Monday, June 11, 2007

Want Lower Quality of Life? Choose Bend Oregon!

David Fosters analysis for for May is out, and it is the source for some strange and sometimes contradictory conclusions about where Bend and the RE market here, are heading.

The Real Story is inventory. David's own count of homes in Bend hit a new record, 1,511, versus the old mark of 1,454 set in Aug 2006. I think everyone knew new records would be broken from the probably slightly flawed, but timely figures from Realtor.com. These figures went up day by day, and were finally reflected in Davids' data with inventory jumping from last months level of 1,373, and up 86% from last year at this time. And a fact of novel interest also came to pass this past month: Given Realtor.com's inventory figures and listing averages, Bend pushed into the billion dollar area of homes for sale.

So the question asked last Fall has been answered: Everyone knew everyone else would be listing this Spring. If we all knew that we all knew this, would listings be held back? The answer is clearly, "No". Personally, I began to buy into the "We're ALL discretionary sellers" idea: No one REALLY needed to sell, but were still fishing for the occasional Bucket-Box moron from California to pay 50-100% over comps. And when EVERYONE knew full well the folly of this, that many would decide not to entertain their Gold Rush dreams. Not true. I don't think the "Bend is 100% Discretionary Sellers" philosophy is one bit true.

So there is clearly an inventory overhand in Bend. But, it is Spring/Summer, and the buying ALWAYS picks up in May, right? Wrong. While April to May 2006 sales jumped from 188 to 244, or up 30%, April to May for 2007 was a distinct downer, dropping from 147 to 121, or down 18%. All this combined to push months of inventory to 12.5 months, a new record. May 2006 was at 3.33 months, and the previous record was last October at 11.8 months. Record levels of months of inventory are SUPPOSED to happen in the last quarter, not at the beginning of Bends' Big Summer Push. Over a year of inventory in May? Don't let anyone tell you that isn't Really Bad News for the Summer.

Finally, we get to price, and on this front there was good news for sellers, at least on the face of things. Preliminary figures from Doug Farmer showed unexpectedly large jumps in averages during May to $485K, up from $424K last month, or +14%. I can tell you that flew in the face of what I expected which was slightly lower prices, and slightly higher volume. And that $484K is a hairs breath from the all-time record for Dougs' data of $491K set last June.

And then Davids data came out, and the average increased at a fairly significant pace, although because it is YTD form, it's not nearly as break-neck an increase as Dougs. Averages went from $408K to $427K, a very sharp increase given that 4/5ths of the data set remain unchanged. Increasing averages 4.6% for the month means that May data had to do quite a bit of pulling to get that increase.

I was pretty confounded by this, to tell the truth. Far fewer sales at higher prices. Given what I knew was a pretty good uptick in inventory, I figured there would have to be pressure on sellers to lower price. And if they did lower price, I thought it was reasonable that we would see something similar to the 30% increase in unit volume over April. Maybe a little lower, but surely May would be higher, right?

Nope. But, yes... sort of. See, if you look at Davids data closely, you see medians going from $349,250 last month to $351,900, a jump of only 0.75%. It is hard to get medians to move given "outlying" data, in a nominal bell-curve distribution. So medians really didn't move much, which indicates that there may have been some high priced deals go through in May. The answer came from "The Wizard" over on BendBB:

"The big reason for the rise in median and average, is that there were 11 homes sold in May in the 1M - 3M range."

I am fairly sure that The Wizard is a Realtor, as (s)he provides quite a bit of data to BendBB that can only come from MLS. I also wrote a short example showing that just a few (even 1!) large scale purchase can significantly skew monthly results:

"
I wrote on another thread that there are 2 Pinelyn park homes @$4.5MM/ea. And if you sell 30 homes @ $333,333, and just one $4.5MM property, it pushes the AVG up to $468K, up 40%. Even ONE big transaction can really impact monthly results."

So here is May explained: Months of Inventory is at almost catastrophic levels, over a year. This is, without a doubt, The Single Most Important Data Point In Bend Real Estate. Absolute levels of homes for sale is totally useless, without knowing how many are being absorbed in any given time period. What if someone tells you that some anonymous town has 10,000 homes for sale. Is that a glut? A shortage? Who knows, until you know how many sales are happening per month to absorb that number. If there are 4,000 sales/mo., it's a shortage, if it's 800/mo., it's a huge glut. This statistic is applicable across almost ALL real estate markets.

We're going to hear about how well prices held up in May. This is to some extent, true. But there were relatively small number of high-priced closes that skewed averages much higher. Medians on the other hand, barely budged. I'm not sure how much 11 individual transactions should be counted toward gauging the health of Bends housing market... they DID occur, they skewed results, and maybe as Tim said, the high-end might be firming up a little after many moribund months.

So how to characterize this market? May, unfortunately, did little to give a completely unambiguous descriptor. Volume was, without a doubt, a disaster. Realtors ARE suffering, dollar volume is down 30% (Dougs data) from May 2006. From the professional perspective of what the vast Bend RE machine is grossing, this market is collapsing. You'll hear the term "normalizing", but this is a matter of perspective. If you buy a stock at $10, it rushes up to $200, and then falls back to $75, it's called "normalizing". If you bought at $200, it is collapsing. Yet another illustration of this industries sense of Indigenous Amnesia towards Bends' Current Residents and it's Grass Is Always Greener perspective on Inbound Migrants. If you already bought & lost at the Bend RE game, to hell with you, we'll backdate the options (ie homes) until everything is all blistering growth and Rose Colored Goggles. It's called normalizing.

And a comment from Bend Econo-Rocket:

The current generation of 20-30-something Bendites (who grew up in Bend) is different from the previous ones because they are at their career-building years in the height of the Bend boom.
Previously, you had the choice of going into the mills or the woods, or some other trade, or leaving to go to college and then either staying away or trying to find gainful employment in Bend with a degree. The top-dog positions of big landowner or big millowner or big newspaper publisher or whatever were sinecures handed down within families.


But if you graduated from a Bend high school in, say, 1995, you could make more money staying in Bend and working in construction / development / RE sales than you could going off to college getting a degree and coming back. I don't want to think of what happens to a lot of these folks as things slow down in those businesses.


Bend is one of those USA towns where you cannot complete a full life cycle of childhood-school-college-career. It loses people to attrition normally (it barely increased in population from the '50s through the '70s) so this inflow of outsiders isn't just for RE, it's for the town's viability, period.


I think that is one thing that has changed here in the past 10 years or so. People used to LEAVE Bend to live, because it was economically untenable to stay here for many, especially if you aspired to something beyond blue-collar labor. But now, people are COMING here to live... and WORK.

I've talked ad nauseum about who I think will win the epic battle between old-school, indigenous low productivity Bend Boss Hog dominated industries, and our current Escalade driving, 160IQ, tanned and wonderful immigrants. Let's say, I think they'll be leaving at some point, tail planted firmly between legs.

And we hear nothing except the wonders of Bend from Outdoor-Lifestyle magazines of every stripe, something flogged endlessly in the Bulletin. But all this demand has sparked something that even the Powers That Be are finding unpleasant: INFLATION. Scan BEM's old archives, and I wrote that the onslaught of general price inflation in Central OR was an inevitable result of RE inflation. It's simple: Real estate is a basic input to virtually all businesses, like a phone, or utilities. And if you picture the gross revenue of a business as a pie graph, all these costs take up some percent of sales. Real estate is usually quite a large chunk, and I'd bet that if some of the income statements for downtown businesses I've seen are representative, it's somewhere around 20-30%.

Sometimes this is a tolerable percentage, especially if location is acting as a marketing "proxy". You may not have to advertise at all if your location is good enough. But sometimes it's not, witness the large number of retail outlets closing in Bend since steep price hikes were instituted, largely in reaction to inflated prices paid in the past 2-3 years for downtown commercial buildings. The pie-graph is being taken over by RE costs for many downtown.

What is the result? In a strangely ironic twist, one downtown Japanese restaurant, Kuishinbo Kitchen is closing, while deep a significantly higher-priced Japanese restaurant is opening. This is indicative of something I think will happen all over Bend: Outlets offering lower-moderate priced items will be shuttered and replaced by "amenity-laden" outlets offering similar, but far higher priced goods. In other words: INFLATION.

And inflation without any accompanying wage inflation means one thing: LOWER STANDARDS OF LIVING. And according to a recent Bulletin article, "
Food, health, housing drive Bend costs up", there has been staggering increases in the price of groceries (+20%), and home prices (+19%) in Bend in the past year. The overall cost of living in Bend increased 9% in the past year. If this happened nationwide, let's just say it would be interpreted as an economic catastrophe. NINE PERCENT INFLATION! Last time that happened was in the 70's, and the subsequent recession was the worst since The Great Depression.

"So what!", you say. "I bought pre-bubble, I'm doing just fine, thanks. I make great money, and am basically immune to any downturn around here. All this bubble talk doesn't affect me!" If you are one of these lucky few, good for you. But an ever-larger majority are coming here to live & work, and the labor treadmill is tilting up just a bit each month... and we're not getting anything extra for our efforts. No more 40 hour weeks like 5 years ago, we need to work 55 hours just to stay even. Have to work just a little longer for that Sushi, because the old cheaper sushi place is gone, because her rent went up, because her building got sold for many, many millions and the buyer must pay his bills...

Pretty soon people will have to face a choice: Work ever more hours just to keep their nose above water... or downsize. Laminate, not marble. Cheap carpet, not wood. 2,200sf, not 3,000. McDonalds, not Merenda. Fuqua, not Renaissance. Hyundai, not Honda. Work, not hiking, biking, or anything else. Inflation lowers your enjoyment of life. Not abstractly, but in real terms. And Bend is lowering its residents enjoyment of life by about 10%/year, at least those coming here and trying to live & work.

Maybe soon, many Bendites will think, "Des Moines, not Bend". I know I am.

And a comment (from Wikipedia) on a town we're all familiar with:

This historic character of the city has been challenged in recent decades by skyrocketing property values and the proliferation of second homes, increasingly shutting low- and middle-income workers out of the city and creating a large pool of commuters from nearby bedroom communities ... At the same time, in stark contrast to its historic character, the city has emerged into international fame as a glitzy playground of the wealthy and famous. The downtown has been largely transformed into an upscale shopping district that includes high-end restaurants, salons, and boutiques. The booming real estate market has forced the city to struggle between permitting growth and restricting it. The city today remains a mix of high-end luxury homes and condos intermixed with legacy residences and mobile home parks populated by an old guard of... residents struggling to maintain the unique character of the city.... is the destination of choice for tourists from all over the world.

Bend, right? Perfect description. But no, this is Aspen. "So... we really CAN be the Next Aspen, right? Hell, we practically sound exactly like it right now!" Well, maybe, if we're willing to make a little tiny sacrifice, that sacrifice being YOU. Read a little further, and you see that Aspens population in 2006 was 5,804. Bend was 75,290. We're going to need to cull the ranks a bit, shucking off 12 people for each one we keep. "Well, why can't we be Jackson, WY?" We could, but 9 of your friends & co-workers will need to go. How about Whistler, BC? Kiss 8 friends bye-bye.

I've maintained that we will not be the Next Aspen, probably to the chagrin of Bends Powers That Be. We're Way Too Big. But it could happen. It happened to Aspen. You see in 1890 the Sherman Silver Purchase Act was passed which doubled the US Government purchases of silver. By 1893, Aspen had boomed to 12,000 residents, mostly silver miners. Unfortunately for Aspen, Grover Cleveland repealed the act, and Aspen began a long, slow, grinding descent, until in 1930 it was a mere skeleton of its former self, with only 705 residents.

So next time someone asks you, "Can Bend be the Next Aspen?", answer in an ever ebullient and positive tone: "YES WE CAN! There's only one thing standing in our way... YOU!"

Now.... GET OUT.

180 comments:

Anonymous said...

What is the result? In a strangely ironic twist, one downtown Japanese restaurant, Kuishinbo Kitchen is closing ...

From the Bulletin: "Kuishinbo Kitchen owner Sukmi Douglass is optimistic she can reopen the restaurant somewhere else downtown, even though higher rents are becoming the norm. She has a place in mind, but would not disclose the the location."

IHateToBurstYourBubble said...

9.9 months of inventory is certainly high, but perhaps not as abnormal as it would appear. From 1995 through 1998 the number of homes on lots that were listed in Bend averaged 7.7 months of inventory. In 2000, the average was 8.1. Historically, before the "seller's market" years, more than 6 months of inventory was a "normal market" in Bend. Even after the excess inventory is sold and the market becomes more "normal", inventory levels will probably be above 6 months.

This comment by David Foster I thought was interesting, as he admits that 10 months (looking back over a year of sales) of inventory is high, but not alarming.

I'm not sure, but it looks like the worst data point he could find in recent history was 8.1 months. Given that we're about 25% higher than that, I would say things ARE pretty bad.

We are clearly priced at far higher than a market clearing price. And market clearing doesn't mean every house is bought, just that there exists some nominal inventory level relative to sales. We're FAR above that price now.

And David states that Bends HPI rank of 7th in the country is a "positive indicator". I think he and many others in the industry will at some point see that appreciation will be a poor proxy for the health of the Bend RE market. Prices are staying firm, yes... but volumes are imploding. Given that there may well be 2,000-2,5000 Realtors in the area, 121 sales for the month means an awful lot of Realtors did not bring home a paycheck in May. Or April. Or March. Or....

"Appreciation = Health" is going to be one of the RE homilies that goes by the wayside over the next few years. We're NOT going to be the Next Aspen, if anything we'll be the Next Peoria. We need to get home prices down AND/OR incomes up. We have the opposite now, and mark my words, It Is Killing Us, And Will Continue To Kill Us.

The Powers that Be are going to flog the same old solution: MARKET THE HELL OUT THIS PLACE. But at some point that's akin to just burning the money. Trying to convince me to buy an "affordable" $225,000 Ferrari (because there's a $300,000 Bugatti down the street), won't work. Not on me, at least. I don't have the money. Some do, but the vast majority do not. That's why you don't see Ferrari and Bugatti & Rolls Royce commercials on TV, it's a waste of money. 999 out of a 1,000 people can't afford it, no matter how hard you market it.

But it'll happen just the same. Won't spend it on drawing any sort of employer, we'll just flush it. Which would probably actually be a better idea. We should set $100,000 in dollar bills on fire, film it, and put it on YouTube. I would actually go to a place crazy enough to do that!

IHateToBurstYourBubble said...

Found some good stuff at the OFHEO site. Go to the bottom of the page, choose "Bend, OR" from the drop downs, and click "Search". You'll get a table of yearly appreciation figures for Bend, going back quite long time, usable figures actually start Q4, 1986. Q1 YoY figures for the following years:

1987: 5.24%
1988: 5.53%
1989: 15.82%
1990: 16.29%
1991: 14.06%
1992: 9.4%
1993: 5.26%
1994: 6.26%
1995: 3.77%
1996: 6.24%
1997: 1.09%
1998: 7.09%
1999: 5.23%
2000: 6.76%
2001: 8.43%
2002: 6.9%
2003: 7.42%
2004: 6.47%
2005: 14.52%
2006: 34.93%
2007: 13.67%

The absolute highest quarterly gain prior to recent years was the Q2 1990 gain of 24.7%. Beginning in Q4 1988, there began a string of YoY double digit gains that lasted 10 quarters. Alas Q2 1991 began an uninterrupted string of single digit YoY gains that ended in Q3 2004. Of the Top 5 YoY gains from Q4 1986, they are:

Q2 2006 - 36.39%
Q1 2006 - 34.93%
Q3 2006 - 30.97%
Q4 2005 - 30.41%
Q2 1990 - 24.7%

Of the 82 quarters reported, 21 were double digit gains, or 25.6%. Taking out the recent (11) double digit months reduces this to 14%.

I would say there exists some "natural" level between these 2 figures for when housing is especially attractive, maybe 20%. But given the fact that Bend suffered from a relatively long drought in price appreciation after the early 90's "mini-bubble" (almost 13 years), I would say we're in for something proportionate: Probably 20 years. 4 of the top 5 appreciating quarters in Bend home price recorded history have been in the past 2 years. Going to take a long time to work off excesses created by something like that.

And note that after the early 90's mini-bubble, prices simply began to appreciate at an ever slower rate, finally hitting "bottom" at 1.09% in Q1 1997. No crash. Just an ever-flattening top that lasted 6 years. Then things just as slowly began to appreciate again, culminating in the recent massive gains.

IHateToBurstYourBubble said...

For those interested on the OFHEO stats:

AVG: 9.48% avg yearly appreciation
STD DEV: 7.34%

AVG from Q4 1986 - Q4 2003: 7.5%

t-stat of Q2 2006 gain of 36.39%: 3.66

That 3.66 t-stat is a very unlikely to be repeated event. Neither I nor my kids will be alive to see that. An equivalent YoY loss would be -17.43%

Anonymous said...

Why are you so angry?

You need a hug.

BilboBend said...

Good report, I note that ol David has taken a lot of his bullshit off his website.

Two of my favorites were ...

Bend is like Aspen, ..

People are "confused" is why homes are no longer selling

First of Bend is NOT aspen, there was never any silver here, so it never was a boom town, and there is long history of logging being played out early here in the desert.

Secondly, none of our 'confused' we know exactly what is happening to Bend, how it got over-priced, and we know who 'pumped and dumped'.

I really get tired of reading about medians from the RE folks, as they tell you nothing.

Here is what I did this AM, I walked all over westside, and up to NorthWest Crossings.

First NW-XC, its a ghost-town, I saw two people up there doing yard work, otherwise nobody, I saw one young couple on a bike with the kids, the people doing the yard were not the friendly type this village is supposed to be, they looked like they really would prefer that it was a gated community.

WRT the lowlands I noted that for every home with a 4-sale sign, there was a lock-box on the house next door, so its pretty clear that folks don't want the signs to advertise that the house is empty, on entire streets on saw 1/2 the homes being empty.

I note that all the houses 4-sale last summer, are still 4-sale.

One interesting thing I noted was a saw a few 'sale pending' stickers, I'm wondering if this isn't a marketing ploy?

In summary things look real sad, don't expect a report from me on the eastside, I never go over there for nuttin,

BilboBend said...

Let's look at Merenda since all the talk is of the non-existant "deep".

Merenda was ok, 2-3 years ago when it first opened, but then went to hell, first time I went there it was excellent.

Sometime about 1-2 years ago the place went to shit, the food was mediocre and the help intolerable, one night at the bar the waitress didn't bring our group water over almost 1/2 hour { still no drinks }, she didn't know where the wine-list was. The regular seating area has good service, but the food had totally lost its edge.

Last fall at Deschutes for an ale, I'm sitting there and bs'ing like I always do, and the guy next to me indentifys himself as the manager of Merenda... He conceeds the place had gone to shit, but said what do you expect when you have 80 employees... He mentioned the new place and how it was going to be different.

I think the myth here is that these places are re-inventing themselves out of boredom or rent increase. I don't think so, in these businesses every thing has to be new, just like me I was sick of Merenda after the second visit. There are only so many people in this town that can go out and spend $50++/person.

I remember when the girl that had Marz, I loved Marz, she sold it 2-3 times before she got rid of it, I asked her once why did you sell? She said that when she started she and Hans were the only gig in town, it was easy life, then when merenda came there was competition, it wasn't fun anymore.

On most nights now there is NEVER a wait at Merenda. Marz is now nothing what it used to be, I used to go to Hans frequently ten years ago, but I haven't been there for years,

Deschutes Brewery is going through changes, had dinner their last night, as good as always, consistent, they still have the wait after 6pm, but Deschutes NO longer has employee benefits, the company is getting killed in the CA and CO beer market, they just fired the marketing team, I think FISH will sell once he open's PDX, but he can no longer be the only service biz in town that has benefits and pays well.

Soon Deschutes will be just like Bend-Brewing, and St.Francis, just a min wage place and pray for tips.

Anonymous said...

Here is what I did this AM, I walked all over westside, and up to NorthWest Crossings.

First NW-XC, its a ghost-town, I saw two people up there doing yard work, otherwise nobody, I saw one young couple on a bike with the kids, the people doing the yard were not the friendly type this village is supposed to be, they looked like they really would prefer that it was a gated community.


That's pretty much the opposite of what I saw in Northwest Crossing this afternoon. I went to Compass Park with my daughter for a couple of hours and we saw at least 50 people in the park walking, playing, riding bikes, having picnics, and socializing. I met half a dozen new people, most of them residents of Northwest Crossing and a few from other neighborhoods, and all of them were friendly. I wonder why we had such different experiences?

NWX Maven said...

That's pretty much the opposite of what I saw in Northwest Crossing this afternoon.

Ditto. Northwest Crossing is a vibrant, vital part of the community. I don't think that at this point Bend can imagine itself without Northwest Crossing.

Those of us who live there would never dream of living anywhere else and those who are moving there are STEALING properties at today's listing prices.

IHateToBurstYourBubble said...

those who are moving there are STEALING properties at today's listing prices.

No offense, but Got Inventory?

Northwest X-ing may be a lot of things, but one it ain't is cheap. Tell me it's friendly, full, great food, shopping, convenient, and basically your dream World... OK, fine.

Cheap? No way. It's one of the most heinously overpriced places in town.

It is very tranquil & I always like it a little more than I think when I drive through. Executed well. But cheap? Brother, just mark it down 20%... that'll get'r done quicker than saying it's cheap to a bunch who know better.

IHateToBurstYourBubble said...

For example: MLS# 2615784. 1,638sf, that has been CUT to $499K, down from $575K.

It's basically a cottage that's copped a 'tude, and they want half a mill. Go fish.

And it's a spec house! That small square footage stuff in NWX is some of the worst values in town. I would almost rather own a place in The Shire! Although not quite. And I did just watch Lord of the Rings, so maybe the feeling will fade.

And Yes, I need a hug.

Frau Farbissina: Remember when we froze your semen? You said that if it didn't look like you were coming back we should try to create an heir so a part of you would live forever?
Dr. Evil: Oh sure.
Frau Farbissina: Well, after a couple of years we got a little... impatient. Dr Evil, I would like you to meet your son.
Dr. Evil: My son?
Frau Farbissina: Ja. SCOTT!
Dr. Evil: Hello Scott.
Scott Evil: Hi.
Dr. Evil: I'm your father. Dr Evil.
Scott Evil: I haven't seen you my whole life and now you just show up and *expect* a relationship? I hate you. What?
Dr. Evil: Can I have a hug?
Scott Evil: No.
Dr. Evil: Give me a hug.
Scott Evil: No way.
Dr. Evil: Come on. Let's go. Pronto.
Scott Evil: What are you doing?
Dr. Evil: I'm with it. I'm hip. Well, don't look at me like I'm friggin' Frankenstein! Come here and give your father a hug.
Scott Evil: Get away from me, you lazy-eyed psycho!
[Dr. Evil runs after him with his arms out]
Dr. Evil: Hug, hug, hug.

Anonymous said...

That small square footage stuff in NWX is some of the worst values in town. I would almost rather own a place in The Shire!

Prices in The Shire look like they'll be similar to Northwest Crossing prices. From the Shire Forum: "[Prices] are going to be 400k and up to 1m Houses range from 1300sf to 3,200sf"

400K for 1300sf is over $300/sf.

MIsstrade said...

Dream Weaver aka NWX maven, you have to justify the $300 a foot you payed in last year. Can't blame you, but have to agree with Paul, prices must come down to 120-150 per foot to call them fire sales. Party on Wayne. I was in the Neighborhood today its always great in NW crossing. Pleasantville for sure. Just quiet and sleepy most of the time with lots of for sale signs all over. As a resident for two years and living on top of my neighbors, I won't be paying 200 per foot over there anytime soon. 150 maybe, but rent is about 1/5th of the ownership cost. So rent if you like it but buyings for suckers in pleasantville at these prices.

Anonymous said...

NW Crossing always seems dead to me. I walk through and drive through. It feels like a ghost town. Not sure why.

Anonymous said...

Agree about median number...it does't mean anything. The only important number right now is inventory and it is at record levels with decreasing sales.

I predict panic mode will occur sometime in late August.

Anonymous said...

BEND ECONOMY 1997-2007: INTERACTIVE CHART

Anonymous said...

___________


Positive signs in area growth
Economy stabilizing in first quarter
By Anna Sowa / The Bulletin
Published: June 10. 2007 5:00AM PST


Editor's note: The Bulletin has partnered with the University of Oregon's College of Arts and Sciences and Department of Economics to produce the Central Oregon Business Index, the third of which appears here. The index provides a regular snapshot of the region's economy using economic models consistent with national standards. The index, exclusive to The Bulletin, appears quarterly in the Sunday Business Section.

CLICK HERE TO LAUNCH AN INTERACTIVE CHART

Central Oregon's economy started 2007 better than it finished 2006, but it still isn't nearing the exceptional growth experienced two years ago, a quarterly report indicates.

The Central Oregon Business Index rose to 173.9 in the first quarter of 2007, a 0.7 percent increase from the fourth quarter of 2006. That means the local economy is stabilizing after the fourth-quarter index dropped, said Timothy Duy, assistant economics professor at the University of Oregon and author of the study. But the index's drop from first quarter 2006 - 0.8 percent - indicates that economic growth continues to slow, as it has for the past three quarters.

The index provides a snapshot of business activity in Central Oregon, combining nine economic indicators into a single measurement of the economy. Of the nine indicators, five deteriorated and four improved. The index starts in February 1997 and has a base number of 100, set in 1998.

"In (the first) quarter, we saw some positive signals," Duy said. "The decline in help wanted ads stabilized, nonfarm payrolls grew, new business filings stabilized, building permits perked up a bit after falling last quarter and housing sales are coming back on line."

Still, comparing first quarter 2007 with first quarter 2006, growth is much slower.

Notably, tourism activity softened in the first quarter, Duy said, and the housing market isn't performing as well as it was one year ago. Quarterly increases in housing units sold and building permits indicated the market rebounded from its dip in fourth quarter 2006, though both categories are still well below year-ago levels. Additionally, houses are sitting on the market as long as they did nine years ago.

"There's still that warning sign ... lurking," Duy said. "Although more homes got sold, it's clear they are taking longer to sell - median days on market increased - which suggests things are still weaker than they were a year ago."

Following are variables that comprise the index, all seasonally adjusted, and how they performed in the first quarter:

* The Bulletin help wanted ads were largely unchanged, though they dropped slightly from the fourth to first quarter. In the second and third quarters of 2006, however, considerable declines in ads suggested that employers were looking for fewer employees. This was a negative indicator, helping push the index down.

* Bend's lodging revenues slid from the fourth to first quarter, also a negative indicator.

* Redmond Airport activity - boarding and deplaning - also declined from the fourth to first quarter, similar to how lodging revenues fell, negatively affecting the index. Airport activity for the first quarter is still above the first quarter of 2006.

Duy said the slight softening of tourism activity coincides with overall economic activity declining. Tourism industry officials hope a busy summer will make up for the first-quarter dip.

"We knew the first quarter was off slightly," said Alana Audette, president and CEO of the Central Oregon Visitors Association. "But we are encouraged by our projections for summer."

Audette mentioned a number of events happening in Central Oregon this summer, including the Jeld-Wen Tradition senior pro golf tournament and two major RV gatherings at the Deschutes County Fair & Expo Center.

"We feel we will recover from the (first quarter) dip," she said. "It makes it all the more important that we rebound for the balance of the summer to recoup those losses."

Summer booking rates at hotels, vacation homes and resorts are running about 10 percent to 15 percent ahead of last year at this time, Audette said.

This summer will not be record-breaking, Audette added, but steady growth is expected in the industry, which has a $471 million-a-year impact on the economy, according to COVA.

"If we hit 3 to 5 percent growth, that's good for (the tourism industry)," Audette said. In unincorporated Deschutes County, room tax collections for the fiscal year starting July 1, 2006, through April 20, 2007, were up 2.12 percent over the previous fiscal year, according to COVA. In Bend, the same fiscal year tax collections were up 4.52 percent through April over the previous fiscal year.

* The number of days Central Oregon houses sit on the market increased from the fourth to the first quarter, hitting 142 days for the first quarter. That is the highest average number of days a house has sat on the market since the first quarter of 1998 and negatively affects the index.

"This is telling you that although there is stability in other (housing) indicators, it's too early to breathe a sigh of relief," Duy said, adding that the bottom of the housing market hasn't been reached.

* Unemployment claims in Deschutes County increased for the third consecutive quarter, indicating an increased pace of layoffs, Duy said. The number of claims negatively affected the index.

* Bend's nonfarm payroll shows that hiring is up in the area, with average monthly payrolls gaining 600 workers for the first quarter, compared with a gain of 200 in the fourth quarter.

Those numbers move independently of each other, economists say, so they can go up and down regardless of the economy's health.

"What this tells me is we are continuing to add jobs," said Stephen Williams, economist for the Oregon Employment Department in Bend. "But at the same time, there are higher numbers of initial unemployment claims."

That could mean jobs added are different than the jobs being lost by unemployment claimants, Williams said.

"We are getting more workers in the system," he said. "Employment is continuing to steadily increase in Deschutes County."

* New business filings in Deschutes County rebounded in the first quarter of 2007, rising 10 percent over the previous quarter. Many of the new businesses created were for the sole purpose of doing a business transaction, Duy noted, which is why business filings surged during the real estate market's peak. This indicator positively affected the index.

"This makes sense given the data," Duy said. "Parts of the housing market have stabilized, employment continues to grow and therefore more business opportunities are created in the region."

* Central Oregon saw the number of housing units sold increase from the fourth quarter to the first quarter, rising to a monthly average of 359, compared with 295 in the previous quarter, positively affecting the index. That includes all housing types, not just single-family homes.

* Building permits also were up in Deschutes County, climbing from 163 in the fourth quarter to 199 in the first quarter. Still, compared with first quarter 2006, Duy says the housing market remains significantly weaker, with sales and permits off 26 percent and 45 percent, respectively.

BENDBUST said...


ECONOMY SEES RECOVERY - BULLETIN
Of the nine indicators, five deteriorated and four improved.


This is so Pravda like, we're lead with a title "recovery", then we learn we're darn near heading the bottom.

Thus from twisted "lets go shopping" logic, I can see that the only direction now is up.

Ergo, the recovery is on its way ...

Indicators -
1.) Hotel's - lots of RV conventions { do they park the RV at the hotel ? }
2.) Permits - I love this, the building permit dept has basically came to a standstill, now if they issue one permit they can call it 100% growth.

The paper has to throw ink on newsprint, they have to meet advertising contracts, and folks I guess want to read that things are getting better.

Go over to the Source this week, and is the sky is falling. The realtors are saying I told you so, if you had just let us build 800sq-ft homes on 1500 sqft lots "they would have come". Let's see that a 30by50 lot, in 20by40 home, isn't that a trailer-park??? Didn't the good boss-hogs of bend just shut down our trailer parks? Now they want to bring in new ones, and call them "affordable housing".

BENDBUST said...

NW Crossing always seems dead to me. I walk through and drive through. It feels like a ghost town. Not sure why.

Over 50% of the units are empty, by that I mean second or third home, the other 40% are spec homes.

Now lets get the REAL issue, why would anyone come to bend and live in a home where you couldn't keep your RV in the yard, where you couldn't park you car in the street.

I was seriously looking at buying a few NW-XC'ing homes about two years ago, I went the realtor shop up there at Mt-Washington, next to the little coffee-shop, kitty-corner to the High-School.

I asked for literature, and the realtor immediately told me that you couldn't lose money at NW-XC, she said that all you had to do was buy , and you could make 500% a year on your down payment. The way it worked she explained is you bought the 1200sqft 'affordables' at $500k, for $50k down, and that given that Bend would NEVER see less than 50% annual appreciation, .e.g. first year your $500k home would go to $750k, SHE TOLD ME THIS.

I said to her that I was only looking for rental property that would pencil, she told me that everyone at NW-XC just let the prorperty sit empty, because there was no point in getting $1k/mo, when you were making $20k/mo in appreciation.

I asked her how many homes she had, and she said FOUR, I always do this to see if these folks buy their own shit. I believe she was sincere, and believed every line she dumped.

Now, I ran, and I ran fast and go back up there weekly and walk around.

The reason that NW-XC is a ghost town, is that everyone up there is terminally fucked, and they know, and there is NOT a damn thing they can do about it.

That said, they screwed themselves, they believed the dream that you could lose $1k-3k a month, because you were making $20k, it was a guaranteed deal, you couldn't lose Bend REAL-ESTATE ONLY GOES UP.

The reason folks @ NW-XC are so pathetic, is that they just discovered this AM that the tooth-fairy doesn't exist.

Anonymous said...

I went to Compass Park with my daughter for a couple of hours and we saw at least 50 people in the park walking, playing, riding bikes, having picnics, and socializing.

I was there at noon, and there were two people in the park.

Are we talking the same town?

Anonymous said...

you couldn't lose money at NW-XC, she said that all you had to do was buy , and you could make 500% a year on your down payment. The way it worked she explained is you bought the 1200sqft 'affordables' at $500k

Today your $500k 2005 affordable has an ask of $380k, and they're not moving, and many have NEVER been occupied. Let's see down $120k, you cannot lose money in NW-XC. So your $50k investment is now a -$70k (net-loss). That's a whopping -120%/year negative return on your investment.

They call this a "falling-knife" in the wall-street biz, but in Bend its called a Steal, yes it was a steal, the con-artists that marketed this project, literally had a City-of-Bend license to STEAL.

Anonymous said...

Although it looks dead to me (even kinda spooky), it seems like if it fills out with owners someday (after defaults?) it could be nice. I like the look and the school. The houses, unlike some neighborhoods (Skyliner Summit and the Parks), don't all look the same.

Get enough people out on the porches, and I'll give it a thumbs up.

IHateToBurstYourBubble said...

Much thanks for The Bulletin articles!

I read that piece, and am a little confused. I got the same impression as a previous commenter: Nice, happy title... then an onslaught on terrible statistics!

I mean look at the Y-axis on that housing units sold graph... it's almost ZERO! From 600 to almost ZERO. Except for a brief dip during the recession of 2001, volume has never been this low. Similarly, Days On Market has never been this high.

Maybe the most interesting chart is the Help Wanted count. After staying in the 1-2,000 area from the start, it jumped to almost 10,000! This is good news? I'm not sure. Business hasn't exploded 10 fold in the past 3 years in Bend, so this is really a reflection of businesses DESPERATELY fishing for employees. This is indicative of a heinous labor shortage, which I can tell you from personal experience, is fairly bad news. You end up spending all your time & MONEY trying to find employees to service customers, and start working MUCH harder for less & less money. It sucks.

This report seems to do a lot of quarter to quarter comparisons, which is just wrong. YoY is the only thing that works around here. Housing units sold compared to last quarter? Not really useful.

And NWX-hoe... I told you that pig wouldn't fly. I agree with the renter: It's a renters paradise! Owners are and will continue to get spanked. This thing was sold on the premise that 30%/yr would last my lifetime & my kids lifetimes. And I'll bet that Realtor story is dead true... They promised the Moon & you bought.

Northwest Crossing is a vibrant, vital part of the community. I don't think that at this point Bend can imagine itself without Northwest Crossing.

Oy! You must own 5-6 FSBO units over there! And you must of come from Down South, cuz sentences like "Bend can't imagine itself...". Woof. It's a town... it can't imagine anything.

IHateToBurstYourBubble said...

A Realtor.com 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)

Seems to be slackening very slightly, but still an awful lot of net new homes coming online. June, again, seems a dead lock for record inventory.

BENDBUST said...

Business hasn't exploded 10 fold in the past 3 years in Bend, so this is really a reflection of businesses DESPERATELY fishing for employees.

IHTBYB look at it this way, For as long as ME can recall I have dined every AM at long-board louie on the west-side for the breakfast-burrito, and it include's an excellent cup of java for $4. It's NOW GONE, the owner says' perhaps in the fall he'll bring it back, pray tell why? WHY?

Because he cannot get help, nobody in this town wants to work in a greasy hot kitchen at 7am, historically they had some of the cutest young things in town, but now of course that Bend is populated by cali spawn, WHO KNOW that their time is worth at least $20/hr, they're not going to work in a greasy little kitchen for $7.

Why the owner doesn't hire mexicans like the ever present rigoberto or even our all time favorite super-burrito, is at least they can say me-no-hire-illegao-mexican-he-my-brother, the owner of long-board, has to hire white folk, and white folk will not work. Thus you see a ton of help-wanted, in fact long-board went as far on his outdoor billboard to take down the special list and say "help wanted", to NO avail.

Yes, there are a ton of jobs in Bend, yes un-employment is down in the since that employment listing(s) are up. They'll continue to go up, what can anyone do in Bend on $7/hr, you cannot hire a college kid, because they need to be at school at 8am.

Watch closely the next phase of bend will be MOST of our favorite places will be owned by mexicans, and they can legally have relatives work. Places owned by white people cannot hire mexicans, and white kids will not work,

Perhaps you can a walmart greeter to work the AM shift at long-board, but my humble opinion is that cute young gals has something to do this LB success.

In time of course the want-ads will disappear as our mexican owners will not advertise as they can hire word of mouth.

Thus what we see right now if ad's up is simply a transistion period, from white owned small business, to foriegn owned small business.

One the BIG side they're all leaving, don't expect much jobs from LesSchwab as most of the good paying Juniper-Ridge folk already live in Bend.

Don't get me wrong, I love latinos, and I think it is appropriate that they inherit ownership of future Bend, as Home-Flippers to pathetically stupid to work and/or have their own business.

BENDBUST said...

Get enough people out on the porches, and I'll give it a thumbs up.

The place is anally designed, there will never be life on the front end { porch }, all life in NWXC will be in the alley's.

In five years after the bubble recovery, and NWXC is a ghetto, every garage door will be open selling tacos, folks will walk the alley's, as that is where the life is,

This place is EXACTLY like MISSION-VIEJO of the 70's, they built, and it collapsed once the greatest-fool bought, and today its a mexican garage sale paradise on the weekends, every garage is open, and every garage is selling stuff, its better than the mexican market in downtown LA,

NWXC in the next 2-3 years will average $1k/mo or less for rent, it will be become a low income housing village. There will NEVER be life on the porch because all ingress/egress was designed on the ASS-END.

All the workers at super-burrito, and rigobertos, and all the other mexican owned business in BEND, will send their employees up there who will live ten to a family very comfortably.

Lastly, mexicans LOVE parks, the parks in NWXC will actually get used in five years.

Anonymous said...

The way it worked she explained is you bought the 1200sqft 'affordables' at $500k, for $50k down, and that given that Bend would NEVER see less than 50% annual appreciation

I love nwxc, everyone always makes money, the $50k down goes straight to house commissions.

The contractor's sold, so they could build more, bank is happy.

It's only now that new houses are selling for less than owner occupied that things are getting weird.

That said, the nwxc real estate people can still make money on the down-payment. Life is still good in Bend.

Homes are still being built, as the new spec homes are cheaper than the 2-3 year old homes.

Contractors are busy,...

Just keep the new cali buyers away from the first generation purchasers. Then again, the new buyers are getting a steal.

If you go to the south end of nwxc, you'll see that much of the new single-family home stuff is small, thus the builder's are getting the idea that small is good. Now if nwxc can just market a $250k home.

The old joke about nwxc is they spent 25% on marketing, where typical is close to NIL, in Bend houses sell themselves, as if you build they'll come. About seven builders NO better than any other builder's and nwxc executives spent this 25% to market the myth that nwxc homes were better, and built by a better builder. This makes a lot of other Bend builders laugh their ass off, as NO home built after 2001, is-was of quality in Bend, there is another joke, "never buy a bend home built after 2001, it was thrown together overnight".

So, nwxc built say $600k homes, that should have been $450k, but your paying a $150k premium for the marketing, I'm sure that NXC-HOE is part of that team.

In summary when looking at nwxc homes always subtract that $150k premium because it was hot-air that cooled off long ago. Given that a small simple home has an average ask of $400k, and that $150k is of marketing that has NO benefit to todays buyer, I highly suggest that these homes are actually in real value today worth $250k, then you would be paying real dollars for a reasonable value.

The NWXC marketing myth was always a myth, and cannot be considered to be REAL tangible good-will value, as it was ALL based on MYTH.

Anonymous said...

I was there at noon, and there were two people in the park.

Are we talking the same town?


Same town, same park, different times. I was there between 1:00 and 3:30 and there were lots of people in the park.

I don't live in Northwest Crossing, but the people I've met who live there seem to be happy with it.

Anonymous said...

>>Seems to be slackening very slightly...

Be careful with Realtor.com. I'm graphing several North Carolina cities and they all have falls at the beginning of months. I think it's due to expirations. You really have to check the same date of each month to get a feel for increases.

Anonymous said...

Same town, same park, different times. I was there between 1:00 and 3:30 and there were lots of people in the park.


we have ...
1) lots, at 2pm
2) fifty, at ???
3) two, at noon

I guess next sunday, we'll have to take pic's, no problem, I think it would be fun to have a NWXC days blog with lots of nice ghost-town pic's. One last word in most primitive cultures anything over three is 'lots'

Anonymous said...

The Shire

The difference between the shire, and nw-xc seems to be timing. In my humble opinion, the nw-xc was executed with perfect timing, as they caught the entire bend-bubble-bull, this pump&dump project was brilliant, it should be a Harvard MBA textbook case study.

Now on the other hand there is, TheShire seems to have done there greatest PR campaign { 16sep2006 }exactly at post-peak of the bubble, in fact I now firmly consider that the day "THE-SHIRE" went public should be considered the bend-bubble pop, as things never got any stupider than this!

****

"The Shire is conceived to be a retro community in its exterior appearance. Inside The Shire dwellings you'll find a blend of quaint and charming styling cues melded throughout completely modern floor plans, conveniences and appliances.

To achieve the character and feeling of English cottages and village townhomes, The Shire designers have specified only high quality fixtures and materials. Some materials, seldom seen in residential construction for a hundred years, have been resurrected and manufactured from contemporary compositions.

The Shire is unique, fearlessly created to the vision of developer Ron Meyers and a team of designers to help implement his vision. The Shire's homeowners will share this unique vision to have their community and primary residence beyond the ordinary incorporated with the values and charms of a different age."

Depicted above is a cottage of a type called “The Swordsman.” Why a swordsman would live in a Viking range equipped, granite counter supplied McMansion disguised as a quaint country getaway is difficult to discern.

You wouldn't necessarily know that this community is patterned on Middle Earth's bestest place from the website's mainpage http://www.bendshire.com/ go here for a quotation from Tolkien that will distinguish this Olde English village from one that might have been developed by, oh, say the piss artist Thomas Kinkade.

To truly make me want to live in Bend, Oregon, this Shire had better include prowling Ringwraiths and the possibility of Balrogs.


***

1) Do they come with peasants?
2) If someone taller than my sword walks onto my property, may I shorten him/her by a head without all the irritating paperwork?
3) If I like my neighbor's house better than mine, how long will it take me to get an army together to take it from him?
4) As a woman, would I be consigned to the role of peaceweaver in one of these things? 'Cause I'm really not set up for that. (See questions 1-3)
5) How much do guard-geese go for these days?


You know, given what I study, I should have something intelligent to say about plushies (furries, fursuits) or, for that matter, medieval bestiality: but I don't. Although I did just run across this Parisian penitential:

"Si quis laicus cum quadrupede furnicauerit, I annum, si uxorem habit, peniteat, si autem non habet, dimidio"
(if a layperson has sex with a barnyard animal, let him do penance for a year if he has a wife, but if he doesn't have one, let him do penance for half a year: is that right?)

I got hung up on the part of the site that said something about architecture inspired by the 17th century. Huh? So confused.

Here's what I want to know, akin to Heo Cwaeth's questions:
1) If you live in one of the Tudor style homes, are you allowed to persecute those living in the medieval style homes for being Papists?
2) If you live in the quasi-meadhall depicted in this post, must all of your drinking vessels be horns and claw-footed beakers to go with your Viking range?
3) Do the suits of armor depicted in many of the show homes come with them, and may they be put to appropriate use when trying to annex your neighbor's land?

And HeoCwaeth, at $800,000 you can bet the houses come with peasanst, especially on the West Coast. Only they call them "gardeners" and "maids." { In central Oregon we call them mexican's }

I believe that medievalism is just another thing to buy. 800 large is more than my assistant professorial salary can bear, and I do wonder why we cannot resist to poke fun at someone for buying The Swordsman. I for one don't think we--that is, we medievalists--gain anything by trivializing serfs and medieval warfare just to crack a few flat jokes.

But wait a minute – we are talking about something based on the Lord of the Rings here (as ADM pointed out). So in fact the dream has nothing to do with any real past – with any reality – but with an entirely fictional world. The website for SoB entirely conflates the two – the fictional and the supposedly real past of my country, the UK. That I begin to find worrying, even offensive – not as an academic medievalist – but as a modern British person. It is wrong for any state to create a world view – a sense of current affairs, possible futures and the best place of that state in the world – based on a fictionalised idea of what other states were and should be like. If kids growing up in the middle of Oregon are given entirely fictional views of world history like this they are being disserved in exactly the same way as if they were taught about creation but not evolution.

I have travelled in rural/suburban US – and I found the lack of knowledge of the outside world among some communities frankly disturbing – in the richest and most powerful country on the earth. Anonymous’s notion that this is all OK – that it is just a form of consumerism and no more significant than that is also disturbing. In all kinds of way consumerism can be a powerful good, but if the consumer is also an unregulated king it can also be a very powerful bad.

The Shire development is Oregon is wierd, not *just* because, as you point out, the so-called past history it points to is not "medieval," per se, but more "Lord of the Rings," which is, already, a fictional "medievalism." But did you note, when perusing website, that the developers write that the time period they are aiming for is "18th Century"? Turns out they're not really "thinking medieval" at all.

I don't in any way feel "superior" to those who either designed The Shire or who might want to live there, nor, if I *were* feeling superior to them, would my superiority be based on the fact that I am a poor academic who only has her intellect to use as a billy club against those who are more wealthy, and perhaps more conservative, than me. I, in fact, grew up on trust funds, and was also raised by a father who worked for Robert Kennedy. It's not because I can't afford to live in The Shire that I think it's an odd development, nor does my economic background predetermine my politics and ideological viewpoints. And I never, ever go around, just because I am a professor, acting as if I "know everything." I think part of the humor [or humorous barbs] pointed at The Shire development mainly just stemmed from our recognition of the sometimes absurd manner in which emblems, sites, and history of the past are appropriated in contemporary culture, sometimes with unintended moments of historical dissonance. I would rather be amused than full of vituperative, academic scorn over the matter. Anyone who knows JJC's work, in fact, is always struck by the sheer joy he seems to take in any and all subjects, past and present, and in the wierd assemblages that sometimes result in the margins between older and newer worlds, bodies, text, etc.

My only real problem with The Shire development [and if this makes me "superior," so be it] is the brand of escapism it promotes and sells; more and more, I am struck by all the ways in which, especially in America, contemporary consumer culture [whether involving fashion, architecture, eating out, cars, etc.] is predicated upon all manner of sleek [yet ultimately very thin] fantastical surfaces. I can hardly tell what counts any more as an authentic experience [sex in an alley?--haha--you would have had to have read a very vicious essay by Anthony Burgess castigating the work of Virginia Woolf for its sophisticated and ultimately empty qualities that was published umpteen years ago to get this joke--he suggested her writing would have been better if she had been raped in an alley-ouch!].

Given the horrors that daily visit those living in poverty, in prisons, etc., a development like The Shire strikes me as yet another example of our consumerist excesses gone awry. And because it very obviously and purposefully gestures toward a pseudo-medieval [albeit, also "18th-century"] past, it is of interest to those of us here at In The Middle as an example of medievalism, and as a site through which we might possibly explore what it is people find so comforting about a supposedly agrarian, rural, "peaceful" past that did not really exist the way the developers imagine it did.

I especially like her characterization of The Shire as "consumerist excesses gone awry," though so much has gone awry with respect to consumerist excess that The Shire is, well, as Karl said, "sad." There is something pitiful here, though I am aware that if I pity I install myself in a position of superiority. Perhaps such pity may be strategic more than anything. The Shire affords us the opportunity to look at the present to see how the past is being rewritten. This, now that I think of it, reminds me of Strupp's view of psychoanalysis.

At any rate, the Shire's not as bad as all that. While I might make it seem like a varient of some neo-medieval "blood and land" politics, I think that'd probably be unfair. At least it's trying. The houses might be a bit silly, but the technology they're shooting at--or at least invoking--is Green, and, in comparison to the condos where I had dinner yesterday, they're not utterly hideous. So long as they're understood as imagination, reinvention, and fun rather than, well, the nostalgia I loathe, what's not to like, a bit? I mean, apart from their (apparently) total contempt for the urban communities I love so much and the enroofment (er) of all that I so much desire in my better moments.

I have absolutely no problem laughing at The Shire. It's funny and it's sad. I mock it happily. Sue me. It has nothing to do with my political beliefs, BTW -- my guesses are that people who live there will have similar political beliefs to my own. It has little to do with the architecture -- I kind of like the Rohirrim-y house, even if it's way too big (none of these houses is all that green with that kind of square footage and open floorplans ...).

Here's why I laugh and cry:

It's Tolkein and Kinkade, represented as medieval. The developers clearly don't know when the Middle Ages were, and have mixed up all kinds of real and fictional times. Or maybe they do, and it's a joke being perpetrated on the buyers.

What they are selling, if one reads the website, is an idea of community -- of Little England. But it's not England (and did Little England ever really exist?), it's Oregon. To me, it is funny and sad that people might buy into the idea that they can get community via the trappings of (several) other cultures.

Me, I'd be perfectly happy if this were simply marketed as "hyper-expensive houses for Tolkein fans with too much money". That would be more truthful. Because there won't be the community as advertised -- there can't be. The kind of community advertised is generational and requires lots of different kinds of people in different jobs and of different social and economic classes.

For what it's worth,I also think n50 is absolutely right in the problems of remembering a created past, rather than learning about the real one. I'd take it further. Despite anonymous' objections, although I don't see myself as owning the past, I do think that, as a professional historian, I have an obligation to point out when the past is being bastardized for someone else's use. What people do with that knowledge is entirely up to them. Knowing how bad the latest King Arthur film is did not keep me from enjoying it, after all.

Anonymous said...

we have ...
1) lots, at 2pm
2) fifty, at ???


Between 1:00 and 3:30 "lots of people" = "at least 50 people". The most I saw at any one time was in the 25-30 range, with people coming and going.

Does somebody have a grudge against Northwest Crossing?

Anonymous said...

nwxc listed new homes at $600k, that should have been priced at$450k, but your paying a $150k premium for the marketing

Why shouldn't NWX get be entitled to a premium. The intrinsic intangible is still there? Its quite normal in business to pass all costs on to the end user. Everyone at NXC enjoys the intangible value of owning a share of paradise.

br/>
Perhaps this argument was valid for the first generation that bought in 2005 or earlier, and enjoyed the 30% annual appreciation, which was largely driven by the marketing. Now that the entire project is enjoying negative appreciation, the cost shouldn't be passed. Unless of course it can be proven that current marketing costs are what keep the boat afloat, if that is the case then the costs should be passed.

Certainly the NWX should be no more than $250/sq-ft anything over that for this mediocre construction, is simply a marketing premium, and we can argue all day long if that matters to second, or third generation buyers. What is clear today is that the second generation can be new from the builder for less than the first generation owner can sell.

IHateToBurstYourBubble said...

It's NOW GONE, the owner says' perhaps in the fall he'll bring it back, pray tell why? WHY?

Have to make a drive over to the Eastside. We'll go slummin'! I haven't checked his new location for hotties.... hopefully it's still good.

Just like that gas station/car wash just past the underpass as you go Southbound on 3rd... yeah... the Summer hotties are The Draw, who cares about how clean the car gets.

Employing hot gals is good business. You'll get a lot of perver... er, business you otherwise wouldn't.

IHateToBurstYourBubble said...

In summary when looking at nwxc homes always subtract that $150k premium

The market will do that on its own on resale. Although it illustrates why "marketing" homes extensively is a bad idea: Comp's won't have this built-in premium, and the value of a heavily marketed subdiv will probably actually accumulate to nearby home owners: Your $550K over-marketed shack makes it way easier for me to get $475 for my undermarketed hovel.

I think a lot of NWXers MUST talk themselves into the idea of NWX being "paradise", "wonderful", "affordable", and all that, because under the harsh light of reality, they have been bamboozled more that any humans in a 1,000 square mile area. They're going to lose their shirts financially, and they need to feel good about it somehow.

Can't blow $500/sf on a cracker shack, rent it for $1/foot/mo, and think things will be OK. That's an ROI of 2.4%... what did you think was going to happen?

And I concur with the NWX Ghost Town assessment. Nary a soul on the occasions when I have driven thru. No cars, no kids, no RV's, no nothin'. Like a neutron bomb went off... killed the people, but spared the homes. Weird.

Anonymous said...

Don't worry professor, we don't think you're "superior", just long winded. We yocals only need a sentence or two to describe the Shire as "consumerist excess gone awry" (a cliche). And we'd leave Virginia Wolfe out of it.

Anonymous said...

When school gets out in the afternoon, there is activity and you can see the potential. It doesn't last long.

I still think there's a chance it ends well after the investor defaults.

Anonymous said...

"And I concur with the NWX Ghost Town assessment. Nary a soul on the occasions when I have driven thru. No cars, no kids, no RV's, no nothin'. Like a neutron bomb went off... killed the people, but spared the homes. Weird."

Get out of your car and walk. Especially on a nice day.

That's what the neighborhood is built for. If you're on foot, you can see it.

If you think it's overpriced, don't buy it.

Anonymous said...

I walk through NW Crossing regularly and it's spooky. I think it'll be better once it all fills in.

IHateToBurstYourBubble said...

That's what the neighborhood is built for. If you're on foot, you can see it.

If you think it's overpriced, don't buy it.


True. When driving I actually go legally blind.

And Thanks. I'm glad there's someone out there to tell me not to plotz out $400/sf on a house I couldn't squeeze just my wife & I in... much less our kids.

Dude... just to unbunch your panties... I like what I think the founders of NWX may have had in mind for the place. Except for the extreme price-gouging, that's what killed it. I mean it was timed perfectly, selling into the biggest boom in Bend history.

But they asked WAY too much, and now that it's gone soft around here, probably never to return like it was, NWX may never reach its lofty goals, which I think is too bad. As I said, well executed, very nice, well timed, and a good concept... but wayyyy too expensive.

Something a lot of new subdiv's are suffering from, cuz they overpaid for the land. But NWX got it's start far enough back that they didn't have to mega-gouge every buyer. The thing could be sold out and full had they not done that.

Really, I like it there. But they targeted flippers & Realtors who drank their own Kool-Aid, which may mean NWX never attains it's true potential. Too bad. Maybe the good news, is that it'll be a "real neighborhood" once people start defaulting, and they can resell to "real people".

I mean, I'm sorry you got suckered, but me walking around NWX ain't going to get $400/sf you need to unload those white elephants. The best thing that could happen to NWX is a 50% beating across the board. It'll fill up pretty fast, won't be a ghost town, and could be a "premiere" Bend address with pretty firm pricing. Holding the line on these ridiculous $400/sf prices is just going to draw tumbleweeds. Get'r down to $150/sf, and it'll look good.

Anonymous said...

I remember reading an article/ad in the Oregonian's Sunday RE section about NW Crossing last year - interviewing folks who stopped for coffee at a new little place on their way to work, and hung out there in the afternoon. Interestingly, all the interviewees were either Realtors or mortgage brokers, some working from home. Maybe those people were the easiest to interview, but I got the sense that when the music stopped, the place might not be full. I'd guess, though, that when prices become reasonable, over time, it will be a nice place. And it probably is now, if you're working. If not, I suppose it may be a trap.

Anonymous said...

Question for IHTBYB: How the hell do you find time to write all this???

Anonymous said...

NWX is a New Urbanist attempt to create a community out of nothing. When more of the homes and business spaces are occupied it may work out okay, but that could take a long time.

Meanwhile the Portello Wine Cafe is a great place for lunch. Well worth the trip.

Anonymous said...

Peculiar "guest columnist" piece in The Bulletin of 6/12 by one Larry Fulkerson headlined: "Bend leaders aren't honest about growth." He slings a bunch of numbers to reach the conclusion that "at the present rate of growth by 2030 the population of Bend will be 533,000, not the 119,009 forecast by the CPF (Coordinated Population Forecast)."

Okay, 119,000 may be on the low side. But half a million people in Bend by 2030?! How the hell does he get there?

First he notes that since 1990 Bend has grown at an average annual rate of 8.5%. This conveniently overlooks the fact that a big part of that growth was due to annexation of large chunks of unincorporated land during the early '90s under then-City Manager Larry Patterson. Then he takes the insane and unsustainable growth rate of 2004-'06 and projects that out for 17 years.

Like they say, figures don't lie but liars figure.

Anybody know anything about this Larry Fulkerson? What does he do? As usual The Bulletin tag line says only, "Larry Fulkerson lives in Bend."

Anonymous said...

"I've maintained that we will not be the Next Aspen, probably to the chagrin of Bends Powers That Be."

No way in hell is Bend going to be the next Aspen, whatever the Powers want. Reasons:

1. The vast population disparity, as noted. (Aspen has remained a quaint small town; Bend is a sprawling mess.)

2. Bend has one ski resort; Aspen has four.

3. Famous people with part-time residences in or near Aspen (partial list): Prince Bandar of Saudi Arabia, Kevin Costner, Jack Nicholson, Michael Douglas, Michael Eisner, Martina Navratilova, Mariah Carey, Antonio Banderas ...

4. Famous people with part-time residences in or near Bend: ?????

He/she who seriously touts Bend as "the next Aspen" exposeth him/herself as an arrant ass.

Anonymous said...

Yo Bendbust,

Why don't you get off your lazy ass and work for $7 per hour at your favorite burrito shack. Oh wait I know because they would probably want you to be able to spell and use proper grammar on yor resume. After all you are the enlightened white man who understands all other cultures right? You strike me as possibly an ex-hippie that is so completely full of sh@t.

bendbust said...

Oh wait I know because they would probably want you to be able to spell and use proper grammar on yor resume. After all you are the enlightened white man who understands all other cultures right?

Listen BITCH, the reason, I hang comma's instead of periods, and the reason I hyphenate, the reason I spell as I was is that it's a FREE FUCKING COUNTRY RIGHT?

I could write and spell as IHTBYB and/or BEM, but that would make me just like all you other whores.

Elvis Presley once said "They days to make a buck, you got to be different".

The fucking 'resume', I'm in my 60's and I haven't worked a JOB, in my life I'm self-employed, and have dumb bitches do my work for me, dumb bitches that focus on periods, commas and hyphens and spelling. There's NO MONEY in punctuation. In case you didn't KNOW we don't get paid for this SHIT. IF and WHEN somebody paid me at least $100/hr to type this SHIT, then and only then would I take time to actually give a fuck about spelling and punctuation.
Lastly, I would like to add, that which seems to bother you BITCHES the most is not the ideas, but the spelling, ... and grammar, and punctuation. The ISSUE here is that I ONLY CARE ABOUT IDEAS, spelling and grammar are boring.

My PRINCIPAL idea here is that you folks have TERMINALLY fucked my beloved BEND, I have been here forty years and slowly seen this place get fucked by get rich quick goblins&orcs. The principal weapon that I use is ridicule. Which isn't hard as the average 'professional' in this town is a cheap, time-punching, punctuation obsessed pederast.

In summary, with regards to super-burrito, me hombres there don't even speak your fucking english, let alone write the stuff. I love the 'mexican', because he/she is the ONLY real folks in this town with a soul.

Anonymous said...

He/she who seriously touts Bend as "the next Aspen" exposeth him/herself as an arrant ass.

Senor, my name is Pedro, I am from Tiquana, Mexico.

I have been to your Aspen. Today I work the Sister's Hotel, where I wash the dish.

Saying that Bend is like Aspen is like saying the Tijuana is like Firenze ( Florence-Italy ). Bend is very much like Tijuana, yes you have your river corridor, which is like the gringo beach north. Yet, most of your Bend is exactly like my Tijuana.

Aspen has culture, high mountains, and a History, there is an establish mining history. Bend is a desert town that has gone boom & bust for a century. The only people who promote this myth as Bend being Aspen are realtors. We have them down in my Tijuana, and they promote Tijuana as LaJolla ( gringo beach north of San Diego ).

Realtors have always promoted as such, but it doesn't make it true.

Gringo is funny, they talk a lot, but when this game is over the latino will be the principal employer in Bend. Thus, you better learn spanish.
- Pedro

Anonymous said...

Anybody know anything about this Larry Fulkerson?

***

Fulkerson, is a well known RE appraiser in Bend.

He uses these hyper-growth lies in order to justify his over the top appraisals.

For instance if your a realtor, and want to assess a house, Fulkerson will come in 25% higher than conservative appraisers. The reason is that Fulkerson uses these growth demand assumptions to base his appraised value.

These are just numbers pulled out of the ass, so its not really important what the appraisal is, or what Fulkerson says' about the future. What is important is that Bend media continues to only use the speculators in Bend as their principal source of news.

BilboBend said...


It's NOW GONE, the owner says' perhaps in the fall he'll bring it back, pray tell why? WHY?

Have to make a drive over to the Eastside. We'll go slummin'! I haven't checked his new location for hotties.... hopefully it's still good.


IHTBYB the 'break-fast burrito' is gone, yes I'm well aware that long-board-louie has opened a new shop on the east-side (sic).
The issue, and I know this is hard, but the issue is he killed his breakfast biz { both locations }, because he cannot hire. He tried for months to get help, and no white kids want to do this kind of work, at least not in Bend.

Once the economy really goes to shit, then kids might be glad to make $7/hr. My opinion on this is that Bend is now a town where cali transplants 'retired', and their 20+ year old 'spawn' live with them, these deadbeats believe they're worth $20+/hr, and thus simply refuse to work. The parents let them live at home free, and thus nobody really needs money, many of these parents even pay for auto, insur, and fuel, ...

Like I said this will not last.

In the long term Pepes, Super-Burrito, Rigobertos, ... will win. As they can hire 'family', and not be subject to the vagaries of employees. Ergo the future of Bend will be Latino owned businesses.

Family owned business when only 'family' works the biz, is exempt from almost all over-sight, thus long-board-louie is a dinosaur, they can't get people, and they can't compete using white-people, but they can't hire illegals, because its against the law.

BilboBend said...

Get out of your car and walk. Especially on a nice day.

That's what the neighborhood is built for. If you're on foot, you can see it.


I have been walking around NWX for years, all my reports are based on walking, I walked the whole place 10-noon this past sunday.

I ride through the place daily on my mtn-bike on the way to phils' trail.

I agree you cannot see anything by car.

What I found MOST interesting on my last sunday RE walk, was that a large portion of houses now have a lock-box on the door-knob, but NO real-estate sign.

Obviously folks are scared shit-less what it would look like if every damn house listed or had a lock-box had a sign out front.

This is a good reason right here to walk, just walk and look for lock-boxes, and you will be amazed. I counted 1/2 dozen per block on the average, while the number of signs in NXC for instance were one.

Also this isn't just NXC down in the area near the break-fast place at Galveston&14th heading west in the side streets same thing, for every sign I counted 4-6 lock boxes on door.

Anonymous said...

NW Crossing last year - interviewing folks who stopped for coffee at a new little place on their way to work, and hung out there in the afternoon.

Last summer, and the summer before I used to stop at the little coffee shop at crossing's&mt-washington. On my way to Phil's Trail for an AM ride, its a good place to sit in the sun and have a cup, and a cop-free donut.

I have only met realtors, and Mortgage Brokers also. What I found MOST fascinating is that they all owned several units there. They all said the same thing, that the property was returning 30%/year, and that you didn't have to rent an empty house, because it wasn't worth the time.

Last year of course the intersection got built up with the new stuff to the southwest, thus the views are now gone, and all you can see is car's and buildings, but two years ago the spot was nice and sunny. The little girls that work there aren't too bright, and the coffee is mediocre, and the pastry's are dated, but great sunny AM spot.

Much like a star-bucks, the only hood people I ever saw were the types that would stop in their SUV run in for a coffee and run, the real-estates folks and mortgage broker type that I met were all the folks that worked next door. The main real-estate shop for ALL of NWXC is just next door to the coffee shop.

What I found MOST fascinating is that even secretarys' at the RE shop had bought speculation homes at NWXC. In fact I dont' think I ever met anyone that actually lived there, but I met dozens who owned spec homes there. I haven't hung out there since mid-summer last year, so I don't know what they're staying now.

The bubble broke last fall, but last summer everyone was still spending their 30% return. That's whats cool about NWXC you can spend your returns before you even make them.

Only in Bend.

BilboBend said...

Community -- But it's not England (and did Little England ever really exist?), it's Oregon. To me, it is funny and sad that people might buy into the idea that they can get community via the trappings of (several) other cultures.

Me, I'd be perfectly happy if this were simply marketed as "hyper-expensive houses for Tolkein fans with too much money". That would be more truthful. Because there won't be the community as advertised -- there can't be. The kind of community advertised is generational and requires lots of different kinds of people in different jobs and of different social and economic classes.


Yes, and this is why also that NWXC will never be the kind of community as advertised, because speculation and flipping will NEVER create the kind of generational love a true community requires.

Like the Bend River Corridor asphalting both sides of the ever and building a canyon of condo's will never create a community. Only a tourist-trap that realtors can hock second-homes.

Today's NWXC only has one kind of people Realtors and Mortgage Brokers, SUV driving, Cell Phoned obsessed ALPHA Males & Females. This kettle of humanity will NEVER crate a 'community'.

The Bend River Corridor Herein Called Bend-Condo-Canyon, will never be the ECO-BIZ its touted to be, theres a old saying in the RealEstate Biz, that things are always named after that which they destroyed. Years from now people will be asking, "Why did they build the condo-canyon, why did they pave the shores of the Deschutes River", and nobody will know, all will simply shrug their shoulders as the PUMP & DUMP crowd will have long ago moved on.

IHateToBurstYourBubble said...

Home sales still sliding as prices inch upward

The monthly review of the RE market in the Bulletin today. (I still say that the best indicator that your economy is WAY TOO dependent on RE, is that the local paper follows RE trends like an EKG.)

Kudos to the Bulletin for doing what I thought was a piece worthy of print. I honestly thought they'd flog the Higher Price aspect for all it was worth, but they did actually focus far more on what I thought was the real story: imploding sales & exploding inventory.

I see Bill Berger was equally confounded by the strange cross-currents of May:

"We've just got so darned many pieces of conflicting information here, I just don't know what to make of it," Berger said. "I honestly wish I had a better handle on it."

It really was strange. Volume across all price points way down... except for a large increase in $1MM+ homes, up from a pretty stable 2-3/mo., up to 11 for May.

I'm not sure where the $385K median for Bend came from. Not David Foster, nor Doug Farmer. It's not even mentioned in the piece. $351,900 IS mentioned from David. Is it correct? I'm not sure, but Dougs data seems to have the most high-priced sub-sectors & his medians was below $380K. Strange that all other towns had distinct downturns/flattening, but Bend was still on a rocket ride higher. I think everyone knows this isn't really true, and that if the may median number of $385K is right, it's probably pretty darn anomalous.

The best stuff in the piece is the graphs. They get some good stuff in their graphs occasionally. And the graph of price points vs sales is very nice. As I noted, volume is just imploding across the board (except for that weird tick up in mill+ stuff). This leaves me wondering: Is Bend growing? Has Bend really been growing for awhile?

It seems clear that unit sales of homes has far overstated inbound migration... this place has been a speculators haven. I think I, and maybe many others, just assumed that if you saw 50 lots platted out, built and sold (or, at least missing their sold signs), that Bend is growing. Right? But some of the graphs on this page seem to show that sans speculators, Bend is barely growing, if at all. From 180 last May down to 56 sub $400K sales (I think... I can barely see the graph numbers. I'm kind of guessing given statements like In Bend, sales of homes worth $400,000 or less last month were down 65 percent from May 2006)

And Redmond: Nothing sold for more than $522,000 in Redmond in May.

I think we all knew Redmond had blue-collar roots that ran deep, and gentrification would be a hard sell. Redmond had 4 sales over $450K, and NOTHING over $522K. Nada! Compare that to the veritable flood of sales over a mill in Bend for the month. 38 total sales in Redmond, down 61%.

It's MAY folks! May! We should be packing houses if we're still the destination of choice to live in The West. I'm starting to wonder if we're growing at all. I think stating that housing in Bend might go soft is something that a lot around here have resigned themselves to... but a static Bend population? A shrinking Bend? This is just heresy. It's unconscionable.

But It's Happening.

Anonymous said...

Notice that the Bulletin dosn't use Central Oregon Realtors for the inventory. They use the number from some dude.

And yeah, what is WITH all those lock boxes in NWX? My only explanation is that each individual is trying to sell one house at a time when they own multiple houses. This has happened in other neighborhoods. It's "serial sellers." Some dopes bought houses right across the street or next door to each other.

And I still think NW Crossing can possibly live up to potential. After defaults.

IHateToBurstYourBubble said...

And also nice that Fisher illustrates that May was a huge downer. He's got some "May Surge"'s highlighted in that top graph, and it's clear that it didn't happen this year. He even labeled it a "May Plunge".

You can also see that May has been the start of high-volume Summers. 2004 & 2005 had big Summers. 2006 saw the beginning of the end... but still May was very good last year. Not only was May 2007 one of the slowest months in the past 3 years, it was the slowest May in 5 years, and Bend was a lot smaller in 2002.

Clearly Bend participated in the nationwide bubble runup, and there was a lot of unneeded building to purely fuel the flipping & speculative demand (read: homes that serve ZERO purpose), but I'm starting to wonder just how much Bend housing stock is completely unneeded? We've got TONS of vacant homes. TONS. Bend-Bilbo-Bear has noted the large number of NWX homes w/o For Sale signs, but WITH a lockbox. I've seen this too. There's a hell of a lot of vacant stock around here, more than just the stable, income sufficient second home owners.

I wonder if those housing permit numbers will start coming down. I still think that apparent demand is still higher than "real demand". People are still building using the rear-view mirror. Do we need the all these new homes, when there are thousands of existing homes that sellers can't get rid of?

Oy. What happens when people figure out that the Party is OVER... not cooling down, becoming manageable, or some other "mellowing". But OVER. We're a town of 80K (possibly NOT growing at all), with the housing stock sufficient for 120K? We don't need new homes, we can't sell what's already here.

I think the revenue implosion of the entire RE industrial complex of Bend is about to get killed. And get killed... and not Come Back. That's a HUGE piece of the Bend economy. There have been recent Bulletin pieces about the RE slowdown not affecting the rest of Bend, but that's like saying the train has run off the cliff, but all is well in the caboose. It's purely a matter of time.

All these Condo-mania, destination resorters, should start taking a hard look at unit volumes. People want Cent OR, but they DO NOT want it at the 30% yearly price increase extrapolation that you built into your 5 year plans. Selling $2MM, 1,500sf shacks out in the badlands IS NOT going to happen. Extrapolating 2003-2006 "looked" like it could happen, but not now. Unfortunately REALITY is back, and it's pissed.

Anonymous said...

bendbust: "I could write and spell as IHTBYB and/or BEM, but that would make me just like all you other whores."

I have to hand it to you -- that's the most ingenious excuse for being illiterate that I've ever seen.

LOL!

IHateToBurstYourBubble said...

Mortgage brokers, in particular, have been whipsawed by fallout from the sudden decay of the subprime lending industry, said Rockland Dunn, last year's president of the Central Oregon chapter of the Oregon Association of Mortgage Professionals and the broker of record for Summit Mortgage's Bend office.

Partly due to a nationwide rise in foreclosures, and partly due to the general slump in home prices, most lenders have tightened their lending standards considerably, Dunn said, insisting on more money down and better documentation of income and assets from borrowers, along with more critical appraisals of the homes they are buying.

That will result in a more stable and predictable housing market going forward, Dunn said. But the loss of loan volume to the investors and marginal first-time buyers who thrived for awhile on no-money-down, no documentation loans is painful for the mortgage industry in the short run.

Several offices around town, including Dunn's own, have laid off brokers, Dunn said. The rest are waiting to see where things stabilize.

"We rode the wave, and now it's going to get back to a normal buyers' market, rather than the artificial one we had created," Dunn said.


Maybe the most interesting quote in the piece. An admission on the part of lenders that they are culpable for the bubble.

As I've said 100X before, when it fully plays out (won't be for years), most who rode the wave higher will wish it never happened. The ones who don't care will have left town by then, leaving the rest of us to clean up the mess.

Sans speculation, the RE industry in Bend can probably only support 2,500 out of the current industry population of probably well over 15,000. At least there'll be someone to fill all those 10K Help Wanted ads in The Bulletin.

IHateToBurstYourBubble said...

Okay, 119,000 may be on the low side. But half a million people in Bend by 2030?! How the hell does he get there?

I agree. The truth is probably somewhere in the middle. I think the UGB getting scaled back at the current acreage numbers is clearly a Boss Hog driven decision: That's more or less admitted to in todays piece, "Bend narrows proposed UGB"

“The boundaries of the UGB expansion may change based on the public testimony we receive,” Bend Senior Planner Damian Syrnyk said. But he added that the total area would probably stay about the same, suggesting that if one chunk of land gets added back in, another one would have to be pulled out.


The map is based on estimates of what Bend’s population will be in 20 years: about 113,000 people, by the city’s latest count.

But that number could come much sooner, in which case the city would go through a similar boundary expansion process again sometime before 2027.


113,000 in 20 years? Please, don't insult my intelligence. There's practically an implicit admission by the city right now that we'll blow through that before 2027.

This scaled back UGB is being done PURELY to keep land prices high. They're already admitting that if they add one piece, another will be removed... Holy CRAP, can you imagine the backlash from those removed? Right. This is just a case of who can suck up the most to the City. This is an admission that the UGB expansion is a PURELY POLITICAL PROCESS, and has got SQUAT to do with what the city needs to grow. These numbers (from 75K to 113K in 20 years) imply a 2% growth rate for Bend... something so full of crap, it's unbelievable. That's less than the US at large.

Something like 4-5% is FAR more realistic, and that would push us towards 175K people in 20 years. But that would also unleash a FLOOD of UGB-included land, and whomp the value of Boss Hog & Enis' land holdings. THAT is all this is about.

KEEP PRICES HIGH, is all the UGB process is about. City of Bend: Look at home sales volumes. If you want to contract this town, you're on the right path. The Party is OVER, and low prices are ALWAYS the path to growth. If this UGB plan goes through, plan on Bend SHRINKING. You're 2% growth targets will be TOO HIGH!

Anonymous said...

First IHTBYB posted this:

I'm starting to wonder if we're growing at all. I think stating that housing in Bend might go soft is something that a lot around here have resigned themselves to... but a static Bend population? A shrinking Bend? This is just heresy. It's unconscionable.

But It's Happening.


Then this:

These numbers (from 75K to 113K in 20 years) imply a 2% growth rate for Bend... something so full of crap, it's unbelievable. That's less than the US at large.

Something like 4-5% is FAR more realistic, and that would push us towards 175K people in 20 years.


You can't have it both ways, shrinking and growing, at the same time.

Anonymous said...

Dunn said, insisting on more money down and better documentation of income and assets from borrowers, along with more critical appraisals of the homes they are buying.

This DUNN sounds like one of us, ...

1.) Bend is screwed,... It's June 2007, the bull peaked in Sep2005, and busted in Sep2006, and then a year later a leader in the MTG biz has to tell the public why he is laying off his staff and leaving town.

2.) Loans now require doc's and proof of income/assets! WOW what an idea. That people have to have a job, that you can no longer buy a NWXC home for nothing down.

3.) Critical appraisals, shit will larry fulkerson still have a job? The banks are no longer accepting wishful thinking type appraisals.
( 50% of ALL loans are denied because they don't appraise )

This is is some BIG shit, when a MTG biggy is telling the public the truth. I have a suspicion that July2007 may be the month of blood.

Let's look at the significant points of interest to date.

Aug2005 - Gastronomy Magazine announces Bend next Aspen culinary ...

Sep2006 - The-Shire ( Bree like Hobbit fiasco ) is marketed worldwide, entire WORLD shakes head at Bend.

June 2006 - Bend RE & MTG executives tell public that the party is over.

July2007 - Bend Real-Estate & Mortgage lay off 90% of staff,

Sep2007 - Only Mexican owned and operated Restaurants in Bend survive. Major's national chains on I-97 survive. Mill District becomes super-walmart.

Dec2007 - Bulletin lays off 90% of staff as advertising revenue plummets.

BENDBUST said...

? A shrinking Bend? This is just heresy. It's unconscionable.

90% of the people here are to make a buck, even the rich folks I know here, bought in the last five years with the idea that their $1M mansion could flip in five years for $5M.

Now that the party is over, expect a BIG exodus.

Problem is, and I have been saying this for SIX MONTHS, is that nobody I know can move, because they don't have a down-payment, and they want to own, where they're moving to.

They cannot sell the house and walk, because they'll lose their down. Folks that bought in the last five years effectively have lost their life savings, and thus they're in a trap.

Now that RE & MTG is laying off, expect people to not pay their monthly MTG.

Even construction people here cannot move, because they don't have a down.

If you sell your home here for break-even, you walk with ZERO cash, how do you start over? With NOTHING, and insult to injury zero-down, no-interest, no-doc loans are gone, so they couldn't buy another home if they wanted.

Thus, ALL just wait, and wait, the thing is NOBODY is making any money, how long can they bleed?

Anonymous said...

90% of the people here are to make a buck, even the rich folks I know here, bought in the last five years with the idea that their $1M mansion could flip in five years for $5M.

*

There are a lot of 'rich' people that aren't rich anymore in Bend.

Move to Bend from cali with you Google stock, say $5M, build a custom $3M home, and assume that you can live on interest of $2M, and then BOOM, your home is worth $500k, what do you do? Sell or wait for a generation...

A lot of people bought in Bend because they were told, or assumed, or believed that you could buy a garbage dump and get 30% return, remember after the dot-com / Y2K crash, there was no where to park money, cd's were paying 2%, so EVERYONE 'noveau riche' put their money in Real-Estate, the theory was if you had to buy RE, but in Bend and play while you made money.

Game Over - Money Gone,

Anonymous said...

Shrinking,...

This could be like Detroit,

Let's say 1/2 the population leaves, and that's with the 1/2 homes empty now,

That means that 75% of the Bend Homes will be non-occupied.

Let's play the number games, at 100 houses a month in todays BIG market its going to take thirty years just to fill the homes, and thats if they STOP building today.

That said, if you stop building then the last 25%, or a good portion of them will leave.

Again back to Detroit, or Flint where you can buy a home for $15k

We all knew this was going to happen, you cannot have a 70% appreciation reported, and not expect to have a -50% when the boom is over.

Bend in this mini run saw 5-6 year run-up, and now we're going to see a 2-3 year run-down.

It's all good news for the kids, I especially think its good news for folks who work at super-burrito, it means their children can get an affordable home.

Anonymous said...

It's all good news for the kids, I especially think its good news for folks who work at super-burrito, it means their children can get an affordable home.

What little pocket-change exists in Bend will go to the Bend-Entrepreneur the Mexican.

They'll buy low, and sell high.

In 5-10 years the Mexicans will be the boss hogs of Bend, and instead of that deadbeat lackey Freidman Mayor, will have Mayor Pedro of Tijuana.

BENDBUST said...

Some dopes bought houses right across the street or next door to each other.



Actually this is a good thing for a landlord, on lawnmower day I don't have to drive all over town. Just go from home to home, and its like monopoly, you always want to own the block.

Trouble is YOUR dopes bought high, and sell low.

Just wait about 2-years and folks will pick ALL this stuff up for $100k, and then you'll have sweet little rentals that pencil out.

Just be patient.

Yes, I see this a lot in NWXC where these realtors bought a whole row of condos. What nuts.

I have said before and I'll say again, this is the desert. The desert always wins. White People have been coming to Central Oregon and most have left with the tattered clothes on their back.

The desert is NOT kind.

There's a whole row of single family homes some bozo near me bought, he want's $450k, god knows what he paid, but I know they were built new for $120k in 1998.

Like I have said stabilization is 4x, where 'x' is income, note now we have $60k/year family income, but its going to drop, it has to drop. Thus I see these little $450k home going $160k { 2008 bend income $40k/yr ] in the next 2-3 year, out ten who cares.

To me homes are just income generators. Trouble is in Bend you have never been able to get more than a $1k/mo for a home, and thus its always been silly to pay more than $100k for a home, or there abouts, every 10-20 years here things collapse, and ol curmudgeons buy more, always been this way,

The desert always wins,

Anonymous said...

I bring this up because I've heard it three times now. People who can't sell for the price they think they deserve are planning on adding their house to the overnight rental stock.

Apparently, some people currently make great money doing this, renting out for over $200 a night. But will they still make great money doing this if everyone else is?

One of these desperate owners is way out around Awbrey. Does that make sense for vacation renters? I'd think they'd want to be near Century Drive to make it work.

This is just ANOTHER way of saying people are getting desperate and looking for a way out.

IHateToBurstYourBubble said...

You can't have it both ways, shrinking and growing, at the same time.

True. Good catch. But let me just say that I consider a Bend (or most anywhere) that grows below "path" (maybe the national growth rate), to be "shrinking" in some regards. It's a negative "real" growth rate. I mean, if you were selling $1MM in computers back in 1982, and you're selling $1.1MM today... you have grown, but have you done well?

Maybe this sounds like Congress persons when they say that growing some budgetary item at 5%, instead of 15%, is a "cut". Technically 5% growth is GROWTH... it's just not "growth" in the sense of what previous norms dictate.

2% "growth" for Bend maybe technically be an increase, but it'd be ONE HELL of a comedown from recent growth rates.

I think the City planning for 2% growth will lead to possible contraction, an actual shrinking in Bends population. I'm not sure how long it'd last. But we'd become more "Aspen-ish"... smaller, exclusive, very high priced. I think we're on a planning path to artificially restrict growth in Bend. Severely. We could "maybe" do 6-7% for 10 years, but current plans will be a "cut" from those figures.

Anonymous said...

I think the City planning for 2% growth will lead to possible contraction, an actual shrinking in Bends population.

The problem is this city is hell-bent on growth.

They have already spent more money for to-date projects, than will be realized. They have to fudge future metrics to justify this years budget and next.

The sad fact is that taxpayers of Bend should get off their arse ASAP, and pay attention.

The golden-goose is dead, and during good times this city has run on auto-pilot. Now that RE & MTG will no longer be the gravy for election's there is NO reason to make RE & MTG issues, priority ONE for the rest of us.

Juniper-Ridge and ten new cops, and all the other pet projects are all based on the premise that grow and build and they will come. The fact is they're all leaving as quickly as possible.

There needs to be some table slamming ASAP at the City Council meetings. Otherwise all these pet-project costs are going to get passed to the few of us who intent to stick around.

Mayor Friedman is only here for the growth and political ambition, now that he knows that he's looking over a dying town his bunch will be trying to cut as many PORK-DEALS as possible to land him a new job elsewhere.

It's time for folks to quit being dis-engaged in Bend.

Anonymous said...


Apparently, some people currently make great money doing this, renting out for over $200 a night. But will they still make great money doing this if everyone else is?


Bad idea, but this is what I expect from people who don't belong in the property management business.

First they said its ok to lose $1k/mo because you were making $20k/mo on appreciation. Now that they have decided to rent, and figure that $1k/mo will not pay the MTG, they decide to rent daily.

The problem with renting is that YOU must do a FULL FBI back-ground check on renters, otherwise you'll end up with a toxic waste site at best, or a fire at worst.

If this over-night thing goes as you say, then the overnight value of a mcMansion on Awbrey will fall to $50/night, and it will cost $500 for the full Mr.CLEAN. Now sure you 'may' be able to get people to lay down the $500 deposit for cleaning, but that will NOT cover breakage.

Personally what this sounds to be is that some smart realtors have decided to start a little business. They know there are thousands of empty houses and people desperate for cash. So you tell them you'll rent the house for $200/night less expense and your 'commission'. However like I just said, on the average the owner will hardly be taking in $200/night more like $20 after expense. The smart people that run these rent-a-night mansion, will be making their money in maintenance expenses.

There is NO way the average idiot who bought these white-elephants can manage the property over-night or monthly.

I can see it now the Realtor says "It's ok, that your losing thousand of dollars a month because you can make $6,000/mo on over-night renting".

In summary, the same people who made money during the boom, will now make money during the fall. The rich will get richer, and dumb will get poorer.

Anonymous said...

Mayor Friedman is only here for the growth and political ambition, now that he knows that he's looking over a dying town his bunch will be trying to cut as many PORK-DEALS as possible to land him a new job elsewhere.

Friedman and fellow kleptocrats only enjoy the game when the times are good, then it is fun.

Soon the City will be taking in less that it spends, and times will no longer be fun. Municipal debt bond-holders will be looking at Bend very skeptical.

It's NOT going to be fun anymore running Bend, not for a long-long time.

Anonymous said...

People who can't sell for the price they think they deserve are planning on adding their house to the overnight rental stock.

Apparently, some people currently make great money doing this, renting out for over $200 a night. But will they still make great money doing this if everyone else is?


Bend hotels are dying.

July/August the shoulder economy for these folk is around the corner, come September when there is a ten month hiatus expect to see 1/2 of Bend hotels close.

It's easy to clean a 200sq-ft room when your getting $120/night, but a 3200sq-ft home costs $200 just to clean.

Hotel's even right now are in a world of hurt with gas being high. Sure July/August is golf season and everyone comes to Bend.

By xmas the problem's in Bend will be national news, and most people will NOT even think about coming here for december.

I see lots of over-night rental signs in my hood, they call them 'cottages for rent'. That said, I hardly ever see people in them.

A way to look at it is this, if an idiot is sitting on an empty home in Bend, he's losing money, if its a 'business' .e.g. the home is an over-night rental, then everything is an expense, there will be NO income. So what you have done is turned an un-sellable white elephant into a TAX-WRITE-OFF.

This is a good thing. For doctors, lawyers, dentists, and CPA's.

I suspect that most of the people with these 'tax-write-offs' don't really need this because they're probably not making any money.

Realtor - "Do you have an empty house?, Is it just sitting losing money??, How about turning it into a business, and realize tax-write-offs that will make you rich"

Deja-vu people just love it when they don't pay tax, hell it may even drop some folks out of the AMT, e.g. if they have a good CPA.

In summary folks that over-night rent, aren't going to make money, they're going to turn a non-appreciating home into a tax-haven.

The ONLY winner in this game will be our mexican house-cleaners. A smart mexican should be advertising right now "I specialize in over-night house cleaning", you will make a fortune.

Anonymous said...

>>It's time for folks to quit being dis-engaged in Bend.

Yeah, but to tell the truth, I'll just move when it sucks, so it's hard to be engaged.

Anonymous said...

There's a furnished 3-bedroom single floor house in Skyliner Summit that rents by the night for a hefty fee. I think $250. It's all managed by an agency, I believe.

Guess what? It's for sale. It's been for sale for a while. When the overnighters come, the sign comes down. When they leave, the sign goes up. They have some people (the must be pretty wealthy) rent for weeks at a time, which is probably about as lucrative as these things get.

But if the owner is trying to sell it, just how good is the deal after the agency fees? Probably not good.

And if more people are jumping on that bandwagon, it'll be a disaster.

Kinda funny how everyone is just flailing. Everyone is busy trying to do what someone else is already failing at doing.

There's just no way out for some of these people, and eventually they will realize it, or the lender will.

Anonymous said...

Mayor Friedman is only here for the growth and political ambition, now that he knows that he's looking over a dying town his bunch will be trying to cut as many PORK-DEALS as possible to land him a new job elsewhere.

I will unzip my pants and be happy to cut our City leaders a PORK-DEAL.

Anonymous said...

Yeah, but to tell the truth, I'll just move when it sucks, so it's hard to be engaged.

Could you tell me when you decide to move so I can move too? I'm so disengaged I can't even tell when it sucks.

Anonymous said...

I don't think we will have to worry about the hotel industry in Bend...and folks will be lining up for the rental houses.

WE HAVE A WATERPARK COMING TO REDMOND!

It will solve all our problems.

Anonymous said...

That waterpark will never, never be built. Reason being, it's not really a water park at all.

It's a big condo scam. Believe it.

The idea is, they're going to build something on the order of 200-plus 'condo/hotel' units, where, so the theory goes, I buy a condo and then the operators of the park rent it out by the night. Being in a non-residential zone, these condo units can only be occupied by their owners for something like a week or two out of the year.

According to the developers, the condos will finance the construction of the park, which is supposed to happen at sometime down the road. That is, once the condos are built and sold.

You interested in buying an condo you can't even live in between the railroad tracks and the fairgrounds?

Didn't think so.

Anonymous said...

I am one of the Californians you speak of who came North 3 mos ago with bagfulls of money. But even with our limited local experience, we can not see how home ownership would be worth a potential $100k or more loss. Thank you so much for this blog!!
Can someone enlighten me on how the bankruptcy laws have changed and when they will take effect? This sounds like a major change that will crush many unfortunate fools.

Anonymous said...


That waterpark will never, never be built. Reason being, it's not really a water park at all.

It's a big condo scam. Believe it.


They said that redmond was going to do a bigger BEND, than Bend. If they did the condo scam, then only Mrs. Breeze would be jealous.

The water-park is a done deal, the city is going back bonds. The city believes it is a good investment, because tourists will stop.

The condo plan is back by the city, because densification will pay for the 'water-park'. City grows, Hotels grow, city gets more money. Hires more cops, everybody wins. At least this is what the insiders @ redmond city council are telling me.

Everything is a condo plan, poor builders, land costs too much money so they must a unit on every 1500 sq-ft, the only way to do this is condo.

Condo's are good, they always become section-8 housing. Someday there will be lots of low income housing.

I heard this out of one of the city-councilors mouth - "If we have a waterpark everyone will stop, we'll separate all the tourists from their money". I personally think that the only people that will get separated from their money is the Redmond taxpayer.

I think the tourist is way smarter than the inbred Redmond power structure.

Anonymous said...


Can someone enlighten me on how the bankruptcy laws have changed and when they will take effect? This sounds like a major change that will crush many unfortunate fools.


They took effect last year. Much has already been written on this subject, why is that I always feel like these questions are baited.

I think this question to quote the man "fictional", as any body that moved here 3 months ago wouldn't be telling the world they have a bag of money.

First of all nobody is going bankrupt, I have written about this extensively, I really wish folks would read everything on these blogs before asking the same question over and over.

The way it works when you miss 60 day's of payments, the bank will make you sign an obligatory note for what they can sell the house. If you refuse to sign, then they sue you, and you can NO longer file bankruptcy. If you sign the note, then the rest of your life your fucked, they can go after your childs education, and your 401k.
The smart thing to do is sign the note, leave the house after the sheriff evicts you, and pay what you can on the note, otherwise the hounds of hell and lawyers will screw your life.


*****



Debt, Bankruptcy, & Prison: Bend's Road to Riches

If you hear an Orchestra look for a Conductor. I don't believe for a minute our USA debt-bubble, and its consequenes were NOT planned.

a.) Across the nation, debtors can now be imprisoned, Not Oregon yet, but many States our now imprisoning debtors, and its a growing trend, being lobbyied by the prison-industrial-complex, and the collection lobby, and judges are going along with it.

b.) Bankruptcy is phased out, which means that walking is not an option. The new laws mean that debtor's will be saddled with debt until death, that even children of the debtors will never be able to purchase a home.

Any doc's on this?

***

There was a large article on this in the WSJ this past fall, I can find it and post if you wish, wrt to the imprisoning of the debtors. The basic gist was the trend is now for judges to THROW non-payers of debt in jail indefintely, and of course 'privatization' means they're debt increases, because the cost of incarceration is added to debt load. The carrot on the bank is these folks get to work $1.20/hr and that can be to applied towards debt.

WRT the second issue,'bankruptcy' you know the law changed a few months ago by dubya, it used to be you could just walk from a major loss like buying a house in NW-XC for $750k, and walking at $500k, you could eliminate the debt of $250k by bankruptcy. GONE. Under the new system serfs will carry this DEBT the rest of thier lives.

Let me say this once more I have said it a dozen times, this entire deal of all our Central Oregon morons taking on ton's of debt has been well planned. USA was originally a penal colony, and its going to be again a penal colony. Besides what better way to compete against the global economy. To have ten's of millions of 'debtors' all working for $1.20/hr the USA will once again be as great as there were during the days of southern plantations.

There's an old joke amongst us ol-timers, there's three kinds of folks: Field Niggers, House Niggers, and Plantation Owners. The essence of the joke was the HN's felt they had it bettter than the FN's. Under good ol DUBYA the FN will be folks working the street like constructions, and such, and the HN will be the folks in confinement doing office chores. Lastly, the PO's will be running around in thier RV's with a lot less traffic.

Think of the outcome as a reverse gated community, the current trend in Bend has been for the PO's to live in gated community's, e.g. very large prison farms. In the future most of the masses will be living in gated community's and the PN's { Boss-Hogs }, will be truly free.

Only in America.


Bilbo-in-Bend

Anonymous said...


Yeah, but to tell the truth, I'll just move when it sucks, so it's hard to be engaged.

Could you tell me when you decide to move so I can move too? I'm so disengaged I can't even tell when it sucks


Democracy requires participation, if and when you move, and you don't participate in the new environ, the same thing will happen again and again.

The folks running this town have fucked the taxpayer almost to death, basically we're already a dead town, but nobody has put the closed sign out yet.

It will take years and years to pay for all the pet projects that Friedman and friends have created. The first essential step is a halt to all new and current non-essential projects.

I know your all moving, but they're going to bankrupt this town, and the folks that plan on staying should get involved.

Anonymous said...

There's just no way out for some of these people, and eventually they will realize it, or the lender will.


Your giving the lender too much credit, they just fired the CEO of NewCentury today for refusing to answer the question "what is our loss to date", NewCentury recently went bankrupt.

In an environment where perhaps 20-50% of ALL sales from 2001-2006 maybe returning to the lender, they're not exactly excited about getting homes back.

This magnitude of loss of homes hasn't happened since the great depression, I have told the story before and I don't want to bore people. The government will typically refinance loans for folks who made stupid decisions. It's sad, but the honest folk always pay the bill for crooks ( Note I didn't say morons, as most of our speculators bought these homes like lottery tickets ). Its been the American way since 1776, it doesn't pay to be honest and thrifty.

Anonymous said...

I am one of the Californians you speak of who came North 3 mos ago with bagfulls of money.

Wrong blog, we always say cali's are assholes, orcs, and goblins. Too much has been written about cali's http://bendbubble.blogspot.com/2007/04/californians-are-goblins-oregonians-are.html

I don't think anyone in this forum ever said that a cali brought a bagful of money, they might have brought a bagful of dope to Summit-High, and returned to cali with a bag of money. I think we said that.

There are some that say that Bend is a Craptological economy that strips cali's of their 401k's, and some us have said that we'll take your wife and daughter, and send yo u back to cali with an alimony and child support.

I never seen a cali bring a bag of money into Oregon.

Anonymous said...

I never seen a cali bring a bag of money into Oregon.

Cali is a city in Colombia, as in "Cali cartel". Guys from Cali bring bags of money wherever they go.

Anonymous said...

>>I know your all moving, but they're going to bankrupt this town, and the folks that plan on staying should get involved.

I agree. I'm just in Bend as a "trial period." I didn't vote the jokers in. But if I cared about the place, I'd be involved. I'm just worried that few care.

The city council stuff here is almost as lame as Eugene's city council stuff.

BENDBUST said...

The below is pretty tough stuff, let's be honest here, Bend is going negative on population, and we all know it, but the city is budgeted for 17% increase per year. $8M is budgeted just for a roadway and infrastructure for lesSchwab.

We cannot allow the city grow the budget 20% per annum which in effect means that the budget will double every three years into perpetuity. Note that this is a city with a declining population, and a declining income.

***

$476M over two years: What will it buy Bend?


In its first two-year budget plan, the city of Bend has detailed $476.3 million in spending that would bolster police department funding, go toward making city facilities more accessible to people with disabilities and begin the development of Juniper Ridge.

The Bend budget committee has recommended the city spend more than $476 million over the next two years, allowing it to hire 49 new employees. If approved, the budget would represent, on average, a 17 percent increase in each of the next two years

Juniper Ridge

The proposed budget earmarks $12.6 million over the next two years for the development of the first 700 acres of Juniper Ridge, which sprawls across 1,500 city-owned acres. More than half the money would go to fund infrastructure improvements, such as water and sewer lines, at the development, which will house businesses, a research park, homes and possibly a university.

This $7.6 million would pay for projects including a new roundabout at Cooley Road and 18th Street for roadway connections to the future headquarters of Les Schwab Tire Centers

Anonymous said...


I am one of the Californians you speak of who came North 3 mos ago with bag fulls of money.

What is the best way to secure a property in Bend for cooking meth??



Ten years ago and more it was fairly common in Bend to have a rental house become a meth-lab. Then about ten years ago the State of Oregon started a land-lord education program that has been real good at eliminating the problem.

Today with 1,000's of empty houses in Bend, and folks desperate for $500/mo revenue, you may see a increase. Works like this a guy calls and says he just moved to down, and has to have a house, and pays cash for rent. Someone naive in the landlord business then has a good chance of being an owner of a toxic waste site, and note the insurance isn't covered. You are out the $400k you borrowed IO,HELOC,... on this property.

WRT meth-cooks buying a home, the whole deal is NO records, its best to rent on a handshake, and pay cash. NO proof, no records.

Buying a house for cooking meth is completely stupid, a 'smarter' thing to do would to take your dirty meth money, and 'launder' your cash in Bend RE, but keep the RE clean. By 'smart' I'm talking about cooks and dealers that do NOT partake in the product.

I think from my 30-40 years in RE business that this story of meth-cooks buying IO,NO-DOWN RE and turning it into meth-labs is an urban myth.

WRT to cali, who knows what goes on down there, anything is possible, but MOST probable is that the 'buyer' bought the house on contract for nothing-down, and forged his identity, this way there would be NO public-record, and in effect the buyer is still paying rent, and the owner has NO power of that of a land-lord.

In this case it would make perfect sense to buy a house in Bend at an huge price, and pay nothing down, and IO payments which would be low on contract. Then the meth-cook has the house, and NO nosy land-lord. I think this method would work very well.

Regarding the normal purchase where there is a public record, and a NOTARY takes identification, that would be ONE completely stupid meth-cook. I the Oregonian portrays those folks as stupid, but remember they have to be twice as smart as the dumb-ass cops to stay in the game.

BENDBUST said...

I agree. I'm just in Bend as a "trial period." I didn't vote the jokers in. But if I cared about the place, I'd be involved. I'm just worried that few care.

Oh, They care, ...
1.) They care about appreciation.
2.) They care about eating burgers at Red Robin at the Old-Mill.
3.) They care if there Excursion or Escalade gets dirty.
4.) They care if they get a speeding ticket.
5.) They care about shopping at the Old-Mill.

But they don't care if this town goes bankrupt, because as soon as they can sell their home(s), they're out of here.

I think that the current City Council is pretty much the same, and its probably reason number three why Hummel bailed, he knew the shit is going to hit the fan, its just NOT going to be fun anymore. No more buying over-priced bus'es and saying oh-shucks, its just few Million, and we can get it back in one month from Bend appreciation.

Virtually everyone that came during the past ten years has no roots here, they moved here to retire or hike, or construction, or sell real-estate. They'll move on, as easily as the moved-in.

This is how ghost-towns are created. Funny thing is none of the mainstream media has yet caught on to the idea of what happens to the few remaining. The solution right now is to pass the 17% per annum budget increase on to water and sewer bill. Ok, that's fine that means your water and sewer bill will just about double every three years. Once the water/sewer gets to about $100/mo most people will be pissed, I don't think we have to long to count on this strategy.

The fact is rather than growth, we need to be talking about what we're going to cut, and quick.

Otherwise we're heading into default quick.

County tax receipts are going to crumble.

Our county and city government is still partying on and buy lipstick for the pig like its still 2005.

They said recently when they went to two year planning that they were going to be thinking long-term. Hell in two years homes will be down 50%, and 25% of the people will be gone. Is that in their plan? No, and it will probably take many more months before the mainstream media has one their experts slowly tell the public the truth.

In the meantime the insiders are trying to sell like a fire-sale, nobody wants to be the last guy holding the last property in Bend. Tell a good tale, only put a sign on one of your propertys at a time, don't let anybody know that everything is for sale.

IHateToBurstYourBubble said...

From KTVZ.com: "Regardless of what the numbers say, prices are dropping," the Realtor said. "According to our 24-hour market watch on the MLS, yesterday (Tuesday) there were roughly 65 new listings, 25 sale pending, 30 closings and 127 price reductions. Those reductions will ultimately lead to lower prices throughout our market."

What a difference a year makes. Remember BEM... seems like just last Fall, Realtors would go on your blog: "I don't care what the numbers say, THIS MARKET IS GOING THROUGH THE ROOF!

Funny, that Realtors are a manic/depressive lot... never believing what's right in front of them... either way the hell too happy, or pathologically despondent. I guess that happens when you have the suckiest job ever.

Anonymous said...

I guess that happens when you have the suckiest job ever.



I remember in February of this year, most realtor's I know told me they had no closings on the calendar.

They had never seen this before. This goes for Bend and the Willamette Valley.

Another thing is mortgage and title-companys, I wonder if Amerititle { biggest } is announced layoff's yet?

IHateToBurstYourBubble said...

Inventory Update:

From Realtor.com: 2,439 On May 11, 2,460 today, +21 2 days later.

1,563 Residential Homes in Bend according to CentralOregonRealtors.com. David stated this figure at 1,511 a few days ago (not sure when he grabs his stats).

It's not leveling off really. +21 homes in 2 days is a small sample size, but that's a lot of houses. Even Davids +52 homes would be a lot if he got the number June 1.

Don't buy that house folks! They're going to get cheaper.

Bend Economy Man said...

Two things:

I'm starting to wonder if we're growing at all. I think stating that housing in Bend might go soft is something that a lot around here have resigned themselves to... but a static Bend population? A shrinking Bend? This is just heresy. It's unconscionable.

Look for Bend to bring neighborhoods containing 15-20,000 people into the city limits before the next census (2010) so no one will no for sure how many people are new arrivals and how many are due to city limit expansion.

Also, the smallish UGB expansion gives Bend a chance to be Oregon/regional/nationwide news if/when it "blows through its planned UGB years early." Set the bar low, then jump over it, right?


From the Bulletin article:

And, with the rug pulled out from under the market's once plentiful supply of no-money-down, no-documentation loans, fewer first-timers can afford to buy, even if they wanted to.

"You actually have to have 5 percent (down) of your own money right now," Hamilton said. "And there aren't a lot of people who have that kind of money sitting in their bank accounts."

...

That will result in a more stable and predictable housing market going forward, Dunn said. But the loss of loan volume to the investors and marginal first-time buyers who thrived for awhile on no-money-down, no documentation loans is painful for the mortgage industry in the short run.

Several offices around town, including Dunn's own, have laid off brokers, Dunn said. The rest are waiting to see where things stabilize.


OK no one caught this little whopper of an admission - that Bend is such a subprime haven and the loss of "marginal buyers" is so "painful" that brokers are either laying people off or in wait-and-see mode (aka hiring freeze).

Also, Bend buyers are so leveraged and so cash-poor that there "aren't a lot of people" who can come up with a 5% down payment. 5%!!! WTF? 5% for the median house in Bend would be less than $20,000. I thought we were an affluent community. Bet you don't see a lot of articles in the Aspen newspaper indicating that it's a rare Aspen buyer who can come up with the massive sum of $20,000.

Hasn't EVERY SINGLE Bulletin story before this quoted only people claiming that subprime is insignificant in Bend? Hasn't EVERY SINGLE Bulletin story before this painted a portrait of the buyer in Bend as the upper-middle-class (at a minimum), sophisticated, moneyed sort, loaded with cash from the sale of his/her out-of-area home?

Anonymous said...

I'm glad they want 5% down. I wish they wanted 15% down. I hate competing with idiots that don't have to put any skin into the game.

--TT

IHateToBurstYourBubble said...

I remember in February of this year, most realtor's I know told me they had no closings on the calendar.

This sort of market is going to eat Serial Listers: Realtors who do nothing but list stuff & wait for someone else to sell it. These types have made a fortune in the past few years. They'll get hungry soon, and have to go through the distasteful task of actually working for their money.

What becomes of those mega-lease deals in The Old Mill? Some of those RE offices are damn opulent & priced for 15% gains for the next 20 yrs. I wonder if some of those shut down, and move to more "cozy" digs.

There's a (John L|Steve) Scott sign in a vacant building window as you enter Sisters... been there going on a year now. I think a lot of people are going to re-think moving themselves or their business to that town. You think Bend is RE-dependent? Ain't got nut'n on Sisters! I've said since I got here that 110% of Sisters growth is dependent on RE. The place would be smaller were it not for the RE machine there. Bend may get clocked hard in the coming years... Sisters will implode, a neutron bomb; a hell of a lot of house & nobody living there.

If there is a chance at a 50% haircut in any particular property sub-sector, I'd guess it'd be Sisters big acreage. Some of those boys have Ashwood OR - level delusions of grandeur. Stuff they bought for $150K 30 yrs ago, they want to develop a $50MM subdiv or some crazy crap. But they are willing to "settle" for $20MM today. Crazy.

BENDBUST said...


Hasn't EVERY SINGLE Bulletin story before this quoted only people claiming that subprime is insignificant in Bend? ?


They must be reading this blog.

Over the past 3-6 months a lot of them tried to debunk the facts, but facts are that 80% of all loans in 2005-2006 were subprime. The issue is people didn't want to consider themselves as subprime, like it was some kind of leprosy.

Even a 5% is sub-prime, only a 20% is the real deal.

Ok, here is some facts if you bought a house right now, do it for 20%, because if you do less than 20% they make you take out two loans, they charge you outrageous amounts for insurance, and the PMI has gone up incredible { PMI is insurance that is required when you pay less than 20% down - SUBPRIME }.

What is happening now and this guy is a liar, is that yes you pay 5% down, but your still paying nothing down, because the 5% will hardly cover the closing costs associated with two loans, PMI, points, and insurance.

Even this guy's 5% is BULLSHIT, and he admits that few have the bucks for this, but a NON-SUBPRIME would have to ante at least $80k, and as I have said for months post 1998 with average US savings NEGATIVE folks don't have $80k NOWHERE.

p.s. check out PMI, in some cases it has gone up ten fold year to date, because the fact is if you pay less than 20% down, the chances are you will default.

People who trade PMI contracts on the market have seen ten-fold increase year to date.

My point here is that if you buy a home, YOU must pay 20% because the PMI and Insurance will kill, and the little second loan for the 15% in this case is short-term high interest, integrate the package, and its a complete SUBPRIME package for SUCKERS.

In summary if you don't have 20% down, stay out of the fucking game.

IHateToBurstYourBubble said...

Also, Bend buyers are so leveraged and so cash-poor that there "aren't a lot of people" who can come up with a 5% down payment. 5%!!! WTF?

Good point.

IHateToBurstYourBubble said...

I put $70K (20%) down on my first Cent OR home. I thought that was pretty typical.

Anonymous said...

Also, Bend buyers are so leveraged and so cash-poor that there "aren't a lot of people" who can come up with a 5% down payment. 5%!!! WTF? 5% for the median house in Bend would be less than $20,000. I thought we were an affluent community. Bet you don't see a lot of articles in the Aspen newspaper indicating that it's a rare Aspen buyer who can come up with the massive sum of $20,000.

C'mon, the median home price in Aspen is (ahem) $5.3 million so 5% there is $265,000.

And in case you think your tax bill is too high, how about this: "Property tax rates for a $5.3 million home - the median property price in Aspen - will increase from $10,400 last year to an estimated $14,000 this year."

http://www.aspentimes.com/article/20070322/MOUNTAIN04/103220051

Anonymous said...

I put $70K (20%) down on my first Cent OR home. I thought that was pretty typical.

That is pretty typical of the people I know, contrary to bendbust's "facts".

Anonymous said...

"Property tax rates for a $5.3 million home - the median property price in Aspen - will increase from $10,400 last year to an estimated $14,000 this year."

Perhaps this is what Abernethy and Friedman mean when they say Bend is Aspen.

If we don't stop the 17% automatic annual budget increase, people in Bend will be paying $10k/yr taxes for their $250k shacks.

Anonymous said...

I put $70K (20%) down on my first Cent OR home. I thought that was pretty typical.

That is pretty typical of the people I know, contrary to bendbust's "facts".

***

Which one is it?? $20k or $70k, oh I get it now, nobody has $20k, but everybody has $70k.

USA has had a negative savings rate since 1998. If it weren't for zero-down, no-doc, interest-only loans, there would have been no Bend-Bubble, and the median home price today in Bend would be $120k.

Anonymous said...

>>That is pretty typical of the people I know, contrary to bendbust's "facts".

It was easy to put down 20% when houses were $180k just a few years ago. I doubt all these middle class people in these neighborhoods where the houses went up to $600k in 2005 were putting down 20%. It's the people who bought 2004-2006 who are screwed. Plus anyone who went HELOC-mad.

Anonymous said...


I think the City planning for 2% growth will lead to possible contraction, an actual shrinking in Bends population.


Planning for 2% increase, but fixing the budget increase to be an annual 17%. Explain that?

For the current plan out to the next ten years the plan is NOT to raise taxes put put the increase on the water-sewer bill, that means that the bill will be between $200/mo in a few years.

BENDBUST said...

I think I need to explain the difference between a 5% ( what I call sub-prime ) and a 20% ( what I call conventional ).

We're going to take two case's, 5% and 20% down, and apply it to a nice little $300k home in Bend today.

1.) 5%
5% of 300k is $15k, fine, thus the loan would be $285k, but this is NOT how it works, when you don't pay 20% down you have to double wrap the loan
300k - 60k = 240k ( loan #1, cost $1300/mo )
loan #2 45k, cost $600/mo
Fire insurance $100-$150/mo
PMI insurance $200/mo
taxes withheld $200/mo

Thus the actual cost for your little 5% loan is $2400/mo.

2.)20%

$240k loan, $1300 mo

Thats it, you don't pay PMI, you pick your own fire for $200/year, and you pay taxes when you wish.


Now my point here is that Your putting almost twice as much every month in the toilet for the privilege of a 5% loan, this is a fools game, and everybody makes money on you.

ONLY A COMPLETE FUCKING MORON WOULD PAY LESS 20% down.

Now given that NOBODY has 20% down, this is why home purchase have halted.

BENDBUST said...


20% down

Thats it, you don't pay PMI, you pick your own fire for $200/year, and you pay taxes when you wish.


This is why MTG sells sub-prime loans they make more money, they often own the PMI company, and they charge 5X for fire insurance.

You NEVER want to pay PMI, its a mortgage insurance that you pay monthly premium that guarantee that the bank doesn't lose it's money. Thus in effect they know that your going to foreclose, and that your a fucking loser.

Yes, sure NO houses would sell if it weren't for these package loans, but this is how MTG companys make their money.

The worst part in my humble opinion is that low down's make you pay in effect twice as much every month, and the difference is literally going into the toilet, not your toilet, someone else's.

In summary, if you cannot pay 20% down, then don't buy, and save your money. If you pay less than 20% down, then your a fucking sub-prime loser, and worse you'll always been locked into that category.

BENDBUST said...

Closing Cost's 5% versus 20% down

The way the whores who run Mortgage companys make money is closing costs, and there are ton's of them, all obfuscated by the best MBA's that money can buy.

All along I have been saying that a 5% is still NOTHING down, because it CANNOT be applied to the principal.

Let's see ... closing costs as a percentage of finance can be anything between 2% to 10% its ALL how you do your shopping. Most MTG & RE folks will lie through their teeth, generally you'll never know the actual COSTS until the day of closing.

20% down, .. on little $300k home is $60k, so the loan is $240k

They're going to stick you with a 'loan-fee' of 1-2% for this $240k, this is how they make their money, the bigger the fee, the less interest you pay, and a dozen or so other little $100 here and there fees.

The closing costs average 2% to 10%, thus the average is 5%. Thus if you do a 5% loan, you have to borrow the FULL 300K for your home, you have in effect put NOTHING DOWN.

Now in the case of a 20% down, that means that you at least only have bought $45k equity into the home. This is good, so that after you buy you can sell it for $255k, and lose your $60k,

If you still think that Bend RE is going up, and you don't want to lose YOUR money, I guess I can see why the 5% down is attractive, but let's say the market goes down 10% and you have to move, you owe $300k, but your home is worth $270k, your -30K under-water.

BENDBUST said...

Actually in My own little case I failed to add the closing, so now I'll do it like the MTG boyz do it ..

$300k home
$15k closing cost
$315k total cost

$15k down


$300k net-cost { amount you borrow }

{ Thus you in effect have paid NOTHING DOWN


1.) 5%
5% of 300k is $15k, fine, thus the loan would be $285k, but this is NOT how it works, when you don't pay 20% down you have to double wrap the loan
300k - 60k = 240k ( loan #1, cost $1300/mo )
loan #2 45k, cost $600/mo
Fire insurance $100-$150/mo
PMI insurance $200/mo
taxes withheld $200/mo

Anonymous said...

>>Now given that NOBODY has 20% down, this is why home purchase have halted.

I can afford 20% down if lenders stop giving people 100% loans and prices come down 30% to make up for the lack of buyers.

Anonymous said...

In summary, if you cannot pay 20% down, then don't buy, and save your money.

This is the best advice bendbust has posted. Seriously.

SacTo said...

Your calculations for 5% vs. 20% down are off a bit. For starters, you DO NOT have to do a second mortgage...it is very common to do 5% down and a 95% primary mtg:


Purchase price: $300,000
5% down: $15,000
Primary mtg: $285,000

Closing costs average 3% of mtg (not 5-10...): $8,550
Cash required to close: $23,550

Payment:
Primary mtg P and I (at 6.5%): $1,791
PMI: $179
Insurance: $65 (all lenders will allow you to choose your own insurance company...it's federal law)
Property tax: $220 est.
TOTAL: $2,255

20% down
Down payment: $60,000
Primary mtg: $240,000
Closing costs: $7,200 (3% of LOAN amount)
Cash to close: $67,200

Payment:
Primary mtg P and I (at 6.5%): $1,508
Insurance: $65
Taxes: $220 est.
TOTAL: $1,793

DIFFERENCE in payment: $462/ month
DIFFERENCE IN CASH REQUIRED: $43,650
OPPORTUNITY COSTS (the amount of money that extra $43,650 could make if placed in a CD yielding 5% annual): $2,182/yr, or $181/mnth.

THUS: Putting 5% down, as opposed to 20%, only truly increases your monthly payment by about $282 per month, all things considered.

Anonymous said...

Bend is on Ben Jones' blog today:


http://thehousingbubbleblog.com/?p=2949

Thanks, everyone, for your posts.
-that evil Excal guy

Anonymous said...

I bought two houses with less than 20% and both times I did it with one loan.

I think the two-loan thing was mostly done in the last couple of years for people to get very big loans with zero down.

Anonymous said...

I paid 10% down, one loan, no points, with PMI. I paid down enough principal in two years to end PMI, plus paying the extra payments took nearly 10 years off the life of the 30 yr loan. Bendbust is coming up with absolute worst case scenarios.

Anonymous said...

I paid 10% down, one loan, no points, with PMI.

If your paying PMI your getting hosed. If you paying PMI that makes you a sub-prime borrower.

End of story.

PMI last few years was .5-1% of MTG annually, after the HUGE MTG default FEB2007 PMI will now be 2-5% annually.

Anybody that buys into this is screwing themselves, because in order to KILL the PMI, you have to have 80% equity, and as YOU ALL KNOW the equity in Bend is a FALLING-KNIFE.

The way it worked last year, is if you had 22% equity and two years, you could kill your PMI, but now Bend is going to go down -50%, and its already down -20%/yr, and there is NO way anyone in Bend will kill their PMI in the next five years.

Anyone that can pay additional payments to buy equity in a falling market is crazy, they should have paid the appropriate down in the first place.

Anonymous said...

THUS: Putting 5% down, as opposed to 20%, only truly increases your monthly payment by about $282 per month, all things considered.

That was in 2002, the PMI has gone up ten-fold in 2007.

Boy we have brought in a ton of mortgage and realtor people today.

Anonymous said...

Closing costs average 3% of mtg (not 5-10...): $8,550

He said the window of closing was 2-10%, not 5-10%, the average is 5%, find the 2% is a matter of shopping.

The fact is when you don't put down 20% cash, real cash your cash ...

They require HUGE PMI, double-loans, pull their favorite FIRE-INSURANCE out of their ass,
and withhold the property-tax.

...

Only a financial IDIOT would get a 5% loan, but NOTE, nobody in Bend has 20%, so the whores MUST sell, 5% loans, which just covers closing cost's on the average.

Anonymous said...


Purchase price: $300,000
5% down: $15,000
Primary mtg: $285,000

Closing costs average 3% of mtg (not 5-10...): $8,550
Cash required to close: $23,550


Ok, so its NO longer 5%, for a person who only has $15k, now its $23k, and that $8k difference is going into the toilet.
That's a lot of money to flush down the toilet.

Notice that our MTG-BROKER has completely failed to list ALL of th monthly costs.

This is how it really works, ...

$300k price
$10k closing

$310k cost
-$15k down

Balance to borrow
$295k

Two loans are required, a funny short term loan for $45k, and a BIG loan for $240k.

The $45k is a high-interest personal obligation note { typically 10yr balloon }, as there is NO equity in the house. The $240k is a conventional loan at 6.5%, but we haven't even mentioned variable, the MTG bastard's will sell you variable on BOTH this is how they make their money.

When they say the difference betwen 5% and 20% down is $200/mo, that is assuming that both loans are interest only low INT first 3yr, balloon, thus its complete poop.

The cost of borrowing $240k { 20% down } on a 30yr is about $1400/mo, the cost of a 5% loan if both MTG's were fixed rate, would be over $2500/mo, in actual out of pocket monthly expense TOTAL.

I think we hit gold today, we have at least five different MTG brokers and Realtors going out of their minds.

Anonymous said...

http://www.kiplinger.com/columns/ask/archive/2007/q0514.htm

The above is excellent source on getting out of a PMI, but NOTE it is impossible in a FALLING-KNIFE market like Bend.

Also note that at close RIGHT-NOW 50% of all appraisals are NOT meeting appraisal, thus a deal either collapses, or our borrower HAS to do a 5%, even though he/she intended to do 20%, o r they have to ante MORE cash.

Anonymous said...

Even with new legislation, foreclosure crisis will continue

Up to now people scammed by fast-talking mortgage brokers have had little recourse. With the new legislation, if you feel you've been wronged in a mortgage deal that drove you into foreclosure you'll have what he calls private right of action.

"You can bring a direct suit against the mortgage placement person. Not only can they sue them, the consumer will now have the right to get their attorney's fees paid if they win against the mortgage broker. They will also get the right to bring an injunction against that broker so that they don't do it to other people and they can also get their costs of investigation," he says.

The legislation also requires lenders to verify a borrower's reasonable ability to pay a given loan and it prohibits "churning" - the sale and refinancing of loans simply to generate commissions and fees without benefit to the borrower. Lenders will also be required to include taxes, insurance, and escrow when comparing loans and brokers will be required to act in the borrower's best interest.

The passage of several bills this session aimed at the foreclosure crisis is due in large measure to what's happening on the ground. Thousands of Oregonian's have lost, are in the process of losing or soon will lose their home to foreclosure. Housing advocates argue many bought a house whose value was inflated by a crooked appraiser in league with a greedy mortgage broker.

Anonymous said...

>>PMI last few years was .5-1% of MTG annually, after the HUGE MTG default FEB2007 PMI will now be 2-5% annually.

If that's true, that's a big deal. When I was paying PMI, it was tiny. And I got out of it quickly with extra principle payments as well.

Is there a site that tracks PMI/ Seems like a very important aspect to the numbers. If it's really 2% or higher.

Anonymous said...

The meltdown in BEND subprime loans today is commonly seen as a result of poor underwriting, not regulation.

Mortgage Brokers, Lenders: Regulations Could Hurt Consumers

Mortgage brokers and lenders concerned about a regulatory backlash by state officials are warning that weightier rules may force them to turn their backs on many consumers.

But their threats may be empty.

From Maine to the Oregon housing market, states have been awakened to poor mortgage practices by surging delinquencies and home foreclosures and are drafting rules that increase the responsibilities of lenders and brokers as they deal with consumers, especially those with spotty credit records. The momentum for regulation has created anxiety for the mortgage industry, which claims it’s already treated with a heavy hand.

A recent discussion between mortgage professionals, led by Kenneth Logan - head of NovaStar Mortgage’s warehouse lending before the company cut the program this year - was dominated by complaints about keeping up with laws that vary by state, county or even city. The worst case scenario isn’t inconceivable: mortgage lenders could stop providing credit in some locales, Logan said.

“Capital (investor money) will leave” if regulation goes too far, he said, echoing others on a panel assembled by the Mortgage Bankers Association.NovaStar and more than 50 other lenders threatened to do just that a year ago in the Montgomery County, Maryland housing market, home to nearly 1 million people, according to the Maryland Association of Mortgage Brokers.

Brokers, Lenders A county ordinance passed in 2005 aimed at discriminatory lending created an uproar among mortgage lenders and brokers, claiming the language was too vague and would spark a firestorm of lawsuits, said MAMB’s executive director, Tom Shaner. Lenders - including Wall Street-owned First Franklin and Aurora Loan Services - informed the county that they would cease making mortgage loans due to unquantifiable risks.

The law, which never took effect, was overturned in November after a court ruled the county lacked the authority to enact such legislation.

“This mortgage industry is already regulated so much, it’s just incredible,” said Douglas Davies, a Seattle-based lawyer who represents brokers and lenders. “The effect is it’s driving out funding for borrowers” who are on the margins, he said.

But that hasn’t curbed stabs at the industry by state mortgage regulators. More than half the U.S. states have passed or are considering legislation to prevent predatory lending practices, according to the National Conference of State Legislatures.

Anecdotes of consumers losing houses to foreclosure because of aggressive or deceptive lending practices have also fueled a push for Congress to rein in lenders and bail out owners.

Industry warnings about regulatory damage to homeownership haven’t slowed Oregon’s efforts to pass legislation, said Angela Martin, the economic fairness coalition director at nonprofit Our Oregon. Among new rules, Oregon wants lenders to qualify borrowers’ ability to pay based on the highest rate that could be incurred over the life of the loan instead of the low, initial teaser mortgage rate typically used.

Mortgage lenders, including Countrywide Financial Corp., the United States’ largest, have complained about similar guidelines proposed by federal regulators, claiming that more than half the borrowers receiving their bad credit mortgage loans in 2006 wouldn’t have qualified.

Damage to mortgage businesses from regulation “is not substantiated at all,” Martin said. “Can you craft bad public policy that shuts down an industry? Of course. But is that what Oregon is doing? No.More than 80 percent of lenders in Oregon are also operating in North Carolina and New Mexico, states recognized as having some of the most stringent mortgage laws, she said. The meltdown in subprime loans today is commonly seen as a result of poor underwriting, not regulation.

Lenders and industry officials, recognizing the errors of their peers, actually played an instrumental role in writing Minnesota’s tougher predatory lending law, which, like the proposal in Oregon, requires repayment ability be judged based on future mortgage interest rates instead of teaser rates, said Jordan Ash of ACORN, a community organization.

Lenders made no threats of pulling their businesses out of the state, he said.

The bill before Oregon’s House would impose regulatory requirements and restrictions on at least 75 percent of all loans in the state, according to local broker blogs. Borrowers under the bill would also gain the power to sue brokers for loans they can’t afford.

“We will lose good products that help when correctly used, and many of us will have to turn down customers because we will not want to be liable for their ability to repay the loan in the future,” said Marvin Von Renchler, a veteran broker in Oregon. “It’s a mess.”

Anonymous said...

My mortgage lender doesn't seem to understand, when I tell him to get the other $176 from my Opportunity Cost fund, instead of my wallet.

Anonymous said...

Among new rules, Oregon wants lenders to qualify borrowers’ ability to pay based on the highest rate that could be incurred over the life of the loan instead of the low, initial teaser mortgage rate typically used.

Yes, and this is the WHOLE problem, when you do 20% down @ 6% on a $300k home ( $240k loan }, its about $1400/mo for thirty years, thats it PERIOD. But with a 5% down, PMI, IO, VAR, ... The monthly payments are most often $3k/mo after the first two years, and with a negative-appreciation RE MKT like Bend your NOT going to kill the PMI for about ten years.

Anonymous said...

Is there a site that tracks PMI/ Seems like a very important aspect to the numbers. If it's really 2% or higher.

I'll fine one tonight, the important thing for now are two issues.

1.) PMI { Private Mortgage Insurance } are traded on the stock market like bonds, they have gone up 10X since the Feb2007 sub-prime default. You can buy PMI contracts just like options put&call. People who had bought PMI contracts last fall and held them this spring made 10X, e.g. Billions of dollars. The people holding NewCentury stock, etc. ... Saw their holdings go to NIL.

2.) Just like Katrina, after the Hurricane flood insurance went sky high, nobody wanted to cover it. Just yesterday the CEO of NewCentury was fired for refusing to answer a question from the board "What are the losses". Nobody knows, but it is thought to be in the Trillions.

Nobody wants to cover PMI write now, thus if you get shafted with PMI right now, your going to be paying the worst rates in history, and STUCK WITH THEM FOREVER.

The above two issues are what needs to be known. The other stuff is MBA trivia.

Traditionally PMI was .5-1% per annum of loan value. Given that PMI wholesale contract that are traded are up 10X, nobody knows quite what to do or how to price them right now. My knowledge is they're telling people to simply ignore it for now, as you'll be able to get rid of it in two years when you have 20% equity, but as we know this cannot be done. Its already documented that the appraisers working for the PMI companys will NOT accept BULLSHIT-BEND appraisals. Thus your stuck with PMI forever.

Anonymous said...

easy way to get around pmi...5% down and 15% second. Then, you wont have to pay pmi...get it?

Anonymous said...

"NewCentury was fired for refusing to answer a question from the board "What are the losses". Nobody knows, but it is thought to be in the Trillions. "


What a bunch of BS...Trillions? yeah, right....

Anonymous said...

The meltdown in BEND subprime loans today is commonly seen as a result of poor underwriting, not regulation.

The meltdown in BEND is seen for TWO reasons.

1.) REALTORS - telling everyone that you could make $20k/mo on appreciation for ever, so everyone jackass bought in.

2.) Mortgage Brokers - Filling out applications, and lying { no doc }, and selling 110% loans to people they knew could NOT afford the monthly in 2-3 years.

It's endless the Mortgage Brokers in Bend the realtor's created the MESS. Blaming the regulators and underwriters, is like blaming gun manufacturers for robbery.

It is the first line of defense the MTG & RE people to make sure that crime is NOT taking place. During the Bend-Bubble the MTG&RE folks made ton's of money, its only now that they mea-culpa, and try to blame the investors. "If you hadn't have given me the gun, I wanted have robbed the bank"

The fact is RE & MTG were totally involved in the crime, and went along 100% as long as they were making money. Now that the money is over, they want a government bailout.

Anonymous said...

easy way to get around pmi...5% down and 15% second. Then, you wont have to pay pmi...get it?

This is called lying, its against the law. If you don't have 20% down, you have to pay PMI, if you borrow the down, you have to have PMI.

Sure, a MTG broker, can get the 15% on a high interest obligatory note, that's what we have said all along, but that is against the law.

That said, this is exactly what has been happening, and of course the investor is NOT protected, you can NO longer get a loan without PMI, unless you can prove the 20% is yours, and you have it in the bank. Just like it used to be.

This is exactly what MTG brokers have been doing, helping folks lie, telling them they don't have to have a down, because they could get an unsecured high interest second loan. The MTG broker made two commissions. Only in Bend.

Anonymous said...

"Nobody knows, but it is thought to be in the Trillions. "

What a bunch of BS...Trillions? yeah, right....

*

Just like the Iraq war, the real cost is ONLY ready known to be two trillion dollars.

The ultimate cost right now, of the national RE collapse is thought to be same. But again nobody knows, and those running the company's refuse to answer questions, and have hired lawyers.

Want to have a trillion dollars, look at Bend, over night the bend RE MTG went to a billion, and you only have to have 1,000 billion to have a trillion, and there are 1,000's of Bend like problems all over America.

The fact that you don't understand large numbers, doesn't mean the rest of us have to drink your kool-aid.

Anonymous said...

Private mortgage insurance has steepest rise this decade

Private mortgage insurance, a means of protecting lenders against homeowner defaults, rose in April 2007 at its fastest pace this decade.

The amount of insurance outstanding rose 11.7 percent to $696.4 billion from a year earlier, the Mortgage Insurance Companies of America, a Washington-based trade group, said in a statement today. Private mortgage insurance is often required of borrowers who can't make a down payment of at least 20 percent and don't take out secondary loans to cover the purchase costs.

When lenders make borrowers take out mortgage insurance or purchase it themselves, it makes the loans "more attractive in the secondary market than uninsured loans," Steve Stelmach and Paul Miller, analysts at Arlington, Va.-based Friedman, Billings, Ramsey & Co., wrote in a report today.

About 161,000 consumers took out new loans with private mortgage insurance last month, or 68 percent more than in April 2006, the Mortgage Insurance Companies of America said. The share of delinquent loans whose borrowers have caught up on payments versus the number in default fell to 79.6 percent, from 92.3 percent in March and 98 percent a year earlier.

Data from the group reflects new and existing business at six of the seven U.S. mortgage insurers.

Anonymous said...

Insurance-101 if claims rise, then premium rises

HEADLINE:Fitch: Delinquencies Are Up at U.S. Private Mortgage Insurers


In the context of recent adverse developments in the U.S. mortgage market, Fitch Ratings released a special report that examines recent trends in the domestic business of the U.S. mortgage insurance companies, and the results show delinquencies are on the rise at these firms.

The U.S. private mortgage insurance companies, whose core business is insuring the risk of losses arising from defaults of residential mortgage loans, are among the industry participants that have attracted increased attention following the problems in recent months in the residential mortgage lending market, particularly in the market for subprime mortgage loans.

The Fitch report released today, 'Across the Board, Delinquencies Are Up - An Analysis of U.S. Private Mortgage Insurance Exposure,' contains comparative data on recent originations, details on the insurance in force, and performance trends of recent vintages aggregated for all mortgage insurers rated by Fitch. The report provides some initial perspectives on potential implications for future performance of these insured books as well as the financial impact on the mortgage insurance industry.



According to the report, market concerns have been broadly centered on 2006 vintage originations, but to some degree concerns extend to originations of the preceding years as well. At the same time, while the subprime sector has overwhelmingly been the primary concern thus far, some apprehension also exists that problems in the subprime sector may spill over into other sectors of the mortgage market - which comprise the lion's share of the mortgage insurers volume and insurance in force.

Fitch believes that the industry as a whole will be able to manage this more difficult operating environment over the intermediate term without ratings implications, although some companies may be better situated than others. Fitch believes partially offsetting the immediate to intermediate negative effects of the current housing market are several positive implications that are emerging or may emerge as a result of it. Some of these factors would include tighter lender underwriting standards, increased demand for the mortgage insurance product, and better pricing given expansion of credit spreads.

The Fitch report, 'All Across the Board, Delinquencies Are Up - An Analysis of U.S. Private Mortgage Insurance Exposure,' is now available on the Fitch Ratings web site at www.fitchratings.com.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

Anonymous said...

"This is called lying, its against the law. If you don't have 20% down, you have to pay PMI, if you borrow the down, you have to have PMI."

No, you are completely wrong on this. sorry, but it is not illegal in any way or form to do a 15% second.

"Sure, a MTG broker, can get the 15% on a high interest obligatory note, that's what we have said all along, but that is against the law."

No, it is not against the law, and it is typically not much higher than the primary mtg. The second is typically tied more closely to the fed funds rate, and is adjustable, but there are a wide variety of loan products out there to meet pretty much any need. The bottom line, however, is that is is perfectly legal and quite common, and allows the borrower to avoid paying PMI.

"That said, this is exactly what has been happening, and of course the investor is NOT protected, you can NO longer get a loan without PMI, unless you can prove the 20% is yours, and you have it in the bank."

This is entirely wrong as well. Considering I just sold an investment property to someone who has a 30 yr fixed primary and a 10% 5/1 adjustable second, I can say from firsthand experience that his lender knows full well all about the borrower's down payment being less than 20%. You are wrong, period.

"This is exactly what MTG brokers have been doing, helping folks lie, telling them they don't have to have a down, because they could get an unsecured high interest second loan."

Yes, mtg brokers have been doing this to meet the needs of consumers. It's called a free market.


"Only in Bend."

Again, NO. Everywhere.

Anonymous said...

"The ultimate cost right now, of the national RE collapse is thought to be same. "

True, but your original comment specifically regarded New Century, which you said had losses in the "trillions."
That is simply not the case, as anyone can tell you.



"The fact that you don't understand large numbers, doesn't mean the rest of us have to drink your kool-aid."

The fact that I can tear apart your pseudo-factoids quicker than you can pull them out of your ass does not make me a cool-aid drinker, it makes you a moron.

Anonymous said...

BTY, BendBust, you posted this on another thread, regarding HOA dues:
"...which is what happened at inn@7mtn, $50/mo to $1,000/mo..."


This is taken from the Inn@7Mt Web site:

"Is there a homeowners association, what are the dues and what do they cover?
Yes. As an owner you are a member of the AUO (Association of Unit Owners). Monthly dues are based on the size and location of your vacation home and currently range from $84.45 to $170.67. They cover just about everything including phones, cable TV, heating, cooling, electricity, landscaping, exterior maintenance, wireless internet, snow removal and pool maintenance."

Again, you seem to be pulling factoids out of your "arse."

Anonymous said...

"Private mortgage insurance, a means of protecting lenders against homeowner defaults, rose in April 2007 at its fastest pace this decade.

The amount of insurance outstanding rose 11.7 percent to $696.4 billion from a year earlier"

If you read this correctly, you will see that it is only saying that the DEMAND for PMI has gone up...syas nothing about the end cost to customers (borrowers.)


"Fitch believes that the industry as a whole will be able to manage this more difficult operating environment over the intermediate term without ratings implications."

Hmm, still don't see anything about savagely higher PMI premiums....


"Fitch believes partially offsetting the immediate to intermediate negative effects of the current housing market are several positive implications that are emerging or may emerge as a result of it. Some of these factors would include tighter lender underwriting standards, increased demand for the mortgage insurance product, and better pricing given expansion of credit spreads."

Again, nothing indicates drastically higher PMI rates for consumers...the only ambiguity is :
"better pricing given expansion of credit spreads."

This can be read both ways (i.e. better pricing for consumers, or better (higher) pricing for the PMI providers.) However, nothing even remotely indicates a 10-fold increase in PMI rates for consumers, as your previous posts assert.

Anonymous said...

However, nothing even remotely indicates a 10-fold increase in PMI rates for consumers, as your previous posts assert.


What was said is that whole-sale market tradeable PMI on CDO's had gone up 10X, its too soon to tell how much will get passed on to the consumer, it will be something between 2X->10X. When wholesale costs go up, and its NORMAL econ-101 that end-user prices go up.

Traditional PMI had been .5-1% per annum, but, and this is the BIG but is that PMI is currently sky-rocketing, because like Katrina, nobody wants to get stuck with the explosion of claims expected.

My guess, and my BET is that we'll see 2.5% PMI by fall of 2007.

Anonymous said...

As an owner you are a member of the AUO (Association of Unit Owners). Monthly dues are based on the size and location of your vacation home and currently range from $84.45 to $170.67.

Out of context you fucking RE BITCH.

This is what I know, about 2-3 years ago inn@7 sold, and the new owner increased the HOA from $50 average to almost $1k.

The price on the units collapsed from $150k to $30k. I have at least five friends who bought units two years ago for $30k.

Today the prices are back up to $100k, and all my friends are paying from $500-$1000/mo HOA, but the way they look at it, they got the condo for free, and use it frequently, and intend to sell and make a tidy profit. They feel like they pay rent for a week-end cabin, and they feel that they all made $70k.

This is what I said. One problem in this forum is dumb fucking bitches like to modify what was said several months ago, but this asshole/bastard has a fucking memory.

Anonymous said...

True, but your original comment specifically regarded New Century, which you said had losses in the "trillions."
That is simply not the case, as anyone can tell you.


I'll try this one last time, its obvious your a fucking moron. The specific mention of NewCentury was that yesterday they fired the CEO for not answering a question. End of Story.

The trillion figure is follows, .. Bend has currently a Billion dollars of homes on the market that aren't selling ( 2500 times 400k ), if just 1/2 foreclose that is a 1/2 billion, there are several thousand city's just like bend with this problem.

That is two trillion dollars.

It's obvious that your an idiot, please go somewhere else and play

Anonymous said...

"I'll try this one last time, its obvious your a fucking moron. The specific mention of NewCentury was that yesterday they fired the CEO for not answering a question. End of Story."


No, this is the direct quote:

"Just yesterday the CEO of NewCentury was fired for refusing to answer a question from the board "What are the losses". Nobody knows, but it is thought to be in the Trillions."


See how you indicate that NewCentury is on the hook for "trillions" of dollars in losses? If English is not your first language, I can understand your inability to comprehend. Otherwise, bite me imbecile.

Anonymous said...

"One problem in this forum is dumb fucking bitches like to modify what was said several months ago, but this asshole/bastard has a fucking memory."

Except the fact that these are direct quotes from your own posts....hmmm. Perhaps you need to lay off the meth.

Anonymous said...

Except the fact that these are direct quotes from your own posts....hmmm. Perhaps you need to lay off the meth.

1.) There is only one person who write like you and that is bendbb/timmy-twat

2.) You try to say what I said, then call it my quote, but I'll NOT play your game.

The reason your site bend-bulletin is so pathetic is that its all a bunch of losers.

Anonymous said...

"Just yesterday the CEO of NewCentury was fired for refusing to answer a question from the board "What are the losses". Nobody knows, but it is thought to be in the Trillions."

Again, I see where your going with this, but its contextual, I have been writing about this for months, I'll try and break it up for you, because obviously your very linear, and have only read whats in front of you.

1.) The CEO of NewCentury was fired for not answering questions, one of them was what was the loss at his own company, he did not answer.

2.) WRT to my post about two-trillion, that is what I believe will be the loss to investors, but I don't even want to think about the loss to familys, and the gain to lawyers.

In summary your gluing together two different issues, one was that folks at BIG MTG clearing houses are getting thrown out for being non-cooperative, and secondly the losses will be horrendous.

This was my point.

Note, lastly that I wrote on the current comment-thread at least 3-4 times about this new-century guy, and you picked the quote you wanted to, but I have now for the third time tried to explain what I meant, not what you wanted to think I meant.

Anonymous said...

Considering I just sold an investment property to someone who has a 30 yr fixed primary and a 10% 5/1 adjustable second, I can say from firsthand experience that his lender knows full well all about the borrower's down payment being less than 20%.

Big-time investor are we,

Note I only had one point that I have been stressing for months, and that was that anyone that doesn't pay 20% down is a pathetic subprime loser, and you have proved my point.

I hope you get the property back, and I hope you yourself are sitting on lots of 5/1 ARMS because its your kind that darwin loves.

Anonymous said...

Your giving the lender too much credit, they just fired the CEO of NewCentury today for refusing to answer the question "what is our loss to date", NewCentury recently went bankrupt.

The above is the exact quote on todays board, anyone can search for it on this blog-thread.

Note that nowhere do I co-mingle the two-trillion, with NewCentury, I simply mention that CEO was fired for NOT knowing what their loss to date is-was.

This is the second time today that timmy-twat has taken my post's and mangled them, and then tried to tell me what I said.

Perhaps he has a point, I just wish we could get back to the bend-bubble.

Anonymous said...

2.) Just like Katrina, after the Hurricane flood insurance went sky high, nobody wanted to cover it. Just yesterday the CEO of NewCentury was fired for refusing to answer a question from the board "What are the losses". Nobody knows, but it is thought to be in the Trillions.

Here is the second quote, and I think this is where you got lost.

a.) katrina is-was a big national deal because flood insurance went through the roof as a result of claims
b.)bankrupt ceos don't even know what the fuck they have lost
c.) This is going to end costing investors trillions of dollars.

If you note I go from national, to specific, back to national.

I know its hard, I suggest you go get yourself into a nice subprime MTG.

Anonymous said...

You're all mixed up. My last post in this thread was the 12:30 one and you answered it fine. I've been watching the Cavs game (sigh) and missed all your ranting and raving.

Anyhow, I'll be tickled pink if people had to start putting down 20%. I hate competing with dopes putting down nothing.

Anonymous said...

>>This is the second time today that timmy-twat has taken my post's and mangled them, and then tried to tell me what I said.

By the way, what were the two? The second one wasn't me. But was the first? I remember saying that several years ago PMI was cheap and that I paid it off after a couple years and that I agree it's a big deal if it's not cheap now. I don't think that was mangling if that's what you're talking about.

--TT

Anonymous said...

>>1.) There is only one person who write like you and that is bendbb/timmy-twat

I would never say "lay off the meth." I'm not as crude as that poster. Or as you, either.

Anonymous said...

sounds like bend bust is hitting the crack pipe extra hard tonight.

IHateToBurstYourBubble said...

Now you boys Play Nice!

Boy, the Happy Hour posts on here be gettin' nasty!

Was I like this BEM?

I see a subscription story on The Bulletin today, "Regional economy is diversifying; Experts see it as a sign of maturity".

Not exactly sure what it says, but the general idea of diversifying the economy around here is as applicable to stocks. If you've got one Big Elephant and it takes a dive, you'll get creamed.

And I think in general economies generally diversify as they grow larger, and while Bend is certainly more diversified than it was 30-40 years ago, it is far more concentrated in RE than most towns its size. I've read that Bend has 2-3X the RE industry per capita of other Oregon towns.

I think the diversification of Bends economy vs Redmond, Prineville, etc, may be why we hold up a little better than these "fringe" towns. Note Culver which is (was) the most concentrated economy in CO, was clocked when Seaswirl closed. "Concentration" itself is very risky.

Bend seems to have a paradoxically diverse economy. On a per company basis, Bend is fairly diverse. You could take out the top 5 companies & we'd survive. On a per industry basis, we're one of the most non-diversified towns of our size. Take out RE & healthcare, and Bend would be left for dead.

I think Bends per company diversity is what will help home prices maintain gains. A thousand little businesses will help Bend. Conversely places like Culver & Sisters will get killed.

Another stock market parallel is the concept of "beta". Duncan of Pegasus Books often writes that he does well, when the rest of the economy is going to pot. He's kind of discretionary entertainment, and he's negative beta. This is supported by what happened during the Great Depression... movies, and other entertainment did well while the rest of the economy went to hell.

Having an economy with many small poorly correlated businesses makes for a strong "portfolio" and a strong economy. Nothing can really take you out, and even if there is a general deterioration, have low & negative beta holdings can keep you from getting killed.

I always look at Berkshire Hathaway as an interesting case study: BRK hit a multi-year low on the exact date that the NASDAQ hit its all-time high in 2000. Is BRK negative beta? It seems to be fairly low beta, but I think a correlation analysis would show it to be positive, it's a hell of a big company. But it seems to be very negative beta with respect to "speculation". I look at times for when BRK is relatively underperforming, as a speculative time for the rest of the market, and maybe a time to sell stocks. People know Buffett isn't going to go nuts & start buying dot com's, and so he gets the cold shoulder when the speculative juices start flowing.

I hope the Powers That Be try to attract a diverse set of companies to Juniper Ridge. Not all high-tech, not all aerospace. Make the industries extremely low correlation so that no one break can take down the whole thing.

Bend is not diversified enough on a per industry basis, and we will pay for it. When RE goes South as it surely will, it'll hit everything. People will start praising St Charles & healthcare in general as the savior of our economy, when really it's all that's left. I remember someone posting on BEM's original blog that Arnie Swarens had a plaque on his desk that said something like, "God, please help me to not waste the next real estate bubble". We wasted our chance, again. But what that plaque means is taking the money generated... and PUTTING IT SOMEWHERE ELSE! NOT doubling down on RE over & over. We've doubled down over & over until the RE juggernaut is at 60-70% of everything here. We'll pay for our short-sightedness. We'll pay for not diversifying.

Anonymous said...

I remember saying that several years ago PMI was cheap and that I paid it off after a couple years and that I agree it's a big deal if it's not cheap now.

We have written to exhaustion why PMI is a bad deal, and why any MTG with less than 20% down is bad deal.

An interesting aspect of this PMI fiasco is that team DUBYA has just made it for the first time tax-exempt. This year only is the hook.

The problem is 'investors', e.g. people who have been buying the CDO's { thats a whole other subject }, are demanding congress that they don't lose their money. Of course the BUBBLE made everyone rich 2001->2006, but now that's game over the 'investors' realize with foreclosure they'll lose their money.

Thus DUBYA gives them a little carrot, actually give an incentive for SUBPRIME borrowers to get PMI, which is a policy that the BUYER pays to protect the investor who want a risk free investment.

Personally I don't think tax-exempt PMI will request the bend-bubble.

Anonymous said...

WRT to this tax-exempt issue, its interesting the whole NOTION of home-ownership has gone full circle from $20k/mo appreciation get rich to simply 'tax-exemption' / tax-avoidance / tax-deferral.

Almost all the condo's that don't sell along the river, are being converted to commercial, that way they can be 'for-lease', bought by REITS, and the 'investors' get to write off the full-lease value for years. Nobody cares if the unit is never rented, because the theory is the property will eventually recover.

Thus almost all the condos in Bend,will be converted to commercial, and they'll sit empty, and NewYawk REITS will sell them, and nobody will care. ALL about tax-write-offs, the interesting thing here is that given nobody is making MONEY in bend, we don't need tax write-offs, but there are lots of lawyers, cpas, doctors, and dentists - that invest in tax-write-offs.

Note, that single family homes sitting empty is bad REIT play, which is why TOLL-Brothers already got out.

Expect to see lots MORE commercial stuff just sitting around in Bend, with FIVE-YEAR-TRIPLE-NET-LEASE's, which nobody in their right mind would sign { sort of a subprime for businessmen }. The REIT boys every once an awhile finds a sucker.

Anonymous said...

2005 - come to bend, and buy property and make $20k/mo

2007 - come to bend, by commercial, and get a tax-shelter

As long as it keeps the builders busy, who cares.

Anonymous said...

"Personally I don't think tax-exempt PMI will request the bend-bubble. "

Huh?

Duncan McGeary said...

As usual with the Bulletin, the meat of the article seems to contradict the title.

I analyze what I think the figures mean on my blog.

The Bulletin loves the real estate industry....

but it's conflicted!

Duncan McGeary said...

It's a nifty trick, the positive slant the Bulletin manages to put into the title of every article, and in the first paragraph.

A train wreck, the engine lies in a tangled, burning mass at the bottom of the canyon, cars are strewn around the countryside, but they managed to uncouple the caboose just in time.

The Bulletin article proclaims: "Caboose show resilence! Comes through unscathed!"

I like the Bulletin, really I do, but critical readers and or bloggers need to challenge their assumptions.

Bend Economy Man said...

Take out RE & healthcare, and Bend would be left for dead.

Duncan made the comment on his blog that healthcare and education are the kinds of things that just ARE wherever people are.

RE is kind of the same way. People need a place to live, wherever they are.

Next thing you know they'll be citing our booming grocery stores as a sign of a great economy.

Anonymous said...

Duncan made the comment on his blog that healthcare and education are the kinds of things that just ARE wherever people are.

That's true, but St. Charles and BMC and their associated health care specialists serve more than just the local population -- people come from all over central and eastern Oregon for care here in Bend.

Anonymous said...

I'm one of those "subprimers" who didn't have 20% lying around to put down. I have PMI. However, we have a great interest rate (5.875% 30-yr fixed), and are paying extra principal down every month. So the PMI is temporary. The only way we could get rid of it would be to refinance - our mortgageholder won't just drop it.

However, I'm frankly irritated that we can't deduct the PMI, as new debtholders will.

By the way, our plan is to pay our house off and live in it for the next 40 years, if possible. We've been in it six already.

Bend Economy Man said...

It's a nifty trick, the positive slant the Bulletin manages to put into the title of every article, and in the first paragraph.

Let's try it. Here's the first two paragraphs of the June 15 article "Regional economy is diversifying":

In May 2001, Central Oregon's job market had greater shares of retail, construction, and leisure and hospitality jobs than both the state and the nation. In May 2007, the most recent data that was released Thursday, those three sectors still dominate the region's private-sector employment, although economic officials say Central Oregon is seeing a more diverse mix of industries.

Looking at Central Oregon compared with 20 or 30 years ago, Roger Lee sees significant positive changes in the region's job makeup. Lee, executive director of Economic Development for Central Oregon, says the percentage of construction, retail and tourism-related jobs has generally decreased over that time.

"We're becoming a more mature regional economy," Lee said. And that maturity is leading to diversity, he said, a key to securing Central Oregon's economic health.


And here are the last few short paragraphs:

Central Oregon has almost twice the percentage of construction jobs as the United States and Oregon. It also beats state and national numbers in retail, and leisure and hospitality industries.

In May 2007, 11.1 percent of the tri-county's jobs fell under construction, according to the data. In the nation, 6.1 percent of jobs were in construction and 6.5 percent in the state.

In retail, Central Oregon had 13.8 percent of its jobs tied to this typically lower-wage industry, compared with 11 percent in the nation and 11.6 percent in the state.

In leisure and hospitality, Central Oregon and its $475 -million-a-year tourism industry comprised 12.6 percent of all employment, compared with 9.9 percent in the nation and Oregon.

Those three industries "have more eggs" of Central Oregon's employment basket, Williams said.

"If one of those industries were to take a huge hit, we would feel it more," he said. "We don't have the same diversity mix as the U.S. and Oregon."


Is that schizophrenic news reporting or what? It would be jarring enough if it were in two different stories in the same issue or even in the same week, but in the SAME STORY? What's this story about, anyway? Our healthy economic diversity or our unhealthy lack of economic diversity?

Anonymous said...

You guys make these planes, right?

http://blog.oregonlive.com/breakingnews/2007/06/plane_crashes_at_state_park_ne.html

Anonymous said...

Duncan made the comment on his blog that healthcare and education are the kinds of things that just ARE wherever people are.

That's true, but St. Charles and BMC and their associated health care specialists serve more than just the local population -- people come from all over central and eastern Oregon for care here in Bend.


Bend area hospitals have the highest rate of back-surgery per-capita of any place in the USA.

Have a common-cold, go to a doc in Bend ... Get a back surgery.

The knife is the solution to pollution in Bend.

I concur with Duncan, but the outrageous overuse of surgery is troubling.

Anonymous said...

It's a nifty trick, the positive slant the Bulletin manages to put into the title of every article, and in the first paragraph.

Let's try it. Here's the first two paragraphs of the June 15 article "Regional economy is diversifying" - bem


What are they to do tell the truth, if everyone hasn't seen it, get todays business section of the NY-TIMES. It's ONLY about subprime default and the world coming to an end.

The Bulletin, like the Oregonian has to make folks feel good, so they go shopping.

The Bulletin ONLY exists to print ad's, that's how they make a buck, and if they write the depressing truth, folks don't shop at the old-mill, and don't eat at red-robin at the old-mill.

Everything's ok, 19% of all subprime is now over 60 days late.

Anonymous said...

That's true, but St. Charles and BMC and their associated health care specialists serve more than just the local population -- people come from all over central and eastern Oregon for care here in Bend.

The specialty of Bend is back-surgery. People are not coming here from Mexico for back surgery.

The doc's here are cutting on the highest per-capita basis of anywhere else in the country, and note we're a small two horse desert town.

Sure, there are jock's here, that need new knee's, and spine's, but not really that many than any other yuppy place with old folks running around like kid's. People are NOT coming to Bend for back surgery, the doc's in Bend are pre-scribing back surgery. Reputable doc's west of the Cascades think the practice is outrageous, they'll not say to publicly, as you know professional courtesy.

Anonymous said...


"Personally I don't think tax-exempt PMI will request the bend-bubble. "

Huh?


Request may refer to:

* a question
* in computer science, a message sent between objects

Sorry about that, what I meant to say was that the object message transferred from DUBYA of making a short-term tax-deduction on PMI would not translate into a meaningful object-message to the bend-bubble above the ambient noise level.

Ergo, the simple fact that republicans are trying to do everything they can to fix the subprime meltdown { that they created }, this little act is NOT going to save Bend from the cookie-monster.

The cookie-monster will have his day, Bend RE will go down 50% or more before it recovers from the bend-bubble-burst.

DUBYA can create new tax-deductions all day long, but they'll do nada for the poor schmuck that cannot pay is MTG.

Lastly, NOBODY should get PMI, as they'll NEVER get rid of it, PMI requires 22% equity, and equity is a falling-knife in Bend, and the new appraisers are going to be low balling EVERYTHING.

Anonymous said...

A train wreck, the engine lies in a tangled, burning mass at the bottom of the canyon, cars are strewn around the countryside, but they managed to uncouple the caboose just in time.

The Bulletin article proclaims: "Caboose show resilence! Comes through unscathed!"


A positive lead message is what makes coupon clippers move straight to the Fred-Meyer section, and this is what the Bulletin is all about.

Sure they could have a lead that is depressing, but long ago, back in the 1920's marketing/advertising folk learned that what's make people shop is good things, bad things makes people NOT shop.

It's ALL about shopping, and the Bulletin knows who butters their bread.

Besides is a WIN-WIN, the shoppers feel good, and they're not going to read the 'report', and the nerds who do read the nasty-report with all the true gory details, those folks don't shop. Nerds don't shop.

What I'm saying is that its good to know that this practice goes on, and its fun to read the lead front page title, and then try to assume that what actually happened is 180% opposite, but this is for people who think. Most people don't think, and they don't want to think, they're completely dis-engaged.

So we'll keep the bad news flowing here, you'll never here any good news in our title-lead { right ihtbyb?? }, and our content will be just as negative.

My take on all this has always been this ...

There are three kinds of people those that know what's going on, those that make things happen, and those that don't have a clue.

The Bulletin's job is NOT to inform, its to entertain, and to motivate shopping. If you want to know what's going on you must read, and study outside of the annointed press. I have read the WSJ for forty years just so I know who is fucking who. The WSJ has NO advertisers, so its anything goes, cruel brutal capitalism.

WRT to those that make things happen, they generally don't want anyone to know. My experience is the party that your told that did something is quite often not the actual party that did that thing. Without having been there its always quite difficult to know actually did what, and anyone who has ever been there, and then seen what got reported knows that the truth and reporting rarely ever meet.

In summary as I have written during the last few months, since man first crawled from the cave 97% of men are generally fucked, and 3% get the best women, food, shelter, and other good stuff. In order to be part of that 3% you MUST base your decisions on truth. The goal that I see here in the bend-bubble debate is that we help each other see that truth, so we don't fuck ourselves the way our neighbor has fucked himself.

Anonymous said...

DEJA-VU 2008 BEND BECOMES TAX HAVEN

2005 - come to bend, and buy property and make $20k/mo { oops thats over now }

2007 - come to bend, buy commercial property, and get a tax-shelter { tax shelters are bend future }

As long as it keeps the builders busy, who cares.

Buy a commercial building in Bend, and get a free golf-membership.

Don't worry about green-fee's, they're paid by the City-of-Bend taxpayer.

Buy a commercial building and/or office in Bend, and get a Free Redmond Airport yearly pass, paid for by the Deschutes County Tax Payer.

Mrs. Breeze cannot sell her condo's as the all the rich left Bend, thus the condos became commercial property.

Bend City Council saw that it was good.

BENDBUST said...

But I don't believe our Boss Hogs are getting rich, or are corrupt. Unfortunately, I do believe that developers with vast experience in dealing with local government and in exploiting the landscape, can come in and outmaneuver and manipulate even the smartest local leader. - duncan

How it really is ...

Councilor Hummel believes this is the toughest vote he has ever had to make.

A few months later Hummel quits, the Bulleting blames it on the BUS fiasco. The fact is the elected officials are incapable of being matched against the boss-hogs and thier lawyers that RUN this town.

Now DUNCAN this is just like Grade-Schol YOU say you didn't know that BIG-OIL rigged prices, and likewise you say YOU don't know what's going on in BEND, now YOU DO KNOW, what are YOU going to do about it.

Read the following carefully, and you will hear the pain, the pain of a city-council out of their league getting fucked in the ass, by the most powerful people in Central Oregon

les schwab juniper ridge
Page 1
Bend City Council Special Meeting
Page 1 of 3
December 12, 2006
Bend City Council Special Meeting
December 12, 2006
1.
Roll Call
A special meeting of the Bend City Council was called to order at 9:00 A.M. in the City Council
Chambers at Bend City Hall, 710 NW Wall. Present upon roll call by City Recorder Patty Stell
were Bend City Councilors Dave Malkin, Linda Johnson, Bruce Abernethy, John Hummel, Chris
Telfer, and Mayor Bill Friedman. Councilor Jim Clinton joined the meeting during Executive
Session.
2.
Mayor Friedman called a recess to Executive Session at 9:00 A.M. pursuant to ORS
192.660 (2) (e).
3.
The special meeting reconvened at 9:59 A.M.
4.
Sale of Real Property
Economic Development Director John Russell explained the public hearing to consider a land
sale for the first 20 acres of Juniper Ridge. The agreement is for the immediate purchase of 12
acres with an option for an additional eight acres over the next 12 years. The company would be
building a 120 square foot building for 320 employees. The land would be for Les Schwab
corporate headquarters relocating from Prineville. The company approached the City in May
anonymously. This would be for the corporate headquarters and the remainder of the Prineville
operations would remain in Prineville. The Company was considering Bend or leaving the state.
a. Hold a public hearing to receive comment on the proposed sale of real
property
Mayor Friedman opened the public hearing at 10: 01 A.M. Hearing no comments, the public
hearing was closed.
b. Consider a motion to sell real property
Councilor Telfer moved to approve the purchase and sale agreement with SWW LLC. Councilor
Malkin seconded the motion.
Discussion:
Councilor Johnson advised that this is a difficult vote for her. The City has great dreams for
Juniper Ridge and respects Les Schwab as a regional partner. She understands that the Council
is being asked not only to vote for Bend, but to vote for the region. The vote is difficult for her
because Council has been held to secrecy and been asked by the employer to put relationships
with regional partners at risk. Council has only been given an hour to review the agreement and
to discuss it. There is not a direct tie to the principles that Council established for Juniper Ridge.
It might be a great agreement, but Council has not been given an opportunity to talk about it and
Page 2
Bend City Council Special Meeting
Page 2 of 3
December 12, 2006
ask the questions that are needed to make the best choice for the City and for the region.
Councilor Johnson will vote no, not because of the content of the agreement, but because of the
process and the position that the Council has been put in to take a vote which puts at risk the
Council’s relationships with the region.
Councilor Hummel believes this is the toughest vote he has ever had to make. The fact that Les
Schwab is such an important employer to Prineville and to Crook County is what initially struck
him. He worked in Prineville when he first lived in Central Oregon. Les Schwab saved the
community when mills were shutting down. Councilor Hummel respects Les Schwab for staying
in the Prineville community for all these years when it didn’t make financial sense for them to
stay. He saw the kids who worked at Les Schwab who could stay in Prineville and raise a family
because of the living wage jobs. They were proud to work for Les Schwab. If Les Schwab will
leave Central Oregon if Bend City Council does not approve the contract, then all the employees
will lose. He understands this is the corporate office and not the operations. Les Schwab has a
right to do whatever it wants and it has given more than anyone to the community of Prineville.
Councilor Hummel had been leaning toward a vote of yes because he felt it would save jobs in
the region. Then, Councilor Clinton raised the issue of the details of the agreement. The details
of the agreement did not come close to working. Councilor Hummel believes the details are bad.
It is unfortunate that Les Schwab insisted on these deal breaking terms.
Councilor Clinton believes that Les Schwab is the kind of company Bend would welcome in
Juniper Ridge. It embodies good paying jobs, community spirit, and a contributing nature that he
would love to have at Juniper Ridge. However, the details of the contract have put the Council
in a box. It is an unfortunate way of proceeding that looks like bullying. The contract is not in
the best interest of the City or of Juniper Ridge and is not fiscally prudent for the community,
Juniper Ridge, or the City. The contract includes precedent setting incentives. Council made an
attractive offer for the land, better than to the master developer. Land was offered at a
discounted price with the condition that no further incentives would be offered. The contract has
other incentives and allows that this company be treated differently than any other company
would be treated. He believes the contract is remarkably and unacceptably bad.
Councilor Malkin will vote yes because it is very important that Les Schwab stay in Central
Oregon. He is concerned that Les Schwab not leave the state. Additionally, he believes that Les
Schwab will be an incredibly good business to start off the City’s operation at Juniper Ridge.
The company will bring 350 jobs to Bend. It is one of the leading employers in Central Oregon.
It is the strongest regional business in the west, and he is pleased that Bend can retain them in
Central Oregon.
Mayor Friedman hears a huge amount of affection for Les Schwab and excitement about the
company locating in Juniper Ridge. He also hears distress about the agreement itself. In terms
of secrecy and restriction, it is not consistent with his image of Les Schwab. He will vote yes
with the hope to see the real Les Schwab emerge. He hopes the company’s principals will fit
with the Council’s principles established for Juniper Ridge. If it turns out that this hope is not
realized, then he believes he will have made a mistake.
Page 3
Bend City Council Special Meeting
Page 3 of 3
December 12, 2006
Upon roll call vote the motion to approve the purchase and sales agreement passed, 4/3.
Councilors Abernethy, Telfer, Malkin and Mayor Friedman supported the motion. Councilors
Clinton, Johnson and Hummel were opposed.
Mayor Friedman explained that the City Manager is authorized to execute the agreement with
Les Schwab. Council would appreciate the opportunity to understand where Les Schwab intends
to go with this agreement.
5.
Adjourn
Councilor Johnson moved to adjourn. Councilor Malkin seconded the motion which passed
unanimously, 7/0.
The meeting adjourned at 10:14 A.M.
Respectfully submitted,
Patricia Stell
City Recorder
/km

BENDBUST said...

I'm sure BendBust will tell me I'm being mealy-mouthed. But I think its important not to tarnish people's reputation without proof. - duncan

If a weak council was exploited by name, and in their own name, and that so tarnish thou, is that truly slander and/or libel??

Or perhaps YOUR use of the terms tarnish, perhaps don't really apply to what was actually said about the wise city-council.

The contempt I feel toward the City-Council is their inability to stand up for what they believe. Perhaps if they didn't have 'executive session' with boss-hogs and their lawyers, just perhaps, there was light on the meetings, then perhaps someone could just possible vote NO, on something they knew in their heart to be wrong.

Lastly, pray tell why is the above considering to be tarnish? I feel that these poor pathetic creatures are something to be pitied. At least Hummel did the right thing, and fell on his sword.

Anonymous said...

CONSERVATIVE BLOGGER'S GOING NUTS

The blog Ace of Spades called Bush "incompetent" and "embarrassingly
dimwitted" and urged him to retire.

"The White House will go out and zealously promote Harriet Miers [the
former White House counsel who Bush unsuccessfully nominated for the
Supreme Court], defend [Attorney General] Alberto Gonzales, promote
this bill, but will not take a firm stand on the war," said Erickson.
"I know people who are boiling with rage that the president has been
beating up his own side over this bill but won't take the bully pulpit
to beat up Democrats over the war."

****

Let's look at what's going on here, ever since the RAYGUN revolution,
the Republicans have got the Bamboozled Class all whipped up about
guns, jeezus, and genitals.

The Bamboozled WHITE-MALE voter, Knows something is wrong, the
Republicans have OFF-SHORED all the jobs, and after twenty years of
down-sizing, there is NOTHING left to steal.

Like the NAZI party, and BUSH is a NAZI, they know too blame a the
weakest member of society for their problems. The USA is in BIG
problems, the country has sold its manufacturing base, moved it
abroad, the favorite store WALMART of the bamboozled class is buying
all their SHIT made in china.

This was NEVER economically sustainable, then like everywhere else in
the world, immigrant poor people come in and work for cheap. The
difference here in the USA is that folks have gotten SO LAZY that most
businessmen would rather hire a mexican, because he does better work.

So we have every class of BLUE-COLLAR work being screwed, the economic
party is OVER. The bamboozled jumped into houses during the last five
years, and bought SUBPRIME, and TODAY 20% of them are late 60days.
We're going to have the greatest foreclosure mess since the Great
Depression.

All created by the REPULICANS, and what are they going to do?? Blame
the Mexican.

The Mexican made you buy a subprime, interest-only, no-down home, on
an ARM basis. The Mexican MAKES you shop at walmart. The Mexican makes
vote republican.

NO POLITICIAN can solve the problems we have today, and CERTAINLY NOT
democrats.

Long ago Perot said there would be a Great Sucking Sound, and today
your living with everything he predicted. BUSH is a NAZI, and when the
NAZI's economically went to shit in the 20's they created a war on the
weakest elements of society and robbed them, they robbed millions of
jews to rise to power.

Today BUSH will get the bamboozled all worked up, and they'll demand
that the mexicans be robbed and separated from all their money, as
they're illegal they can be robbed, just like we robbed the japanese
during WWII.

When BUSH is done with the Mexicans he'll go after the Jews,

None of this 'revolt' is real, BUSH said he was going to offer FULL
amnesty to get love from Mexicans, he had the Fed's attack Portland,
to WIN love from the conservative bloggers, in the meantime millions
of Iraqi's are being murdered.

Soon we'll be at war with Mexico, WHY?? Because killing and stealing
is what has always made BUSH, HEARST, and FORD Great.

IHateToBurstYourBubble said...

Yet another Realtor.com 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)

Still going strong....

Assuming about 5 new listings a day for the past 5 days, since I didn't get a chance to check on May 14, would give +174 net new listings for the May 14 to June 14 month period.

Anonymous said...

Let's look at the significant points of interest to date.

Aug2005 - Gastronomy Magazine announces Bend next Aspen culinary ... This is where the bend-bubble peaked

Sep2006 - The-Shire ( Bree like Hobbit fiasco ) is marketed worldwide, entire WORLD shakes head at Bend. This is where the Bend-Bubble blew its load.

June 2007 - Bend RE & MTG executives tell public that the party is over. This is where the masses were told they were screwed.

July2007 - Bend Real-Estate & Mortgage lay off 90% of staff. This is where the masses will be punished for 'their' excess.

Sep2007 - Only Mexican owned and operated Restaurants in Bend survive. Major's national chains on I-97 survive. Mill District becomes super-walmart. This is when folks will re-adjust to a new lifestyle of spending.

Dec2007 - Bulletin lays off 90% of staff as advertising revenue plummets. This is when 'blogging' will be your ONLY new's source for a long-long time.


***

Anyone want to place bets or alter the past & future from the above?

Anonymous said...

____

JUNE 16, 2007

BEND IS RATED MOST OVERVALUED MARKET IN THE USA BY NATIONAL CITY CORP. AND GLOBAL INSIGHT


Most overvalued metro areas
Where housing prices are most out of line


Bend OR 78.7%
Prescott OR 64.6%
Naples FL 63.4%
Merced CA 63.2%
Madera CA 62.9%
Miami FL 59.2%
Atlantic City NJ 57.8%
San Bernardino CA 56.7%
Salinas CA 56.3%
Flagstaff AZ 55.6%

Anonymous said...

Most overvalued metro areas
Where housing prices are most out of line


Bend OR 78.7%


I wonder if the Bulletin will print a rebuttle to this story....I doubt it.

Anonymous said...

Only suckers didn't buy using PMI or two loans pre-2005. Saving that 20% means you would not have a house, nothing more. My PMI is paid off, meanwhile prices swelled impossibly high. Thanks to 10% down + PMI, I have a house and don't have to sit around bitching and wondering when prices will return to normal, if they EVER do.

Mr. Reality said...

My PMI is paid off, meanwhile prices swelled impossibly high.

When did you buy? How much was the purchase? How much down? Where was the house?

Mr. Reality said...


Most overvalued metro areas
Where housing prices are most out of line
Bend OR 78.7%


You are reading this wrong, Bend is 10% more affordable, and less over-valued today than it was in September 2006.

Mr. Reality said...


Only suckers didn't buy using PMI or two loans pre-2005. Saving that 20% means you would not have a house, nothing more. My PMI is paid off, meanwhile prices swelled impossibly high.


Well said.

Anonymous said...

Might take a moment and review who the board members are at your local builders association. Might likely be one or two from your newspaper (The BullSpin) and a few others spinning the rest of the "future" of Bend. All is correctly stated in what I read in this blog, however, you won't read it anywhere else. I lived through all the categories....It scares me to death to have any of my family members consider living there, even it they grew up there.