http://bendoregonbubble.blogspot.com/
YEAH!
Well, if you wondered what Armageddon looks like, go outside. This is it.
I posted an "Addendum" to last weeks post regarding mstuckers mid-Feb update on Month to date sales.
One home a day sold.
Not that that rate could possibly be sustained at such a low level, but that's 365 homes a year! We did 2,849 sales in 2005.
If there's anything I'm sure of, it's that number will pick WAY up. 6 months ago I was also sure that we could NEVER get to where we are today.
timothy said... The gears have ground to a halt. You can hear the silence. Next up: the flood of "spring" inventory.
As I've said before: This will get worse than you or I ever thought possible. Even Bends Gold Standard builders is starting to crack:
Anonymous said...
The layoffs are a comin'. Palisch homes just laid off 17 employees including 4 of their 6 superintendents. They were the last builder still slamming houses up. Supposedly unloaded the building that their offices are located in also. Maybe wal mart is hiring.
Even Duncan hopped on the Prediction Bandwagon, and NAILED IT!
So, I think we'll see the first battleground in the dining industry. Obviously, a lot of older restaurants are seeing the handwriting on the wall. The second battleground I'll predict -- with absolutely no inside knowledge, just a guess -- is in office space and condo's, especially on the west side. Third battleground are the outliers -- businesses and stores located in what may be zoned retail but not normally seen as retail.
BANG! The very NEXT DAY, the Bulletin runs this piece (and kudo's to them, I suppose, for running ANY sort of real estate piece... FINALLY):Area’s industrial and office space vacancies rising
‘If you’re in an expansion mode,’ says one local broker, ‘it’s a great time to be looking’
By David Fisher / The Bulletin
Published: February 24. 2008 4:00AM PST
When Chemica Technologies, a Bend-based biotech research firm, pulled up stakes and moved to Portland last year, the managers at Grace Bio-Labs didn’t hesitate.
Grace, a maker of patented labware for the molecular study of cells, was about to burst out of its space on Empire Avenue, Business Development Director Michelle Carney said. So it bought the building that Chemica left on west Bend’s Cyber Drive, complete with built-out lab space and offices.
Now Grace Bio-Labs, which has been in Central Oregon since 1986, has 2½ times more space for its 17 employees, with room to build out further.
“It’s very well suited to what we do,” Carney said. “So it was just a matter of being in the right place at the right time and having the right connections that we found this building when we did.”
Businesses throughout Bend and Redmond are finding industrial and office space easier to come by this year.
After three straight years of relatively tight vacancies and gradually rising lease rates, vacancies opened up in the fourth quarter of last year, Bruce Kemp, principal broker at Compass Commercial Real Estate, said Thursday. The change was fueled partly by a contraction in housing-related business sectors and partly by the effects of new buildings coming onto the market.
According to Compass’ quarterly survey of 177 buildings, office vacancies rose to 11.2 percent in Bend by the end of the year, nearly double the 6.5 percent of fourth quarter 2006.
Industrial buildings also loosened up in both Bend and Redmond, according to Compass’ survey. Bend’s fourth quarter vacancy rate reached 10.5 percent in industrial space.
Redmond’s reached 17.3 percent, bloated mostly by the addition of new buildings.
The total amount of space leased in both markets increased through the year, but not at the same rate of growth the markets saw in 2006. In Bend, 48,800 square feet of new office space was leased out through 2007 — less than half the 124,000 square feet that was absorbed in 2006.
Industrial absorption in Bend amounted to a little less than 85,700 square feet, according to Compass’ numbers, about 33 percent off the 2006 pace.
In Redmond, less than half as much new space was absorbed in 2007 as in 2006.
The bottom line for potential tenants is simple, Kemp said. Lease rates have remained stuck, but tenants are getting much better incentive deals from prospective landlords, ranging from richer tenant improvement allowances to several months of free rent, as landlords scramble to get their buildings filled.
“If you’re in an expansion mode,” Kemp said, “it’s a great time to be looking for space.”
Who’s looking?
After a moribund fall, activity in the commercial leasing market is picking up as companies, like Grace Bio-Labs, that are not related to the housing industry begin to realize that they might be able to find a decent deal on new space, said Steve Larsen, principal broker at Steve Larsen Properties.
Much of the interest seems to be coming from the nonhousing-related financial and service sectors — insurance brokers, lawyers, accountants — who have needed for some time to grow their practices to keep up with the expanding population, but have felt shut out by a tight leasing market, Larsen said.
Now, with monthly Bend office lease rates stuck in the $1.65 to $2 per square foot range, depending on class and location, and with landlord incentives rising, some are making their moves.
“I think there are a lot of people who have kind of been on the fence for a while through 2007 who are making those kinds of decisions, either because they are out of space or they can’t wait any longer,” Larsen said.
Still, there is an air of caution in the wind, Kemp said, and it’s tipping the weight of the market toward leasing rather than buying space, and toward holding off rather than starting a new building project.
From a tenant’s perspective, the factors that go into making those decisions can get complex, Kemp noted, but it boils down to a basic question: Is there more money to be made by investing in a building or by paying rent and investing the upfront cash back into the business?
Right now, market factors are tipping the table toward leasing, Kemp said. First, there’s the question of whether to invest in a building or in something else. With lease rates flat, it’s tougher for the income stream on a commercial building to compete with the 6.5 percent or more in simple interest that a similar investment could draw in the general economy.
Then there is the question of rising or decreasing real estate values, Kemp said: Right now, there’s downward pressure on the price of commercial buildings, and particularly fierce pressure on the price of commercial land.
Consequently, Kemp said, he would expect the major office buildings that are already under construction in Bend, including The ODS Cos. building at Wilson and Bond streets and the 38,000-square-foot Bonnett Point office building at the corner of Simpson Street and Colorado Avenue, to finish up and gradually fill up this year. But any new construction that starts is likely to be a build-to-suit project for a locked-in tenant — and he doesn’t expect to see many of those.
“It’s a little bit cautionary,” Kemp said. “I think people who may want to buy at some point in time are probably going to lease rather than buy right now.”
Office condos
That’s not to say that sellers aren’t trying.
Ron Ross, a commercial property broker for RE/MAX Equity Group in Bend, said he counted eight to 10 sales of commercial buildings in Bend in 2007. Last month, there were 66 commercial units listed for sale, Ross said. About half were buildings and the rest were office condos.
Office condominiums — buildings in which the tenants can buy a small piece of a larger building, rather than having to shell out the millions that it takes to build a full-sized, Class A structure — are a relatively new concept to Bend. Two of the largest, the 32,000-square-foot Vision Plaza building and the neighboring 11,420-square-foot Columbia View Suites, sit next door to each other on west Bend’s Columbia Street. Both have had units for sale for about six months and neither is close to full.
Ross is dubious of the concept’s staying power, particularly in a market that is already overbuilt.
“They just flat have not been successful,” Ross told a group of reporters and real estate agents at a Central Oregon Association of Realtors lunch Wednesday. “I’m sorry if I’m offending anybody here, but they have not been selling office condos.”
Larsen, the listing agent for Vision Plaza, said he has one of the building’s units under contract and another in negotiations. There are two letters of intent to lease some of its space — an option that wasn’t part of the owners’ plan when the building was built.
“Obviously, the last six months were not what I, as the listing agent, or the owners anticipated,” Larsen conceded, but he blamed the building’s slow sales more on market timing than on the concept.
It took more than 18 months to take the Vision Plaza building, where 1,200-square-foot units are listed for around $367,000, from the concept stage to completion, Larsen said. The market changed during that cycle — a risk that all developers of commercial buildings, most of which are large, expensive and time-consuming to build, face.
“If it were easy, everybody would be doing it, and for a while, a lot of people did. But it’s a risky business,” Larsen said.
That’s true, Ross agreed. The current market has driven out most of its speculators and tax-deferred property exchangers, leaving a different sort of playing field. But it’s taking awhile, he said, for some of its players to adjust.
“Property has to stand on its own, fundamentally, right now, and if it does, we have good buyer interest,” Ross said. “That means it has to have real tenants, with good leases that are supporting the price point. If that happens, property can sell in today’s market. But unfortunately, we have a lot of sellers who don’t understand that, and even a lot of brokers who don’t understand that, so we’re building up an excess of inventory.
“Long-term, I’ve seen this picture before,” said Ross, who’s been in Central Oregon real estate since the economic troubles of the early 1980s. “I’m actually very positive … you just have to take a bigger picture, longer-term view.”
David Fisher can be reached at 541-617-7862 or at dfisher@bendbulletin.com.
First off, lemme say that Duncan has been calling this for awhile. Personally I am fairly out of touch with commercial, except for a glimmer of personal knowledge that downtown is becoming wildly overbuilt, with unsustainable lease rates. I ultimately think that the credit/housing bust will affect EVERYTHING, but this was one of those things that's off my radar.Second, note that business expansion as measured by office space absorption has dropped in half in 2007 vs 2006. And 2007 was not really supposed to be weak. In fact, EVERYONE seemed to state repeadedly that commercial was 100% IMMUNE from the whole crdit/housing bust, at least in Bend.
My Lord, they were building commercial space like crazy in 2007!
I actually drank the Commercial Immunity Kool-Aid, and thought Bend commercial would be OK. I did NOT understand the economics of how that could happen, because I personally thought the lease rates were insane, and I thought the "office condo" had all the appeal of the "home condo": Nice if you love living wall-to-wall with your neighbors and sharing in the financial pain of the weakest link.
That horrible abomination out near Colorado will probably end up on the RIP board. Office Condo's? Geez, that'll end up being another collective "What the fuck were we thinking?" head slapper.
Apparently Dunc was right, and the only thing collapsing (Yes, they are collapsing. I don't need a freakin' dictionary to figure that out.) faster than the Bend housing market, is now the imploding commercial market.
We are headed towards a mega-glut in commercial space in Bend. Nice high, double digit vacancy rates, and all that good stuff. All those pining for The Good Old Days, circa 1983, in Bend will soon have their wishes granted.
The most interesting quote in the Bulletin piece, to me, was this:
Is there more money to be made by investing in a building or by paying rent and investing the upfront cash back into the business?
Yeah! My "Rent And Invest The Difference" motto is starting to get some traction.
Of course it would be considered far more quickly in a purely financial setting like commercial. Rent & Invest The Diff is harder to implement with your wife & kids involved.
OK, I agree with that.
Good job Dunc, on nailing this one!
So... what else happened this week?
Oh right. CACB revised their quarterly earnings to pocket change.
Huh, seemed like they had ironed out all the Q4 messiness last month:
Cascade Bancorp (Oregon) (Nasdaq: CACB) Released Results for the Fourth Quarter and Full Year 2007, Confirming Earnings Per Share at $0.19 and $1.23, Respectively
BEND, Ore., Jan. 23 /PRNewswire-FirstCall/ -- Cascade Bancorp ("Cascade") CACB reported 2007 full year Diluted Earnings Per Share (EPS-diluted) at $1.23 per share down 8.4% as compared to 2006 with Net Income at $35.0 million versus $35.7 million for 2006. As pre-announced on January 3, 2008, the Company confirmed it recorded a $7.5 million (pre-tax) provision for credit losses for the fourth quarter of 2007 to increase the Company's level of credit reserves primarily related to its residential land development loan portfolio. This resulted in a full year 2007 provision of $11.3 million versus $6.0 million in 2006. Fourth quarter 2007 earnings per share were $0.19 per share on $5.3 million of net income, compared to $0.36 per share and $10.2 million for the year ago quarter and as compared to $0.35 for the linked-quarter. The Company also confirmed its pre-announced fourth quarter net-charge-offs of approximately $3.9 million, a majority of which were against loans affected by the real estate downturn.
Sorry! Hold the bus! 'Member that thing we said last month? Scratch that, that was a big load of shit! Man, were we way off. We actually got our ass waxed. Here ya go, this here is the Real Deal:
Market Report -- In Play (CACB)
February 21, 2008 4:31 PM ET
Cascade Bancorp increases Q4 provision for credit losses Co announces that it revised its estimated Q4 earnings from its previously reported results on Jan 23. Co says its Q4 results are reduced to $0.01 per share. This updated earnings estimate is the result of an $8.1 mln (pre-tax) increase in its provision for credit losses to $15.6 mln from the $7.5 mln previously announced. Co says "As we navigate through this challenging downturn in the real estate market, we will continue to monitor our loan portfolio and take appropriate measures to reserve against the risks posed."
Some among us seemed DUBIOUS about this financial wink-wink...
Bend Economy Man said...
Just a thought:
If Bank of the Cascades had 4Q 2007 earnings of $0.01 per share, probably a safe bet that in 1Q 2008 it's running at a loss.
CACB really "lucked out" (wink-wink) that even after revising its accounting mistakes, it managed to eke out a meager profit, thus delaying the inevitable "Bank of the Cascades Unprofitable" headline for a few months.
How, by the way, has P. Moss kept her job the whole time?
My target CACB stock price for April 2008: $9.
Step 1) Drink Kool-Aid non-stop
2) Report earnings 50% below prior year
3) Wait for the hub-bub to die down, then drop the other ONE FOURTH of the earnings bomb.
Hey WAIT! "ONE FOURTH"? That sort implies this line of bullshit spewing forth from Patty "Never A Quarterly Loss On My Watch" Moss is NOT OVER.
Right. See, the losses at CACB dwarf their Kool-Aid fueled idiocy. The losses are FAR larger than what they are reporting. They have applied liberal amounts of ELIZABETH TAYLOR-FICATION to their reporting so that the horror is minimized.
Moss & Crew get the ::eye roll:: of the week for this little facade.
Anonymous posted this:
More people moving in, but at a slower pace
California continues to be No. 1 feeder market by far
By David Fisher / The Bulletin
Published: February 17. 2008 4:00AM PST
Back in 2006, Altrec.com CEO Mike Morford and his managers figured they had to get their company out of Seattle. The offices of the online seller of outdoor gear were 15 traffic-choked miles from its warehouse, and it was running out of space.
It was tough to compete for top-level techies in a region dominated by Amazon.com and Microsoft, Morford recalled Wednesday. People’s commutes were tough. Nobody, in other words, was having much fun.
So the company cast a net around seven or eight Western towns and regions, including Central Oregon, weighing 20 or more different variables, from transportation to space availability to state incentives, to find a new place.
It settled on Redmond. Since it moved in September 2006, the company has brought 17 families to Central Oregon from outside the area, Morford said. Its total staff has tripled, partly because it has been relatively easy to attract talented people to the area to keep its Web design, marketing and search engine functions going, and partly because it has found a reasonable supply of them here.
“It actually has worked out better than we thought it would,” Morford said. “We knew it was going to be fun, in the sense of moving to Central Oregon, but I’ve been amazed at the number of people from places like San Francisco and Seattle who know about Bend. They have a place in Sunriver, or they’ve vacationed here or something, and they are trying to figure out how to live here.”
The total number of new families moving into and out of the area has slowed with the national housing slump, if data on interstate shipments from three of the country’s largest movers is any indication, but the basic trend remains strong.
People who can afford to move, and who can afford to hire movers, continue to prefer moving into Central Oregon to moving out of it by about a 2-to-1 margin.
Overall in 2007, United Van Lines LLC, Mayflower Transit LLC and Atlas Van Lines Inc. reported 369 shipments into Central Oregon’s three counties, and 179 shipments to other states. California accounted for the bulk of the inbound shipments with 37.9 percent, followed by shipments from Washington state at 9.8 percent.
Overall, four times more Californians moved in than moved out, with 140 coming in to 33 moving out. Washington’s 36 inbound shipments exactly doubled the number moving out of the region to that state, but some numbers were more balanced.
Sixteen shipments headed for Arizona, while only 19 came in from there, according to statistics from the three movers.
Colorado sent 18 shipments into Central Oregon, but got 15 back. Massachusetts was the only net draw from the Central Oregon region, attracting eight shipments out, but sending only two back.
Slowdown in moves The inbound migration pattern may have remained strong through 2007, nearly exactly reflecting the 2-to-1 inbound ratio of 2006. But the total amount of movement dropped substantially. The 369 inbound trips of 2007 were down nearly 15 percent from 2006. Outbound moves dipped, too, dropping 10.5 percent from 2006 to 179.
The data, collected from the three movers last week by The Bulletin, gives an incomplete picture of the region’s total migration pattern because it includes only interstate moves. Moves within Oregon are regulated by a different arm of government that doesn’t require the same type of data collection.
Still, the drop in overall numbers reflects a national slowdown in shipments, Atlas Van Lines spokeswoman Barbara Cox said, which is grounded in a single factor: A sluggish housing market is making it tougher for people to sell their homes where they are, which makes it tougher for them to relocate.
The slowdown is as apparent in Central Oregon, a region whose housing economy has traditionally been dependent on newcomers for its strength, as it is in the rest of the country. Sales of single-family homes on lots dropped 26.7 percent to 1,520 last year in Bend, according to the Central Oregon Association of Realtors, while the number of homes listed for sale topped 1,200 at the end of the year.
Redmond’s sales fell even further, dropping nearly 43 percent to 516, with more than 500 homes still listed for sale at the end of the year. As they have in much of the country, slowing sales are translating into lower prices.
In west Bend’s NorthWest Crossing, a 400-acre subdivision developed by Brooks Resources Corp. and Tennant Development, sales of housing units slid into the 45 to 50 range in 2006 and 2007, from the 105 sold in 2005, according to David Quiros, principal broker at NorthWest Crossing Realty. About 75 percent of the NorthWest Crossing inventory that sold last year went to buyers from outside the area, at prices that were significantly off.
Lots in the subdivision today are listed as low as $138,000, he said, down from the spring 2006 peaks of nearly $200,000.
The fiercest downturn in moving activity seemed to settle in last fall, a couple of months after a credit crunch bit the nation’s mortgage lending markets, said Harold Perry, owner of local Atlas agent City Moving and Storage Co., and it hasn’t picked up yet. “We had some things going last year, but jeez, there’s nothing going on this year,” Perry said, calling this year the worst winter he’s seen in the local moving business since the early 1980s. “You could almost go to sleep and not miss anything, so it’s bad. Whether it comes back or not is anybody’s guess.”
Given the number of unsold houses in Central Oregon and its biggest feeder markets, the leaders of Brooks Resources, the region’s biggest development company, figure that land and home prices may have to work their way back roughly to 2003 levels before the market regains some semblance of supply-and-demand balance, Brooks Resources President Kirk Schueler said.
That would bring median home prices in Bend back to the mid-$200,000 range. The median sales price through 2007 for Bend homes on lots stood at about $349,000, according to the Central Oregon Multiple Listing Service.
“Our prediction — I guess maybe it’s a hope — is that it squares around when we get back around the 2003 area,” Schueler said, “and it varies. Different pockets of town will do better than others.” Who wants to be here Meanwhile, Nancy Lynch, who’s owned local United Van Lines agent Bend Storage & Transfer Inc. since 1981, said she expects the same kinds of migration patterns to continue, even if they happen in reduced numbers.
Some will move here from warmer climates, then move back again after a few winters of snow and cold. Some will move here with half-formed dreams of economic success, then fail and move away.
On balance, though, the area for more than a decade has been a magnet for retiring baby boomers and others who are anxious to get away from the rat races, Lynch said, and the ones who have either brought jobs or money with them — or both — have had the best luck sticking. If they can get here.
California reported its lowest number of outbound moves in more than a decade, according to Atlas’ year-end report, possibly because people found it difficult to extricate themselves from houses in that state’s hard-hit markets. But despite the national slowdown in movement, Atlas’ national statistics still indicated a strong inclination for people in the country to move West, according to the company’s year-end report, with net movement particularly strong into the Northwest.
Falling prices in the local housing stock might actually help the region pull out of its funk faster than the rest of the nation, since its underlying desirability apparently remains undiminished, said Roger Lee, executive director of Economic Development for Central Oregon. “People still want to own homes and, in our case, boomers still want to be in the Pacific Northwest,” Lee said, “so things are playing well for us. If we were in the same position in Detroit, I don’t know what my forecast would be.” First of all, this piece goes on and on about the TREMENDOUS inbound inbalance between Oregon & just about everywhere else. Population figures from the Census bureau:
California: 36.5MM
Washington: 6.4MM
Arizona: 6.2MM
Oregon: 3.7MM
Huh, here's a nugg printed by BendBB, "New data reveal depth of housing slump":
The states suffering the biggest drop in sales in the third quarter were Nevada, down 44 percent and Wyoming, down 42 percent. Other states with big declines were New Mexico, down 39 percent, Oregon, down 38 percent and Arizona, down 37.6 percent.
Oregon is a TINY population state, just like Wyoming. DUH. That's why we don't have a lot of foreclosures.
Granted, there's more to it than population... Michigan is suffering from a depression, and THAT is going to keep them in the doldrums for years.
But even if WE are having the Best of Times, and Cali is suffering The Worst of Times, they WILL HAVE MORE FORECLOSURES than we ever will. Basic math.
Don't succumb to basic mathematical crap that is being printed around here. Is it true? Yes. Is it also misleading? Of course. Somehow you never find the footnote telling you that:
1) We are a very low population state & will ALWAYS have a small number foreclosures.
2) We are 18 months behind the curve of the RE Mega Bubble Implosion.
The header over on BendBB puts it well:
BEM said it best with respect to these recent Disaster Scenario Bulletin stories:
Bend Economy Man said...
I think that The Bulletin showed some backbone by publishing some rough facts and deadly quotes right after the COBA campaign began. Kudos to The Bulletin.
Yes, they followed the old Bulletin formula of Misleading Headline That Says Exactly the Opposite of the Facts in the Story / "Happy News" First and Last Paragraphs / Hard-Hitting News in the Middle. But by now I think we've deduced that this is in the Bulletin's editorial standards manual.
80 losing jobs at Bright Wood
Layoffs amount to 16 percent of work force; company attributes cuts to housing market
By Lauren Dake / The Bulletin
Published: February 21. 2008 4:00AM PST
MADRAS — For the second time in just more than a year, Madras-based Bright Wood Corp. has laid off more than 10 percent of its work force.
Around 180 out of 1,130 employees, working mainly in manufacturing and administrative positions, will be let go, said Bright Wood President Dallas Stovall. The layoffs started Monday and should be completed by the end of the week. The cuts amount to about 16 percent of the staff.
This should come as no surprise. And like CACB earnings "surprises", this one ain't over either. The hits will keep coming.
Area tourism feeling a pinch
By Jeff McDonald / The Bulletin
Published: February 21. 2008 4:00AM PST
Skiers and snowboarders flocked to Central Oregon over Presidents Day weekend, but the business boost was short-term relief in a so-so winter for many businesses that rely on visitors, industry representatives said Wednesday, expressing nervousness about the future.
Benefiting from clear roads, ample snow and sunny days, Hoodoo Mountain Resort broke attendance records over the holiday weekend, and Mt. Bachelor ski area saw more visitors and spending. But local lodging properties and restaurants are feeling the pinch of a cooling national economy.
A slow December and January at many area lodging properties could bode ill for the region’s $498 million-a-year tourism economy, according to Alana Audette, president and CEO of Central Oregon Visitors Association, which promotes the region’s tourism industry.
“Overall, we’re still getting that sense that people are just belt-tightening a bit,” she said. “People are getting more wary about making those vacation plans. Advance reservations for spring are off, and the summer also is showing signs of slowing. It’s making us real nervous.”
Business has dropped between 15 percent and 20 percent the past 2½ months at Merenda Restaurant and Wine Bar in downtown Bend, said Jody Denton, chef and owner. He said the slowdown has affected many restaurants and retail businesses around town. Denton also is chef and owner of Deep, which opened downtown in June.
“I don’t think anybody’s immune,” Denton said. “I thought Bend would dodge the bullet until December and January, but it’s definitely trickled down.”
Bend’s cold housing industry has played a large role in slower business at Merenda and Deep, Denton said.
Our commercial real estate sector has finally jumped whole hog into the bursting RE horror. Ridiculous concepts like "office condos" which is a simple-minded attempt to sell RE to the only group capable of buying anymore, BUSINESS, has failed MISERABLY. Lease rates are simply unsustainable.
Local banks, that only months ago declared themselves fit as a fiddle financially & almost completely IMMUNE from the collapse... LIED. They were firmly planted in some Kool-Aid fueled hallucination where they were exempt from reality. Even I bought into this fantasy. As GHWB so eloquently put it:
CACB plumbed new lows, and is within eyeshot of the single digits. Who would have thunk it? Even CACB Shorter covered in the $20's.
People aren't moving here anymore. Has Bend lost its luster? Well, certainly some. I got here in 2001, and am not enamored of the "attitude" that has transformed the place in just that short time. Honking, rude, self-absorbed psychotic consumerist nightmares. Hopefully the Bust will put out that fire.
More specifically, NO ONE CAN SELL THEIR HOUSE, and we are finding that THAT is the grist of the Bend economic mill. We RELY on the ability to GRIFT PEOPLE OF THEIR MONEY. Look at that quote from the "moving" piece:
they are trying to figure out how to live here.
This is just amazing. I know of Very Few places where you have to "figure out" how to live somewhere. YOU FUCKING WORK. OK, you work.
Not Central Oregon. We are grifters, we have to FIGURE OUT how to survive. And my God, has the grifter trade here been a bonanza for the last 5 years. Ask Holz-Tek: Two of the most gifted Flim-Flam men to ever grace our shores. These two drew up a Perpetual Motion Machine on a napkin, called it a "Master Plan", and sold to the City of Bend for $2,560,000! AWESOME!
Unfortunately, this gig is up. The money has gone away, and there's no one left to pay for the nightmare created during this romp. Brucey got the Big Fuck You, when he dared address this problem with Bends Big Muckety Mucks:
bruce said... On the CC meeting: LS building looks as good as we will get, Sonia is worried about money (some real "choices" will have to be made if we don't sell any JR land next year) and the dickhead John Russell simply brushed me off with a "no" when I asked him how we were planning on paying for the roads/sewers/etc. for the 50 acres we were planning on selling if all the money from that acreage was going to pay for the current shit that we are building.
I STRONGLY ENCOURAGE you to head over to Bruce's Blog, and read his headline piece, "JR Financing Just Doesn't Make Sense". Excellent review on the Circular Financial Clusterfuck that is Juniper Ridge.
Nice Bruce.
Finally I want to retract my statements of last week, that could be interpreted that this may NOT be the Best Buyers Market in 20 Years in Bend.
I thought about it, and maybe they are right. This MAY WELL be The Best Buyers Market Of ALL TIME. Check this listing over on BendBB:
2008-02-22 2613809 Bend Mtn River Estates 1475000 725000 -750000 -50.85 219 11
This little Sugar Shack has been listed since the Earth was a ball of hot magma, and worse it's been marked down ELEVEN TIMES, for a total of OVER FIFTY PERCENT.
Think about it: This little shithole has been for sale FOREVER, and has taken 11 Reality Revisions for a 50+% hit in price. This bodes well for a strategy that has been non-existent for 5 years in Central Oregon:
This species, long ago thought extinct, actually has a basis in reality nowadays. People who previously would have not even thought about responding... well, most probably still will not respond, but SOME WILL.
The sale of RE around here is being removed from peoples DISCRETIONARY table and being put on the COMPULSORY table. They HAVE TO SELL.
Can you imagine throwing this homeowner a 50% OFF lowball on Day 1? My God, they'd call the cops on you. "We've got a crazy person in the building!".
Have a scroll through BendBB's price change boards. Those badboys are well-populated with HUGE reductions from initial DREAMY list prices. There are people who HAVE TO SELL.
Now their prices are still insane in most instances. That should tell you something, when they are still 100% too high after a 35% price reduction. BUT, you can walk to the table in todays atmosphere of Dread, and calmly throw down a LOWBALL that renders every man in the room sterile, and every pregnant woman goes into premature delivery.
And you won't be removed forcibly. They might actually talk about it. Most won't. 90+% won't. But the ones that DO, can be worth your while. Some of these people/banks that hold onto 3 or 4 $320K EMPTY rental shitholes, MAY look kindly on a $190K kick square in their hairy-ass beanbag, if it means avoiding foreclosure on the lot of them.
This could be The Best Buyers Market EVER. But you gotta have the means & the fuckin nads to walk in unabashed, and give EVERYONE in the room FINANCIAL EBOLA & THE FUCKIN AIDS with a lowball that DOES NOT saddle YOU with their Horrific Financial Problems.
If you play their game, you will get killed. You'll hold an unsalable piece of shit in a MASSIVELY DECLINING market. You'll never break even, and you'll lose money every month, and you'll take a 33% haircut AT BEST when it comes time to sell, and that's a Big IF... IF you can sell.
But, if you firmly plant a scrote busting, steal-toed LOWBALL right in their crotch, you can actually make out OK, and that is IF AND ONLY IF you do NOT plan on selling in the next decade, and you can make that cracker shack pencil as a rental. And there are Realtors who are STARVING TO DEATH for you to play this game.
So do me proud folks: Go out looking for a cracker shack, and walk proudly to the table and throw down a LOWBALL that ruptures every eyeball vein in the place.