Tuesday, June 19, 2007

Q: What Are Bend Homes Worth? A: $185,000.

We got the CNN-Money list of most overvalued & undervalued metro areas in the country, issued June 16. Bend is at the top of the list, with a stated overvaluation of 78.7%. First, if the median they used of $324,400 is accurate, we are more overvalued than that. Our median now stands at $351,900. Given the figures in the article, you can back out $181,533 as "fair value" for Bend, or 93.8% overvalued. An excerpt:

Bend took over first place from Naples, Florida, which had led the pack for several years. Price declines in Naples enabled it to slip into third place at 63.4 percent overvalued. In second place was Prescott, Arizona, at 64.6 percent.

So what is the median home worth around here? There's a myriad number of ways to arrive at fair value. Maybe the most relevant, is comparing owning to renting. I ran across an article in this regard wayyy back when the bubble was still in full force across the country. It was by Liz Pulliam Weston, called "Don't get trapped in a housing bubble". An excerpt by economist Edward Leamer:

Leamer says he can tell because homes, just like stocks, have a price-to-earnings ratio (P/E) that he believes determines their fundamental value. The earnings part of the ratio consists of the annual rent the house could command. Homebuyers can compare current P/Es with historical levels, Leamer says, to get some idea of whether houses in their cities are becoming overvalued.

I like the idea of computing the P/E the most, as it's inverse, E/P is the earnings yield for a property, and when you think of a rental home like a earning investment, it's easier to separate out all the nonsense that people sometimes associate with owning a home (I'm thinking specifically of a comment where someone stated, "I don't think Bend could imagine itself without Northwest Crossing". Woof.).

What's hard here, is that Bend does have a very wide range of rental properties. You've got your "Arson Ready" properties: Homes that benefit the entire of humanity when they "accidentally" burn to the ground. Twice. These are barely fit for human habitation. Then there are the brand new McSubdiv homes, with line upon line of cookie-cutter 1,800/sf homes. These are the meat of our market it seems. And there's the NWX whacky-shack, typically owned by a Realtor or mental patient, that bought into the $10K appreciation/mo. line of crap spewed to sell these white elephants. It's really a wide range.

And computing the P/E is a totally different exercise for each. The McArson Meth Lab rental is going to have many expenses not associated with say, a 500/sf NWX dog house rental. "McArson" (aka, "The Mic") rentals will typically have the dog-pee-soaked subfloor, load bearing 32 gallon meth drums, and Kohlers new "River of Pee" septic system, developed exclusively for for India's City of Joy whorehouses, which is basically a small ditch dug in the dirt floor that drains out in the septic field; ie front yard. The Mic is a maintenance nightmare. All this has to be factored into the "P" (Pee?) part of the P/E equation.

Contrast this to the NWX doghouse rental. At 500/sf, buyers usually had to assume second mortgages financed by the local TV station, since about half the value of these homes is advertising. I've long maintained that NWX is the most overpriced neighborhood in Bend, and it is precisely because of this: Rental income there is a small fraction of what a mortgage will run you. Homes that cost $500/sf are fetching $1.25/mo as rentals, or a 3% yearly yield.

Those two example illustrate the gamut of what the rental game is in Bend. The very high maintenance meth-laden crap shack vs the low/no maintenance 6 mortgage NWX special. I think the meth cracker box is an endangered species though: It's just going to pay for someone to "smoke cigarettes around oily rags", and let nature take it's course. Face it, these places are worth more dead than alive.

What Bend is really looking at is a mega-glut of brand new 1,800/sf McSubdiv homes. And these are what are really facing steep price cuts recently. Multi-million dollar mansion? Hell, you just have to find One Guy to buy that dog. Your platted out, 100 lot McSubdiv isn't going to sell in onesies and twosies anymore, you gotta mark 'em down to get'r done. I've seen many of these go from near $400K in Phase I, to $300K or LESS by the end. These love shacks can usually fetch somewhere between $1,100 - 1,400 depending on the time of year and such. Assuming $1,250 and $350K middle of the road estimates, this gives about a P/E of 23, or a 4.3% yield. 2 words: Not Good. 2 more words: Really Good. If you're a renter.

Pulliam's article outlines P/E ratios for a number of big and traditionally overpriced metro areas. Boston, San Diego, Frisco are in the high 20's, with Chicago in the low 20's. Bend's current P/E puts it close to Seattle. Do we really have the economic base to maintain a Seattle-style P/E? You will have to be the judge of that yourself, but my own opinion is that once the Tequila wears off, that Bend's P/E should be in the 13-15 range, and that's assuming rates stay relatively low. A P/E of 14 X $13,200 in yearly rental receipts (with NO other expense, taxes, etc) yields $184,800, remarkably close to CNN Money's estimate.

We've also heard a lot of talk about a "return to normalcy", like it's a good thing. In a way it is, we'll be cost competitive in many ways that we aren't today. I found an OFHEO Housing Price Index that showed Bends long-term, non-bubble yearly return to be about 7%. This is actually higher than I thought it'd be. The index starts way back in 1986, so it is a very large sample, but the standard deviation is also large at around 7%. All that means is that we can state with very high statistical confidence that Bend's mean yearly return is between 21% and -7%... no help there. You can maybe safely assume that Bend has had some sort of persistent long-term appreciation premium due to 1) Excessively depressed performance right before the sample period, or 2) Bend has enjoyed some sort of excessive in-bound "migration premium". during the period., or 3) There is some sort of constraint that is holding up prices during the period. Or maybe something else. Is 7% a rational appreciation rate going forward? I don't think so.

Bend has experienced 2 very high yielding periods in the past 20 years, one in the early 90's and the recent huge gains. Taking out these periods, Bends has experienced fairly ordinary gains, something closer to 4-5%. I think something around 5%, maybe 6%, is what Bend should experience over the long haul, maybe a bit over the 1% real return that Robert Schiller puts forth as the long term gain for US housing in aggregate.

Second, homes act much like bonds or other "yield" type investments. As rates decline, their price goes up. But as rates decline, the forward looking return goes DOWN. You get appreciation as rates decline, but less yield going forward. We've had our appreciation run, in spades, now I think it's all been squeezed out (and then some), and we have nothing but the poor yields to look forward to.

So, I would put forth that Bends very long term 50 year appreciation rate, from 1986 should be around 5%. Using the OFHEO data to back out an approximation of 1986 home prices (a very faulty exercise.. someone tell me if you've got better data...), we "de-compound" at 7% for 20 years, use $351,900 as our starting point, and arrive at a (very) rough starting point of $91,000 in 1986. I can't overstate how rough this number could be, I don't know what 1986 medians were. The good news: Compounding forward 50 years to the year 2036, gives a pretty rockin' median of $1.04MM. Not bad! That's up 195% from here. The bad news: It'll take 30 years or so to get there. That's only 3.67% per year yield, buying today.

Where does this metric leave us today as far as fair value? Well, compounding forward from 1986 @ 5% for 21 years gives about $250K as fair value. 4% for the period gives $207K. So the whole "return to normalcy" also yields lower prices, but not as bad as CNN-Money. This methodology is sort of a least-squares projection forward of logarithmic-adjusted data, starting in 1986. Well, close. It's just hard to take the data as given and come to mathematically solid start or end points. So this method seems less accurate than P/E's, though not totally discountable.

What about replacement cost? Hmmm... this may dictate whether new homes are being built more than anything, because I think precious few home buyers of older homes care what aggregate, timber, stone or other materials cost at the time of construction were. It seems to be something that becomes less and less relevant with time. But Bend is becoming a "new town"; our installed base of homes probably has a lower average age than it did 10 years ago. Schiller actually shows an HPI index with material cost indicies on his Irrational Exuberance website. This data is fairly interesting in it's own right, and I encourage anyone interested to download the Excel/CSV data file Schiller has made available.

Building material costs ARE relevant, but mostly in the determination of the "build or buy" arbitrage equation: Should you buy your neighbors farm, or build next door? This is one of those things that can swing wildly year to year. I think there was a time in the past few years where timber prices doubled, before falling back. I think more interesting than raw materials prices, are the wage rates in the construction industry in Cent OR. I saw on the front page of the Oregonian yesterday an article about the percentage of illegal immigrants in various industries. Cooks, landscaping, construction, and housekeeping were the top industries penetrated by illegals. Political swag aside, these are the bread & butter of Cent OR's economy. These people are the Yugo's to our whitebread Camry past. They'll do it, and they'll do it cheaper. I think from this trend alone, home prices will come down (if immigration bills stay encumbered), and Bend will become more "slum-like". Not a slam, but just true from observation. Mexicans have no qualms about living 10-15 to a home, and will to economize their earnings. Their wages & economic "limbo" pretty much force this on them. I think Cent OR's percentage of Hispanics and other ethnic groups will increase, and they will start to become the "middle class". And call me crazy, but there could be a pernicious little trend of turning today's new McSubdiv homes to McArson Meth shacks over the years.

Maybe this is a little too political for figuring out "Fair Value" around here, but strong Hispanic immigration, especially the illegal variety, can have nothing but depressive effects of wage rates. Boss Hog certainly benefits, since he'll have Chico manning the stoves, weed whackers, nail guns, and the like instead of Johnny Whitebread. This will lead to a gutting of the middle class, and something like a vast servant class (Morlocks) serving a tiny elite group (Eloi). This seems to be the trend countrywide and Worldwide in fact. This country seems to be morphing into a culture that fewer and fewer are able to economically adapt to, and extract some semblance of what many think of as a "normal life". We're looking at the first generation of 30-somethings with lower standards of living than their fathers. Whitey ain't competitive, and I don't know if you've looked around recently, but there's a hell of a lot of us in Bend. Demographics seem to favor lower prices.

Finally, there's the "Bend is different, and people WANT to live here." There were some disparaging comments about no one wants to live in Wichita or some such on the last thread. Well, first Wichita isn't a real fair comparison, just like Fargo isn't. It's the Midwest, and it's different. This whole attitude presumes that geography and outdoor activities are All That Matters. Bull Poopy. They're a nice plus, but they are secondary to the business of living. Assuming Bend is a destination for all because it's a destination for you simply tells us they speaker is so blindly selfish, they can't see beyond their own nose. If I could double my earnings in Wichita, and cut my home price to the median ($99,100!), I'd be there in a heartbeat. I'd sacrifice some sort of quality of life today, to save like crazy and retire early tomorrow. This is yet another nail in the coffin of Bend home appreciation. People will not become indentured slaves to a lifestyle that requires 90 hour workweeks.

In conclusion, the yield of Bend rentals is the most appropriate measure of valuation, as it measures the "comp" of rent vs buy. It shows a fair value of around $180K. Other less measures of value, but nonetheless indicative of possible future trends also seem negative. Future supply in the guise of chameleon-like destination resorts bode terribly for the future. I think backward-looking ROI computations will on marginal ("half-assed") large scale projects (Redmond Water Park, The Shire, The Plaza, Angus Acres, Work-Live condos, "Expensive" office space) will act as nothing but massive depressants on our market for many years. We're building enough supply today for the next 20 years. Bend housing will be a mini-S&L crisis. We'll become a town largely comprised of Hispanics and there will be a certain Mexicanization of Bend, which is well under way. There are opportunities there, but they'll probably be capitalized on by Hispanics.

On the upside, Bend is a great place to enjoy the outdoors... if you can afford to. The weather is nice, the mountains & diverse geography, and all are terribly fun. But there's less and less "fun" time for the median person living here, and so this aspect of Bend becomes less & less important.

The Bottom Line: Bends Fair Value Median is $185,000.

This is kinder than CNN-Moneys implied fair value of $181, 533, but not much. The obvious bad news is it's a 47% haircut from todays prices. Some think we'll see such a nominal decline in short order. I do not. Housing prices have traditionally adjusted very slowly, and much in the way of "losses" in falling markets have been in prices treading water for years (decades), not really falling much. I think we'll see a combination: prices falling slightly, then rising slightly, then falling again... for probably 20 years or more. I think the target date for todays prices being equal to "fair market value" is about 11 years from now. There may be some particularly terrible intervening price plunges that'll give someone abnormally good returns in the meantime, but they probably won't be for sometime, 10 years minimum.

Not to beat a dead horse, but if you're planning on living in Bend for the long haul: Rent, and Invest The Difference. Cater to the extremely rich or Mexicans. Own landscaping, hotels, restaurants, don't work there. Or do what really makes sense:

LEAVE.

206 comments:

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IHateToBurstYourBubble said...

2 things:

I should say that I think Duncan's "case study" about surviving in Bend over the long-haul is very relevant and topical to housing & Bends' economy in general, and illustrates a skill I think will become increasingly valuable in years to come. Plus I just like his blog, and feel he has some good nugg's on housing too.

Second, as for the pattern of Bends housing retreat, I actually think there are going to be some particularly hard years coming soon. I think we'll squeeze out some of the monstrous excesses in the next 3-5 years as we see YoY losses across the board. They could be very painful.

Then it'll just get boring, with low positive & negative returns for well over a decade.

Anonymous said...

Contrast this to the NWX doghouse rental. At 500/sf, buyers usually had to assume second mortgages financed by the local TV station, since about half the value of these homes is advertising. I've long maintained that NWX is the most overpriced neighborhood in Bend, and it is precisely because of this: Rental income there is a small fraction of what a mortgage will run you. Homes that cost $500/sf are fetching $1.25/mo as rentals, or a 3% yearly yield.

C'mon, nobody has ever paid anywhere close to $500/sf for a home in Northwest Crossing, and none of the sellers are even asking anywhere close to $500/sf there. Look in DIAL and you'll see that most homes in Northwest Crossing have sold for less than half that.

IHateToBurstYourBubble said...

And a lot of these "Gold Rush Cracker Shacks" thrown up by the tens and twenties, weren't exactly built to German teutonic standards. In a few years these babies will not age well, and will be in need of maintenance that I'll bet is one hell of a lot higher than older homes.

I live in one... and can already see some steep maintenance costs 5 years out. They just aren't built to last.

IHateToBurstYourBubble said...

nobody has ever paid anywhere close to $500/sf for a home in Northwest Crossing

Oh, I beg to differ. Those crappy little "dog house" cottages, under 1,000/sf, I saw in the high $400's.

But true, the larger the home there, typically the less expensive.

Anonymous said...

Oh, I beg to differ. Those crappy little "dog house" cottages, under 1,000/sf, I saw in the high $400's.

Gotta call BS on this. Can you provide the address of a single Northwest Crossing house/cottage that ever sold for $500/sf? (That's a rhetorical question -- of course you can't because none ever sold for that price, not even the cottages.)

BENDBUST said...

I found an OFHEO Housing Price Index that showed Bends long-term, non-bubble yearly return to be about 7%. This is actually higher than I thought it'd be. The index starts way back in 1986, so it is a very large sample, but the standard deviation is also large at around 7%.

I would be VERY careful about using 1986 to present as a basis for prediction.

I have been a landlord and buy homes in Oregon full-time since the 1970's, and the last real correction I saw was 1983->1986. I saw homes collapse from $70k to $30k {DOWN -50% in one year}, then slowly work the way back up by 1985, and by 1986 my reference { nice little 1100/sq-ft } were up to $80k. These are NEW little homes FYI.

Since 1986 Oregon has ONLY SEEN UP, there have been a 1/2 dozen mini-me corrections in cali, but here in Oregon, its been a consistent UP. A better reference would be to go back to 1974 and watch the effect of post vietnam war that destroyed prices in Seattle, and then look at 1978 with 22% interest rates.

What I'm saying is that to truly predict Bend, don't use POST 1986.

People will continue to move here, because we have water, and lower crime. This bust will settle within three years, prices on the dog-shit outer sub-divs, and NWXC will be down 50%.

I do agree that $180k, could be the normalization, as I see a wage drop, using my preferential 4X rule-of-thumb { remember I'm a landlord, so I have always used rent as a basis for valuation } right now fair is $240k, for a nice drake park $1100 sq-ft home. $180k will mean that average family wage falls to $45k from present $60k, and thus is most likely, as those that stay and work, will make much less money.

Oregon will NOT see a 19860->2006 rise again for a long-long time, things will go to hell for the next three years. Then there will be stabilization at 4X of income, and/or 4X RENT { Note as a landlord in Bend YOU CAN NOT RENT FROM ME IF YOU DON'T MAKE 4X of the rent, where X is the rent }. This is because its a statistical historical fact that when more than 25% goes to housing, things generally don't work out.

Normally I might GUESS that things would have another BULL after three years, but things will be different now. Here is why ...

The baby-boom is over, every macro-economist knew and has planned on USA recession from 2006->2015, the USA will have a WWW-III, and there will be another baby-boom in 2015, and then the gold-rush will return, and there will be another twenty years of Oregon UP.

The SMART thing to is BUY when things are down -50%, and just hold on until 2015, if you can. It's actually NOT far away.

The only real perturbation I see in USA macro-planning is at some point the victims of our WW-III, just might waste a US city, but that said Oregon, is a least likely target, and thus just another reason why folks will move here, again we have water, and its reasonably clean.

IHateToBurstYourBubble said...

I'm Ashamed Of You People!

We've scared off The Zombie Duncan, and it sounds like he's scuttled his bid for Mayor. A travesty!

The Zombie Duncan does mention the Next Big Thing At The Old Mill, the mega-million complex going in on what I "think" is that little strip of land between Colorado & Arizona. What a spanktacular location. He's makes comparisons to AOL/TimeWarner. Nothing could be more true. This place is sprouting Absolutely Stupid Ideas at an alarming rate. And I think they're thinking, "Well, when it fills out, it'll be OK", which may be true, but the filling out given all the other macro projects is getting pushed out farther & farther. There is stuff going up that won't be cash-flow positive for 20 years. Some of this stuff is the next "Mountain View Mall", big empty edfices that remind their developers of when they actually had money. Too much money.

Wow. There is just so much money that is going to be lost around here in the next 10-20 years it's amazing. Much based on the idiotic decisions being made today.

Anonymous said...

NWXC - crappy little cottages

These crappy little condo's @ NWXC still haven't sold, they started around $500k, then went to $450k, then $400k, now they're asking $380k.

One to two years ago lot's of people were asking almost $500/sq-ft for this highly marketed shit.

Today $350/sq-ft is most likely the typical ASK, but as we said a few weeks ago, your paying a marketing premium here, nobody should pay anything over $250/sq-ft for anything in NW-XC, again perhaps thats why nothing is selling YET.

The $250/sq-ft doesn't even take the fact that Bend is 78% over-valued.

If you want to know what NW-XC is worth, look at what they get for rent. Even two years ago they were getting a $1,000 bucks a month. Thus on that basis the AVERAGE home in NW-XC should be trading for $120k. Of course they told us then that was OK, because you made $20k/mo on appreciation.

Now that appreciation is OVER, and the rent is still around $1,000/mo, that's $12,000/year, and 10% is a good rule-of-thumb of what to ASK for rent NORMALLY, thus this stuff is worth $120k.

Lastly, that we're NOW enjoying a negative appreciation, people will soon be paying you to purchase NWXC homes.

Anonymous said...

There is just so much money that is going to be lost around here in the next 10-20 years it's amazing. Much based on the idiotic decisions being made today.

GAME-OVER, first of ALL this shit is ALL driven by REITS, and with CNN's publishing that Bend is 78% over-valued you can be sure the retired folk across the USA are looking at the REIT portfolio and making sure there is NO orygun in there. I'm sure that new-york REIT firms right now are trying to divest of Oregon, so they don't look stupid, two years ago you looked smart, over night you look stupid.

IHateToBurstYourBubble said...

Duncan also mentions the Real Problem for these mega-projects: MYOPIA.

These whacko RE developers think, "Hey, I like real estate. I'm rich. I'll bet everyone else likes real estate too, and they're rich too. Plus the only money being made around here has been in real estate for the past 20 years, and all my rich real estate friends think that's gotta continue forever. So the Best Way To Make Money, is spend all the money I have, plus all the money I can borrow, and build the biggest building possible. It's fool proof!"

This is the proverbial doubling down on red for the 8th time because you've mistaken the first 7 wins as "skill". All I can see is 20-30 years of supply coming online and sitting empty for most of that time. This place will be ground zero for an S&L style debacle in the next few years.

Anonymous said...

These "big time" developers and RE "investors" are so far, very insulated from reality. They got lucky and bought and sold when the time was right, and now they think they can't lose. Wealth is not an indicator of intelligence. Observant people , like many on this blog, are seeing the signs. I think a lot of those that are still planning these monstrosities hang out with like minded people and cheer each other on, completely ignoring all the signs on the horizon.

IHateToBurstYourBubble said...

Can you provide the address of a single Northwest Crossing house/cottage that ever sold for $500/sf? (That's a rhetorical question -- of course you can't because none ever sold for that price, not even the cottages.)

Well, thanks for allowing... then not allowing... me to answer this question. I DID see NWX "cottages" advertised at over $500/sf, as I looked at some as rentals there last year. Admittedly, it was the white-hot, dead-on top of Bend RE. And I do not go to the Westside that often, very rarely to NWX, so I'll hang it out as an exercise for someone more knowledgeable (Tim comes to mind):

Anyone see any sales in NWX over $500/sf? What is the highest per/sf sale that's ever happened in NWX? I think you'll find high per/sf stuff down at the low square footage ranges. I KNOW they were asking over $500/sf on some of those cottages.

IHateToBurstYourBubble said...

First, if the median they used of $324,400 is accurate, we are more overvalued than that.

Hmmmm, poorly worded. Better:

First, if the median they used of $324,400 is accurate for computing their overvaluation, we are more overvalued than that.

Anonymous said...

Can you provide the address of a single Northwest Crossing house/cottage that ever sold for $500/sf? (That's a rhetorical question -- of course you can't because none ever sold for that price, not even the cottages.)

In the day, summer of 2006 I saw a lot NWX property with an ask of $500/sq-ft, and when I inquired from the realty shop, why they were ALL empty, they told me they were all to be purchased on speculation. I inquired on the reasoning, and they said that it wasn't worth the time to rent for a $1k/mo, when you could make $20k/mo on appreciation.

It really didn't make any sense, I asked the realtor's if they had bought, and they all told me they had 'invested' in NWXC themselves as it was a "cannot lose" business proposition.

WRT to the rhetorical question, and the fact today that the NWXC will not even sell for $250/sq-ft, perhaps all the bend-bubble was just a mirage. Perhaps none of this ever happened.

NWXC exists, but nobody ever asked for over $250/sq-ft, and you can go up there today and see for yourself.

We must live in today, there never was a bubble, there never was a time where any property in Bend had an ask over $250/sq-ft

Anonymous said...


We must live in today, there never was a bubble, there never was a time where any property in Bend had an ask over $250/sq-ft


Nobody ever paid more than this either, and if they admitted publicly they would be considered a fool, a sucker.

Omerta, time for silence. Time to deny our past forever more.

Anonymous said...

One thing to consider is the # of people who live here but don't earn their living here. That includes retireds but also telecommuters. I telecommute to PDX, and know a fair # of people who telecommute to other places -- Phoenix, NYC for example. Those places pay salaries that make it perfectly reasonable to buy a NWX house at current asking prices.

I've never seen a report showing how many of us there are.

Anonymous said...

The P/E ratios, etc. are interesting, and maybe the truly rational homebuyers out there will look at that and shy away from Bend real estate (or real estate anywhere right now). But the thing is, many folks simply do not consider these things when it comes time to buy a house.

Someone said on the old BEM blog that a house is worth exactly what someone is willing to pay for it, no more no less. I think that's about right, and that no matter how many news articles point out how overvalued Bend is, there will still be people willing to pay far more than the "true value" that P/E workouts would indicate.

Anonymous said...

NWX homes $359/sq-ft, what a bargain. Can I get two please!Oh and can you throw in one of those great new condo's going up.

Anonymous said...

Anonymous said:

"One thing to consider is the # of people who live here but don't earn their living here. That includes retireds but also telecommuters. I telecommute to PDX, and know a fair # of people who telecommute to other places -- Phoenix, NYC for example. Those places pay salaries that make it perfectly reasonable to buy a NWX house at current asking prices."


I know exactly what you mean. I live in Wichita but telecommute to the Mayfair district of London. When I go to the local diner, I insist upon paying $18 for a cup of coffee.

Anonymous said...

No matter how many news articles point out how overvalued Bend is, there will still be people willing to pay far more than the "true value" that P/E workouts would indicate.

Yes, BUTT, there is now a big BUTT, and that is you no longer can buy your dream home in Bend with nuttin down, interest-only, stated-income. Now you MUST have a significant down, and your home MUST appraise, and 50% of all appraisal's are NOT appraising these days. Now that people have to use their OWN-MONEY, in order to purchase we'll just watch and see what the true-value, is-is.

Note, what we do know is things right now aren't selling. There will always be able willing to pay more than somethings worth with OPM { other-peoples-money }, but now we're in a whole new world, a world where the average American has negative savings rate.

Anonymous said...

Those places pay salaries that make it perfectly reasonable to buy a NWX house at current asking prices

Then for gawd's sake Just-Do-It, and while your at it, buy a few $1.2M condos from Mrs. Breeze, you could be the great-white cali, coming in on a horse of silver we have all been waiting for.

Most telecommuters I know in Bend are stock-market related traders, analysts, they're very conservative. One thing we do know about telecommuters is that they make up NO more of Bend than 5%, thus they'll never be the bend-bubble savior.

I love this 'bend exceptional-ism', we just got rated the worst place to buy real-estate and already apologists are trying to put a positive spin on the news.

Anonymous said...

Did our telecommuter perhaps buy in NWX at the peak? Sure, there are telecommuters - but not that many of them just yet, because the way to get ahead at work is with face time - at least according to a WSJ article I read some time back. Not that the idea isn't nice.

Anonymous said...

http://www.millqtr.com/about/Bend_Growth/
What is Driving Bend Oregon's Growth?
Primary Reason: Quality of Life

There are not many places where you can ski in the morning, play nine holes of golf and land a trophy trout, all in the same day. For many places "quality of life" is the first thing promoted to new, prospective businesses.

Population growth in the Central Oregon region has greatly outpaced the state, Pacific Northwest, and nation as a whole. Our high technology industry is among the fastest growing in the United States. We have the Northwest's largest concentration of destination resorts and world class golf courses.

***

Where is this high-technology? Are these the telecommuters? Largest concentration of resorts? No wonder rich people aren't lining up to buy at "mill quarter".

Anonymous said...

Anyone see any sales in NWX over $500/sf? What is the highest per/sf sale that's ever happened in NWX? I think you'll find high per/sf stuff down at the low square footage ranges. I KNOW they were asking over $500/sf on some of those cottages.

Here are sales details for two of those Northwest Crossing cottages:

Site Address: 1330 NW MT WASHINGTON DR BEND 97701
Total SqFt: 1396
Date: 08-22-06
Amount: $436,025
Price per sf: $312

Site Address: 1322 NW MT WASHINGTON DR BEND 97701
Total SqFt: 1298
Date 07-27-06
Amount: $384,420
Price per sf: $296

Look 'em up on DIAL for verification.

Still waiting for the address of one of those mythical $500/sf sales.

Anonymous said...

NWX homes $359/sq-ft, what a bargain. Can I get two please!Oh and can you throw in one of those great new condo's going up.

Can you point to a single Northwest Crossing home that's for sale for $359/sf? Just one?

Anonymous said...

"There are not many places where you can ski in the morning, play nine holes of golf and land a trophy trout, all in the same day. For many places "quality of life" is the first thing promoted to new, prospective businesses."

Actually, you can do this in Los Angeles, and go surfing if you want in the late afternoon.

Anonymous said...

Actually, you can do this in Los Angeles, and go surfing if you want in the late afternoon.

Sure, all the "quality of life" transplants should move to LA for skiing, golfing, fishing and surfing. But they'll need to pay more for a house in LA than in Bend, and of course they'll need a helicopter to get from Big Bear to the golf course to the trout stream to the beach in order to avoid the infamous traffic jams.

IHateToBurstYourBubble said...

Duh! I'm driving home & forgot the Income/Value ratio. Or Income to Mortgage payment.

I heard 4X yearly income as one rule of thumb on the comments... not sure of it's veracity, never heard that before. One I've heard & been subject to on every home buy I've done, is 37% of income MAX should go to PITI. I've read several times the Average Family Income in Deschutes County is about $60K. From the Sisters Nugget:

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.

And the ever popular: Households making 120% of median wages around here cannot afford 92% of the homes.

Suffice it to say, income isn't exactly a main support beam for home prices. In fact, after the wash-out in RE coming, I'll bet we'll see lower incomes.

And the whole, "We can count on the conveyor belt forever to absorb the mass of space we're building." May have worked when we were 40K, 50K, and 60K. But this AIN'T ASPEN! A town of 100K cannot be supported by out-of-towners. No way. The equity locusts from CA have been sprayed, their reproductive organs withered & useless... well, more so than before.

Income also seems to dictate FAR lower prices than where we are.

And I hate to whale on illegals so much, but I also really think that our No Child Left Behind, Not Even Children From Other Countries That Cannot & Will Never Speak English, Not To Mention A Flood Of Special Needs Kids For Whom Public Schools Are Totally The Wrong Place (whew), is going to push up property tax rates around here to exorbitant levels. It's already a pretty big problem. I've seen estimates that a single illegal brings economic benefits of $6K/yr, but consumes over $30K in services. Someone has got to pay for this & property owners are the logical & long-standing choice.

Sisters, which has relied on a pristine record, is absolutely overrun with kids that it can't possibly teach anything. Consuela hauls her kid into Sisters schools, which CANNOT legally refuse them, dumps them there for the day, and cleans house. It's a disaster. These kids, nor thier parents have the slightest inclination to learn English. The kids sit there in a total stupor, learning nothing. These places are already packed to the gills, and they can't recruit new teachers cuz homes there are 4X what teacher pay can afford.

The only possible cruel irony is that ultimately high property taxes from high schooling costs brought on by illegals who were hired to push out Whitey & lower building costs, will ultimately cost Boss Hog and Enis their 1978 cherryed-out Cadillac. And push down condo sales, too.

Anonymous said...

FWIW,

1362 NW Mt Washington Dr asked $427.30 per square foot and 2788 NW Colter Ave asked 409.63 per square foot last summer. There may have been some in spring asking more.

Many asked over $300 per square foot.

--TT

Mr. Reality said...

1362 NW Mt Washington Dr asked $427.30 per square foot and 2788 NW Colter Ave asked 409.63 per square foot last summer. There may have been some in spring asking more.

It's a free country and anybody can ask whatever they want for their house, but nobody ever sold a house or cottage for $500/sf in Northwest Crossing.

Here's another cottage example.

Site Address: 2776 NW COLTER AVE
Total SqFt: 1315
Date #1: 06-02-06
Amount #1: $338,919
Price per sf #1: $257
Date #2: 01-29-07
Amount #2: $377,500
Price per sf #2: $287

So far the highest documented sale price for a cottage at Northwest Crossing is $312/sf. Look in DIAL and you'll find others in the general vicinity of $300/sf, but you sure won't find any at $500/sf (a number IHTBYB apparently made up to support his preconceived notions).

Mr. Reality said...

Here's another one of those $500/sf Northwest Crossing cottages.

Site Address: 1272 NW MT WASHINGTON DR BEND 97701
Total SqFt: 1192
Date: 10-21-05
Amount: $302,985
Price per sf: $254

Oops, it only sold for around half of $500/sf. Maybe the buyers in Northwest Crossing aren't the spendthrifts they're made out to be.

Anonymous said...

>>It's a free country and anybody can ask whatever they want for their house, but nobody ever sold a house or cottage for $500/sf in Northwest Crossing.

Right. I was just pointing out that the idea of what you could get for one of those has changed dramatically in a year.

Anonymous said...


Site Address: 1272 NW MT WASHINGTON DR BEND 97701
Total SqFt: 1192
Date: 10-21-05
Amount: $302,985
Price per sf: $254

I think you should call the person on this one.

Provide ALL the proof that sale actually took place at this address for this amount, at the date provided.

MIsstrade said...

Still those houses can be built for 90 a sq. foot. so the builders are the only ones benefiting in that 250 per sq foot arrangement. That my dear is the bottom line. You won't be able to sell it for 150 a foot in 2 years, mark my words those cottages @ 1k sq feet are worth 150k tops. Nothing more.

Anonymous said...


Can you point to a single Northwest Crossing home that's for sale for $359/sf? Just one?


I saw lots of them this winter asking $400k for 1000sq-ft, it its true that they're NO longer asking $400/sf, all I can say is its about time.

Sound's like NWXC is finally becoming rational, now if they could just drop down to $160sft.

Anonymous said...

Site Address: 1272 NW MT WASHINGTON DR BEND 97701
Total SqFt: 1192
Date: 10-21-05
Amount: $302,985
Price per sf: $254


let's play this game, somebody, somebody out there tell me, why in the hell would any complete IDIOT move to bend, and live on a busy Freeway like NW-Washington. Just the fact that NWXC built all these condo's facing the busy street is bizarre. You all know folks go 50 mph all day this location.


Note, below ALL we know is this shitty little property on a busy street with a small lot, surrounded by other shitty little houses, has an appraised value of $308k, we really don't know what they actually paid, other than what we were told. Does anyone have access to the public record's of what was paid, and can you proof.

*** --------2006-------- --------2005-------- ---------2004--------
Total Taxable Total Taxable Total Taxable
RMV A.V. RMV A.V. RMV A.V.
LND: 133,620 79,950 28,350
IMP: 174,870
TOT: 308,490 146,440 79,950 49,730 28,350 19,278

Mr. Reality said...

Note, below ALL we know is this shitty little property on a busy street with a small lot, surrounded by other shitty little houses, has an appraised value of $308k, we really don't know what they actually paid, other than what we were told. Does anyone have access to the public record's of what was paid, and can you proof.

Click the "Sales Information" checkbox in DIAL and you'll see this:

SALES: --- 1 ---
Date 10-21-05
Sale $ 302985

If you don't believe the information in DIAL, you could always double-check it on the County Clerk website. Here's a copy of the statutory warranty deed you'll find there.

http://docs.google.com/Doc?id=dgjh7dvj_2ftrb5f

Same sale date and price.

Anonymous said...

MIsstrade said...

Still those houses can be built for 90 a sq. foot. so the builders are the only ones benefiting in that 250 per sq foot arrangement. That my dear is the bottom line. You won't be able to sell it for 150 a foot in 2 years, mark my words those cottages @ 1k sq feet are worth 150k tops. Nothing more.


Thank-you we needed a voice of clarity brought back to the picture. Yes, last winter they were still ASKING $400+sq-ft for NWXC, today they're asking $300sq-ft, and soon they'll be asking $200sq-ft, and it STILL WILL NOT BE selling.

let's remember as the poster here so eloquently mentions, that the shit can be built for less than $100sq-ft. Has anyone walked there recently? I was there last weekend on sunday, you can walk anywhere an inside, the lousiest materials I have ever seen, even on external wall's under brick they're using dry-wall, not even wonder board, and the worst kind of particle board. The NWXC has ALWAYS been 99% marketing.

Like one of the MOST prestigious builders in Bend told me five years ago, he was asked to be on the list for NWXC, and passed. He felt that the builder's selected were no better than any other in Town. He did mention one important fact that I have held dear, he told me NEVER BUY A HOUSE in Bend that was built from 2001 to 2006, they're all crap.

Like was mentioned earlier today, given that the rental value of the average NWXC home is $1000/mo, then the average value of the home's is $120K. Given this subtle fact, if someone really wanted to live there just rent, and wait eventually 2-3 years you'll be able to buy there for less than $200k, why invest $300k+ of todays money for something you can have today for $1000/mo, and NOT enjoy negative appreciation.

Lastly, a fresh breed of realtors have come out today, the principal issue they seem to be on is that our figures are based on the ask from last month, its quite clear that ask is now down -25%, therefore everything the bend-bubble folk have to say is irrelevant.

The trouble is it doesn't end here, next month it will be another -25% and we'll still be wrong.

The fact that nobody ever asked for $500sq-ft in NWXC and noboday ever paid over $300sq-ft in NWXC. Omerta.

Mr. Reality said...

Lastly, a fresh breed of realtors have come out today, the principal issue they seem to be on is that our figures are based on the ask from last month, its quite clear that ask is now down -25%, therefore everything the bend-bubble folk have to say is irrelevant.

If you're referring to Mr. Reality I'm not a realtor, and my point is that Northwest Crossing has been the victim of a drive-by blogging. IHTBYB quoted the mythical $500/sf sales figure three times in his blog post and he used it to calculate a bogus yearly yield. To paraphrase the 80's Wendy's ads, "Where's the beef Bend bubble folks?" When I lift up the bun on your "facts" there's no meat inside. Why do you need to make up numbers?

Anonymous said...

1272 NW MT WASHINGTON DR


Date 10-21-05
Sale $ 302985

I found this one interesting, because even though I personally think these little shacks on the busy street are hideous I'm quite surprised that this chap got this shack for this price at this point in time, as I used to go up frequently, and at that time I never saw any of these shacks with an ASK of less than $400k, and the realtors had explicitly told me { the ones next to the coffee shop }, that offers for less than $400k would not even be considered. Thus I'm deeply perplexed by this BUY, and I can only assume that it is an inside buy, this it might be useful to see if there were other 'low buys' such as this, or what the average buy at the time for these little busy-shacks-on-the-street were actually selling for.

It's obvious that our realtor-boy here is quite proud of this sale, it is even more surprising as this price at a peak of the market is lower than the current ask today.

*** --------2006-------- --------2005-------- ---------2004--------
Total Taxable Total Taxable Total Taxable
RMV A.V. RMV A.V. RMV A.V.
LND: 133,620 79,950 28,350
IMP: 174,870
TOT: 308,490 146,440 79,950 49,730 28,350 19,278
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -


SALES: --- 1 --- --- 2 ---
Date 10-21-05
Sale $ 302985 1270500*

Mr. Reality said...

Thus I'm deeply perplexed by this BUY, and I can only assume that it is an inside buy, this it might be useful to see if there were other 'low buys' such as this, or what the average buy at the time for these little busy-shacks-on-the-street were actually selling for.

Yes there were other "low buys" such as this. In case you missed it here's another cottage that sold for $257/sf a year ago (and subsequently re-sold for $287/sf).

Site Address: 2776 NW COLTER AVE
Total SqFt: 1315
Date #1: 06-02-06
Amount #1: $338,919
Price per sf #1: $257
Date #2: 01-29-07
Amount #2: $377,500
Price per sf #2: $287

Anonymous said...

If you're referring to Mr. Reality I'm not a realtor, and my point is that Northwest Crossing has been the victim of a drive-by blogging.

Everyday the same person comes back with a new persona, ok this is fine.

I think that the issues to date have been ...

1.) That NWXC is a ghost-town.
2.) That it is over-priced.
3.) That the realtor's hawking the place sold it as a 10k-20k/mo appreciation investment.

You have been picking the shitty of all the homes in NWXC, I know the place well, I bike it everyday, HELL I EVEN MADE an offer on 2776 NW COLTER AVE FYI,

These were the worst houses because they're all near NW-Washington, which is a busy street, they were the hard to sell property's. So the fact that you have picked out the crap-of-the-crap to prove your point is bull-shit.

I would have to ride around on my bike to pick out the houses that I have in mind, that I know over the past two years had over $400sq-ft ask, and it would be interesting to see what they actually sold for.

The blog here is not 'drive-by', the issue is we think NWXC is an over-marketed scam pure & simple.

The property is ALL marketing, and NO content. There are a few outer perimeter property's that sold cheap because nobody wanted to buy them, in fact most of these property's you mention have realty signs even today, as the people who bought them are trying to dump them.

Anonymous said...

NWX homes $359/sq-ft, what a bargain. Can I get two please!Oh and can you throw in one of those great new condo's going up.

Can you point to a single Northwest Crossing home that's for sale for $359/sf? Just one?

You are welcome!


2436 NW Fort Mandan Way
3 bedroom : 2.50 bath : 2504 sf
Priced at $899,000

Anonymous said...


Click the "Sales Information" checkbox in DIAL and you'll see this:

SALES: --- 1 ---
Date 10-21-05
Sale $ 302985


I agree that this property sold for $302k in oct05,

1.) It is a special case as I have seen NONE other near this house, sold for this price all other's near sold for $390k
2.) This is the worst shit in NWXC
3.) This shit all has for-sale-signs today on it, because nobody wants to live there,

I think what's going on here is we-the-bloggers said that there are over-pricing in NW-XC, and to prove us wrong, you pick the pathetic sick puppy's of NWXC.

First of all we all deal with averages, and ALL the property's your have picked are perimeter propertys near the worth intersection of the worst street, adn the ugliest area of the whole development, thus yes they had to sell these dogs at a low sq-ft price.

Anonymous said...


http://www.millqtr.com/about/Bend_Growth/
What is Driving Bend Oregon's Growth?
Primary Reason: Quality of Life

There are not many places where you can ski in the morning, play nine holes of golf and land a trophy trout, all in the same day.


What kind of bullshit is this? Can the kid who works at a bike-shop even afford to down-hill on the weekends?

Can a middle age guy ski 4 hrs in the am, then golf for 4 hrs, and then fish for 4hrs??

I find that a 2hr bike ride in the AM, and another 2hr in the afternoon, and I'm bushed.

Quality of life is not running around 12 hrs a day skiing, golfing, and fishing. This shows how out of touch these marketing people are. Most folks I know who fish don't do the other, and most people I know who golf are lard arses, that don't do anything else.

Perhaps a kid could do all three in a day, but they have NO money.

The developers promoting this lifestyle crap, they come to bend to destroy our river, and thus kill the fish. They come to pollute Central-Oregon, and thus destroy the golf, and of course the population will cause acid-rain which will destroy the mtn. Thus let them all come and spend 12hr's day fishing, golfing, and skiing, and I'm assuming they'll have a heart-attack.

Mr. Reality said...

You are welcome!

2436 NW Fort Mandan Way
3 bedroom : 2.50 bath : 2504 sf
Priced at $899,000


Thanks! Just one more question -- there aren't any Northwest Crossing listings in the MLS for 2504 sf/$899,000, so is this a FSBO?

Mr. Reality said...

I think what's going on here is we-the-bloggers said that there are over-pricing in NW-XC, and to prove us wrong, you pick the pathetic sick puppy's of NWXC.

I'd be happy to prove you wrong using any other Northwest Crossing phase of your choice, but IHTBYB is the one who picked the cottages as examples. Here's a quote from his comment:

nobody has ever paid anywhere close to $500/sf for a home in Northwest Crossing

Oh, I beg to differ. Those crappy little "dog house" cottages, under 1,000/sf, I saw in the high $400's. But true, the larger the home there, typically the less expensive.

Anonymous said...

"you picked the pathetic sick puppy's of NWXC"

I'd be happy to prove you wrong using any other Northwest Crossing phase of your choice - mr.reaper


You keep saying that, but you only pick the sick puppy's to prove that there are cheap homes in NWXC.

We know there are cheap homes there, that's why nobody is there, that's why it is a ghost town.

We have all seen people 'ASK' for up to $500k for the dog-houses in NWXC, now if anyone ever bought, that's an separate issue, I personally would hope that nobody is that stupid.

The real estate people have made it very clear or the past two years that NWXC is special, and thus deserves a 25% premium.

You say "you would happy to prove us wrong using a phase", I think this argue will get no where because as always, you do the same thing you take a little sentence from the post's and twist it around to your meaning, and then use it to prove that everything posted here is false. This is of course considered grade school abuse of logic, but its your hobby, not ours.

I think for once, what you should do is STATE your position, and then let us correct it for you.

Just like the above you quote the quote that your proof's are based only on 'sick puppy property', but then you completely ignore the issue. Which leads me to believe that other than cutting&pasting one liners, your IQ is well below the two digit norm.

In summary, state your position, state what you believe, at this point the debate is going no-where, because you just keep pasting random sentences, from random posts, and then expect others to infer your concern.

What I'm trying to say, is your point may be better understood, that rather than cut&paste stuff out of context. That you actually write a small article about what YOU believed that transpired over the last five years at NWXC.

Everyone else has done this, now its your turn.

Anonymous said...


If you're referring to Mr. Reality I'm not a realtor, and my point is that Northwest Crossing has been the victim of a drive-by blogging.
- mrs. netnanny


Drive-by blogging is a punishment by death in this town pardner. If you have proof then say it.

You say your point is that NWXC is a victim, but where is your proof?

You here to defend NWXC, but no where do you have an argument for your claim. There are 100's of arguments that we have posted on this issue, but where is yours.

Please take the time to write up a complete article and explain what NWXC is a victim of drive-by-blogging { actually most of us walk and bike through nwxc }. I would prefer you accuse us of bike-by-blogging, but I guess drive-by connotes gun-violence, I'm quite surprised you haven't thrown a terrorism connotation in as well for good luck.

So please explain your point.

Regarding your concern that we have committed a crime, this is what has been said ...

1.) NWXC is over-price +25% or more for a marketing premium that NWXC created artificially, a premium that is now without value.

2.) NWXC is a ghost-town. Rare are people seen. Lock boxes are seen on doors 10to1 over people, I have noticed myself in the past months that for-sale signs are less present, but lock-boxes have increased.

3.) NWXC marketing real-estate 'sales', especially those next to the coffee shop are some of the biggest hustlers in town.

4.) NWXC is-was marketed to speculators, you can see that from DIAL where most homes are owner by NON-Occupants. NWXC marketing told

5.) NWXC marketing/RE told everyone that you could make $10k/mo { 30% appreciation on $400k home is $120k }. I heard this directly from RE people at the shop many times. A sure thing BEND RE would NEVER go down. You cannot lose money in NWXC.

Ok, the above is only five items that have been posted here, this should be enough to question the integrity of NWXC.

The issue here is its your turn, write a 100 page article state your position, defend NWXC.

Anonymous said...

You know, George Bush caused all of this.

Anonymous said...

The fact that nobody ever asked for $500sq-ft in NWXC and noboday ever paid over $300sq-ft in NWXC. Omerta.


The point here is that if its NOT true today, then it wasn't true yesteday. This is the mind of a realtor.

After a few months of silence when the NWXC homes start to go from $250k to $275k the BULLETIN will have a headline NWXC 10% appreciation, never mentioning the fact that these home went down 100%. This is the game, and this will always be the game.

Deny bad news, and hyper-inflate the positive.

Mr. Reality said...

Which leads me to believe that other than cutting&pasting one liners, your IQ is well below the two digit norm.

Dear Mr. Bendbust: Do you believe disparaging another person's IQ is a useful debate technique? If so, how sad for you.

Anonymous said...

The IQ statement must have been a joke, since the IQ norm is by definition 100 (three digits).

Anyway, About the 2001-2006 houses, I've got to agree with that. If you're going to buy one, hire three really good inspectors. It'll pay off.

I saw houses being built in horrible weather. In a saner time, you don't build houses while it's snowing. I've heard stories of mold and cracks and leaning walls.

Sometimes heating systems were OK'd without even being hooked up. Believe me, things got so bad that builders were assuming you were going to call 100 times to get things fixed. If no one lived in the house, or a quiet renter was in there, odds are the house has dozens of unfixed flaws.

I've even heard several stories of smells from vents where the workers were regularly peeing.

--TT

Mr. Reality said...

Here you go, a random sampling of Northwest Crossing sales from DIAL. Note that there aren't any $500/sf sales in there -- in fact there aren't any $400/sf sales either.

Site Address: 2463 NW ORDWAY AVE BEND 97701
NORTHWEST CROSSING PHASE 1 Lot: 16
Total SqFt: 2454
SALES: --- 1 --- --- 2 --- --- 3 ---
Date 10-19-05 08-08-02 07-02-02
Sale $ 407400 314943 312000
$/sf 166 128 127

Site Address: 1483 NW JOHN FREMONT ST BEND 97701
NORTHWEST CROSSING PHASES 2 & 3 Lot: 128
Total SqFt: 2031
SALES: --- 1 ---
Date 08-18-05
Sale $ 410000
$/sf 201

Site Address: 1594 NW LEPAGE PL BEND 97701
NORTHWEST CROSSING PHASE 4 Lot: 145 Block:
Total SqFt: 1988
SALES: --- 1 ---
Date 09-14-04
Sale $ 344900
$/sf 173

Site Address: 2588 NW SHIELDS DR BEND 97701
NORTHWEST CROSSING PHASE 5 Lot: 171 Block:
Total SqFt: 2895
SALES: --- 1 ---
Date 03-28-05
Sale $ 429730
$/sf 148

Site Address: 2428 NW LABICHE LN BEND 97701
NORTHWEST CROSSING PHASE 6 Lot: 253 Block:
Total SqFt: 2766
SALES: --- 1 ---
Date 05-27-05
Sale $ 356810
$/sf 128

Site Address: 2191 NW HIGH LAKES LP BEND 97701
NORTHWEST CROSSING PHASE 8 Lot: 396 Block:
Total SqFt: 3520
SALES: --- 1 ---
Date 08-22-06
Sale $ 799900
$/sf 227

Site Address: 2139 NW HIGH LAKES LP BEND 97701
NORTHWEST CROSSING PHASE 8 Lot: 403 Block:
Total SqFt: 1602
SALES: --- 1 ---
Date 02-14-06
Sale $ 486288
$/sf 303

Site Address: 858 NW FORT CLATSOP ST BEND 97701
NORTHWEST CROSSING PHASE 8 Lot: 380 Block:
Total SqFt: 2189
SALES: --- 1 ---
Date 03-21-06
Sale $ 518743
$/sf 236

Anonymous said...

http://www.northwestcrossing.com/ for some great listings.

Mr. Reality said...

2436 NW Fort Mandan Way
3 bedroom : 2.50 bath : 2504 sf
Priced at $899,000


Ah ha, found it on the Northwest Crossing Web site. It's listed as "MLS# 2611753, Status: Pending Sale", but that one sat on the market for quite a while so it probably didn't sell for full price. ;-)

IHateToBurstYourBubble said...

Sorry to fixate everyone one $500. I'm not sure if a drive-by by me a long-time ago at the dead smokin' top and some quicky math is the most reliable info. I still hold to the statement that I saw (I know I saw it) a sub-1,000/sf micro-shack for well over $400K.

Plus, proving whether I saw it or not doesn't settle the issue of NWX being overpriced. It IS overpriced. I think that's apparent from the complete inability to sell anything over there. I think people who bought there got snookered and are pissed and are looking for any rationalization to prove otherwise.

And I agree: This town is PACKED with Gold-Rush quality shacks: ie Crap Shacks. These weren't "homes" when they were getting built, they were monopoly money to be passed around. I think we'll see some accelerated depreciation on many homes that were thrown up here in the past 5 years.

What I think is ironic is that the NWXers are trying to prove NWX is "affordable". My God, a year or more ago, it was being sold on the fact that it was totally UNAFFORDABLE. They were proud of the outrageous asking prices. Funny that "affordability" is the new buzz word in Bend home marketing... a year ago it was "exclusivity" You NWXers seem to want to prove low per/sf prices... seems like you should want to prove the opposite. All the bubble-types are trying to raise your comps.

We're Trying To Help You! Won't You Let Us HELP YOU!

Anonymous said...

2436 NW Fort Mandan Way
3 bedroom : 2.50 bath : 2504 sf
Priced at $899,000

Ah ha, found it on the Northwest Crossing Web site. It's listed as "MLS# 2611753, Status: Pending Sale", but that one sat on the market for quite a while so it probably didn't sell for full price. ;-)

***

It would be useful, if someone could find the county assessment for this for 2006, I have found that appraisals are going right now about 10% over county. Then we'll know if this thing will even close.

Anonymous said...

The IQ statement must have been a joke, since the IQ norm is by definition 100 (three digits).

No joke, the average buyer in NWX has a two digit IQ.

Anonymous said...

There has been a lot of deep analysis here, and I think the conclusion is that nickel over $150/sq-ft for NWXC is a nickel wasted.

If & when our Mr.Realtor can alert to us that the average NWXC home has an ASK at $150/sq-ft then we'll know the bend-bubble-bottom for NWXC has been reached.

Lastly, our Mr. Realtor is still only using the perimeter dog's to prove bargains. It would be more useful to ONLY consider the Compass-Park property's because this is the cream that is marketed, and this should be used as the NORM.

Mr. Reality said...

Sorry to fixate everyone one $500. I'm not sure if a drive-by by me a long-time ago at the dead smokin' top and some quicky math is the most reliable info.

Well said.

Plus, proving whether I saw it or not doesn't settle the issue of NWX being overpriced. It IS overpriced.

I agree, but keep in mind that most people (non-flippers) who are buying in Northwest Crossing aren't paying the asking prices, they're negotiating the prices down.

What I think is ironic is that the NWXers are trying to prove NWX is "affordable".

If you're referring to Mr. Reality, I'm not a Northwest Crossing resident and I don't have any financial interest in the neighborhood. I'm posting actual sales data from DIAL to shed some light on what Northwest Crossing residents (non-flippers) have really paid on a $/sf basis, but as you'll notice the sale prices are higher than the Bend median so they aren't the most affordable homes in town. My impression is that Northwest Crossing was conceived as an upper middle class neighborhood and it'll probably stay that way which means it will only be affordable to families making six-figure incomes or having seven-figure net worth.

Mr. Reality said...

No joke, the average buyer in NWX has a two digit IQ.

Well I guess that answers my question about Bendbust's proclivity to disparage other people's IQ's.

Bendbust, since you know so much about IQ's can you tell us what your IQ is?

IHateToBurstYourBubble said...

My impression is that Northwest Crossing was conceived as an upper middle class neighborhood and it'll probably stay that way which means it will only be affordable to families making six-figure incomes or having seven-figure net worth.

I agree with some of your points here, and they're well stated. And I think NWX may have been "conceived" as a "real neighborhood" of sorts, but by Summer 2006 it had morphed into something else. It was chocked FULL of Flipper Bait, and was pushed as such.

You can practically admit to your lawyer that you killed someone, but they are largely bound by confidentiality to keep that quiet. NWX Realtors -- same thing. NONE will admit that NWX units were Flipper fodder that that served almost no useful purpose toward the end, except Flipper Bait. They threw flipper bait into the water, and Flipper came... no surprise.

The unfortunate side effect is that Bubble-Top buyers are going to get spanked, and pricing precedents have been set that will grind new sales to a halt. This is just builder backlash for giving people the Pump-N-Dump. They didn't HAVE TO mark it up to $350/sf (or whatever), but they did anyway, and now there is starting to be a Bad Collective Memory of getting spanked by greedy builders. Said it 100X: Lots of people regret what they do when they're good & drunk at a party they think will last forever.

Once you've been flipper bait, it's hard to go back.

Q: "What's that?"
A: "That? That there's Flipper Bait?"
Q: "What's Flipper Bait?"
A: "Flipper Bait's been spanked, passed around the room, peed on and put away wet. Now it's just a worn out shell of it's former self."
Q: "Oh. I wasn't pointing at that whorehouse. I was talking about that NWX cottage next to it."
A: "So was I."

Anonymous said...

Once you've been flipper bait, it's hard to go back.

That is why I keep coming back to this blog! Funny as hell AND informative.

Good stuff!

Anonymous said...


I agree, but keep in mind that most people (non-flippers) who are buying in Northwest Crossing aren't paying the asking prices, they're negotiating the prices down.


A non-flipper in NW-XC, now we know your from out of town.

Pleeeeeeeeeeeeeeeze, do not insult OUR intelligence.

Anonymous said...


My impression is that Northwest Crossing was conceived as an upper middle class neighborhood and it'll probably stay that way which means it will only be affordable to families making six-figure incomes or having seven-figure net worth.


NWC was conceived to be a flipper-paradise. Why else would the Real-Estate shop just next door to the coffee shop only speak appreciation.

There are two kinds of buyers at NW-XC there occupied-flippers, and non-occupied-flippers.

The trouble now that all the zero-down flip's no longer pencil, you cannot flip, and GREAT that a few flipper's didn't pay full ASK, but so what! Even at the price they paid, they'll have a hard time selling to a BIGGER fool-flipper.

The Greatest Fool-Flipper, has bought. Now Flipper's at NW-XC have to find even greater Fool-Flippers. Trouble is SubPrime is over, so there is no flipper-fuel.

What's a flipper to do?

You new to this blog-site, and its been said again, here is the future of NW-XC.

Once 1/2 the place is full of $1k/mo rentals, then there will be taco-shack sales on the weekends, me pedro, hermes, and hulio already have our wives & kids coming up from Mexico. Our employer is co-signing for us. NW-XC is a great low-income project, because its got park's that the Gringo doesn't use, NW-XC doesn't have too many INS or Cops patrolling. It's just a great place for an extended family of say 10-20 to live, rent, and raise a family.

Our gringo land-lord { senior flipper } couldn't sell, so he moved back to california. Life is good I tell all my Mexican friends that NW-XC is just like Southern-California without the crime.

I love NW-XC the streets are empty for the kids, but the alleys are ideal for week-end garage sales, and taco-stands. I find NW-XC a far better place to raise a family than Tijuana.

Anonymous said...


Northwest Crossing was conceived as an upper middle class neighborhood and ... will only be affordable to families making six-figure incomes ...


Do yo make this stuff up or do they type it for you??

Bubble is over, there are little to NO six-figure job's in Bend. The average FAMILY income is $60k, and the std-dev is narrow.

I think you have just answered your own question, as to why almost everything in NW-XC is for sale, its because they priced themselves out of the market.

Two major problems here. First the average person cannot afford more than $240K, and second your $100K person, WHY in the hell would they want to live in a place like this?

You know what NW-XC is? It's leisure-world, a place for blue-hairs to die. Lot's of HOA's, lots of rule's, not the kind of place that a child could mark chalk on the side-walk.

In summary, we have said that the average price for NW-XC will soon be $160/sq-ft, then it will be affordable to the average Bend family.

The sales-hype of NW-XC was that everyone would flip and get rich, and everyone would be a millionaire, and all the rich would be move to Bend, ...

The party is now over, and the flippers are torn. Do they walk, do they run, or do they just slowly bleed to death. This is the question you should be asking yourself.

IHateToBurstYourBubble said...

NWX Developer slammed two subdiv's into our side, chief. It was comin' back, from the island of Tinian Delady, just delivered the housing bomb. The Hiroshima Housing bomb. Eleven hundred flipper bait homes went into the market. Vessel price went down in twelve minutes. Didn't see the first flipper for about a half an hour. Tiger. Thirteen footer.

You know, you know that when you're in the water, chief? You tell by lookin' from the dorsal to the tail. Well, we didn't know. `Cause our refi mission had been so secret, no distress signal had been sent. Huh huh. They didn't even list us overdue at the mortgage office for a week. Very first light, chief. The flippers come cruisin'. So we formed ourselves into tight groups. You know it's... kinda like `ol squares in battle like a, you see on a calendar, like the battle of Waterloo.

And the idea was, the flipper would go for nearest man and then he'd start poundin' and hollerin' and screamin' and sometimes the flipper would go away. Sometimes he wouldn't go away. Sometimes that flipper, he looks right into you. Right into your eyes. You know the thing about a flipper, he's got...lifeless eyes, black eyes, like a doll's eye. When he comes at ya, doesn't seem to be livin'. Until he bites ya and those black eyes roll over white. And then, ah then you hear that terrible high pitch screamin' and the housing market turns red and spite of all the poundin' and the hollerin' they all come in and rip you to pieces.

Y'know by the end of that first dawn, lost a hundred grand! I don't know how many flippers, maybe a thousand! I don't know how many HELOC's, they averaged six an hour. On Thursday mornin' chief, I bumped into a friend of mine, Herbie Robinson from Cleveland. Baseball player, bosom's mate. I thought he was asleep, reached over to wake him up. Bobbed up and down in the water, just like a kinda top. Up ended. Well... he'd been bitten in half below the waist. Got his wallet.

Noon the fifth day, Mr. Hooper, a Lockheed Ventura saw us, he swung in low and he saw us. He'd a young pilot, a lot younger than Mr. Hooper, anyway he saw us and come in low. And three hours later a big fat PBY comes down and start to pick us up. You know that was the time I was most frightened? Waitin' for my turn. I'll never put on a 105% HELOC again. So, eleven hundred flipper bait NWX homes went in the market, three hundred and sixteen flipper bait come out, the flippers took the rest, June the 29, 2005. Anyway, we delivered the bomb.

Mr. Reality said...

A non-flipper in NW-XC, now we know your from out of town.

Nope, I live right here in Bend. By the way, what's up with the "royal we" you use in your sentences? I know you're an old guy, but that went out of style with Queen Victoria.

There are two kinds of buyers at NW-XC there occupied-flippers, and non-occupied-flippers.

Nope, I personally know people who bought in Northwest Crossing five years ago and who plan to live there at least until their kids are grown (10+ more years). I've also met people who bought more recently who intend to be long-term residents, not flippers. Mind you, I'm not saying there aren't flippers in Northwest Crossing, of course there are, just like in all the other new subdivisions built during the boom years.

Bubble is over, there are little to NO six-figure job's in Bend.

Well I've got one. Just because you don't have one doesn't mean they don't exist.

I think you have just answered your own question, as to why almost everything in NW-XC is for sale, its because they priced themselves out of the market.

I agree with you that asking prices are too high in Northwest Crossing.

Two major problems here. First the average person cannot afford more than $240K, and second your $100K person, WHY in the hell would they want to live in a place like this?

I can't speak for other people, but I live here because I enjoy the small city, I enjoy skiing in the winter and the varied recreational opportunities in the summer, and I have friends and family here. How about you, why do you live in Bend?

Anonymous said...

mr. Reality...

Don't try to argue with them... they are convinced everybody in Bend makes $7 per hour, there is no hope for any good job here, and the sky is falling. Any data or prosperity outside of their expectations will only result in ridicule and disbelief that you aren't a species of rare bird.

Anonymous said...

California median family income is only 61,476. I guess houses in California should only cost 190K.

hahahaha

Anonymous said...

Having watched for weeks without commenting (a lurker?), I now dive right in.

He (well, somebody) said that the average family annual income is in the $60-70K range, with a narrow std deviation. He also said the the number of $100K incomes is probably around 5%.

You say you have a $100K income. You say you like NWX and plan to live in NWX for a long time. Great. Good for you.

Well, I have a $100K+ income. But I brought my job with me... telecommute to a Bay Area salary. So I am one of the lucky 5%. How many more of my kind are there in Bend? How many more will be coming here in the next 3 yrs? Maybe the 5% goes to 7.5%? .. maybe 10%?

Even so, if the 5% doubles to 10%, where are they gonna move to? I wouldn't want to ever live in NWX... I could fit over 100 NWX crackerjack houses on my hobbyfarm. Will the new money ($100K+ telecommuters or the SME biz owners) really want to live in NWX? I am fine driving to Mt. Bach for 40mins instead of 20mins (from NWX)... not a bad trade off every winter to drive an extra 40mins a day (back and forth), but not have to put up with the other 'issues' of NWX.

So, my question is again:
Will the new money ($100K+ telecommuters or the SME biz owners) really want to live in NWX?

I think not. Their money goes farther in other Central Oregon locales. And besides, people bringing in $100K (and $200K+, $300K+...) incomes have bigger equity packages, so they aren't into $400K or $600K Drastic Price Reductions NWX houses.

Hence the big jump in $1M+ properties. The real money will not dry up right away. But, sadly, that real money (1M+ house buyer) can be counted on one or maybe two hands monthly, hence won't save the Bend RE Bubble.

Anonymous said...


Well, I have a $100K+ income. But I brought my job with me... telecommute to a Bay Area salary. So I am one of the lucky 5%. How many more of my kind are there in Bend?


Your a very lucky person.

One of things we have asked over & over here, is that unless your NOT a world traveler, what is special about Bend? I have traveled everywhere, and do not find Bend special. That said, I did find it sort of special twenty plus years ago, before the BIG-BUILD.

This poster is complete RIGHT-ON, for $500k you can have a hobby-farm, buy a little John-Deere 790, and maybe a little Cat D4, and make pond's, and enjoy central-oregon. Why would anyone but a blue-hair want to live in NWX?

It's very important to hear success story's on this bubble-board, as normally its very depressing stuff. I think our poster has brought out all the right issues ...

1.) If your coming to Central-Oregon, get some land.
2.) It doesn't matter if your 10 or 20 minutes from the mtn on a 10 degree morning in the winter at 7am, before the tourists are out of bed.

With gas prices up, people the hobby-farms are now a great deal. I think I should define a hobby farm as 5-10 acres.

The real issue here is true love of central-oregon, if your real, then its the land "hobbits". If your just a flipper, then it doesn't matter NXWC or OldMill. The city and speculators are right-now rezoning Bend from min of 5000sq-ft lots to 3000sq-ft, and they actually want 1500sq-ft approved so the builder's can make money on land, they say this is to build affordable housing.

Our poster here has brought up a very important idea, the idea that people don't come from cali to go from one box to another, they don't come to central oregon to live in one of Mrs. Breeze's Old-Mill condos with a view of Walmart. They don't come here to live in a track home village, that's just like ALL the rest in californian.

All the marketeer's are always talking about Bend Exception-ality, yet they want the RE buyer to buy into the cali track. What is the point of coming to Bend to live in NW-XC? I think what I'm trying to say is that NW-XC is just another california track home village with your neighbor five feet from your window. Folks are trying to get away from that shit.

Builder's do you know how to read?

Anonymous said...


Two major problems here. First the average person cannot afford more than $240K, and second your $100K person, WHY in the hell would they want to live in a place like this?

I can't speak for other people, but HI live here because I enjoy the small city, I enjoy skiing in the winter and the varied recreational opportunities in the summer, and I have friends and family here. How about you, why do you live in Bend?


We were talking about NW-XC, and you have made it clear you don't live there. When I asked the question "why would they live in a place like this", I'm still on NW-XC even though your somewhere else.

I think you should let this all go, from reading ALL your post's you seem to be about 90% in sync with us, so what's the point?


How about you, why do you live in Bend?

I moved here forty years ago, I always liked Bend as a 'base-camp'. I loved the day you could park your car at Dutchman and not come back for a week, WITH YOUR FUCKING DOG. Ten or so years ago they banned that, now they have banned dogs swimming in the River. Everyday they try to make Bend more and More like Monterey,Cali. I guess is sells old-mill condo's so they say.


I'm still fond of Bend, but the new-commer's want to make it like where they come from. They want downtown to be like Newport-cali or Sausalito-cali, but they want to be close to golfing, skiing, and fishing. So the Marketing folks say.

I like the free things in life. Like, mtn-biking, hiking,xc-skiing, rock climbing. When I first came to Bend all we did is play, and it never cost anything, gradually things are now starting to cost money. I repeat the BEST-THINGS-IN-LIFE ARE FREE.

I think traditionally most of us got rich elsewhere and moved to Bend, we never tried to make Bend into a get-rich-quick-town. When I moved to Bend that's the last reason in the world I moved here, if I wanted more money I knew were to go. I came here to live.

I think whats MOST depressing about what Bend has NOW become is that all the new-commer's in my humble point of view are not here to live, but to get rich quick, or to be part of the latest "Outside Magazine" hot-spot of the week.

IHateToBurstYourBubble said...

Bubble is over, there are little to NO six-figure job's in Bend.

Well I've got one. Just because you don't have one doesn't mean they don't exist.


There are precious few good paying jobs around, very few that'll support the current home prices. Seriously, I'm glad for anyone who is somehow "making it" here. The problem is this is an economy built on $7-8/hr jobs. There's literally a flood of those, and very few "living wage" jobs. The housing bubble has "created" the shortage of living wage jobs. Housing prices actually dictate to a large extent what "living wage" is. If we were down 50% from here, we wouldn't be having this conversation.

Anonymous said...

Duh! No one wants to live in Bend, why would they? We all REALLY just want to live in Wichita. I heard I can get $14 per hour instead of $7.50. It's a no brainer. Do you realize that's DOUBLE my salary. Good GOD!!! I'm moving tomorrow.

Anonymous said...

Hey there Bilbo or should I say Dildo.... Doesn't matter I suppose your comments say enough about you.

You claim you've been here for 40 years and maybe you have but news flash those bill board signs about "Thanks for visiting Oregon but now you can leave", which were under the leadership of Gov. Tom McCall, HE WAS FREAKIN SPEAKING TO YOU Bilbo.......

You complain about all our Cali invaders and how they are destroying the environment here. The only difference between you and them is that you arrived earlier and have been screwing the state of Oregon longer, hey way to go.

Oh yeah dog lover I bet you own a freakin mangy pitbull like your homeless buddies at the river, don't worry he'll turn on you one day and bite you in the nuts that is if they haven't already been withered and deemed worthless.

All the recent migrants from Cali can stay I would rather you go home.

Yep, you can now drink a few more PBR's take a few hits on the crack pipe and start ranting, heaven forbid you should actually spell correctly and keep a coherent thought.

Anonymous said...

Anonymous said...

California median family income is only 61,476. I guess houses in California should only cost 190K.

hahahaha

Yes, that's why I moved to Portland a dozen-plus years ago.
Do I have the last haha?

Anonymous said...

He'll turn on you one day and bite you in the nuts that is if they haven't already been withered and deemed worthless.

I think your dating the wrong guy.

I do have a question, at what point do you deem partially eaten nuts to be worthless?

Ah shucks may I remind you this is the bend-bubble-bashing-blog, and not the neutered-cali-man-seeks-cali-man blog.

If your looking for a non-dog owning guy I suggest you just hang out at red-robin on a sunny day at the old-mill. Put a little blood on your crotch, and the right guy will seek you out. They don't allow dogs anywhere near that area, so don't worry about the blood attracting dogs.

IHTBYB, BEM, ... Duncan where do you find these people? Where do they come from? How can we send them back? They're obviously republicans with this fascination with genital abuse.

Anonymous said...


California median family income is only 61,476. I guess houses in California should only cost 190K.


Stated-income loans, interest-only-loans, nothing-down.

This is why cali is the #3 in foreclosures today, some 20% of cali MTG today is over 60 days late in monthly payments.

Let's say today much of our cali homes are 2X over what people should have bought, but this is classic bubble. Everybody was flipping, and the folks that didn't get to play in 2004 decided to get in, and the MTG folks allowed stated-income, so folks got over their heads.

I don't know where the $190k come's from using my historic benchmark, a $61k/yr family income would qualify you for a $244k home. Period.

This is what bubble's are all about, fools try to get in, and the greatest fool buys, sad thing is most of your population in cali really couldn't afford to play the game, now they're economically hosed for life.

Anonymous said...

Yes, that's why I moved to Portland a dozen-plus years ago.
Do I have the last haha?


Yes, you will I know lots of people that had been renters forever in PDX that bought in 2005/2006 these people barely make $40k/yr ( combined ), and all bought themselves a house.

They don't paint, they don't fix things, and they have NO cash. In about 2-3 years when shit falls apart, all PDX will have a massive foreclosure problem.

What I have seen is people get into $280k-$320k in PDX, with teaser loans, that are interest only, stated income, zero down. The first three year payments are like rent, e.g. $1200/mo, but when these MTG's reset, watch out, because they were told they could refinance, problem is subprime, that got them in the game is now gone, so they cannot refi.

Ha-ha, laugh if you wish in PDX, if you don't intend to hold your RE for over ten years, you better sell quick. PDX is only ok right now, it will be the last to fall, but also the last to recover.

There's a ton of people moving to PDX right now, and there's a shortage of rentals, as they were all sold, and the apartments have been converted to Condos.

Portland is going to completely explode this year. I have landlord friends there that are seeing 100-200 calls a day from a craigs-list ad, for a rental house, and these are all out of state people that want to line up a place before they get here, because the word is now out, that you'll be living in your car if you just show up.

Will you get a ha-ha, I don't know, I don't think that way.

BilboBend said...


Homebuilder's New Mantra: Don't Talk To The Media!


I've never in my life seen so many freaked out CEOs. I say this only because not nine months ago I attended a similar UBS conference, where the homebuilder CEOs and their CFOs and their PR reps and their baggage handlers and their mother-in-laws were all fighting with each other to jump in front of our cameras to talk about the recovery shining brightly ahead in the housing market.

This, of course, was pre-subprime meltdown. They all predicted a happy spring, when sales would rebound and everyone would start spending money they didn't have again, like in the previous boom years.


Well it didn't pan out that way. So here I am again, same type of conference, same camera, same boring business suit so as not to frighten off all the corporate suits, and all of a sudden I might as well be Usama Bin Laden. Apparently, I personally blew up the housing market.
AlL right, I get it, there's nothing to crow about, so get off the fencepost, but here's what really got me. After I asked the Horton CEO, Donald Tomnitz, he went into his presentation in front of about 200 analysts and banking types, and said the following:

"CNBC asked me for an interview which I respectfully declined because all the media seems to talk about is the death of the housing industry. The housing market is not

These foreclosures are only going to add to a glutted housing market, where cancellations are high, inventories are high, and earnings are positively bleeding. I'm just asking for YOU CEOs to tell me what to say, YOU guys to give me something to put on TV so I don't have to ask another analyst, YOU, who have an open mike whenever you want it (and remember, in cable we rarely cut a soundbite in the middle...we'll give you 30 seconds full if it's good, hell we begged you to go live), but your lips are sealed.

It begs the question: What are you all afraid of?

BilboBend said...

NAR: Don't Worry, Housing Prosperity Just Around Corner

I can't help but note the similarities between the dotcom-crash rhetoric/predictions back in 2000 and the housing-crash rhetoric/predictions in the last 12 months.

Those of you who had the misfortune to live through the dotcom crash will recall that I and other analysts correctly predicted that there would be a slowdown and shakeout, but drastically underestimated its severity and duration. All the way down, we kept revising forecasts (read: cutting estimates) to previously inconceivable levels, and each time we cut them, we reiterated our expectation that the inevitable trough and upturn was about six months away. It wasn't until two years after the shakeout began, when half of online advertising revenue had evaporated and more than 75% of the companies in the sector had keeled over that the downturn finally ended... And by that time, most of us were so demoralized that we'd stopped predicting that there would ever be an upturn.

Housing obviously won't experience as deep a correction as the dotcoms did, but I haven't heard a single persuasive argument explaining why this downturn won't look like every previous housing downturn: i.e., will last a lot longer and drop much farther than most people think -- until price/rent and price/income ratios return to or below their long-term trend. Instead, all I hear are arguments like this one, which are based not on long-term historical trends, but on short-term bubble-year pricing and price trends (arguments I am very familiar with, having made similar ones in late 2000 and early 2001):

WASHINGTON -- The National Association of Realtors again lowered its U.S. housing market forecast for this year, saying the market remains "soft." In its latest forecast for the real estate market, NAR projected that existing home sales will fall 4.6% this year to 6.18 million, compared with its previous forecast of a 2.9% decline. New home sales are expected to plummet even further.

The NAR said new home sales are likely to fall 18.2% to 860,000, compared with the prior forecast of a 17.8% drop. While near-term prospects for housing remain fairly grim, NAR said sales should pick up toward the end of the year.

***

Historic housing max should be 4X of household income.

Historic rent should be 10% per year of asset value.

Thus in Bend the average home should be $240k or less.

The average rent should be for todays home price of $350k, around $3k/mo for rent. Instead of $500-1k.



People can afford to rent for less than historic amounts because they have no real money in the deal, with zero-down loans, it makes it possible for a home to sit empty.

With state-income loans, it makes it possible for a pauper working at a car-wash to purchase a $1Millon dollar home.

Both these ratios rent/asset, and income/asset will slowly come back to historic values, now that easy money is a thing of the past.

Bend Economy Man said...

The question is: when prices start to fall, how low do they go?

We discussed this a lot in late 2005 and early 2006 on my blog and I don't think anyone came up with a better answer than "affordability." Somewhere around where a median-income family can afford to pay the mortgage on a median-value house with about 30% of GROSS monthly income with 20% down on a 30-year fixed.

And yeah, that's a scary number for Bend, so it's totally understandable why people continue to resist it.

Bend Economy Man said...

Also, did the "78% overvalued" report get picked up ANYWHERE in the local media?

BENDBUST said...

Sorry to post this again, but as you know we have a lot of newbies, here and we're having to make the same old arguments over&over. We might be at stage #6, perhaps #8, I think we have been cycling between #6-#8, for some time. Given that the NATIONAL-MEDIA just now, e.g. June07 announced #5-#6 to the public, this gives enough time for he cognizant to 'get-out-of-the-market'.


My guess is that local media will report in July07. We're no way close yet to #10, that requires complete mass hysteria. As we all know at this time 80% are still in denial.

Most of the newbies have been questioning the logic of stage-2, thus the re-post.

***

1. Housing markets increase, slowly at first. Faster in the “Hot Markets” { nuttin hotter than bend & CALIF }

2. First-time homebuyers get scared, want in, and need low payments. Homeowners want to enjoy newfound equity (upgrade older homes), especially in “Hot Markets” { dubya has just created two generations of renters that will never crawl out of debt, new peonage system created }

3. Lenders oblige by aggressively marketing Interest-Only loans (mostly ARMS) and HELs, and relaxing requirements to obtain such loans. About 50 - 70% of all new loans in “Hot Markets” are IO/ARMS { Until sub-prime peak in fall 2006, this got to 90%. In February 2007 Sub-Prime was shut down. }

4. Potential for huge gains using IO loans attracts new (but naïve) real estate investors (as well as seasoned investors) who use equity in primary home to finance investment property(s). This all combines to fuel an unprecedented demand for housing.

5. Interest rates rise, imperceptibly at first, to fight inflation levels, partly caused by rising housing prices.

6. As Interest-Only periods start to end, payments rise as much as 70% (based on only a 2% rise in interest rates) because (1) catch-up principal payments (2) shorter amortization period (20-25 years for remaining loan) and (2) rising interest rates. If rates are still low enough, some borrowers will refinance into another IO loan to avoid the large payments, postponing the inevitable for 5 to 10 years. ( We're now here 7% by july07, and then to 8% by sep07 )

7. IO loan borrowers tap out remaining resources (Stock market/banks) to make payments. Stock Markets drop as money flows out to meet the higher payments.

8. Unsophisticated investors are hit with 2 or more rising mortgage payments at the same time, leading to foreclosure/bankruptcy because (1) a double/triple, etc, effect with no increase in income and (2) inexperience in timing market changes and setting sales price, leading them to ride the market down.

9. Sophisticated investors unload property, priced for quick sale. Lenders unload foreclosed properties as quickly as possible to limit their losses. { This what the baby-jeezus may have meant when he told dubya that we're in a grace period }

10. Property values start to plummet as properties flood the market.

11. Most IO borrowers cannot refinance, especially if steps 6-10 happen simultaneously because (1) new fixed rates will be higher than ARMs and (2) outstanding loans will exceed property values. { under new bankruptcy laws, folks that lose their homes on this cycle will be renters for the remainder of thier lives, look at the great dubya RE scam of 2002-2006 as a retirement plan for republicans }

12. Steps 6-10 will repeat over and over, causing ever increasing declines in both the stock and real-estate markets, as (1) houses get harder to unload due to market supply, (2) lenders with a significant IO position go under, (3) money is pulled out of the stock market to mitigate the huge losses and payoff IO loans, and (4) Fannie/Freddie losses are reflected in the market.

13. Record foreclosures/bankruptcies will follow as property values plummet, particularly in the previously “hottest markets” where most of the IO loans originated. { Bend is-was dependent on California sales, which were ALL IO, and ALL incoming californians to Bend were ALL IO, thus the Bend-CALIF symbiotic-parasites will prove to one of the greatest financial failures in America. Today California is completely shut-down. 20% of all MTG's in cali are over 60 days late }

14. Given the new bankruptcy laws that work more like “reorganizations” than a “fresh start,” thousands will carry this debt and bad credit ratings for decades. Some will never recover. Many, many will never be able to afford a home again with a government bailout. Today, more than ever before, there is no “walking away” from a mortgage.

{ #14 is most important of all, there will be no fresh start, there will be no college fund for spawn, there will be no 401k - see "get rich in bend, bankruptcy->prison". }

BENDBUST said...


The question is: when prices start to fall, how low do they go?


They'll over-fall, down to about 50%, and then stabilize to around -40%.

Here's the deal however NW-XC & outer siberian-mcMansions will go down -50% or more and stay down. The BIG stuff $1M+ will go down and stay down for years. Big stuff has high maintenance and always get's hit the worst and longest. Thus for liquidity you want 1100sq-ft average homes.

When I say 40% I'm talking nice little stuff 1100sq-ft near Drake park, that got up to an ASK of $550k, which you can have now for $400k, will go to $200k, and then stabilize around $260k.

Then there will be another bubble and new easy-financing around 2015, and things will go crazy all over again.

Another thing is Bend wages will go down, we'll look back to the $60k/yr and go wow. There's NO way our average can stay high, given that spending is going to completely drop, for no other reason than HELOC spending is history.

Gas is up, tourists will not be coming like they once did, the Hotel biz already knows this.

History affordable stabilization of RE is 4X, but most will never or at least ten years get a home, as its going to be real hard to save 20% cash.

Renters, they historically pay X/4 where X is monthly income so let's use $60k/ that's $5k, and a quarter of that is $1250, problem is renter don't make that much, lets say $40k/year. Which takes us back to Bend history of renting which is $500 for an apartment, and $750/mo for a house.

Sure there will be $60k/yr folk that can afford $1250 for a nice home, but MOST renters will be of the $750/mo variety.

Thus MOST rental's only pencil if you have $160k or less into them. For an old ass-hole like bend-bust, no problem, but mine for double digits years ago.

Thus we'll see two binomial average humps in homes, the $40k/yr income rental cottages which got to be around $160k, and the $60k/yr home-ownership cottages for around $250k. This would be stabilization which I see no sooner than three years from now.

There will be an over-reaction this fall and next winter, ... Remember like I keep posting the STATE-TABLE, we're only at State #6, we have a long-long way to go.

BENDBUST said...

When will local Bend media report that Bend is 78% over-valued?

Right now on google-news there are only two mentions, note the story ran 15jun07, and it took seeking-alpha five days to pick up the story. This is going to be one of those references you see in the back of a book.


The median single-family house price there is more than $324000


BEM & IHTBYB has been hitting this, but I think this is the real number, when you weight the media towards 'like' homes, and throw out the $1M+, this is what you would get today, note we're already down -20% from Sep07,

I know you folks never admit this, it seem like you in denial also, but we're already way down from where we were in the fall of 2006. FYI I bought a home on the westside for $280K in February, that had an ASK of $400k, it had been on the market for over a year, but I just loved the house, the lot, the off-street parking, the garage, and the old trees on the lot. These types homes are rare, that was an almost -30% discount from ASK, yet things like this NEVER even make a blip in the Bend "massaged medians".

I think the analyst that did this work at cnn-money did his homework, he didn't use kool-aid data, e.g. garbage in, he used real data, and was able to give investors real information.

The reason the local media doesn't report this stuff is that we're trying to have an orderly collapse. The good people need time to get out, thus from an objective point of view we're at stage #9. Sophisticated investors have been told at this late stage that the game in Bend is over.

Your rhetorical question of when will the local media tell its readers?? Who cares, they don't care, they're too busy struggling to line up advertising, the last thing they need to do is tell the consumer he's fucked, in business we call this pissing in your own soup.

***

Ok, here it is below, two mentions of Bend being 78% over-valued, using rational data points.

Most Over/UnderValued US Housing Markets
Seeking Alpha, NY - 9 hours ago

Bend, Oregon and Prescott, Arizona are now the nation’s most overvalued markets. Alternatively, price gains in Texas seem more firmly based, as valuations ...
Overheated housing markets cool down

CNNMoney.com - Jun 15, 2007
The report identified Bend, Oregon as the most overvalued metro area in the nation. The median single-family house price there is more than $324000, ...

BENDBUST said...

We discussed this a lot in late 2005 and early 2006 on my blog and I don't think anyone came up with a better answer than "affordability."

This is the only answer, up until Feb2007, you could use OPM 100% { other peoples money }, thus affordability was irrelevant.

Now that you must pay 20% down, and have income that is documentable, nobody can purchase a home otherwise.

Perhaps in 2005 nobody would suggest that affordability as a limitation as it was besides the point, like I have said a car-wash pauper could buy a $550k shevlin-park mini-me mansion on stated-income in 2005.

Throughout history when shoe-shine boyz start telling their customers which stock to buy, this has always been when the BIG boys went cash.

We ALL know now that to have sold high, you have to been out by Sep06.

Stabilization can ONLY occur at the historical affordability zone.

The problem here is like IHTBYB's analogy of P/E ratio, most of our readers bashed that assumption, but its true, if you know your history, you'll know that when P/E sky-rockets its usually a bad historical sign. Same thing here Price/income skyrocketed, shevlin-park mansions selling for $600k to folks who made $60k, this is a historic anomaly, oh but its OK, because this is a new world like dot-com. Besides our realtors say with creative-finance these are the new numbers.

Of course old-timers and folks who actually know the 150 year history of RE pricing know that price/income ratio is a critical factor in whether or not the house returns to the bank.

Ergo, any professional should have know that a TON of homes were going to foreclose in this environ, and they will. Not since the depression are so many homes late on monthly payments, the last time this happened the government bailed them out with new loans. This time its going to be different.

Lastly, I just analyze this stuff, because its been my passion, and it is my business. I haven't sold a house for years. I have made NO money on this bust. I really don't care about money. Like they say, money is like air, its not important, unless you don't have any, which is like sex, not important, unless your not getting any.

The thing about this bubble-bust that makes me most sad, is all this get-rich-quick bullshit that is-was brought to bend 2001->current, and thing is the promoters are STILL working 110% to promote Bend.

The titanic is 90% in the water, and RE&MTG promoters are still selling tickets for the next voyage. Weird.

BENDBUST said...

When will local media report bend is 78% over-valued?

Area ranks 20th for overvalued homes
Bellingham Herald, WA - 6 hours ago
TOPPING THE LIST The most overvalued and undervalued home prices in metro areas in the first quarter of 2007, according to a national study by Global ...
Overheated housing markets cool down

CNNMoney.com - Jun 15, 2007
The report identified Bend, Oregon as the most overvalued metro area in the nation. The median single-family house price there is more than $324000, ...


Home Prices Fall Back to Historic Norms, as Prices Drop and ...
PR Newswire (press release), NY - Jun 14, 2007
Markets identified in the study as overvalued decreased to 54 metro areas in the first quarter, down from 62 metro area markets (revised) in fourth- quarter ...

***

The mother source ...

Some Markets Remain Stubbornly Overvalued

Home Prices Fall Back to Historic Norms, as Prices Drop and Housing Markets Cool

WALTHAM, Mass., June 14 /PRNewswire/ -- Global Insight, the world's leading company for economic and financial analysis and forecasting, today released the first-quarter 2007 update of its study, House Prices in America. The updated U.S. housing valuation analysis shows a widely dispersed drop in single-family home prices, resulting in a continued decline in the incidence of overvaluation in the nation's housing market.

Markets identified in the study as overvalued decreased to 54 metro areas in the first quarter, down from 62 metro area markets (revised) in fourth- quarter 2006.

The nation's most overvalued markets are now Bend, OR and Prescott, AZ, highlighting the precarious nature of the price resiliency in the interior West

BENDBUST said...

Bend, OR and Prescott, AZ, highlighting the precarious nature of the price resiliency in the interior West

I think this is a very important point, like I alway say Bend is in the desert, the desert is cruel.

Coastal is one thing, corrections occur in Santa-Barbara all the time, but it always has and always will be a beautiful place.

On the other hand Bend is in a "precarious nature of the price resiliency", in other words hold on, because your about to fall off a cliff with no bottom, and there will be NO dead-cat bounce.

We live in interesting times, and national media has JUST NOW effective 14JUNE07 informed the folks who manage the REIT's that FUND all BEND insanity that it is game-over.

I can bet you this, there are lots of conference call's this week, between EDCO & NewYork. The Bank of the Cascades must be totally pee'ing their pants. This is BIG-BOY stuff.

http://sev.prnewswire.com/real-estate/20070614/NETH00414062007-1.html

The little boss-hogs of Bend, are totally out of their league. They have conned the east-coast banking establishment to invest billions into Death-Valley, and just now the east-coast bankers are being told only last thursday Jun 14, 2007 that their investment is-was precarious.

So there you have it, even the BIG boys are saying there will be NO dead-cat-bounce.

Like I have said for awhile, what your seeing is the start of a new ghost-town.

Anonymous said...

Bendbust,

Instead of being sorry all the time for re-stating things how about you just don't anymore. If people wanted to listen to you they could go to your blog but it is obvious they don't because your blog doesn't have near the traffic this one does.

Anonymous said...



Instead of being sorry all the time for re-stating things how about you just don't anymore.



Bubble over, it's time to start buying again.

Psychological denial at maximum low point.

IHateToBurstYourBubble said...

Time for a quick inventory update:

May 14: 2,280
May 18: 2,320 (+40 -- 4 days)
May 23: 2,343 (+23 -- 5 days)
May 31: 2,391 (+48 -- 8 days)
June 11: 2,439 (+48 -- 11 days)
June 16: 2,464 (+25 -- 5 days)

June 20: 2,514 (+50 -- 4 days)

I thought we were slowing down for the Summer & we'd inch up from here. Nope. The most new listings in the shortest time, since I've been keeping track.

IHateToBurstYourBubble said...

And if you look over on the BendBB, you can see on the June price updates & new listings, that the new listings are coming fast & furious, like 40-50/day (all prop types), and reductions are winning the race at what seems to be 95+%.

May seemed a head-scratcher... June seems like it HAS TO be down. Daily price reductions seem to damn near outnumber listings! The inventory is exploding & prices are plummeting. It'll be very surprising to see prices jump on this type information. It even seems like volume has to go up... there's just so much for sale.

IHateToBurstYourBubble said...

Daily price reductions seem to damn near outnumber listings!

That is... "new listings".

The Avg price per sf data is nice too. Maybe he'll post that across time, so we can see if per sf pricing is trending in some way by neighborhood. By visual inspection, it doesn't seem to.

Anonymous said...

quick question...i keep seeing bendbust (or bilbo bend, or whoever) claiming that 4X is the right (or historically justifiable) price point for housing...4 times household income. If I read this right, then if my household income is $120K, it is appropriate for me to buy a $480,000 house. Is this accurate?
Thanks

Anonymous said...

Ten Bargain Retirement Spots:

US News and World Report - I see Sandpoint's on the list -

Boone, N.C.
Dahlonega, Ga.
Fredericksburg, Texas
Kennebunk, Maine
Melbourne Beach, Fla.
Natchitoches, La.
Salida, Colo.
Sandpoint, Idaho
Yucca Valley, Calif.

Full story at

http://finance.yahoo.com/retirement/article/103129/ten-bargain-retirement-spots
Yuma, Ariz.

Anonymous said...

My income IS 125K - we hold a mortgage that started at $300K. That was a high-pucker-factor number for us, though we've paid it down some. We thought very carefully about what would happen/how long we could hold out in case of job loss.
If I were to buy today, I would not spend more than $300K.

Anonymous said...


If I read this right, then if my household income is $120K, it is appropriate for me to buy a $480,000 house. Is this accurate?


I'll call my mortgage broker, do you have a number he can call you?

He's very fond of fictional higher-income Bend RE buyers.

Even the owner of Super Burrito, the busiest downtown business doesn't take home that kind of income.

Anonymous said...

Daily price reductions seem to damn near outnumber listings!

Good eyes. Here's a table showing the number of new listings and the number of price changes so far this month. Price changes outnumber new listings in Bend and Redmond.

area #new #changed
Bend 410 477
Redmond 168 221
Sisters 33 30
Sunriver 30 9

-- Bendbb

Bendy Breeze said...

If I read this right, then if my household income is $120K, it is appropriate for me to buy a $480,000 house.

Appropriate would be ...

1.) Do you have $96k cash YOUR MONEY for the down, PLUS closing cost(s) of $40k, .i.e. do you have $140K cash?

2.) A 390K loan is a jumbo-loan, right now 7.5% and rising daily, are you sure you want this even though you 'might' be able to afford it?

3.) Can you really afford $4k/mo for insurance, tax, interest, and principal? That's almost 1/2 your gross, and certainly 2/3 of your take home, assuming your 'fictional income' is subject to AMT, and it would be.

In summary, you would have to be one silly puppy to extend yourself as such, stay with a little 1100sq-ft mansion near drake park, in about three months you'll be able to buy them all day long for $280k-$320k.

Anonymous said...


The inventory is exploding & prices are plummeting. It'll be very surprising to see prices jump on this type information. It even seems like volume has to go up... there's just so much for sale.


10. Property values start to plummet as properties flood the market.


July 2007 Will be stage-ten, and yo expected something else?

Remember this has to be orderly, like the CNN-MONEY 78% over-value report said, Bend is subject to a "precarious nature of the price resiliency ", which is a nice way of saying that which went up, is about to come down even quicker than it went up.

Anonymous said...

Well, let's see:
"Do you have $96k cash YOUR MONEY for the down,"

Yes.

"PLUS closing cost(s) of $40k,"

Closing costs would not be anywhere close to $40K...maybe $12K...and Yes.


"A 390K loan is a jumbo-loan, right now 7.5% and rising daily,"

According to Washington Mutual, I can get a 30-year fixed at 6.375%.

"are you sure you want this even though you 'might' be able to afford it?"

Wasn't the question. I was asking about the applicability, accuracy and rationality of your statements throughout the last couple threads that houses should cost 4X income....which you still did not address.

Mr. Reality said...

stay with a little 1100sq-ft mansion near drake park, in about three months you'll be able to buy them all day long for $280k-$320k.

So Bendbust let me get this straight, you're saying buyers should pay $254-290/sf for a "little 1100sq-ft mansion near drake park"? Is that right?

Anonymous said...

Mr. Reality,

Bendbust is a fool, I'm sure you have figured that out by now, unfortunately he has highjacked this blog. Sure he wants people to pay $254 - $290 sqft for the little shacks near drake because after all he is a big time landlord who has purchased a large quantity of homes near drake and then rents them out for the last 40 years that he has lived in Bend. He also likes to watch Lord Of The Rings movies and play with his little wee wee.

Anonymous said...


"A 390K loan is a jumbo-loan, right now 7.5% and rising daily,"

According to Washington Mutual, I can get a 30-year fixed at 6.375%.


WSJ just reported yesterday that Jumbo's are 7.5%. Today conventional, under $350k are FM
30 yr is 6.75%. { This is the current published rates, if your WAMU is offering something better, I would read the small-print, most likely what your advertising here is a teaser, that the gullible might buy }

The only way you can get a jumbo @6.375% is points. That said WA-MU has lots of 'creative jumbo mish-mash".

Some 'creative' folks like WA-MU, which of course is ON the sub-prime death list, sometimes will take a JUMBO, and break it up, ... but again that is creative, I would look very close at this, as its most likely a tease.


Closing costs would not be anywhere close to $40K...maybe $12K...and Yes.


If you can close for 3% fine, then you must be sleeping with your MTG broker. Most people in Bend pay 4-8% for closing. Most of the MTG people I have gotten quotes from during the last five years in Bend have quoted me 6% on the average in closing costs { as a buyer }.

I'm not saying it cannot be done { 3% }, besides this is an estimate, you'll NOT know what its going to cost until the bitch sings. But given that ALL your stuff is hypothetical and pulled out of your ass, you can say anything.

Wasn't the question. I was asking about the applicability, accuracy and rationality of your statements

I said from the very start, that this guy was a hypothetical and fictional, ... What we have here is a MTG broker, who used to make $120k/yr.

I suggest going to Mexico and learn a new trade like up-holstering auto's.


WRT your issue, and I don't think you know what it is, but it seems to be you don't like the 4X notion.


It's all about REPO man, .e.g foreclosure. Historically people who have to pay more than 1/4 of their gross income for housing lose their homes, its as simple as this.


But what do you care, if you just wait another few months your going to see 1,000's of your customers in Bend who you sold these sub-prime pig jumbo teaser re-settable loans ... lose these homes.

If your lucky you might be able to sell them new loans so they can keep their house, and then you can make money on both slopes of the bend-bubble.

Anonymous said...

"WSJ just reported yesterday that Jumbo's are 7.5%. Today conventional, under $350k are FM
30 yr is 6.75%."

Read what I wrote...not the WSJ, but WaMu...and if you would like to see it yourself, go to their website and put in all the proper info...they will show you the rates....and you will see 30 yr fixed at 6.375 % with one discount point.



"If you can close for 3% fine, then you must be sleeping with your MTG broker. Most people in Bend pay 4-8% for closing. Most of the MTG people I have gotten quotes from during the last five years in Bend have quoted me 6% on the average in closing costs { as a buyer }."

If you are paying that much in closing costs, YOU ARE THE SUCKER. They must see you coming from a mile away...



"I said from the very start, that this guy was a hypothetical and fictional, ... What we have here is a MTG broker, who used to make $120k/yr."

Wrong. I telecommute for a company in Florida, and my wife telecommutes to a willamette valley company. Neither of our jobs is remotely related to real estate. And our incomes are going up, not down.



"It's all about REPO man, .e.g foreclosure. Historically people who have to pay more than 1/4 of their gross income for housing lose their homes, its as simple as this."

This is not what I was asking about...you stated numerous times in other posts that 4X income was what a house should cost. According to your theory, my house should cost $480,000...that would be in line historically, according to your statements. Yet you stomped on that pretty quick, which must mean that your 4X income figure is just like every other thing you say...pulled out of your "arse".

BENDBUST said...


Bendbust let me get this straight, you're saying buyers should pay $254-290/sf for a "little 1100sq-ft mansion near drake park"?


Being near a park is 10% premium, being near Deschutes Brewery and silver-moon so you can listen music, get laid, and crawl home w/o a DUI is a premium.

Most tele-commuters would rather be looking at drake-park, rather than one of your siberian tract-homes. NWXC, Shevlin, ... its all for blue-hairs. Every tele-commuter that I know likes to bike and be outdoors, they want to be within walking distance of their favorite bike shop. ...

Yesterday, I quite clearly said that a rental can only work if bought for $160k, thus if I'm going to place with your hypothetical it would have to be $160sq-ft.

I think that any 1100 sqft +-100, near downtown, e.g. newport market, river, ... is worth 4X, e.g. $240k, and throw in 10% premium if your near the park.

Lastly, as I have also said all along, I never sell real-estate.

Let's split all this up into two camps, one will head out to the siberian tract-homes to be with mrs-realtor, and other's live in walking distance from fun places.

The choice is yours.

I know my choice. ...

If I see a home with 1/2 mile of Drake-Park, on a 1/4 acre lot, with off-street parking, and a big garage, and old trees ... I'll buy it, they are to find. If its a nice house I would have NO problem paying $240k as I know I can ALWAYS get my money back.

On the other hand, I see no reason in the world to come to Bend in live in NWXC, SHEVLIN, or any of the Siberian tracts east of 27th.

Lastly, I haven't hi-jacked this forum, I just have more time than others, apparently.

I know this is going to be hard, because its clear your NOT from around here, but my little nice near-the-river and pub homes have had an ASK of $450K recently. Thus to MEET my price they need to fall -40%, in my humble opinion they're already down -20% since fall of 2006.

Do they write these questions down for you? Or do you think them up yourself??

BENDBUST said...


This is not what I was asking about...you stated numerous times in other posts that 4X income was what a house should cost


There you go again, telling me what I have said.

What I have said, is historically a bank doesn't loan a MTG if it is 4X your gross income, the reason is they don't don't want a foreclosure.

Recently during 'easy-money' sub-prime, historical facts went out the window.

Now sub-prime is history, and banks are again enforcing traditional rules


The above is what I have said all along.

BENDBUST said...


Bendbust let me get this straight, you're saying buyers should ...


I have NEVER told anyone here to do anything.

My job here is to humiliate the status-quo, and to humiliate people who bought homes over their heads { more than 4X }, did so with sub-prime loans, interest-only, heloc, ... Arms, zero-down, 110%, ... Jumbo's ...

If your looking for a forum where people tell you what you should do, I suggest Dear-Abbey.

I think most of us here for months and months have been saying that now is NOT the time to buy, but that would only be our personal opinions.

Mr. Reality said...

I have NEVER told anyone here to do anything.

Really? In case you forgot, here's what you wrote:

"In summary, you would have to be one silly puppy to extend yourself as such, stay with a little 1100sq-ft mansion near drake park, in about three months you'll be able to buy them all day long for $280k-$320k."

That sure sounds like you were telling someone what to do.

I know this is going to be hard, because it's clear you expect everyone to think like you do, but try to realize that the other people reading and posting comments on this blog are intelligent human beings and many of them have opinions that are different than yours.

IHateToBurstYourBubble said...

If I read this right, then if my household income is $120K, it is appropriate for me to buy a $480,000 house. Is this accurate?

From my math, you could go to $556K.

But just for total clarification, YOU being able to afford $556K, or $400K, or $90K doesn't tell anyone much about the housing market around here.

Not that you're saying that, but there have been several comments about individuals making $XXX,000, that income justifying $5XX,000 medians, and hence Bend is dirt cheap. Not so.

You've got to take a look around. If you make $120K, great... congrats. But this is a town of $7-8/hr manual labor gigs, and it's becoming more so by the day. The good paying stuff is going bye-bye. It seems there is going to be a real bifurcated market here with some real nice stuff, and one hell of a lot of crap, just like the Bend job market. All these 2K/sf half-assed built shacks will turn into slums. I'm seeing the start already.

The thing is: Do you want to buy into a town that has a real bipolar disorder: THE Highest priced housing in the US... but no one living here makes enough to buy them? That should tell you where your $300K is going...

IHateToBurstYourBubble said...

I lived in a South suburb of Chicago, Matteson, way back in the 90's. It was about half white, and half black or hispanic. I moved into the city in 1995, but in the late 90's there were a series of news broadcasts about "What Happened To {The South Suburbs}". They had gone from very racially mixed & diverse, to 100% black. No Latino, Asian, Hispanic, Chinese, or Asians of any kind. 100% black.

What was surreal, was blacks got on TV and declared it A Disaster. And it was... property values had fallen off a cliff, vacancy rates were thru the roof. Unemployment was sky high. Graffiti everywhere. It was a nightmare.

And I think I read somewhere (The Tipping Point ~?~) that there can be a stable equilibrium for these sorts of things, and then, with just the slightest push off center, it gos to 100% saturation in no time.

Makes me wonder, Where Do All The Hispanics I've Been Seeing Live? I remember seeing in a publication way back in 2001 that Sisters had 1 black person, which we thought was pretty novel given we had just moved from the city. But there was about 98.X% white here. Now I see FAR more Hispanics in the past 12 months than I've seen since I got here... many fold more. Where are they living?

Not to say it's going to happen overnight, but there are going to be some Hispanic neighborhoods in Bend soon. And just a statement of observation: Neighborhoods that become overwhelmingly ethnic are subject to some serious depreciation, from my experience.

I would personally would rather live next to Hispanics than the scourge of the Earth, White Trash, but resale in neighborhoods of either is usually an unpleasant experience. The pool of buyers is sharply diminished.

Anonymous said...

Hi,

I just love this blog, and I need some advice.

I want to invest in Bend.

I have a good job that pay's $119,000 per year. I also have serveral hundred thousand dollars in savings.

I would really like to buy a home in the Bend suburbs.

Could someone please tell me what I should do with my money?


Paris

Anonymous said...

THE Highest priced housing in the US... but no one living here makes enough to buy them? That should tell you where your $300K is going...

Thank you. It's not how much money you make life has never been this way.

It's how much money you KEEP.

Just because you make $120k/yr, even if true is NO reason to max your RE investment.

Bend is a great place to lose money, that statement of fact has been well established.

Perhaps if today was 2001 things would be different, but today is NOT 2001, its 2007 and RE is going to be a negative investment for a long-long time.

Anybody that buys into Bend today had better have a ten year plan to stick with it, otherwise your going to have your wallet picked clean by this town.

Anonymous said...

The Avg price per sf data is nice too. Maybe he'll post that across time, so we can see if per sf pricing is trending in some way by neighborhood. By visual inspection, it doesn't seem to.

I've only been tracking average $/sf asking prices since February, so here's a comparison of February and June for 10 neighborhoods in Bend. The general trend is down, but there's significant variation from neighborhood to neighborhood and two of them bucked the trend.

addition ------------ Feb Jun %Change
Awbrey Butte -------- 321 285 -11
Broken Top ---------- 337 330 -2
Drw ----------------- 209 197 -6
Northpointe --------- 192 177 -8
Northwest Crossing -- 279 270 -3
Parks At Broken Top - 253 253 0
RiverRim ------------ 225 235 +4
Skyliner Summit ----- 213 209 -2
Sun Meadow ---------- 175 174 -1
Yardley Estates ------212 201 -5

-- Bendbb

Anonymous said...

Realize that the other people reading and posting comments on this blog are intelligent human beings and many of them have opinions that are different than yours.

Wow, another Ned Flanders, Duncan where are you? We need duncan.

IHTBYB has already established the fact that this site attracts a wide variety of desert people.

In the Darwinian sense can we really consider a 'flipper' as an intelligent-human-being?

What about the person who flipped RE, like a lottery ticket, and now has wiped out his 401K, and his kids college fund? Are these intelligent-human-beings also?

One of the common rhetorical questions at this blog-site is "What were they thinking?" Build and they'll come, The Shire, ...

Quite often we're NOT dealing with intelligent-human-beings.

We're dealing with greedy primates. All econ in the human biz is generated by greed and fear.

From 2001 to 2006 was all greed, and now from 2007 ... ??? It will be all fear.

No intelligence is required to participate.

Anonymous said...


I make $120k year, and I can qualify for $480-$560k, should I get myself into MAXIMUM about of debt?? In todays BEND RE market??

1.) Do you have $96k cash YOUR MONEY for the down, PLUS closing cost(s) of $40k, .i.e. do you have $140K cash?

2.) A 390K loan is a jumbo-loan, right now 7.5% { WSJ } and rising daily, are you sure you want this even though you 'might' be able to afford it?

3.) Can you really afford $4k/mo for insurance, tax, interest, and principal? That's almost 1/2 your gross, and certainly 2/3 of your take home, assuming your 'fictional income' is subject to AMT, and it would be.

In summary, you would have to be one silly puppy to extend yourself as such, stay with a little 1100sq-ft mansion near drake park, in about three months you'll be able to buy them all day long for $280k-$320k.


The point, and IHTBYB made the point also, just because you say you make $120k is NO reason to spend it, my point is rather than buy a $480k mcMansion in today's market if YOU MUST BUY today, then it would be smarter to buy a simple little home that will hold historic value.

Why is this so hard to understand?

Historically your $480k mcMansion will be worth $240k in five years, but the little in-town nice house "If you could get it for $240k, and you cannot", would be worth $240k or more in five years.

Thus the point is one play is a total loss, and the other at least you can hold ground, again its ONLY if you MUST buy.

What has been said all along at this site is RENT for $1k/mo where-ever you want to live, and invest the difference in CD's, T-Bills, that is WHAT YOU 'SHOULD' do with your money.

Anonymous said...

What should I do with my money and my life?

Read the blog @
http://bendbubble2.blogspot.com/2007/06/q-what-are-bend-homes-worth-185000.html

There you will find the answer to life's questions.

The following line(s) also have the answer to life's most difficult question.


Not to beat a dead horse, but if you're planning on living in Bend for the long haul: Rent, and Invest The Difference.

Anonymous said...


Makes me wonder, Where Do All The Hispanics I've Been Seeing Live?


I'll answer the question, but it has several parts, as you all know by know I'm a big fan of our latino brother, I would trust them more than our cali white trash get-rich-crowd.

When you meet a latino he'll ask "how many children do you have?", when you meet a gringo he'll say what do you do? What do you drive? How much money do you have?

To your question, most live at work, or near there work. Generally there's not going to be one single place when you have to be one step ahead of the INS.

FYI, if were to publish today, where the most Latinos in Bend are, I guarantee that place would get raided tomorrow.

Thus, most people live where they work, or in some cases where people have bought homes, they can share, but they don't visibly draw attention.

I think this is a terrible way to live, but that said, school teachers in China generally sleep in a corner of their class. Most third world country's if you have a job, thats where you sleep. When your working 12 hours a day, and you sleep eight, and shit, shower, and shave the other four,... Does it matter where you sleep?

Let's remember the stat's, 3% of latinos work agriculture, 30% construction, and 60%+ work restaurant. I know lots of owners who are white that sleep at the restaurant, what's the point if you do breakfast and open at 6am, and work until midnight, what is the point in going home.

I hope I have answered the question.

IHateToBurstYourBubble said...

I hope I have answered the question.

Maybe it's better put, "Where will they live when they're 50-70% of Bends population?". At some point there'll be no way to sweep these people under the rug, there's too many.

And another point, that Oregonian story said that 4 of the largest industries in Bend: housekeeping, cooks, landscapers and construction, had about 25% illegals in the ranks.

Which unfortunately tells you alot about Cent OR industry. It's low paying grunt work. It's work w/o a future. It's not something you can build any future on.

Anonymous said...

"The point, and IHTBYB made the point also, just because you say you make $120k is NO reason to spend it, my point is rather than buy a $480k mcMansion in today's market if YOU MUST BUY today, then it would be smarter to buy a simple little home that will hold historic value."

Not to push the point too far, but of course I never said I was going to buy a Mcmansion in bend, and believe me, I know far better than you how to spend my money. i was simply asking for clarification on your earlier statements that your "rule of thumb" is 4X income for proper house prices.... which you STILL have not addressed.

Anonymous said...

i got it.....i have seen houses used for major pot growing operations.....

we need to get the local boss hogs in on the operation....

turn all the empty houses into pot growing operations and then sell it to who? Maybe the desperate builders and realtors?

Anonymous said...

oh yeah, i am the guy who left the last post.

i rent in honolulu. the front page page of the business section here (population 850,000 honolulu advertiser)........

says Bend Oregon, Most Overpriced US City.....

I want to move there are sellers awake yet and ready to deal?

also, any of you.....who post intelligent comments; IHTBYB, Bend Bust and others are welocme to hang out over here for a few days. We have visited several times and all hte agents we have used to show us over priced houses have been kool aid drinkers.(i am an oregonian) are welcome to hang here a few days I have an extra room. I have a wife and 2 kids but we're mellow.

Are there any sellers in bend who are willing to deal at 80% lof list yet?

IHateToBurstYourBubble said...

i rent in honolulu.

How much?

I want to move there

What in Gods name for? Paradise becoming monotonous? Next thing you know, people here will move to Des Moines...

Are there any sellers in bend who are willing to deal at 80% lof list yet?

There's one way to find out: Start making offers at 60% & meet in the middle. We need "Men From The East" to beat these sellers down. Have some friends of yours precede you with half price insults first, to soften 'em up.

Anonymous said...

Are there any sellers in bend who are willing to deal at 80% off list yet?

It will happen, but that window will only be for the most remote Siberian Tract Homes.

Right now things are down about 25%, by that I mean finally after six months listing(s) are down in ASK about 10-15%, and sellers will take -10% off that.

We have gone from greed to denial/anger.

The problem with a lot of Bend homes is these people who bought during 2001->2006 paid nothing down, and they cannot sell, they can only walk. When facing a foreclosure, its always best to quit paying the monthly, and wait a year for the court to evict you. Thus there will not be actual "foreclosure-firesales", until this time next years. That said fore-closures are a big boyz biz.

If you regularly check "recontrust.com" you can see who is subject to foreclosure, if you deal directly, you might be able to get the house before auction. There are LOTS of REITS that just do auction you don't want to compete with them.

If you really want -80% discount, you'll have to be here, I suggest you find a NICE little house for $750/mo in NWXC, and just sit and wait, on a month-to-month basis, and keep looking and listening, and waiting, and make sure you have 20% down, and income to prove your loan.

Know exactly what you want, and where you want it, and walk/bike, don't drive. What I do is bike, and look for lock-boxes on houses that I like, then using "DIAL" find out if the its a new BUY or OLD buy. IF its old then I know they have equity, I just contact the seller and find out if they really want to sell, and if they do, then I call my REALTOR, and tell him/her exactly what to do.

Most sellers in Bend are still in denial, because they only read the local news, and they believe the dream { kool-aid induced }.

Note that the -80% while it could happen will not be an open window long, as there are lots of 'investors' just waiting for such an opportunity. I'm assuming that you'll buy something with historic value { Near downtown, walk to Newport, Deschutes, restaurants }.

On the other hand there are 1,000's and 1,000's of Siberian Tract homes around the out-skirts of Bend that will definitely be available -50% or less, problem is they're NOT going to bounce back. They were built with a fifteen year life, and by the time this correction has corrected they'll be dilapidated shacks.

Eastside traffic has gotten terrible with all the high-density cali-tract homes.

Let's play your hypothetical, say the avg high in Bend was $500k { spring 2006 }, your -80% would be a $100k, you can buy several nice houses for $100k in Burns why wait for Bend?

It seems that people are NOT reading these blog's I think that IHTBYB makes fairly good argument that the floor will be around $180k.

There seems to be a confusion on what 4X means, it just means that which the bank historically will loan, and if the avg is $60k/yr, then the avg person can only borrow $240k, thus if your trying to sell a home for MORE you have FEWER buyers. This logic is as simple as that, too many people seem to have a problem with statistics.

All of life is based on averages, don't ignore them

With the publishing of Bend being -78% over-valued, there are MANY people like yourself just waiting for that, and to make an investment, I think it might happen that the avg fall to $180k, but its going to pop back up to $240k very quickly as people who hadn't bought will realize that this is the time to get a home, at a reasonable price.

All this said again, the siberian tract stuff in the hinterlands { 5 miles from Deschutes brew-pub }, will not bounce back, and thus you might as well 'invest' in Burns.

BENDBUST said...

Maybe it's better put, "Where will they live when they're 50-70% of Bends population?".

Thanks for the clarification.

As both you & me have already extensively written, the mexican will soon be the boss-hog of central oregon.

Just as Duncan who has the busiest business near his store, and he'll tell you 'super burrito', these folks are printing-cash.

Give it five years, and the latino population will be 50%, and given that they'll have the cash, albeit from low-wage-jobs, but so what its all relative, and this is all there is. They'll be the next city-leaders, be sure to see a latino soon on the Bend City Council.

I think its sad that the people who make this region work have to hide, but they have something going here, they work hard. The gringo will not even know what happened.

To answer your question, in five years when they bump past 50% population, they'll live anywhere they want to live.

Right now they'll continue to live at work, and work, and work, and save. They'll buy MORE business's which provides more cash flow, and more places to sleep.

It's like you said, its all about critical mass, at one point it will just flip and one AM we'll change the name to Bendico or Bexico.

This is NOT a bad thing, the latino's like the weather here, they love children and dogs. They're certainly NOT here to get rich.

I guess the only bad thing for the conservatives is they thought they came to Oregon like it was some kind of Sand-Point-Idaho where every retarded white man is king.

No, Bexico will be a multi-cultural place. The gringos who came here to invest in white-only gated community's will not see the appreciation.

A recurring theme here has been how do we market Bendico as Aspen? As we all know, this was never Aspen in the first place. Hell I97 is a straight shot into Mexico, and with NAFTA the truckers are mostly Mexicans, its only logical that Bend become a Mexican Hub.

Already I love this place some of the best mexican food on every corner, at least where I live.

BENDBUST said...

houses used for major pot growing operations.....

we need to get the local boss hogs in on the operation....



I haven't seen the stat's on pot, but Willamette-Week did one a few weeks ago, you can now get cocaine for $40/gram in Oregon, thanks to the Mexican pipeline.

When I was a kid a bag of pot was $10, and a gram of coke was $150, pot has gotten better of course, but the price is way down. There's more drugs coming in that ever.

The realtors might want to copy DeLorean to go for the drug biz, but I think they'll NOT compete with the latinos, the cost of manufacturing in tropical climates is almost NIL, while the cost of indoor lamps and electricity in Bend are HIGH.

In summary not going to happen, but given how pathetic and desperate are realtors and mtg-folk are I'm sure they'll try, but they'll just lose their ass.

Finally I don't believe that more than 1% of the latinos bring drugs in, thus white-trash is far more likely to have drugs for sale. There are a few truckers that have drugs hidden in the trailers, but if even 1% get through its a HUGE amount. Then again this is a NAFTA problem, not a latino problem. What I'm saying is USA policy created the business opportunity, and people desperate to feed their family will take up the chance to make fast and easy money.

Mr. Reality said...

i rent in honolulu.

The median home price on Oahu is $620,000 and in the Metro area it's $689,000, so no wonder you want to move back to Oregon if you're ever going to have a chance to buy a home.

http://www.hicentral.com/hbr-stat.asp

Anonymous said...

This the Bend and people want to live here.

Check out the spot by Norma on the channel 2. Real Estate Showcase.

Anonymous said...

------I just contact the seller and find out if they really want to sell, and if they do, then I call my REALTOR, and tell him/her exactly what to do.----

Why in the world would you pay a Realtor 6 or so percent for something where you've done most of the work? Especially when you're going to tell them "exactly what to do"?

Anonymous said...

>>I think its sad that the people who make this region work have to hide, but they have something going here, they work hard. The gringo will not even know what happened.

I think that's sad, too. And when construction jobs get hit, it doesn't even show as a blip in the official unemployment numbers or jobless claims, but the illegals get hurt and their families back in Mexico get hurt from the cash that doesn't get sent home.

--TT

Mr. Reality said...

Bendbust let me get this straight, you're saying buyers should pay $254-290/sf for a "little 1100sq-ft mansion near drake park"?

Being near a park is 10% premium, being near Deschutes Brewery and silver-moon so you can listen music, get laid, and crawl home w/o a DUI is a premium.


Reality check time! Your fantasy about people paying $254-290/sf for your 1100sf cottages is interesting, but the reality is that the average square footage people are buying in Bend is around 2000sf. There's a housing size bell curve -- the low part of the curve on the left is your 1100sf places and the low part on the right is the 4000sf McMansions and the high part in the middle is around 2000sf. Plus people are paying under $200/sf for those 2000sf houses which is substantially less than your $/sf range. So the bottom line is that most people aren't in the market for what you're pushing.

And while we're at it not everyone aspires to your self-described lifestyle of "listen music, get laid, and crawl home w/o a DUI", but that certainly explains why you have a grudge against the Bend police. How many DUI's have you gotten?

Anonymous said...

Haven't ya'll figured out that it's the same person doing several of the posts? He gets to argue back and forth with himself and make the comments that he needs to launch into another rant.

This is the one place he can attract attention - negative is better than none at all.

He gets to stir the pot and "humiliate the status quo". How pathetic that he says it's his 'job'. Which perhaps explains why he doesn't believe there are any jobs that pay $120 a year :) How much DOES 'humiliating the status quo' pay?

At least he's amusing. I can see him now... sitting at home, thinking that he's really making a difference in the Bend RE market, when in actuality, people are just enjoying tantalizing him. Kinda like poking a dog with a stick through a fence. :)

Do continue. I enjoy the amusement. Perhaps you'll tell another bilbo-story for us. Eh, wizard?

Anonymous said...

"He gets to stir the pot and "humiliate the status quo". How pathetic that he says it's his 'job'. Which perhaps explains why he doesn't believe there are any jobs that pay $120 a year :) How much DOES 'humiliating the status quo' pay?"

lol..too true. Regardless of his boasts about being a big-time landlord, I doubt he makes much money and it pisses him off that others do. He probably sits in his mobile home all day whacking off and ranting online about things that he thinks will make him seem knowledgable and intelligent. The problem, tho, is that his rambings hardly make any kind of sense whatsoever, and he lacks any sort of ability to follow logic...a tool.

Anonymous said...

I think that's sad, too. And when construction jobs get hit, it doesn't even show as a blip in the official unemployment numbers or jobless claims, but the illegals get hurt and their families back in Mexico get hurt from the cash that doesn't get sent home.

--TT

I agree TT it is sad; however, the part I find sad is that businesses and general contrators in particular have knowingly hired people that are criminals and should be treated as such. It just tells you how many of these people are undocumented illegals when housing has went flat at best and in some circumstances ground to a halt yet low and behold the umemployment stats go down give me a freakin break.

Not real sorry for people that break that law and can't send cash back to their 30 family memebers. Oh and by the way for our little multiple personality friend that is such a lover of the Mexican culture, true a mexican might ask how many kids do you have, I on the other hand ask how many of those kids he has we as the tax payer flipped the bill to birth and now feed on WIC.

Illegals are not the entire problem here but they are one symptom of a deteriorating economy and the fact that capitalism probably won't last very long going down the road we are on as a nation.

Ticktock

Anonymous said...

The extreme negativity of this blog indicates it's the product of an inferiority complex. Everybody subsists on $7 jobs and that's all that's available. Yeah right. Everybody who has bought houses has bought the most expensive house they could possibly buy and only because of crappy lending practices. Also B.S. The town is going to become a ghost town tomorrow so everybody LEAVE. What a load of B.S. and fear mongering. It makes the traditional media almost look honest.

Anonymous said...


I agree TT it is sad; however, the part I find sad is that businesses and general contrators in particular have knowingly hired people that are criminals and should be treated as such.


I hate it when republicans talk about 'criminals' and enforcing the law.

In a few years when all the DUBYA killing is well documented, their are going to be Nuremberg trials for all those that voted for DUBYA, in both elections.

BENDBUST said...


Why in the world would you pay a Realtor 6 or so percent for something where you've done most of the work? Especially when you're going to tell them "exactly what to do"?


I hate morons, but this is an important question. Despite it is being asked by an imbecile.

My 'dear', if and when you hire a lawyer you had better tell him exactly what to do or he'll bill you to death.

If and when you hire a CPA you had better tell him what to do.

Now, and I hope that BEM & IHTBYB are reading this, note that I only BUY, I never SELL. If our pathetic twat here who posts all day bashing everyone knew one iota about RE, he would know the BUYER doesn't pay.

I have a REALTOR do ALL my dirty work, always have, and I do it because the seller is paying my BILL.

Anonymous said...


The extreme negativity of this blog indicates it's the product of an inferiority complex. Everybody subsists on $7 jobs and that's all that's available.


1.) By definition, a collapsing economy is not a positive subject. If you wish to hear the positive side of bankruptcy see www.old-mill.com

2.) Look at the craigslist help wanted, I don't see any six figure jobs.

3.) The normal cycle is expansion, contraction, human emotion we call it greed -> fear. The fact that people are even willing to 'discuss' the truth is important. If you want lies see www.bend-bulletin.com

I would highly suggest that anyone who visits bend-bubble2 to only do so if they relish the I-Told-You-So, or they just want to hear the other side of the story.

There are NOT many sites like this where you can hear the truth in Bend, but some folks would like that number to be zero.

It used to be a 'free-country', its used be an American ideal to speak your mind. Sadly, Republicans hate the truth. Republicans like to talk the talk about 'enforcing the law', which means upholding free speech. The fact is that Republicans DESPISE free speech.

What I like best about this site is that we get to see high-school jocks lose their shorts. Do you know what?? It feels really nice.

I love to see the SUV driver lose his ride, I love to see the same DUBYA voter lose his house. Nobody made him do it, he screwed himself.
They were SO smug just two years ago flipping, they quit their job, and just flipped & flipped, all their change tied up in the FLIP.

Now they ain't got SHIT.

bilbobend said...


Not everyone aspires to your self-described lifestyle of "listen music, get laid, and crawl home w/o a DUI", but that certainly explains why you have a grudge against the Bend police.


Let me understand this ...

1.) You hate ale
2.) You hate girls
3.) You hate walking
4.) You like to drive home from the bar to your suburban home out at Badland's Park 15mi east of Bend.
5.) You love cops
6.) You hate music


You sound like a Republican, arrrrrgh.

Anonymous said...

What I like best about this site is that we get to see high-school jocks lose their shorts. Do you know what?? It feels really nice.

Well, it sounds like you're dealing with your inferiority complex quite well. :)

And someone hit a nerve - the anger is palpable.

Anonymous said...

"Look at the craigslist help wanted, I don't see any six figure jobs."

Most high-salaries positions do not get filled with help wanted signs...it is conducted through headhunters.

"What I like best about this site is that we get to see high-school jocks lose their shorts. Do you know what?? It feels really nice."

I am sure you really DO enjoy seeing jocks in their underwear, but I think that's a subject for a different thread...

IHateToBurstYourBubble said...

I think my next post will be:

Duncan McGeary: RACIAL PROFILER!

I walk in there, and he directs me to the Used Books! What, you assume cuz I WHITE that I cans read? You see dumpy old white guy, so ya direct 'em ta' your books. That's real nice.

What about that punk who brung his pizza in there? At least I didn't bring no pizza in then axe ya ta throw away da dish.

Anonymous said...

It suddenly became clear.

Isn't a TROLL someone who likes to stir up controversy on a blog to garner notoriety?

And who, more than a TROLL, would delight in bilbo-esque tales?

Although your anger and insults are beginning to bore many of us. But at least you have your anonymous 'day in the sun'.

BENDBUST said...


Haven't ya'll figured out that it's the same person doing several of the posts?


Yes, we all know ONE person here does ALL the personal bashing. One day your bashign BEM, then its IHTBYB, then its BendBust, ...

That's why ONLY one person ever responds to you, and that person is bend-bust, who is very partial to retarded gringos.

The other people don't bother, because its common knowledge on the NET, that if you ignore them, they'll go away.

That said bend-bust believes that every village needs a few idiots, so just keep posting, and I'll keep replying.

BendBubble2 is a diverse community.

Anonymous said...

he may be a troll, but he is mildly entertaining. it's kinda funny to watch someone post all these "as I have been saying for a hundred years now..." diatribes, especially when none of them make sense. He thinks that no one else understands the "highly complicated" matter of buying and selling real estate, so he has to "educate" us. Problem is, he knows very little, and any time you point out the flaws in his arguments, he circles back around to "as I've said a hundred times before..."...guess what, just because you have said it, does not mean its true or correct. go take a nap, and PLEASE!!! STAY OFF THE METH!!

IHateToBurstYourBubble said...

Just kidding Duncan! Kidding!

Although, I could tell you thought I wasn't going to buy anything... and you were right. But mainly cuz I left my wallet in the car. Where it belongs.

Thomas said...

Nationally, everything is dropping in sucession. So I don't see what everyone is crying about. Unless you bought in Bend within the last 3 years and have no equity, then I could see where you might panic a bit. Bottom line is, you sell low here you're going to buy low someplace else. Or do like is recomended here and just rent to dodge a falling knife...

Anonymous said...

Uhmmmmm, and what kind of car was that, that has the wallet in it. License plate, location....?

A brutha's just gots to get his in's you know.

BENDBUST said...

This is it, this is the BIG one,

We have been waiting for the CDO collapse. Now nobody will be able to sell their MTG's, thus there is NO MTG market, which means all RE finance is in deep doo-doo.


***

Bear Stearns CDO liquidation sparks contagion fears

Thu Jun 21, 2007 3:38PM EDT

NEW YORK (Reuters) - Even as Bear Stearns held out hope of keeping two hedge funds from collapsing, worries over their forced liquidation are reverberating through U.S. financial markets, raising concern about broader contagion.

So far the risks seem contained, but the fallout may be felt everywhere from leveraged buyouts, investment bank earnings and sales of collateralized debt obligations. Those securities have pushed sales of corporate and housing-related debt to record highs in the past year.

Merrill Lynch & Co. (MER.N: Quote, Profile, Research) on Wednesday sold only $100 million of $850 million of highly rated collateral assets it auctioned after seizing them back from the Bear Stearns funds, said a person familiar with the auction.

Three other banks -- Goldman Sachs Group Inc. (GS.N: Quote, Profile, Research), JPMorgan Chase & Co. (JPM.N: Quote, Profile, Research) and Bank of America Corp. (BAC.N: Quote, Profile, Research) -- have closed out their positions with the funds.

High-grade CDOs trade infrequently because of their perceived safety relative to lower-rated securities that provide higher yield for investors. It might be difficult to sell such a large quantity, dealers and investors said. The concern is that a generalized markdown of CDO positions could be inevitable and spark a greater wave of selling.

"The problem is that marking down the assets to where the market will bid them may in fact be the right thing to do, but no one wants to take the loss," said Jason Brady, who helps manage $4 billion in bonds at Thornburg Investment Management in Santa Fe, New Mexico.

Details about Merrill's auction and efforts by Bear Stearns to offer $2 billion of CDOs were not immediately clear as possible buyers determine how to value the complex CDOs.

Some fund managers speculated the failure to sell the assets as intended indicated the dealers were largely disappointed with what they saw.

CDOs group debt based on credit quality to help diversify risk by placing the strongest debt at the top of the capital structure. In theory, the repackaged debt helps absorb weaker performance from riskier debt such as subprime loans.

BENDBUST said...

A Little Note About Sealed Indictments in the MTG Profession

I had a very interesting talk with a kid that's been out of OSU for a few years. The story goes like this, before graduation MTG companys came on campus and promised six figure incomes for selling creative home mortgages. A lot of kids jumped.

What this kid told me, is that he's very glad he stayed out of MTG, he said that almost all of his friends in the MTG biz are under indictment.

The general complaint is "Selling MTG's to people who could not afford them". He was unable to tell me if these were State or Federal Indictments.

He said that his buddy's were widely dispersed in Oregon.

BENDBUST said...

Bear Stearns CDO liquidation sparks contagion fears

**

I have been talking for months about CDO's but never really got into them.

IHTBYB I really think now that we're at 150+ that it could be time for a new post. It would useful to get into what CDO's are about how they work, and why they're total collapse is VERY important.

This is going to effect Bend BigTime this is equivalent to a stake in the Heart of the Bend-Bubble.

On the other hand the media being in denial for six months, could take advantage of this and fault the MTG shutdown because of CDO's at this point in time, it would be a good mea-culpa.

We need to go back and see who has covered the Bend over-value 78% story, yesterday it was only three.

I really think that June2007 is going to be the month the insider hammer fell, next month is going to be about trying to explain to the public what in the hell happened.

Again this CDO meltdown, is the biggest thing since the 1987 S&L failure, and this is actually bigger.

This is related the guy from NewCentury last week that couldn't answer the question "How much have we lost?", the problem with CDO pools is that almost all the debt is bad. Also most interesting in the past week, its not the poor that are walking first but the rich, thus the theoritical 'best' cod's are turning out to be not so could, and what in the hell does that say about the 'bad'.

Anonymous said...

I had this friend that was in the mortgage business. The story goes he sold a bunch of mortgages to people who wanted them. My friend, ever the capitalists, felt that this was in line with the basic principles of a free market. Now, some of the people he knows that live in mobile homes in bend, OR, the most overvalued real estate market in the galaxy, are having a hard time with the success he achieved. One mobile home dweller in particular, who apparently is infatuated with Lord of the Rings and short-less jocks, can't believe that other people actually bought homes they enjoy and want, while others bought and sold real estate for massive profits. This Golem (not his REAL name, as he prefers another LOTR character) likes to rant and rave about the successes of others, all the while personally and privately tortured by the fact that he lives in a mobile home in Bend, OR, the most overvalued property market in the universe.
Yet, does no one hear his cries? Will no one stop to ask if he needs some spare change? His pathetic whimperings only attract those who would mock him....his attempts at bravery (posting nonsensical and completely pointless diatribes online at an anonymouse web site forum, pretending to be the master of said universe) only bring hatred upon his lifeless, flaccid corpse. Will he ever realize his problems lay deep within his obsessed, overly-meth crazed brain? Will he finally get out of his trailer park and see the beauty all around him? Will he reject the temptataion of jocks in jocky shorts?????
STAY TUNED!!!!

BENDBUST said...

Warren Buffet once said -

"It's only when the tide goes out that you learn who's been swimming naked".

Anonymous said...

This is it, this is the BIG one,

We have been waiting for the meteor strike. Now nobody will be able to sell their MTG's, thus there is NO MTG market, which means all RE finance is in deep doo-doo.

***

Asteroid has 1-in-60ish chance of Earth hit

By Robert Roy Britt, SPACE.com

An asteroid that has a small chance of hitting Earth in the year 2029 was upgraded to an unprecedented level of risk Friday, Dec. 24. Scientists still stress, however, that odds are further observations will show the space rock won't be on a collision course with the planet.

The risk rating for asteroid 2004 MN4 was raised Friday by NASA and a separate group of researchers in Italy.

The asteroid's chance for hitting Earth on April 13, 2029 has now been categorized as a 4 on the Torino Scale. The level 4 rating — never before issued — is reserved for "events meriting concern" versus the vast majority of potentially threatening asteroids that merely merit "careful monitoring."

The Dec. 24 update from NASA states:

"2004 MN4 is now being tracked very carefully by many astronomers around the world, and we continue to update our risk analysis for this object. Today's impact monitoring results indicate that the impact probability for April 13, 2029 has risen to about 1.6%, which for an object of this size corresponds to a rating of 4 on the ten-point Torino Scale. Nevertheless, the odds against impact are still high, about 60 to 1, meaning that there is a better than 98% chance that new data in the coming days, weeks, and months will rule out any possibility of impact in 2029."

BENDBUST said...

Six days and still nobody covering this report.

Area ranks 20th for overvalued homes
Bellingham Herald, WA - Jun 20, 2007
Overvalued: Bend, Ore., 78.7

Seeking Alpha Most Over/UnderValued US Housing Markets
Seeking Alpha, NY - Jun 19, 2007
Bend, Oregon and Prescott, Arizona are now the nation’s most overvalued markets. Alternatively, price gains in Texas seem more firmly based, as valuations ...
Overheated housing markets cool down

CNNMoney.com - Jun 15, 2007
Price declines in Naples enabled it to slip into third place at 63.4 percent overvalued. In second place was Prescott, Arizona, at 64.6 percent. ...
Home Prices Fall Back to Historic Norms, as Prices Drop and ...

PR Newswire (press release), NY - Jun 14, 2007
The nation's most overvalued markets are now Bend, OR and Prescott, AZ, highlighting the precarious nature of the price resiliency in the interior West. ...

Mr. Realtor said...

Yet, does no one hear his cries? His pathetic whimperings only attract other mobile home dwellers

He sure seems to be leading your around by the leash.

Get a life.

Mr. Reality said...

According to CNNMoney.com Bend is less overvalued now than it was last September.

September 2006: 89.3% overvalued

http://money.cnn.com/2006/09/21/real_estate/still_overvalued_housing/index.htm

June 2007: 78.7% overvalued

http://money.cnn.com/2007/06/14/real_estate/housing_market_affordability/index.htm

That should make Bendbust happy, eh?

Mr. Realtor said...



"Look at the craigslist help wanted, I don't see any six figure jobs."

Most high-salaries positions do not get filled with help wanted signs...it is conducted through headhunters.


I have been in Bend for six years, making $7/hr. Everyday I check craigs-list for high paying jobs.

Where do I find a Head Hunter?

Can you explain exactly how I can get a six figure salary in Bend?

Mr. Realty said...

According to CNNMoney.com Bend is less overvalued now than it was last September 2006

Things are getting better, yet people only focus on the negative.

Sep 2006
Bend OR $296,700 89.3%

June 2007
Bend OR $324,400 78.7%

It's very interesting how the price went up, and the over-valuation decreased. Note the price went up 9%, and the over-valuation decreased 10% over nine months. It seems that higher prices increases value. If we can get the prices to double, then Bend will be twice as affordable.

Anonymous said...

"I have been in Bend for six years, making $7/hr. Everyday I check craigs-list for high paying jobs."

If you haven't been able to figure this out in SIX YEARS, you are terminally unemployable outside of retail/services industry.
Sorry. Perhaps you just don't have the skills/knowledge/experience for anything other than your favorite SuperBurrito.

Mr. Reality said...

Where do I find a Head Hunter?

Can you explain exactly how I can get a six figure salary in Bend?

Mr. Reality said...

It's very interesting how the price went up, and the over-valuation decreased. Note the price went up 9%, and the over-valuation decreased 10% over nine months.

There are a number of reasons for this.
1. Inflation.
2. Increasing wages.
3. The overvaluation formula that includes "population density, relative income levels, interest rates and historically observed market premiums or discounts."

That "historically observed market premiums or discounts" means the longer Bend's prices stay where they are the lower our overvaluation % will be.

Where do I find a Head Hunter?

C'mon, stop posting under my nickname. Can't you even think one up yourself?

Mr. Reality said...


It's very interesting how the price went up, and the over-valuation decreased.

There are a nomber of reesons for thus.

2. Increaseng woges.



How much have 'woges' gone up since Sep 2006?

Tell us exactly how we can get a six figure income in Bend?

Your always asking the questions, and everyone here always answers your questions. So you tell us How to Get a Six Figure income in Bend?

Mr. Reality said...

I'm tired, but I cannot turn off my computer.

Anonymous said...

"So you tell us How to Get a Six Figure income in Bend? "

Go to school, learn a skill, and STOP TAKING METH!!!!!

Mr. Reality said...


Do you believe disparaging another person's IQ is a useful debate technique?


Is that what we're doing here? Debating?

What specific part of this "debate" requires intelligence?

Mr. Reality said...

Go to school, learn a skill, and STOP TAKING METH!!!!!

You have expounded frequently that your a genius.

Certainly you can add more insight into obtaining a six figure income to all of us in Bend who envy you.

Go to what school? What skill do you propose? I'm certain someone who is as successful as you out here in the desert has profound wisdom to share.

Why do you always fall back to meth whenever a specific detailed response is asked of you?

Mrs. Realtor said...

Go to school, learn a skill, and STOP TAKING METH!!!!!

You have expounded frequently that your a genius.

Certainly you can add more insight into obtaining a six figure income to all of us in Bend who envy you.

Go to what school? What skill do you propose? I'm certain someone who is as successful as you out here in the desert has profound wisdom to share.

Why do you always fall back to meth whenever a specific detailed response is asked of you?

Mr. Reality said...


That should make Bendbust happy, eh?


Thanks, but NO cigar.

What I asked for was a list of any media that picked up the report last week about the 78% over-valuation. I didn't ask for a link to a similar report from last year.

I can only assume that you didn't find what I requested, and in a feeble attempt to appear clever you brought back a bone. Atta boy.

In the future timely links would be preferential. Good boy.

You are learning to listen, so we're making progress. I think in a couple more years I'll have your trained.

Your homework assignment for tonight is to study CDO's { collatarelized debt obligations }, I expect to debate this subject with you tomorrow.

I have always found asteroids quite boring. I'm not sure the others are interested in space-physics, but as you point out when Jesus comes it will not matter what bend real estate is worth.

I do think that the CDO meltdown will effect Bend sooner than the imminent asteroid collision. We can debate that if you wish.

XXXOOOXXX

Mr. Reality said...

Yes, we all know ONE person here does ALL the personal bashing. One day your bashign BEM, then its IHTBYB, then its BendBust, ...

Interesting conspiracy theory, but alas I'm just one of many questioning Bendbust's "facts".

And I'd appreciate it if you'd stop posting under my nickname.

Mr. Realtor said...


Go to school, learn a skill, and STOP TAKING METH!!!!!


You have expounded frequently that your a genius.

Certainly you can add more insight into obtaining a six figure income to all of us in Bend who envy you.

Go to what school? What skill do you propose? I'm certain someone who is as successful as you out here in the desert has profound wisdom to share.

Why do you always fall back to meth whenever a specific detailed response is asked of you?

Mr. Bend Bear said...

IMF predicts growth, CDO failures, losses of over 1.3 trillion dollars, ... a weakening dollar, the housing market is facing overall losses of 1.3 trillion

`Tipping Point'

``The demise of two Bear Stearns managed leveraged mortgage funds could be the tipping point of a broader fallout from subprime mortgage credit deterioration,'' New York-based analysts at Bank of America Corp. including Robert Lacoursiere wrote in a report published today. They added that the situation could lead to higher rates for new mortgage borrowers.

"Investor Redemptions

The Bear Stearns fund halted redemptions after investors sought to withdraw $300 million by June 30, the newsletter Hedge Fund Alert said last week."

The fund is imploding and current investors can't withdraw their money. Some of them have allegedly been attempting to withdraw their funds since February, and can not.

"...investment manager believes the company will not have sufficient liquid assets to pay investors."
http://www.businessweek.com/bwdaily/dnflash/content/jun2007/db20070612_7...

That doesn't sound too good at all.


Humpty Dumpty Sat on a Wall, SubPrimee & CDOboy fell off the wall, and they couldn't put the Mortgage business back together again.


All subprime was packaged into CDO's and sold to US pension funds.

Today No can get their money out, and losses are expected to be $2 Trillion, that is on the assumption of a $20 Trillion dollar CDO market, and a 2O% LOSS. The loss today is know to 20% based on the fact that right now the 20% of US mortgage's are 60 days late in payment and expected to foreclose. If this number rises, then the agregrate loss rises.

Mr. Wizard said...

Exactly one week later ...

Jun 22,2007
Report: Bend tops nation in overvalued home prices

by Bend Weekly News Sources

Bend, OR & Prescott, AZ Markets Remain Stubbornly Overvalued; Home Prices Fall Back to Historic Norms as Prices Drop and Housing Markets Cool Nationally

BendBust said...


Legislature may require financial aid for displaced mobile home owners


By Aaron Clark, Associated Press Writer
Wednesday, June 20, 2007 12:50 PM PDT

SALEM - Residents of manufactured home parks who rent plots of land would receive up to $9,000 and a 365-day notice if the landlord decided to sell the property, under a bill passed in the House Tuesday.

The measure is part of a sweeping reform that creates significant protections for residents of mobile home parks who are increasingly displaced as Oregon land values rise and park owners sell their property to developers.

***

BendBust is looking for a new home.

Mr. Bubble said...

Today No can get their money out, and losses are expected to be $2 Trillion, that is on the assumption of a $20 Trillion dollar CDO market, and a 2O% LOSS. The loss today is know to 20% based on the fact that right now the 20% of US mortgage's are 60 days late in payment and expected to foreclose. If this number rises, then the aggregrate loss rises.

Correction the CDO market is $10 Trillion dollars, and currently 20% is considered to be lost to date.

All sub-prime as been 'packaged' and sold to US/EU pensioners during the last ten years, the CDO is what created the sub-prime. CDO's 'packaged' and trade-able on the stock market. They were sold to pension funds on the assumption that they were risk-free.

Today nobody will buy CDO's, and those that have bought them have been told that they are 'closed' which is a nice way to say that you cannot get your money back.

PMI and MTG interest is expected to sky-rocket as its clear now that there is no such thing as risk-free MTG investing.

Mr. Reality said...

Where is tonights party?

At bendbust's mobile-home park, its just off 14th & Simpson ( West Side ).

The party starts at 9pm, at the common's, when they kick us out of their we head to the trailers.

Mr. Buzzard said...

Bear Stearns to cancel Everquest IPO

By Ben White and Saskia Scholtes in New York

Published: June 21 2007 23:36 | Last updated: June 21 2007 23:36

Bear Stearns has called off a planned public offering for a fund holding complex debt securities backed by subprime mortgages, amid a crisis at two other related funds managed by Bear that created turmoil in the market for such risky assets.

The two stricken hedge funds, both run by Ralph Cioffi, Bear Stearns managing director, had close ties with the proposed listing vehicle Everquest Financial, also managed by Mr Cioffi.

Mrs. Breeze said...

When this smoke clears, nobody is going to get a MTG for a long time.

***

Bear Stearns to the Rescue—Sort Of

The firm's plan to shore up two hedge funds hit by the subprime mortgage mess favors the one that's in better shape


Bear Stearns (BSC) says it has a plan for rescuing its two hedge funds that are drowning in a sea of risky bonds backed by subprime mortgages. But the Wall Street firm's June 22 effort to provide up to $3.2 billion in last-ditch financing will do little to help investors in the hedge fund that has suffered the bigger losses.

That's because Bear Stearns is planning to use all of those billions to shore up its High-Grade Structured Credit Strategies Fund, a four-year-old fund that raised $916 million from investors. That fund is in much better shape than the 10-month-old High-Grade Structured Credit Strategies Enhanced Leverage Fund, which lost 23% of its value at the end of April.

It was the big declines at the enhanced leverage fund that prompted Bear Stearns to suspend investor redemptions, forced it to sell off $4 billion in high-quality mortgage-backed bonds, and caused a crisis of confidence on Wall Street (see BusinessWeek.com, 6/13/07, "Bear Stearns' Hunt for Big Cash"). The underlying assets in the enhanced leverage fund are believed to be so battered that Bear Stearns isn't inclined to pour in money, according to mortgage bond traders.

Bear Stearns' answer to the problems at the enhanced leverage fund doesn't seem much different from what it has been trying to do for the better part of the past week: negotiate deals with the many banks that lent money to the fund.

It's still not clear whether Bear Stearns will be successful in getting those banks, which include Merrill Lynch (MER), JPMorgan Chase (JPM), Deutsche Bank (DB), and Lehman Brothers Holdings (LEH), to hold off liquidating the fund's remaining assets—distressed mortgage-backed bonds—to pay down the loans.
Investors Out of Luck

But one thing is clear. Investors in the enhanced leverage fund are lucky if they get any money back at the end of the day. A Bear Stearns spokesman declined to comment on the prospects for investors in that fund, which raised $642 million last summer. But people familiar with the situation say it appears that the original equity investors in that fund, which relied heavily on borrowed money to buy risky subprime-backed bonds, are going to be out of luck. Before Bear Stearns suspended redemptions in the fund, investors had sought to redeem up to $250 million (see BusinessWeek.com, 6/12/07, "Bear Stearns' Subprime Bath"). But some investors may have gotten money out of the fund before Bear Stearns shut the door.

Bear Stearns Chief Financial Officer Sam Molinaro Jr. tried to sell the hedge bailout to Wall Street analysts and investors during a June 22 conference call. "All of the threatened liquidations (at the enhanced fund) have been pulled while we are negotiating with counterparties," Molinaro said. "We do think the asset values have been beaten down significantly. But we do think there is significant value in the high-grade fund." But the plan got a cool reception. In trading June 22, shares of Bear Stearns fell 1.4%, to $143.75, on the New York Stock Exchange. The firm's shares have fallen about 4% since the crisis began in its hedge funds.

The fate of the negotiations between Bear Stearns and the banks that lent money to the enhanced leverage fund is critical and being watched closely by all on Wall Street. The big fear is that a mass liquidation of those poor-performing bonds, called collateralized debt obligations (CDOs), will force hedge funds and banks with similar CDOs in their portfolios to mark down their values. A mass reduction in CDO values could cause other banks and hedge funds to report sizable losses and scare off institutional investors. In a worst-case scenario, it could prompt lenders to get more protective and stop making loans of all sorts, not just to subprime borrowers.

The prospect of investors in the enhanced leverage fund getting nothing back may fuel litigation. Already, a number of investors in that fund have begun talking with lawyers. Ron Geffner, an attorney in New York with Sadis & Goldberg, which specializes in representing hedge funds, says a number of investors in the troubled enhanced leverage fund have contacted his office. The firm is exploring whether litigation is a possibility.

Meanwhile, the trouble at the Bear Stearns hedge fund has forced the bank to scuttle its plan for an initial public offering for Everquest Financial, an affiliated entity that had bought some of the riskiest subprime bonds from the two hedge funds. Bear Stearns filed an IPO prospectus for Everquest in early May, at the same time its hedge funds were beginning to rack up big losses on the subprime market (see BusinessWeek.com, 5/11/07, "Bear Stearns' Subprime IPO").

Bear Stearns and the hedge funds are the majority shareholders in Everquest, a company that was founded only in October. But now that the IPO has been shelved, it's not clear what happens to Everquest.

Tip of Iceberg said...

Bank of America calls mortgage woes ‘tip of iceberg’

By Sebastian Boyd and Will Edwards
Bloomberg News
Published June 22, 2007, 4:31 PM CDT

Losses in the U.S. mortgage market may be the "tip of the iceberg" as borrowers fail to keep up with rising payments on billions worth of adjustable-rate loans in coming months, Bank of America Corp. analysts said.

Homeowners with about $515 billion on adjustable-rate home loans will pay more this year, and another $680 billion worth of mortgages will reset next year, analysts led by Robert Lacoursiere wrote in a research note today. More than 70 percent of the total was granted to subprime borrowers, people with the riskiest credit records, they said.

Surging defaults on subprime loans have pushed at least 60 mortgage companies to close or sell operations and forced Bear Stearns Cos. to offer a $3.2 billion bailout for one of two money-losing hedge funds. New foreclosures set a record in the first quarter, with subprime borrowers leading the way, the Mortgage Bankers Association reported.

"The large volume of subprime ARMs scheduled to reset at higher rates in '07 and '08 will pressure already-stretched borrowers," putting more loans into foreclosure, the Bank of America analysts wrote from New York. A collapse of the Bear Stearns funds "could be the tipping point of a broader fallout from subprime mortgage credit deterioration," they said.

Bear Stearns, the second-biggest underwriter of mortgage bonds, offered to provide $3.2 billion of financing to rescue one of its hedge funds. Concern about the collapse of the funds, which made bad bets on securities tied to mortgages, sent bonds and stocks of finance companies lower.

Bank of America Chief Executive Officer Kenneth Lewis said in an interview earlier this week that job growth will likely blunt the effect of rising mortgage payments and defaults on home prices and housing starts. U.S. job growth accelerated last month as payrolls increased 157,000 and the jobless rate stayed at 4.5 percent. Economic growth has been crimped by the housing sector every quarter since late 2005.

"The drag stops in the next few months," Lewis said in a June 19 interview in New York, when asked about his outlook for the housing market. "It's just about to be over. We're seeing the worst of it."

Homeowners who can't afford to pay higher interest rates may struggle to sell their properties as home price increases slow, and stricter lending standards will make it harder to refinance, the Bank of America analysts wrote today. Interest payments on about $900 billion of the riskiest subprime home loans are due to increase this year and next, they said.

LaCoursiere is the top-rated mortgage-industry analyst based on investment return from his recommendations, according to StarMine Corp.

Countrywide Financial Corp. and IndyMac Bancorp Inc., two of the largest U.S. home lenders, may suffer more than other finance companies because they hold mortgages as well as selling them off to investors, the analysts wrote. The companies may not have set aside enough money to cover losses, said Bank of America, which has a "sell" recommendation on both lenders.

Countrywide spokesman Rick Simon didn't return a call seeking comment from the Calabasas, California-based company. Michael DiVirgilio, a spokesman for Pasadena, California-based IndyMac, said executives weren't available to comment.

The proportion of income that U.S. households with mortgages used for making payments in the first quarter of 2007 was close to or above the previous high in the late 1980s and early 1990s, the analysts said. U.S. mortgage borrowers will continue to find it harder to pay their debts until the end of next year, the analysts said.

Shares of Bear Stearns fell $2.06, or 1.4 percent, to $143.75 in New York Stock Exchange composite trading. IndyMac lost $1.07, or 3.3 percent, to $31.32 and Countrywide declined 74 cents, or 2 percent, to $37.18.

Mr. Reality said...

When this smoke clears, nobody is going to get a MTG for a long time.

Of all the laughable predictions Bendbust has posted, this one takes the cake!

Mr. Reality said...


Losses in the U.S. mortgage market may be the "tip of the iceberg" as borrowers fail to keep up with rising payments on billions worth of adjustable-rate loans in coming months.


Of all the laughable predictions Bendbust has posted, this one takes the cake.

Mr. Reality said...


Go to school, learn a skill, and STOP TAKING METH!!!!!


Of all the good advice that Mrs. Reality has given us, this takes the cookie. Stop Taking Meth, that's the secret to getting $120k/yr in Bend.

You have expounded frequently that your a genius.

Certainly you can add more insight into obtaining a six figure income to all of us in Bend who envy you.

Go to what school? What skill do you propose? I'm certain someone who is as successful as you out here in the desert has profound wisdom to share.

Why do you always fall back to meth whenever a specific detailed response is asked of you?

Mr. Reality said...


Humpty Dumpty Sat on a Wall, SubPrime Boy & CDOboy fell off the wall, and they couldn't put the Mortgage business back together again.


Well Said.

Alan said...

Pretty interesting stuff here, folks. This is probably off-topic and selfish, but let me ask something. My girlfriend and I are moving from Brooklyn, NY to Oregon this summer. We're deciding between Bend and Portland. We've done a fair bti of research and have friends in both places. We're both high school teachers, so with the growth in Bend, we're expecting to be able to get jobs and hang onto them, but to never make a lot, but to always have stable income. We'll be renting for a while and coming from Brooklyn, where we currently live in a $1200/mo shoebox, the prospect of a $700 1BR house for rent seems great. This is obviously the most knowledgble group in Central Oregon on housing issues (I trust realtors less than lawyers and politicians). What can you tell me? My gf and I are big outdoors enthusiasts, we know all the easy-to-find-out things about both Bend and pdx, so I'm looking for some real insight. Am I right about teaching jobs? Will I ever be able to buy a house? Will I want to? How does the market compare to Portland? What else should I know? Thanks for whatever you can tell me. From where we sit, Oregon seems like everything we want. Obviously, every rose has its thorns. Just trying to get a closer look at them. Thanks.

BENDBUST said...

We're both high school teachers, so with the growth in Bend, we're expecting to be able to get jobs and hang onto them, but to never make a lot, but to always have stable income.

These rhetorical redundant questions are nauseating because they have been asked a 1,000 times. All has been answered before.

1.) PDX is 100 times better than Bend for jobs, there are dozen's of places to work for teachers in PDX. If you don't like your bend job, you'll have to move.
2.) Live in PDX and go to bend on the weekends.
3.) If you live in bend you'll have to work twice the hours for 1/2 the pay.
4.) If you like music and going out pdx. If you like burritos bend.
5.) Hiking/mtn-biking is better in bend, but the trend is like Sedona, e.g. to charge to play, and charge a lot.

In summary, come to pdx and rent a little home for $800 { they an be found }, and make more money and have more time, and cut your expense. Then since your teachers spend all your time off playing in bend on the cheap.

Once you have saved a down payment, then when your visiting in bend look for cheap deals. There will be lots of deals the next five years, the best deals next year. Bend is NOT growing, PDX is currently EXPLODING.

Mr. Reality said...

A jumbo loan is now 7.5% according to WSJ - bendbust

This is the dumbest thing I have ever heard, there is no such thing as jumbo loan. Perhaps what you meant was dumbo loan.

BENDBUST said...

From where we sit, Oregon seems like everything we want. Obviously, every rose has its thorns.

Pdx rains, bend has sunshine, pdx has high suicide rate, bend has pervasive disparity of have & have-not

You just need to DO-IT,

That said everyone and HIS dog are moving to Oregon right-now. { Mostly to PDX & Medford } I suspect this is because the word is out that the RE biz is still alive in PDX & Seattle.

I know a lot of teachers, and most have master's degrees and have to sub for 2-3 years before getting a full-time job. Certainly bend you could work at a restaurant while waiting for teaching work. In PDX at least there are dozens of private schools you could try to get in, that said they have no benefits. In Oregon YOU must work for the government if you want any kind of retirement.

PDX is good for bikes, if you like to bicycle commute. Bend is good if you like to road-bike or mtn-bike on a seasonal basis.

There are bookstores all over in PDX if you like to read, there are NO bookstores worth a shit in Bend { sorry duncan your not powells }

There are only a few of people that 'make-it' in Bend, ...

1.) Folks that don't have to work
2.) Folks that join the gold-rush every generation { this has ended }, like builders, realtors, mtg brokers.
3.) Historically if you don't have money before coming to Bend, then its min-wage at a restaurant and PRAY for tips. The only place that has benefits is Deschutes Brewery, and now even them no longer offer benefits.

There is a rumor that there has been a baby-boom in bend, thus day-care must be good, its going to be years before these toddlers hit the schools. My guess is that most young people will leave Bend for the lack of work.

During the past five years because of RE it was possible to flip RE with helocs, and not work, and just golf. This is all over now.

In summary there are ton's of jobs in Bend, problem is they ALL pay $7/hr average, so yes you can get a nice house for $700/mo, but its going to take 50% of your take home pay, and then you have to pay utility's. Thus you be working all the time just for a shack, and then you'll have to have your GF work for the food, and gas, and then the car-payments, insurance, ... If you can get a job at a better restaurant and make $200/night on tips, that is where the GOOD-LIFE in Bend is-is.

There are very FEW good paying jobs in Bend, the people with money all had it before they got there. The few people who make good money are usually tele-commuters who could work anywhere. Most that I know are analysts that work on NY time 4AM to 2pm, and then play the rest of the day. Unless you have twenty years experience and a degree in ECON don't even think about that.

PDX has a diverse economy, you'll meet many friends and there are 1,000's of happy-hour places 3-7pm with $2 food, thus its possible to live cheap, and you can bike everywhere all year round. For instance PDX has 100's of great coffee shops to hang-out, and Bend has ZERO, no offense, but even strictly-organic isn't cool. The rest in town just suck. Bend USED to have cool places, but everything has gone STARBUCK like. The reason is that BEND hates slackers, bend is ASPEN, and wants EVERYONE to look the SAME, drive an SUV, ... nobody hangs out, and nobody wants anyone to hang-out, its grab your latte and go to the next RE meeting.

In summary, and this has been said a 1,000 times on this site, live in PDX, and drive to Bend, and you know what? You'll spend MORE time outdoors than the local's do. Everyone that moves to Bend ends up doing less fishing, hiking, ... than before they moved there.

Bend is NOT cheap, except for housing. PDX can be very cheap.

On the other hand if you have money, and/or rich parents and a trust fund, and you don't work, and just want to snow-board, bike,, ... Then bend would be fine.

Another thing over-looked by most people is that they generally LOSE their GF in Bend, this is because there are so many DUDES who are in shape rock-climbing, ... and there are so few women living as bum's in Bend that there is actually a shortage of women in Bend, so frequently women move up in guy's in Bend. On the other hand PDX has more women than men.

Most women in Bend become gold-diggers after 25, I really hate to say that.

Regarding the good things to say about Bend, see "A hobbits life", @ bendbubble.blogspot.com { apr, may, jun }, there you'll see why hobbits like Bend.

The above is just meant to differentiate bend and pdx.

Mr. Reality said...

I guess the only bad thing for the conservatives is they thought they came to Bend-Oregon like it was some kind of Sand-Point-Idaho where every retarded white man is king.

I resemble that remark.

IHateToBurstYourBubble said...

I resemble that remark.

Hey... I like this guy!

IHateToBurstYourBubble said...

From todays Bulletin:

Doctors say surgeries that use the body's natural openings speed recovery, reduce pain and eliminate scarring compared to traditional methods.

Physicians in New York conducted gall bladder removals through the vagina earlier this year. A boy's brain tumor was recently removed through his nose in Pennsylvania. And doctors in India say they have performed appendectomies through the mouth.


BilboBend, we're going to pencil you in the get your head pulled out of your ass!

Oy. I need coffee.

Just kidding Bilbo... I love ya, ya crazy bastard.

IHateToBurstYourBubble said...

Inventory:

May 14: 2,280
May 18: 2,320 (+40 -- 4 days)
May 23: 2,343 (+23 -- 5 days)
May 31: 2,391 (+48 -- 8 days)
June 11: 2,439 (+48 -- 11 days)
June 16: 2,464 (+25 -- 5 days)
June 20: 2,514 (+50 -- 4 days)

June 23: 2,546 (+32 -- 3 days)

There are 1,594 "residential" listings in Bend today vs 1,511 from May 31. There were 814 on May 31 of last year.

"Residential with acreage" in Bend is 284 vs 260 for the start of the month. There were 137 listings of this type on May 31, 2006.

There are 2,262 listings for all property types in Bend today.

Anonymous said...

What is "DIAL"? How do I access it?

Anonymous said...

"The DIAL application allows you to research extensive information on Deschutes County properties. Through the County's DIAL application you can search for various properties by address, by taxlot number and by other search criteria. Property tax assessment information, appraisal information, information on prior sales, land use permits, and other information are available."

http://www.deschutes.org/go/government/departments/assessor's-office/property-records-dial

Mr. Reality said...

Doctors say surgeries that use the body's natural openings speed recovery, reduce pain and eliminate scarring compared to traditional methods.

This is the dumbest thing I have ever heard, natural openings are for sex.

Mr. Reality said...

Bend is NOT growing, PDX is currently EXPLODING.

This is the dumbest thing I have ever heard, Bend is imploding.

Drink a few more PBR's take a few hits on the crack pipe.

Anonymous said...

My part of Portland (SW) is sitting on its thumb, based on the $240-$270K Arbor townhome development. In three months, I see site prep and one foundation (which has been there for a month). ONE car (realtor) at the sales office. Today's a really nice day, too.

Anonymous said...

You will find NY winters in LaPine, to some extent (south and above Bend). The La Pine watermaster notes the number of Californians who move in, have an ice-cold winter, and move back. But it's a dry cold.

On the other hand, if you can get teaching jobs in Bend, and like small towns, then housing may become reasonable.

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