Bend's Magic Number: 70

As I read about the demise of the Bend Mega-Bubble, I'm starting to notice the same number pop up over and over again, or at least damn close.

70

First, I saw a link posted by Timmy Tee over on Bend Bee Bee, House Prices in America by Median Price and Valuation. Besides having a pretty kick-butt interactive chart of overpriced areas all over the country, you can also find killer spreadsheet & PDF report. If you want long-term, good data on home prices in Bend, you cannot beat this National City page. Here's a really long-term chart of Bend medians:

Bend quarterly median home prices from Q1 - 1986 thru Q3 - 2007

Anyway, you can see that despite the fact that Bend is NO LONGER The Top Appreciating Housing Market in the US, we are STILL The Most Overpriced Housing Market by 70%. For those interested in the National City projection of "Fair Value", that 70% overvaluation figure is based on a $320,100 median(?) home price in Q3 of this year, which yields a Fair Price of $188,294.

That's a 50% haircut from the top of $380K in Sept 2006.

Moving on, I did my Google spreadsheet thing with Doug Farmers data this month, as usual. It can be characterized as pretty much The End Of The Real Estate Brokerage Business (and many other RE businesses) As We Know It. Here it is in graph form:

Monthly Dollar Volume Sold - All residential subtypes, Bend (Doug Farmer)

After the usual Winter slowdown in 2005-2006, volume went to a mega-spike high of $133,155, 206. That is a mind-boggling $491,218 AVG price, on 267 units sold. In November of this year we did 102 residential properties sold, at a still incredible $430,599. That's $43.9MM, knocking on a 70% reduction in sold dollar volume.

In a related stat, you can see from Doug's data that 303 units sold in Nov 2005, the earliest data point we have.

Residential Units SOLD in Bend

Again, we are sitting at 102 today, another near 70% decline.

Then there was the much ballyhooed "auction" by Brooks of their last 3 RiverWild condos, graciously highlighted As Usual in the Bulletin, How builders plan to face housing slide. We quickly find from the piece that it Never Really Was An Auction -- not surprising to any Bend resident with one wit of sentience, nothing IS EVER as it seems in this place.

Anyway, from the article we can see that when you run a Fake Auction, you will have Bad Results:

Frustrated by a season of sluggish sales, Brooks Resources Corp. put the last three unsold townhomes in its prime RiverWild subdivision at Mt. Bachelor Village up for auction Nov. 2.

It was a bit of a bust. Only one of the three sold, and at the minimum bid — more than $200,000 below list price.

The other two attracted not a single offer.

That, for Central Oregon’s largest land developer, was a sign of the times.

Sales in all of Brooks’ most active developments — IronHorse in Prineville, Yarrow in Madras and NorthWest Crossing in Bend — have come in well below projections this year, Brooks CEO Mike Hollern noted Wednesday.

Only 1 of the 3 "auctioned" units sold, or about a 70% FAILURE RATE.

In the same piece we heard about the Buena Vista "auction" that took place yesterday. This sham was even more dubious than Brooks farce auction, so we can expect the results to not even approach a 70% failure rate. The only people that would possibly buy Buena Vista shithole whacky shacks are out-of-state idiots who are totally ignorant of the market & probably haven't even laid eyes on these crappers.

I have. These are the "Yugo's" of Bend homes: Cheap, and for Good Reason. I would not buy these shitholes At Any Price. Not even as rentals. These BV dung heaps are the quintessence of Gold Rush mentality built crap. From the same Bulletin piece:

Buena Vista Custom Homes, a Lake Oswego-based company that billed itself as one of the nation’s fastest-growing builders when it moved into the Bend market in early 2006, announced Thursday that it will put all 200 of its unsold homes in Oregon up for auction next month, including 29 in Forum Meadows, its brand-new east-Bend subdivision.

“We were overaggressive and too slow to react to the changes in the market, and that has created an oversupply of finished homes,” Buena Vista President Roger Pollock said in a company press release. “Buyers are going to get amazing deals, but we simply have to reduce our inventory.”

Yes, they will be "Amazing Deals" all right. Amazingly CRAPPY. If you actually bought one of these Shitters, then I got a bridge to sell you.

Then there's the Home Builders. We can see from this 3 year chart, they have been decimated:

Sitting right at 70% DOWN. I actually think these stocks have been pounded so hard that they are getting pretty attractive on a valuation basis. A hell of a lot of Bad News has been baked into this industry. Coincidentally, -75% is about where the NASDAQ bottomed, post bubble.

Ahhhh yes. Now we come back to Becky & The Massively Imploding White Elephant -- The Plaza. She stated that she had SOLD 14 of these condo Crappers, which come with an optional rocket-propelled casket/bed that fires deceased owners straight into the Deschutes River when there is no longer a heat-signature. Plus, the caskets come with Auto-Listing Technology, so when the underside of the casket gets wet, the condo unit is automatically listed on MLS. Timmy said that the toilets come with high-pressure bidets using turbines co-developed with The Bellagio & NASA engineers that not only cleans those hard to reach geezer-flaps, but stands the old bastard up after they blow a crap.

That's real convenience.

Anyway, after much hand-wringing & gnashing of teeth, we actually come to find that Becky HAS NOT sold 14 of these masoleum's, but instead sold 70% FEWER, or only 4. It's arguable whether 2 of these 4 were really "Sales" in the proper definition, as they had the rotting scent of Flipper Bait when they went back on the market less than 45 days after Becky schlocked them off on some True Believer.

Finally, to round out our Lucky Number 70 Review, I saw this post on BendBB, by "bruce"

Post subject: $100,000 30% haircut leads to PENDING sale
There is a house about a block away, very similar to the one I'm renting for $850/mo, that was recently vacated after being on the market for many months. Almost directly across from another newer and larger house that was vacated last summer, and is on at least its second listing. But today I saw something I haven't seen in quite awhile: "PENDING" It seems these guys decided it had to be sold, so according to the new flyer I just grabbed it was marked down $100,000, to $229,900, and the seller also would pay up to $5000 in closing costs.

I think a lot of these Siberian Desert Tract Flipper Bait Buyers will need to realize that they need to mark their current price to 70% of where it is now to even get lookers. This equates to 43% overvalued. But this is short term. There WILL be buyers at Todays' Bargain Prices that will seem insane when they realize that todays market is NOT 43% too high, it is in fact 70% overvalued per National City.

So, as is my way, I will make a few predictions based on Lucky Number 70, with my prototypical 50% coin-flipping accuracy:

First, CACB will ultimately do a high-dive into the concrete for -70% from it's all-time top of $32.

5 year chart, Cascade Bancorp

This would put our beloved local bank down at post-mega-bubble lows towards $10. I said many times in the past that I thought CACB was worth in the low to mid teens... back when "CACB Shorter" manned-up & shorted this loser. It's easy to see from the above chart that after a 50+% beating, that $10 isn't that much of a stretch. $12-13 is probably fair value, but post Bubble implosions know no bounds to their ferocity on the downside, so CACB may even see single digits.

Prediction #2: The Real Psycho Ward projects; The Plaza, The Shire, Tuscany Pines, and Tuscany Shire Plaza Condos at Tuscany Pines, A Tuscan Themed Homeless Shelter (don't worry, If You Build It, They Will Come -- as proven by the Fakeroney "Borealis" macro-scam, that offered IGLOO's as "residences"), will get whacked for 70%. My Lord, they actually had takers too, on that Borealis Scam:

KOHD reports:

12/14/07 Bend

If you're making future plans to stay at the Borealis Resort near Mt. Bachelor, you're in for a surprise. It doesn't exist.

Tim Neville and a friend made up the resort to further the controversy surrounding the endless construction of new developments in Bend. They sent out a mass email with a description, website and phone numbers. Neville says the website was clearly meant as a joke and those who are upset haven't done their research.

"You see immediately that these things are igloos that all of our homes are igloos and they come in 7 to 11 foot diameter configurations," says Neville.

Within a few hours after sending the email, Neville received more than a hundred responses ranging from laughter to outrage. He says that was the point. Some out of state companies even offered to market the new project.

This exemplifies the current thinking in Bend: Lunatic fringe, half baked idiotic RIPOFF mega-scams are The ONLY THING WE GOT. This guy was OFFERING IGLOO's, for the love of Christ, and he had LEGITIMATE offers to MARKET IT, no doubt from desperate Realtors who learned Photoshop over the past 2-3 months, since they ain't eating, and WILL DO ANYTHING for food, including fart Happy Birthday at Old Folks Homes.

Anyway, these SCHIZO-DRIVEN FANTASIES which are quickly imploding will most likely see the most brutal price declines, what I predict are 70% BEATINGS. Siberian Desert tract whacky shacks will get spanked for slightly less, maybe 60%. The average pre-2000 Bend cracker-ass cracker, meth-cooker, Aryan-race ziek-heil, jackboot wearing, goosestepping, standard-issue batten-board shithole in DRW will probably get clocked for 50%. The same goes for gun-totting maniacs in La Pine. And Terrebonne. And Redmond too. And actually most of Bend, since we're mainly Niggra-hating Playa haters.

Yeah, I know, You Ain't... But Everyone Else Is. 2 words: Bend Buster. Yea, bitch. Mother fucker is an entrenched deep-equity type that'll outlast you, me, Cali's and the motherfuckin roaches in a direct nuclear hit. Motherfucker does NOT drive a Prius, takes rent in flatback crack ho fashion, and likes to blog when he drunk... so I guess he's a little more enlightened than he look.

Anyway, THAT motherfucker will be the ONLY one buying property when all the rest of us have been shuffled off to The City, holed up in a cracker-ass cracker 800sf meth-cookin' shithole, or have been unceremoniously shot into the Deschutes River. And that bitch will only buy at -70%.