rock. Builder Kevin Kass and his wife, Roseanna, say building a home on speculation is a risk, but they are confident the market is returning for such homes. (Photo by Larry Coonrod)


By Larry Coonrod Of the News-Times  

NEWPORT-- "I love the smell of concrete in the morning," says homebuilder Kevin Kass as he watches a crew from RK Concrete Construction finish pouring the foundation for the first of 10 high-end homes in the Sea Crest community at Otter Rock. 

 Since hitting a  high of $270,000 in 2007, the median sale price of Lincoln County homes has fallen to $190,000. Some homes have recently sold at or below their tax assessed value. So what makes Kass, his wife Roseanna and their Oceanquest Homes land partner confident enough to build a $465,000 home on speculation with the hope of preselling more? 

 "We think because there hasn't been a whole lot of new homes built on the coast in the last few years that there is a pent up demand that is slowly going to start to take off. Realtors are seeing an uptick in phone calls. Inventory is going to start to become an issue for people who want an ocean view," Kevin Kass said. "Right now the market is right, the interest rates are right. Everything seems poised to start a comeback. But it's still a risk." 

County building permits support Kass' optimism. In March, the county issued 37 building permits, compared to 23 in March 2012. In another indicator of increasing building activity, the county issued 21 septic tank permits in March, compared to just six in March 2012 and eight in March 2011.
 
"We're not going to go crazy ," Kevin Kass said. "We'll build one spec house and see what happens. We feel confident we will sell that, and then we'll get a couple of more started." 

 The Kasses discovered Newport on a trip to the Northwest four years ago and built a home in Sea Crest with no intention of living there permanently. Now that they've adapted to the rain, the couple say they have no plans to leave.

"We were moving to Austin, then we came back from a trip and realized this is where we need to be," Kevin Kass said. "When we first moved here we had eagles in the trees and whales in the cove. I tell my friends back in Arizona that it's like the Discovery Channel ." 

 The ambitious project to build 10-12 homes in the exclusive Sea Crest gated community has the financial backing of Oregon Coast Bank.
 
"The nice thing about Oregon Coast Bank is that they work with the buyer and do a construction loan and then roll that into a permanent loan when the house is finished," Kevin Kass said. "They also work with me as the builder. They will do the inspection and make sure the funds are being allocated for the project while watching out for the buyer and making sure permits and inspections are done properly." 

Bank president Fred Postlewait said the bank first worked with the Kasses when they built their Sea Crest home.
 
"We are actively doing a few homes now. We think he's a quality builder and like the project, so he ended up being our first spec home in quite a while." Postlewait said. "In our part of the world, we still have people who want to retire and live in nice homes."
 
 Although hesitant to say the market is recovering, Postlewait said the bank is seeing more building activity since the recession hit in 2008 than it has in four years. 

 "I think people are tired of being in a recession," he said. "There are a few homes being built. It's an important part of what we do in the community, so we're looking forward to it".


Kevin Kass started out building nightclubs 37 years ago and went on to specialize in building million dollar luxury homes selling for more than $1 million in Albuquerque, N.M., Scottsdale, Ariz., and Las Vegas. Kevin and Roseanna operate as design-builders, customizing everything from floor plans to interior design. 
"We can offer total flexibility in whatever they want," Kevin Kass said. "We have plans where the lower level can be a great room, a gym, a movie or sound studio, anything the buyer wants." 

 Oceanquest Homes has 10 and possibly 12 hillside lofts. Kass designed the three-level homes to have sweeping views of the ocean. An elevator in each house will take residents from the garage to the top floor. Building on the steep hillside to meet geological permit requirements comes with unique challenges such as building buttress walls to hold back the hill. The first home's foundation took more than 100 cubic yards of concrete.
 
Kevin Kass designs the homes with a retro-modern midcentury look with 15-foot vaulted ceilings and open floor plans. The Kasses say the market for their mid-sized homes are empty nesters like themselves looking to downsize but still wanting all the amenities. 

"A lot of people are starting to downsize," he said. "They want this atmosphere and are willing to pay a little bit more for it because they want the amenities. If it's properly designed, 1,800-2,100 square feet of open planning can live like 3,000 square feet because you are eliminating a lot of portioning of walls." 

Kass says buyers looking to move out of California are going to zero in on the Oregon coast as one of the last remaining places where an ocean view is relatively obtainable. The houses he plans to build could run north of $3 million in California. 

 "We don't want them all to move here, just 10 or 12," Roseanna Kass says with a laugh.
 
 Depending on just how many amenities a buyer wants, Kevin and Roseanna say the homes will sell for $465,000 to $750,000.


Oceanquest Homes makes an effort to hire mostly local construction contractors if they offer a competitive price. 

"Appraisers still aren't offering those good appraisals on homes because nothing has really sold in the last three years," Kevin said. "So we have to be very competitive and keep our numbers down."
 
Oceanquest Homes plans to finish construction on its first home by August. In the meantime, the company plans to set up a showroom in Depoe Bay at the corner of Highway 101 and Bay Street.


"The bottom line is I'm taking a risk," Kevin Kass said. "I'm saying to myself there is going to be a market here. We believe that." 

Contact Assistant Editor Larry Coonrod at 541-265-8571 ext. 211 or email larry@newportnewstimes .com.
Close Window