Monday, May 7, 2007

Measure 37 spawns 1,000 Year Reich

Quite a bit to cover, so here we go.

First, the Columbia Air "premonitions" I've had in the past 6 weeks came true. The 6 week cutoff for the "4-6 week temporary" layoffs came & went last week. I sent a gentle reminder to the Bulletin early in the week, and lo & behold they actually followed up with a short piece, "Decision due on Columbia staff" (subscription req'd.). Some sort of status report from the company officials is supposedly due Monday, May 7. I adhere to the adage, "Fool me once, shame on you. Fool me twice, shame on me!". Don't hold your breath if you think you'll be back on the line Monday morning. Or next week... or the week or month after. "Temporary" layoffs have a weird way of becoming permanent.

On Apr 29 the Bulletin ran a story, "Job growth or tough times ahead?". There are several items of interest in this piece, which essentially is a state mandated report written to figure out how much land Bend will need in the coming decades to accommodate growth. The bottom line is we'll need a square about 1.5 miles on a side. This is ridiculous! We need many times that much! We need many times that TODAY! In 20 years, we will probably need a mile wide strip running all the way to Redmond, half way to LaPine, out to Tumalo and halfway to Brothers.

The assumptions made in the report are custom taylored to retaining Bend as a Big-Fish-In-Small-Pond Boss Hogdom, with real estate and leisure holding sway over our economy. For them, if Bend grows (they perceive) their industries will die. Of course this is short-sighted idiocy. They want Bend to be Aspen II -- a tiny postage stamp of a town with outrageously priced RE inhabited by the Super-Wealthy. "Big Bend" would make this impossible in their eyes.

Surprisingly, EDCO chief Roger Lee seems to understand this:

Bend already has waited so long to create new, usable industrial land that soaring land prices - fueled by the shortage - and physical constraints are putting a crimp on growth, Roger Lee, executive director of Economic Development for Central Oregon, said Thursday.

The problem has reached the point where a significant number of existing industrial businesses - everything from cabinetmakers to tarp manufacturers - either are looking to other cities in Central Oregon for expansion or they are moving out of the area altogether, Lee said.

The city has said it wants to attract a collection of clean, high-paying industries, according to the Leland report, including more information technology companies, aerospace and aviation manufacturers, renewable energy companies, higher education and health care.

But if current trends in the city's existing industrial base continue to slide long enough, Lee said, it could give recruiters another potential handicap to go along with the city's relatively high land prices and high housing prices - a shortage of basic suppliers to do everything from industrial-grade recycling to cleaning uniforms to keeping the pop machines filled.

In other words, the city, from Lee's perspective, is "at a crossroads."

"I wouldn't say we are looking at a mass migration," Lee said, "but I would say you are going to see more and more of that in the making - a growing wave of companies that physically can't find a place to be. And, cost-wise, it doesn't really make sense to them to stay."

I would agree, we're at a "crossroads", but I disagree with the mass "out" migration. I think we are on the cusp of a mass exodus of our industrial base. And retail. And much else. Mr Lee seems to understand that high prices are a "deal killer" for Bends industrial base, but in a recent talk to Women Realtors, "EDCO chief shares rosy outlook for area growth", he "bets the audience" $10 that Bend RE prices will not decline appreciably.

This is a sort of strange conviction. Knowing that high land prices & shortages are going to kill this place economically, yet stating in front of whose livelihood is directly linked to the RE industry that he doesn't think it will go down. He's the executive director of Economic Development for Cent OR, and he's betting that the primary force retarding growth here will continue... and sort of making a "symbolic gesture" that he hopes growth WILL NOT HAPPEN. Not good.

Next, I've always disliked how the quarterly PDF summarizing the Cent OR RE prices & volumes gave cumulative YTD stats. It is possible to "back out" the quarterly data, and I had some time, so I did. It's here:

Points of interest: The absolute top AVG price was $416,733 in Q3 -2006. The most homes sold in a quarter was 830 in Q3 - 2005. The highest dollar volume sold was $285.3MM in Q3 - 2005, Q1 - 2007 was $162MM. The highest YoY growth in AVG prices was 30.92% in Q1 - 2006, while the highest YoY growth in total dollar volume sold was 67.63% in Q2 - 2005, and much of the surrounding time periods were close to this. The highest quarterly YoY gain in AVG prices was 10.01% in Q2 - 2004.

It is impossible to tease out the medians, but dividing the quarterly AVG prices by the cumulative MED's yields a AVG-to-MED premium of about 19.7% for the Q2/2002 - Q1/2007 time period. Like many RE stats, this one fluctuates fairly significantly, but it does exhibit a generic falling trend over the past 5 years. What does this mean? Well, it's only really fair to say that "big deals" were relatively more prevalent with respect to the "Average Joe" deal 5 years ago. Maybe you could say the big guys bought in back then, or that the average buyer plowed into lower priced properties recently... who knows. Stats like this can back many political leanings, something I'll leave to the reader.

Finally, I posted about the almost comical supply situation coming online in Crook county. With all the subdiv's and stealth subdiv's (ie: Destination Resorts) coming online in Prineville, I calculated a 75 year absorption period. I and others find this sort of pie-in-the-sky buildout to be slightly comical. But apparently Prop 37 knows no bounds in inflicting delusions of grandeur on otherwise normal people. The Prineville Crapfest ranks about a "4" on the schitzoid-embolism scale, while Hitlers 1,000 year Reich probably ranks a perfect 10.

"Big plans for tiny Ashwood" shows that taking leave of your senses is not a disorder limited to us Big City Whackos! There is a family with about 10 square miles of land practically surrounding the micro-town of Ashwood, OR., population 120. They are filing a Prop 37 claim to build a few homes, 5,500 to be exact. Now the math on this is pretty straighforward, and even optimistic forecasts show this urbanizing of Ashwood might take awhile.

The previously mentioned report for projecting Bends UGB shows a state forecast of about 2.2% for Bend, which is a 40% premium for the state at large. This boils down to about 1.6%, but let's assume the vast & fine amenities of Ashwood, such as dirt & oxygen, push this up 20% to about 1.9%. Further assuming that Ashwood is a fine middling city of families with husband, wife, and 2.2 kids gives a current home count of 28.6, which we'll round up to 30.

Now for the pesky business of ramping up Ashwood from a wide spot with 30 homes, to a decent sized town with 5,500 more homes at a decent clip that is 20% above the state average. The math on this gives a time-to-absorption of:


So we do have a new winner in the Prop 37 Schzoid-Embolism Megalomaniac Delusion of Grandeur Bake-Off! I won't give names, but they are available in the Bulletin piece. I believe that Adolf Hitler may well stay at the top of the All-Time standings, whose "1,000 Year Reich" happened to crumble in about 1% of his estimate date to total absorption, but luckily lawyers have drafted a solid land-use compensation law that we all voted for. Is there anything lawyers can't do? They really are heros. They can even draft proposals that make ordinary ranchers believe that they can finish a real estate buildout that, if it were started in the year 1740 (I do not believe we were a "country" at the time, so it is possible that the King of England would have had to pass such a law), would just be finishing up today! Good job state lawmakers!

P.S. Ashwood DOES hit it's 1,000 year goal at a 0.5% yearly growth rate, which may well be closer to reality. So when people ask you where the next Hitleresque-nutcase might come from, you can proudly say, "OREGON!"


Anonymous said...

I can only think these Prop 37 lawyers are charging these ranchers by the hour. No sane person would want a piece of this action!

barton said...

I really thought you'd miss the mark on that Columbia Air "layoff". I really thought it would be temporary.

Another victory for the Kool-Aid Theory of Bend media. Unfortunately.

Anonymous said...

I read that Ashwood piece. It sounded reasonable while I was reading it. Now it sounds sort of stupid.

IHateToBurstYourBubble said...

You, my friend, are the victim of Kool-Aid coma-fication, an affliction with symptoms similar to meth addiction: The almost total inability to think clearly about anything because your brain is receiving but one signal: MORE!

Bubble-Think RE "dealers" don't want you to think about anything but RE, just like your basic meth dealer. Teeth rotting? Screw it, GET METH! Too many homes now? Screw it, BUILD MORE!

Neglecting all else in your financial life is the ultimate goal of the Bubble Dealers. All else should be sacrificed, including the ability to ultimately get more RE by way of a regular income. But just like meth addiction, RE Bubble addiction does not make one whit of sense. The dealers know you "can't last" as an addict, so their only goal is to milk what they can out of you until you are financial corpse, and then move on to the next cash-flush addict.

This Ashwood guy "can't last". Anyone with half a brain can see that. But the economics of any bubble transforms its participants from normally rational people, to complete nuts, without even the most fundamental ability to think clearly.

Boss Hog doesn't want you to think "reasonably" about RE, just like meth dealers don't want you to think about what your ultimate destination is on the road to meth addiction. It's DEATH, the first is financial the second is physical.

Even Roger Lee can't think rationally about it. He knows it's killing Bend, but he still "bets on it". This is a town sacrificing its soul to real estate, and we should not expect an outcome one bit different from what a meth addict suffers: DEATH.

Granted, it's an economic death, but it is so much more insidious because it will affect so many who have not "chosen" this path, unlike meth addicts. We are throwing every nickel ito pumping up Bends RE-meth-addled corpse and neglecting everything else.

"Clean Industries", Roger Lee? Why don't you actually try to BUST THE ADDICTION (Bends land shortage & ridiculous prices), instead of betting on it?

Anonymous said...

Let's face it. Central Oregon is an economic wasteland. There's a lot of pipedreams, but very little serious effort to getting high-paying jobs in here to support the real estate boom.

If you homeowners want to keep your prices up, you can forget about the builders and construction people and furniture stores an Realtors. They can't help you anymore. You need to get a Toyota factory or something in here.

Anonymous said...

Can't have high paying jobs or normal paying jobs with RE froth being what it is. Just can't do it with the law of large numbers and no wages affordable to the working class here. As Paul likes to say Boss Hog got his cake and wants to eat it too by being the big fish in the small pond.

Anonymous said...

IHateToBurstYourBubble said...

And just in case there was ANY doubt that David Lereah was a paid whore for the Nat Assoc of Realtors:

Housing cheers turn gloomy
Long criticized as too upbeat, Realtors' departing economist now sees recession

In characteristic cheerleader style he demurred when asked whether he ever felt pressure from within NAR to skew forecasts in a positive direction.

"You'll have to talk to me about that in two or three weeks," Lereah said. "I work for NAR now."

Yeah, that's a flat out admission that he was a paid liar by the very people supposed to give you advice about buying or selling a home.

Realtors are going to have to do a lot to salvage their sleazy reputation... if salvaging it is possible.

IHateToBurstYourBubble said...

It appears Clives inventory counter has broken. The scourge of a redesign at caught up with him. There is still an overall number of homes in the results, but not stratified by price anymore.

There are 2,218 properties under a "Bend" search today (Apr 7). The all-time high was 2,238, so we are over 99% of this figure.

Clives last date that I have on a spreadsheeet is 2,086 properties on Apr 14, with 132 properties added in the intervening 23 days (or so), or about 5.74 new listings per day.

At this rate we should see an all-time inventory high this week.

IHateToBurstYourBubble said...

I'm looking at David Fosters April summary, and I still believe the most important stat is months of inventory, at least for some idea of what the future holds.

If you look at his year-end summary, you can see that April 2006 really began the big move up in inventory numbers that culminated in the almost unbelievable near quadrupling in inventory by Aug. Oct 2006 was probably the worst of it (so far) with almost exactly a year of inventory. As I said earlier, we're right at 10 months now.

I'm curious where people think inventory will max out at? If past is prologue, and you extrapolate the current 1,373 number growing by the astounding 157% it grew from Apr 2006 to Aug 2006, you get a whopping 3,500+ properties.

That seems pessimistic. But something in the neighborhood of 1,000 new listings does not seem completely absurd. If you look at the 2005 to early 2006 data, inventory numbers stayed in the high 300's range, and 1,454 properties for sale probably sounded insane. But we did it. In 6 months.

I'm not sure what will happen, but a 2,500 home inventory count seems within the realm of possibility, and if sales stay here in the low to mid 100's, we could have 18 months of inventory by late Summer. That will be a complete disaster.

Anyone have any guesses/ideas?

Anonymous said...

Sorry but I couldn't help it... Ashwood, OR having a big build out, give me a frickin break, did anyone bother to look and see where this was on a map. I mean so what's the commute to the metropolis of well paying jobs that Bend can offer all the soon to be citizens of Ashwood about 80 miles. Sounds great at $4.00 a gallon maybe they can all drive hummers and escalades. Kool-aid mmmmm good.

Bend Economy Man said...

Unfortunately the reaction of a lot of people towards the end of this bubble is to spin the wheel just one more time and bet everything on red.

For a lot of people in Central Oregon, a real estate payday is the only big payday they're ever going to get.

That's right - the lottery and real estate. How else can you get rich in Central Oregon? They probably don't realize that their last-ditch attempt to squeeze some money out of the boom or land a few of the increasingly rare rich-and-naive buyers is just making matters worse.

Anonymous said...

Inc. Magazine places Bend in Top 10 list

By David Fisher / The Bulletin

Inc. Top 10 Inc.'s Top 10 Cities for Doing Business
1. St. George, Utah
2. Yuma, Ariz.
3. Prescott, Ariz.
4. Cape Coral-Ft. Myers, Fla.
5. McAllen-Edinburg-Mission, Texas
6. Naples-Marco Island, Fla.
7. Las Vegas-Paradise, Nev.
8. Sarasota-Bradenton-Venice, Fla.
9. Morgantown, W. V.
10. Bend

The bloom may be off Bend's real estate rose, but its economy is still attracting national attention.

Based largely on employment trends, Inc. Magazine listed Bend No. 10 on its annual list of Top Cities for Doing Business.

Bend moved up seven places from last year's ranking in the magazine's annual survey of 393 American cities, defined by their broader Metropolitan Statistical Areas.

The list, compiled by Pepperdine University public policy professor Michael Shires, relies largely on job growth statistics to find the nation's strongest local economies, on the assumption that job growth indicates expanding economies that are "likely to be hotbeds of entrepreneurial activity," according to the magazine's May edition.

This year's Top 10 is dominated by small cities.

St. George, Utah, the corporate home of SkyWest Airlines, came in first with an 8.4 percent job growth rate over the 2005-06 time span and a 41.8 percent growth rate dating back to 2001.

Yuma, Ariz., came in second, dropping out of last year's top spot. Prescott, Ariz., Cape Coral-Ft. Meyers, Fla., and McAllen-Edinburg-Mission, Texas, rounded out the top five. Only one large city, Las Vegas, cracked the magazine's Top 10.

Cities in the magazine's Top 10 were fueled by growth in distinctly different business sectors.

St. George drew much of its strength from wholesale, business services and manufacturing sectors, according to the survey. Yuma drew from leisure services and manufacturing. Bend's job growth, according to the magazine's listing, was driven most strongly by business services and financial services.

Bend's economy is likely to continue to grow, particularly if weakness in its residential real estate sector proves to be short-lived, said Eric Strobel, business development manager for Economic Development for Central Oregon. Home prices, which are among the highest in the state, are still lower than the larger Western feeder economies of California and Seattle, and the area's quality of life continues to draw interest from people and businesses looking to make a move.

On the other hand, the city's relatively tight labor supply and squeaky tight supply of industrial and commercial land could slow it down going forward, Strobel said - unless you count the greater Central Oregon region, where smaller cities like Redmond, Madras and Prine-ville tend to make up for some of Bend's deficiency of available space.

The Bend Metropolitan Statistical Area includes Redmond, with its ample supply of industrial land, Strobel noted, which likely improved its ranking in Inc.'s survey.

Home sales have slacked off considerably from their 2006 peaks in Bend and Redmond, but demand for business space in Bend remains high.

Vacancy rates in Bend's industrially zoned buildings dipped to 3.2 percent in the first quarter, a historically low level, according to a survey by Compass Commercial Real Estate Services of more than 129,000 square feet of space. Redmond's industrial vacancy rate ran a bit higher, at 5.2 percent, but rental rates are approaching Bend's rates in some newly constructed buildings.

Vacancy rates in Bend's office buildings also remained low, according to Compass' survey, dropping from 6.5 percent to 5.9 percent by the end of the first quarter.

Inc.'s survey weighted a number of factors, including recent job growth trends, mid-term growth, 10-year trends and the current year's growth to come up with its rankings.

The New York-based magazine bills itself as "the daily resource for entrepreneurs."

IHateToBurstYourBubble said...

Bend's job growth, according to the magazine's listing, was driven most strongly by business services and financial services.

I wonder to what extent business & financial services growth has been fueled by housing. This seems one of those far backward-looking studies.

Plus, I suppose everyone heard the "good news" out of Columbia Air. They have re-hired workers! Well, 20 of the 190 they laid off. There was some sort of statement about the remaining furloughed workers would "have to wait 4 weeks for a paycheck". I have no idea what that means, but I will again bet that Columbia will not rehire even close to all those it laid off.

The whole "we're retooling" thing was a complete load. And The Bulletin bought it hook, line & sinker. What a sham... those people were owed the truth! Just say it:


Don't leave them hanging on. Plus, I heard some idiotic "Gag Contract" was forced on those laid off that banned them from talking to the media. What a bunch of scumbags! I'm not even sure such a thing is legally binding... what were they given in return? NOTHING!

IHateToBurstYourBubble said...

For a lot of people in Central Oregon, a real estate payday is the only big payday they're ever going to get.

We really are fueling a lottery/gambling mentality here. RE is like oil: We're NOT making anymore, but it's funny how price spikes bring ordinarily infeasible projects out of the woodwork. They started drilling in all sorts of weird places back in the 70's during shortages. Now completely moronic RE projects are ramping up to satisfy demand that is 100 years or more out.

And people are putting EVERYTHING they have into it. This is exactly the opposite of what you should do. The best Wall Street traders typically do NOT have superior win/loss percentages, they ARE conservative money managers. Bet too much on any one trade, and they will ultimately haul you out.

We've doubled down on red 10X and it's worked. That doesn't mean it's a good strategy. We should be diversifying & spreading risk, not concentrating it. This goes for ANY investment.

These idiotic, infeasible projects, like Ashwood, the many destination resorts, the Redmond water park, and the like will be huge white elephants. And multiply this "double down" mentality across hundreds & thousands of smaller projects that barely make sense at todays prices, and you start to see the "drill anywhere" mentality in Cent OR RE. I remember living in KS at after that time, and there were thousands of idle derricks after the boom busted.

Anonymous said...

Columbia starts recalling furloughed workers
Expects to return to 525-worker level

Anonymous said...

Paul, you gotta watch your "its" and "it's." I roll my eyes every time you get them wrong. I know it's just a typo, but it ruins my preconception of your brilliance.

IHateToBurstYourBubble said...

Randy Bolinger, vice president of marketing and sales, said about 25 of the furloughed workers are being called back this week, with the rest to follow over the next couple of weeks as production is ramped up, returning to a workforce of about 525 people.

"There likely will be some attrition, people we call back who have taken other jobs," Bolinger said.

Right. Stages. 25 now... then what? I heard the next "stage" would be in a month. At that rate, it'll take the rest of the year.

Are you sure people will have taken other jobs by then? Really?


Again, Columbia Air is doing NOTHING wrong. they have a business to run. If I were in their spot, I'd probably do the same (Well, not exactly the same... I probably never would have ramped up worker numbers the way they did. Plus I've heard their IT budget is close to $3MM, most of it waste. Of course, I am hyper-cheap. Or, as I learned in biz school, "I have an extremely high ROI threshold".). It's the complicit soft-selling of these layoffs w/ The Bulletin... or any other big company in town. The Bulletin is NOT a newspaper... it's a PR whorehouse.

IHateToBurstYourBubble said...

I roll my eyes every time you get them wrong. I know it's just a typo, but it ruins my preconception of your brilliance.

Hmmmm.... I wonder who this is? Very, very hard to tell. Its could be anybody. Sounds like a PHP/Excel type. Yes, yes... I would also be angry...

Anonymous said...

Didn't mean to be mysterious. It's me. TimToe. Sorry. I checked that "P.S." paragraph at the end and Word's grammar check does catch the errant apostrophe.

I know you don't get paid for this, but still. Anyway, ignore me if you like. Probably no one else cares.

Apostrophe Freak 2 (too) said...

Note to anonymous... No, I'm a freak about those things too. You're in good company.

Anonymous said...

Ya know, I've gotten in the habit of looking at Craigslist for property and jobs. I do accounting and finance work - aside from the hospital, the pickings are amazingly slim compared to PDX. Of course, I'd expect that, and maybe Craigslist hasn't been discovered by CO recruiters, but...

The part I like best are the blarney stones who are trying to sell a timeshare at Eagle Crest, a couple houses, and some lots in Redmond... "JUST reduced! Houses here go for (enter figure from peak of last year). They post the same old stuff over and over (which I flag as spam) hoping for box of money/bucket of stupid buyers (or is that backward?) Cheap entertainment, anyway.

Anonymous said...

KTVZ report -

Bend homes more expensive than in Portland; lenders wary of Bend's out-of-control home appreciation; "most" buyers were investors in 2002-2005 boom.

Anonymous said...



Bend must start learning from its management mistakes
By Michele Romeo / Bulletin guest columnist
Published: May 08. 2007 5:00AM PST

A recent Bulletin article ("Garage in Bend gets more cash from city") reported city staff's need to up the ante by about $600,000 for completion of the downtown parking structure. In the article, Councilor Chris Telfer is quoted as saying, "I just don't understand how BURA can be upside-down when we're constantly being told that the structure is on budget."

It should trouble all of us whose taxes fuel the city's finances that the surprise comes from a city councilor because BURA, the Bend Urban Renewal Agency, is a board composed of Bend's seven city councilors. In their work, including oversight for the parking structure, BURA is supported by the city's Economic Development Department staff, which reports to the city manager.

That a late-date, substantial budget overrun might be a surprise to Ms. Telfer almost begs disbelief, because no one on the council has a better record than she for responsible governance when it comes to finances. Is it that staff didn't report to BURA along the way, or is it that they misreported the information as they went? Was City Manager Andy Anderson as surprised by the recent disclosure as the councilor? Those are reasonable questions to have answered.

Responses will suggest one path or another to fixing the root causes behind the latest unhappy surprise.

Regardless of how the problems leading to overrun happened, Mark Capell is right in his direction to be aggressive about getting the structure completed so retail spaces can open to generate rent revenue. After that goal is achieved, staff would be wise to spend time on "Quality Assurance (QA) 101" to determine how the problems happened, so learning can be applied to avoid surprises, whether budget overruns that prevent completion of the parking structure or costs associated with the purchase of defective buses. It's not that "aw shucks" moments, including financial surprises, don't happen in any project, because they do. The concern for city staff ought to be focused on the way efforts are managed that lead us continually to learn of significant problems at the 11th hour.

The EDD director attributes some of the garage overrun to demands from the federal agency of the post office. Using a QA prism, it's hard to believe that had someone on staff conducted a complete project requirements and capital investment analysis that post office requirements wouldn't have been discovered sooner and included in the expense outlook. Maybe a root cause here is staff failure to do the due diligence necessary to obtain the right data soon enough.

The bus purchase problems certainly point to similar failures as a key factor. If management begins to see similar process and human performance problems across departments and projects, it should allow them to zero in on implementing "high leverage" solutions in process re-engineering, human performance development and even, sometimes, personnel changes. The QA reviews, sometimes called key learnings or post mortems, are essential to determining what works and how to re-create it as well as what doesn't and how to avoid making the same mistakes over and over. This is all about improving as we go, because the "oops, we did it again" surprises coming from City Hall seem too frequent.

One secret to productive QA outcome is to abandon the position of defensive crouch and welcome transparency in communication and analysis. That sounds simple enough, but it's harder than it appears, even for community leaders. Compare, for example, the reaction of Mayor Abernethy to The Bulletin's comprehensive reporting on BAT problems in which he characterized it as "poisoning" of citizen opinions to that of Councilor Capell, who suggested the city had work to do to rebuild public trust. One of those city leaders is probably going to be more receptive to Quality Assurance work than the other.

Comedian John Cleese did a classic series of business quality lectures, among them one on the value of making and learning from mistakes. In that, he said there are mistakes, like wearing a black bra under a white blouse, and there are mistakes, like starting a land war in Vietnam. With that in mind, he suggested some mistakes should be received with more understanding and patience than others, but the key in all cases is to learn from the mistake and apply the learning to avoid the same mistake in the future. That's a pretty basic lesson in the quest for quality outcome. It's a good lesson for our city manager to ponder because quality assurance needs a leadership model and champion at the top to make it stick in any organization.

Anonymous said...

Regarding the op-ed piece posted above - unfortunately it's thick with management consultancy jargon but it makes a point that many people in town are beginning to grasp: Bend is mismanaged.

Bend city management is incompetent and it is lazy.

Every single time they make a massive, expensive blunder (buses, garage, Les Schwab deal at Juniper Ridge) the city council says city bureaucrats kept them in the dark while the city bureaucrats point the finger back at the city council for their bad decision-making. How many times is that supposed to work?

Everyone who knows anyone who works for the City of Bend knows that it's not a place where people go to work hard and make a difference. It's well-known in town that City jobs are those that let you dick around for 4 hours, work for 3 and get full benefits, job security and a decent salary. And often these jobs put you in a position to do some favors for friends every once in a while.

Problem is that Bend isn't Mayberry any more. We have big projects involving big money that are getting serially botched by BOTH the City Council and the non-elected city staff. We have a crime problem.

It is a shame, a damn shame how casually people who work for the City of Bend treat their responsibilities.

Anonymous said...

Housing inventory piling up
Bend sales prices holding while sales activity slows, listing prices fall

By David Fisher / The Bulletin
Published: May 11. 2007 5:00AM PST

Central Oregon's housing market stayed firmly on the trajectories last month that it established in the first quarter of the year.

Prices - relatively flat.

Sales - down.

Inventory - up.

Median prices on the 142 single-family houses that closed contracts in Bend in April reached $348,272, about 5.5 percent higher than prices in April 2006, according to the Central Oregon Multiple Listing Service.

April medians in Redmond dipped 2 percent from April 2006, to $256,000.

Sales volumes, though, were another story.

Sales for the month in Bend dipped 24.1 percent below April 2006, dropping the city's sales numbers for the year through the end of April to 19.9 percent below 2006, the MLS reported.

Redmond sales also continued to tank, with April numbers dipping 38.2 percent below last April's, and sales volumes for the year through April 30 dropping 46 percent from the same period in 2006.

Inventories, meanwhile, built rapidly through the month as sellers lined up for the beginning of the traditional spring sales season. The number of homes for sale in Bend jumped 13.9 percent from April 2 to May 7, according to tracking data compiled by the Bend-based Bratton Appraisal Group, already approaching last year's high of 1,442 reached on Sept. 22, 2006.

Local contractors, reacting to the inventory bubble that has largely carried over from last year, have not stopped building.

But they have collectively cut way back from the roaring months of early 2006. A little more than 170 building permits were issued in March throughout Central Oregon, according to Don Patton, president of Redmond-based industry tracker Cascade Central Business Consultants. That's about on pace with every month since last September, but down 64.7 percent from April 2006.

The shape of Central Oregon's slowdown seemed to mimic national trends. But what's going on at that level, in an atmosphere of imploding subprime lenders and tightening lending standards, seems to depend on whom you ask.

Lawrence Yun, the National Association of Realtors' senior economist, continued to predict a "soft landing" for the national housing market in his May 9 online market update, predicting that sales would rise gradually through the second half of the year, buoyed by a still-strong national economy.

On the other hand, the NAR's outgoing chief economist, David Lereah, bluntly told the Chicago Tribune that "we're in a real estate recession."

"I'm predicting the first (nationwide) price drop since the Great Depression," Lereah said in an article that ran on the Tribune's Web site May 6. "We're going to have negative home prices in 2007."

As houses pile up on the market, some Central Oregon sellers are trying to attract attention with pricing. The local MLS registered price cuts on 120 properties throughout the region on a single day, May 4, ranging from 26 percent down to just a few dollars.

The median listing price of homes on the market in Bend dropped from $409,900 in March to $399,900 by the end of April, according to www.david, a Web site maintained by RE/MAX broker David Foster. The average list price dipped from $511,791 to $503,182.

At April's sales levels, it would take about 9.8 months to clear all of Bend's current inventory of single-family homes on an acre or less.

To put the current numbers in some historical perspective, the year's sales volumes so far are about on a par with 2004 - a year before the boom months of 2005 and early 2006 pushed Bend's median home price up more than 65 percent.

Prices in Redmond soared 68 percent over that same period.

The current slowdown hasn't been hard on everyone. Becky Breeze & Co. broker Becky Breeze said her office is doing a brisk business this spring, mostly in the $250,000 to $350,000 price range.

"If it has ever been a buyer's market, it is right now, because interest rates are low and there is plenty of inventory for them to choose from," Breeze said Thursday.

Interest rates on 30-year fixed mortgages averaged 6.15 percent Thursday, down 0.7 percentage points from the same day a month ago, according to the federally chartered mortgage giant Freddie Mac.

IHateToBurstYourBubble said...

It's me. TimToe.

Dude... I'm kidding! I knew it was you a mile away!

Housing inventory piling up

I love you guys! I was just coming on here to ask for a copy.... Moochie Moochie!

I show 2,260 homes in Bend per Brand new high... and counting. The high last Summer, 2,238 on Sept 10 (per Clive) has been eclisped. The answer to the question, "What will they do next Spring?" has been answered: They WILL SELL. Or at least they will LIST. This piece seems to say they'll have a hell of a time selling.

I still think Mr 3,000 is possible. Builders with families to feed & workers to pay, and people losing jobs, and the shameless marketing of Bend is starting to fall on deaf ears... plus we're so damn far away from anything, and gas prices are heinous!

I still think Sisters is the most vulnerable RE market in Oregon... or the country for that matter. There's a piece in the site about Sisters job loss, and how $415K median home prices don't mix with housekeeping jobs. And they state what I've been saying forever:

Housing was also a consideration in the calculation of the economic growth equation. The Area Median Income in Deschutes County is currently $58,800, which would provide an affordable home price of $179,330. The median Sisters home price during the first quarter of 2007 was $415,000.

With increasing energy prices, wages in Sisters will either have to increase or affordable housing will have to be available in order to attract those businesses that will require personnel in the medium to lower income tiers. An available workforce is a necessity for many companies to even consider locating operations or facilities in the Sisters area.

It's here: Sisters takes a look into the economic future

Problem is that Bend isn't Mayberry any more.

Good stuff. Thanks for that. If you're a steady reader, you know I heartily agree that Bend city counsilors are doing a terrible job time after time. You can just tell that a counsilor job is basically perceived as a way to join Boss Hog'''''s team, make connections, and shamelessly promote whatever business the counsilor owns. It has not escaped anyone''''''s notice, that councilors get endless free advertising & name recognition in this town.

Hopefully the extra apostrophe''''s make up for past deficiencies!

IHateToBurstYourBubble said...

The median listing price of homes on the market in Bend dropped from $409,900 in March to $399,900 by the end of April

And it's almost impossible to be sure, but I think David quotes all his figures in YTD form, except when he explicitly states otherwise. So that $10K monthly drop really is substantial as it had to "carry" data from the 3 previous months. Medians are hard to move...

Local contractors, reacting to the inventory bubble that has largely carried over from last year, have not stopped building.

This will be the dealer-killer for Bend RE. I think these guys have no choice, they're financially committed and have to proceed with projects.

The supply situation is just out of control, with 100 year projects popping up whereever a Prop 37 claimaint breathes air. We don't need our UGB expanded to have supply explode higher.

The local MLS registered price cuts on 120 properties throughout the region on a single day, May 4

Wow. Boy, cut daily reductions to 1/2 that rate (60/day), and you're still looking at 1,800+/- reductions per month.

Bend Economy Man said...

A little more than 170 building permits were issued in March throughout Central Oregon, according to Don Patton, president of Redmond-based industry tracker Cascade Central Business Consultants. That's about on pace with every month since last September, but down 64.7 percent from April 2006.

Bulletin editors: "oh, it's just a little 65% dropoff in our area's biggest industry in just one year. Let's just bury that in the eighth paragraph of a story on the fourth page of the Community section."

What will be hilarious in a sad way is when The Bulletin portrays the UTTER REAL ESTATE INDUSTRY COLLAPSE that's barreling towards Bend at 100 mph as a complete surprise.

They'll have quotes from Becky Breeze and Roger Lee and Patty Moss saying how no one saw anything but butterflies and candy canes in Bend's future.

A 65% year-over-year drop in housing permit applications. That not only means a slow summer for everyone in the trades; it means layoffs in the city building permitting and inspection offices, it means less work for architects, surveyors and civil engineers, it means a massive dropoff in city revenues in the form of building permit fees and System Development Charges. It means less work for local pickup truck dealers and repair shops. It means a huge dropoff in sales of the snowmobiles, ski boats, jet skis, dirt bikes, sandrails, lift kits, bass tubes, semiautomatic guns and other juvenile crap contractors typically waste money on.

Anonymous said...

Becky Breeze, makes me feel fine
Blowing through the jasmine in my mind

Anonymous said...

Bend is an experimental city, at least thats what I thought when I lived there. I didnt want to be an experimental rat so I moved on. I really think some people there think they can pull it off. ( Bend, Oregon live out your fantise's here} No pollution, no smoking, no crime, no rift raft, no poor people only rich, no dumpy trailer parks, no dirty industries, only realstate brokers ect. no working class people, just mexican labor, they work for less. Tons of upscale shopping for the lucky ones who get to live there. Everything green too. I think the wise choise for the city to do, at least sence they have came thus far. Build a glass bubble around Bend, protect it from all evil. Then all the rest of the world can just sit back and watch through the glass as Bend totally distroys it's self. Thank the people you voted for, and I dont think they have a clue to the lives that have been so affected by this. Sorry just needed to vent.

Anonymous said...

>>Everything green too.

Well, turn off a sprinkler and everything turns brown. It's one of the brownest places I've ever been. That's OK, though. It is a desert, after all.