Real estate in East Pasco takes off as new home prices approach $400,000

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Two homebuilders are drawing attention to East Pasco not as a center for warehouses and food processors, but as a hotspot for new homes at above-average prices.

The two developers — Ramgar Homes and Empire Bros Construction — are building homes priced at nearly $400,000 near East A Street and Heritage Boulevard, which border the community of Tierra Vida to the west.

The Broetje Family Trust created Tierra Vida as a community-focused mix of single and multi-family units that support workers on its orchards. The area has been a destination for modest housing since at least the 1990’s, when the Pasco Processing Center brought food processing jobs to Pasco.

The $400,000 price tags are a tipping point for the region, said Pasco commercial development director Mike Gonzalez, who said the recent wave of commercial development — Amazon Inc., Darigold, Reser’s Fine Foods, Local Bounti — is changing the narrative that East Pasco has is an undesirable place to build and live.

“I think smart developers know there’s going to be housing needs in terms of proximity,” he said.

Builders see opportunity in an overlooked area.

“Pasco will no longer be the low-income home it used to be,” said Hilario Zaragoza, owner of Empire Bros, which has 19 lots in development. “It’s getting where the people of East Pasco want to be.”

The demand is there

Empire builds smaller homes starting at $358,000. He said his homes are all speculative, “nothing special” and they will be sold before they are finished. The most recent was sold for $360,000 in May.

Ramgar, a new company led by Jose Ramirez, is aiming for a slightly higher price point by looking for quality features and starting prices close to $390,000. It is building 14 homes on a three-acre lot it purchased from the City of Pasco and subdivided.

The first three are complete and will be selling within days for prices ranging from $389,000 to $399,000, said Kimberly Rose of Kenmore Team, the real estate firm representing Ramgar.

Ramirez said his agents were initially reluctant to test the $400,000 waters, but he insisted.

Rose acknowledged that realtors don’t like to be first. In the Tri-Cities, new development has focused on the west side and skipped the east, she noted.

She’s pleased with how well the project has been received, and said once the dirt moved, she asked herself questions on a daily basis.

“This is a niche market that hasn’t been touched yet. Our area has focused on growth toward the west side.”

The city’s Gonzalez said the small developments are the vanguard of a transformation coming to East Pasco. Land is not as scarce there as elsewhere because of the stigma attached to the area.

He predicts this will go away as developers see success. The Columbia River and Sacajawea State Park are both nearby, as is Interstate 182, which ticks some of the boxes homebuyers are looking for.

“I’m really excited,” he said. “East Pasco will be a very desirable location. It will be a place where people want to live.”

Dave Savior, President of Savior and
Co | Sotheby’s International is not surprised that development is beginning. His company is not involved in either project, but it will represent a separate developer, JMS Development, as it builds homes and businesses in nearby Osprey Pointe in the years to come.

The entire region lacks lower-priced homes, with only 41 listed for $375,000 or less across the region as of early June, according to Retter’s database. That’s a problem.

“Not everyone wants a million-dollar house or can afford one,” said Retter. “We have to find a way to build affordable.”

“Game Changing Project”

Rangar’s 14 house subdivision near East A Street, called East Franklin, is the first project for the company and its owner, Ramirez.

A Vancouver, Washington native, relocated to the Tri-Cities during the Great Recession while working in the mortgage and finance industries. His financial background sparked his interest in real estate.

He moved to Pasco and loved the low cost of living. He puzzled over the area’s reputation, which the residents loved. He was looking for a site to realize his home building vision and thought he would build one house at a time, or maybe two, and started the process three years ago.

He planned to build $275,000 homes in $230,000 neighborhoods – above average quality, but not outrageously above average.

“I’m going to build a groundbreaking project in an area where you don’t see our product,” he said.

He landed on the vacant three-acre lot and bought it before news of Amazon’s plans broke. The e-commerce giant is building two massive warehouses less than a mile away that will employ more than 1,000 people.

The three-acre site presented a challenge. Instead of building a single home, he was faced with Building 14, and the roads, utilities, and other infrastructure work to support it.

He hired his brother-in-law, Juan Ochoa, owner of Skills Development, as a partner and project manager to help him with this daunting task. Lauriano Garcia, land developer, completes the team.

The Covid-19 pandemic halted their work for a year, but Ramgar secured approval for a subdivision along with Key Bank funding. Ramirez made real estate his full-time career and used his 401(k) to support himself and his family until it paid off.

As the pandemic progressed, construction supply costs rose and the $275,000 price target faded.

By the time the team was ready to build the first three homes, with models named La Niña, La Pinta, and La Santa Maria, materials and home values ​​had skyrocketed. Lumber costs increased from $17,000 to $57,000 per house.

“We had to deal with that,” he said. Fortunately, from a seller’s perspective, real estate values ​​also rose. The median price in the Tri-Cities rose to $441,000. In East Pasco, it was $325,000 in May, according to the Tri-City Association of Realtors. The seven East Pasco homes sold in May stayed on the market for an average of just two days.

Though East Franklin was priced above its neighbors, 30 potential buyers lined up for the first three homes, many with families already living in the surrounding neighborhoods.

Ramgar’s next project will be at West Court Street and 42nd, where he recently purchased a 6-acre lot and will remodel an existing home and build eight more.

It will not develop the three-acre site adjacent to the current project. While Ramgar paid $179,000 for his property, Ramirez’s neighbors said they wanted $1 million.

“I’m not paying a million dollars,” he said.

Empire Bros.’ Zaragoza moved to East Pasco for similar reasons.

He founded the company in 2018 after a decade in the home construction industry. East Pasco comes into its own, he said.

“People are looking for it. It’s a desirable area, not like it used to be,” he said.

Ron Almberg, president of the Tri-City Association of Realtors and broker for Keller Williams Tri-Cities, said few builders are focused on the lower end of the housing market. Outside of East Pasco, new homes can start at $413,000.

“Good luck finding a new build that costs less than $400,000,” he said. Still, he thinks Pasco’s east side could rise.

“This whole area is going to change and it’s going to be a lot more desirable to live over there,” he said.

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