Monday, April 14, 2008

Is Mass Fireclosure In Bend's Future? Hey, I'm just arson a question...

I guess I should start out with less than obvious money-grab, that we all pretty much knew would happen, from Cessna:

In Kansas, Cessna got quick action from government

By Peter Sachs / The Bulletin

Published: April 12. 2008 4:00AM PST

Two weeks ago, aircraft maker Cessna told the state of Kansas that it needed at least $25 million on top of local incentives if it was going to build a factory for its new long-range business jet.

Four days later, the Kansas Legislature passed a package worth up to $33 million, and Cessna agreed to build the factory in Wichita.

The multimillion-dollar aircraft company that recently landed here when it bought Columbia Aircraft Manufacturing isn’t afraid to ask governments for loans or tax breaks when it expands.

But other than saying it wants a tower at the Bend airport by the end of 2009, Cessna has made no requests of Central Oregon governments.

Bend city officials say by all indications, the company is in Bend to stay.

“As far as we know they are investing in Bend; they are investing in that plant; they are hiring workers; they are training workers,” said John Russell, the city’s economic development director.

But the city and the county have few economic incentives to offer if Cessna were to come asking in the future.

“I can’t speak for the board on that issue,” County Administrator Dave Kanner said. “I’m hard-pressed to think of a source of money that we could tap into for that purpose.

Doug Oliver, a Cessna spokesman, reiterated the company’s commitment to Bend last week, but otherwise declined to comment on the company’s plans. Several other Cessna officials did not return calls seeking comment.

Mark Withrow, the new manager of Cessna’s Bend facilities, told the Bend City Council earlier this month that his company has huge expansion plans, but he wouldn’t go into specifics beyond saying he intends to add 100 more jobs to the plant, which currently has 430 employees.

Withrow acknowledged to the City Council that Cessna needs to bring down the cost of the Cessna 400 and increase its production numbers to make it more competitive.

“Our goal in Bend is much bigger than where we’re at in Bend,” he told the council.

Taking flight in Kansas

Cessna’s roots in Wichita, Kan., date to the company’s formation in 1927. About 8,000 of its 9,500 employees are there, according to the company’s Web site.

The company is Wichita’s largest employer and coupled with several other aviation companies, a key part of the state economy, said Kim Young, a project manager at the Greater Wichita Economic Development Coalition.

The city, county and state provide a number of incentives for Cessna and other companies. For example, businesses at Wichita’s airport don’t ever have to pay property taxes on their land or buildings, Young said.

Businesses can get income tax credits for each new job they add and certain businesses can write off up to 10 percent of the cost of equipment they buy.

The city and county also set aside money from their general funds that they can give to companies as forgivable loans. For example, if companies meet targets for new jobs, then they don’t have to repay the loans, Young said. And the state provides money to help train new employees in a range of industries.

“We’re constantly looking at how we can sharpen the tools in our toolbox,” Young said.

Incentives like those can add up to millions of dollars in savings for companies to build and expand in Kansas, Young said.

“Those are just some competitive advantages we have for business, and we certainly make up for it in other areas” like job creation, Young said.

Cessna’s ability to get the state Legislature to bend over backward so quickly earlier this month was “unheard of” and “unprecedented,” Young said.

“That’s exactly the type of thing that we wanted to do,” Young said. “We have to move at the speed of business, which is very fast.”

If not for the Legislature’s action, she said, there was a risk that Cessna would build the plant for the Citation Columbus jet in another state. The plant will bring more than 1,000 new jobs to Wichita.

Central Oregon incentives

Roger Lee, the executive director of Economic Development for Central Oregon, acknowledged that the region has a long way to go if it wants to compare to Kansas’ incentives.

“When we first met with Cessna they made very clear what was available to them in Wichita and other parts of Kansas,” Lee said.

Since Bend Airport is in Deschutes County, the city can’t provide many incentives beyond lower lease rates on land. And the county hasn’t shown much interest in creating aggressive economic incentives, Lee said.

“From our perspective, in many cases the city and the county have not been significant players as far as offering incentive packages ~ for this industry or any other industry for that matter,” he said.

The state currently provides some tax breaks for new businesses, but nothing that compares to Kansas, Lee said.

A special enterprise zone the city and county applied for at the start of the month could provide property tax breaks for businesses at the airport and in La Pine if the state approves it. That would mean businesses wouldn’t have to pay property taxes on new buildings in those areas for five years, Lee said.

The city’s special projects manager, Ron Garzini, said it’s not just about having financial incentives for companies.

“It’s not just a financial issue,” he said. “It’s also, if you’re willing to stretch a bit to show a commitment to them, that means you’re going to stay with them for a long time.”

And ultimately it’s those small steps at building relationships between business and government that matter, Young said.

“Not everybody can right away put dollars on the table,” she said. “But if you’re talking about it and working together, I think you’re certainly moving in the right direction.”

Peter Sachs can be reached at 617-7837 or psachs@bendbulletin.com.

Bye bye, Cessna. First HoltzTek, now this.

Lemme say this with some pretty high certainty: Cessna will be leaving the area within 1 year. That's what this article is; an ultimatum.

The thing you should ask about ALMOST ANY STORY in the Bulletin, is WHY is it there at all, WHO would benefit, and what the hell do they want.

This story came straight from Cessna corporate, and their wants are simple: They want to be subsidized in large monetary terms, or they're leaving Central Oregon & they're taking their jobs with them. Look at the tone of the piece: Strong-arming local governments for millions is Standard Operating Procedure for this company. This article is tenderizing us for the inevitable. It's coming, and unless we acquiesce, they will leave.

I would put to you that they knew this on Day 1. I think they know that any rational government in the circumstances our current local government is in, will be unable to pay this blackmail. Heads or tails, Cessna wins & Bend loses.

Pretty standard shakedown. The question is: Will we shoot our wad on them, or Juniper Ridge... or something else? No matter, whatever it is, the tentacles reaching out for the slim pickins' remaining in this one-horse shithole assure our almost certain destruction.

If we payoff Cessna, we go bust & lose JR. If we don't we lose the jobs, we build some half-assed "facade" out at JR, we go bust & JR ends up a decent wad of blown up lava rock.

Of course, we barely have enough to pay for staying afloat, not withstanding all these bullshit dreams, like JR. This Cessna money-grab is just the vultures starting to pick the Bend carcass to pieces. And sure as shit stinks, our City Council will almost certainly cave to ridiculous demands.

Cessna, a Word Of Advice: Pull a midnight holdup, just like Les Schwab. Roll into a City Council meeting and announce a 1 hour deadline on a series of ludicrous demands, and simply threaten to leave town otherwise. You'll get it. But hurry; pretty soon the pickin's will be to thin, and you won't get squat.

An interesting short, little piece on Marketwatch about The Great Unleveraging:

REAL ESTATE
No-down-payment mortgages gone for good?
Most mortgage insurance companies won't cover 100% loans anymore
By Amy Hoak, MarketWatch
Last update: 7:31 p.m. EDT April 10, 2008

CHICAGO (MarketWatch) -- No-down-payment mortgages have been scarce lately. But in the past several weeks they've become virtually non-existent. And it doesn't appear they will return any time soon.

While Fannie Mae and Freddie Mac still have products that allow borrowers to finance 100% of their home purchase (albeit at a higher cost), recently the major private mortgage insurance companies have backed off from insuring these loans, said Bruce Brown, a certified mortgage planning specialist with First Security Mortgage Co., in Kansas City, Mo.
Mortgage Guaranty Insurance Corp., for example, changed its guidelines last week to exclude coverage of 100% mortgages. At a minimum, borrowers need a 3% down payment and a credit score of at least 680 to be eligible for coverage. In selected markets where home prices are declining, a 5% down payment is the minimum required.

Genworth Financial is another mortgage insurance firm that recently stopped covering 100% loans. In some cases, it's willing to cover loans with 3% down payments; in all markets it will cover a loan that involves putting 5% down, said Mark Goldhaber, senior vice president of industry affairs for Genworth Financial.

Lenders generally require private mortgage insurance for loans that cover more than 80% of the purchase price.

"It's obvious why they're making these changes," Brown said of the insurance companies. "They have to eliminate the losses they're taking." Mortgage insurance companies have been hit hard by the increasing number of defaults and foreclosures, he pointed out.

At MGIC, the changes to underwriting of low loan-to-value loans -- as well as increases to the pricing on some products -- were made due to the recent performance of loans with those characteristics, said Michael Zimmerman, senior vice president of investor relations. But the changes, he said, also reflect a return to more historically normal underwriting standards.

"The more equity that a borrower has -- or, if you will, skin in the game -- in any investment, the more likely they are to have a higher degree of responsibility toward it," he said.

Goldhaber said that those in the mortgage industry also have a responsibility to put homeowners into the proper mortgage product. These days, it's irresponsible to give people a loan for 100%, he added.

"In soft markets like we have today, with declining home-price appreciation, to put someone in a zero down is really inappropriate," he said. "It's the kind of product choice that gets consumers in trouble."

Many people have been finding themselves upside down on their mortgages when the price of the home drops and they end up owing more than the home is worth.

"Putting a person in a zero-down mortgage means in many cases they will lose value on home before they even have the curtains hung," Goldhaber said.

Other ways to 100%

That said, while the conventional no-down-payment products may have disappeared, there are still ways to buy a home without a down payment, said A.W. Pickel, CEO of LeaderOne Financial in Overland Park, Kan., and former president of the National Association of Mortgage Brokers.

"You have to broaden your definition of no-down payment," he said, adding that loan options are available, if not in the form they were in before.

A gift from a family member or a community grant can take the place of a down payment, for example, he said. And down-payment assistance programs are available to help those seeking loans backed by the Federal Housing Administration, he added.

They're not offered now, but shared-appreciation programs might also be available, where investors share in the appreciation of a home in exchange for assistance at the purchase, Pickel said. He expects companies to get more creative and come up with other solutions too.

"You will see more unique products coming out," he said, as companies search for ways to help down-payment challenged buyers get into a new home.

But as of now, there are fewer options than there were before for would-be buyers who don't have ample cash reserves. And Brown sees that as an overreaction.

He believes consumers should have the option of financing their entire purchase -- even if it comes with extra fees or higher rates. Someone who doesn't have a lot of cash, but is a good credit risk, for example, should have that option, he said.

"In a lot of ways, we're creating an environment for investors," he said, as the number of renters is sure to grow. "Think of how many people would be in the market over the next several years if they could be in a house for no money down. Those people have no option but to remain renters."

A possible return?

In fact, the existence of no- and low-down-payment loans were one of the biggest reasons the homeownership rate rose during the housing boom, said Bob Walters, chief economist of Quicken Loans. Some sought these loans even if they could put money down, Pickel said.

"Everyone bought into the idea that if you can borrow money, it's better than using your own," Pickel said. "I don't think that's completely gone," he said, but added that now people have woken up to a sobering reality that home prices don't always go up and that putting money down might be in their best interest as a homeowner.

No one knows if, when and how these no-down payment loans will return en masse. But many people in the industry think they'll be gone for a good while.

"I don't want to say never, but my gut tells me it will be a long time before we see mortgage insurers pop back into the 100% market," Brown said.

If they do return, borrowers will likely need spectacular credit and the local housing market they're buying in will probably need to be a "prime market," that is, they'd need to have a small percentage of second homes and investor homes, said Anthony B. Sanders, professor of finance and real estate at Arizona State University's W. P. Carey School of Business.

"Markets such as Phoenix, Las Vegas and San Diego have higher percentage of second home/investor loans and viewed as being 'speculative' markets subject to dramatic downturns," he said in an email interview. Lenders still may be hesitant to make no-down-payment loans even after housing prices hit bottom, he said.

"But bear in mind that credit events in the mortgage market move in cycles and we swear to never repeat the same mistakes ... until we collectively forget about the last cycle," he added. End of Story

This is why recurring Bubbles usually have a total minimum half-life of around 30 years: People burned in the last one, usually will not jump into a similar one for their adult lifetime.

Note the mention of Genworth Financial, the product of the monster spinoff from GE in 2004. And although they ceased to own any Genworth shares in March 2006, and hence should have minimal financial exposure directly from this unit, GE nonetheless took a severe beating in the market after announcing a surprise drop in earnings that shocked Wall St.

Economic aftershocks threaten recent optimism
GE's warning pokes hole in recent sentiment that credit crunch has passed
By Laura Mandaro, MarketWatch
Last update: 6:13 p.m. EDT April 11, 2008

SAN FRANCISCO (MarketWatch) -- Wall Street, recently basking in optimism that the credit crisis may have turned a corner, got rained on Friday after a surprise drop in earnings from bellwether General Electric Co. renewed fears of persistent economic aftershocks.

General Electric, whose activities reach a broad spectrum of business and consumer activity from TV shows and commercial loans to industrial turbines, said that profit fell 6%. It placed a big part of the blame on the near-collapse of investment bank Bear Stearns Cos.


The profit disappointment came as a shock to many analysts and strategists who had been expecting that diversified, international companies as well as the broader U.S. economy were somewhat buffered from the big loan write-downs and trading losses that have rocked brokerages and banks this year. U.S. stock markets sold off sharply, cutting into gains made since mid-March.

"Apparently the suggestion earlier this week that the stock market has turned a corner has proven to be premature," Sherry Cooper, global economic strategist for BMO Financial Group, wrote in a note Friday.

The rebound had been fueled by renewed sentiment on Wall Street that the worst of the credit crisis -- including the threat of spiraling financial bankruptcies -- was past. The Federal Reserve's intervention with Bear Stearns contributed to that improved outlook. Plus, financial institutions in the thick of the credit crunch have been forecasting an end, or at least quantifying the magnitude, of the financial losses clogging up credit markets.

For the broader economy, several private-sector economists are looking for a second-half rebound, a view in line with that of Federal Reserve Chairman Ben Bernanke. "A lot of people are taking the Fed action with Bear Stearns as an inflection point that, with financial problems, we're getting our hands around those. That could be true," said Joseph Quinlan, chief market strategist at Bank of America.

Reflecting some of this good cheer, U.S. stocks had bounced off the mid-March lows set about the time the Fed and J.P. Morgan Chase & Co.

JPMorgan Chase & Co engineered an unprecedented bail-out of Bear Stearns. Stocks in financial companies, which have played a lead role in the credit crisis, have gained 13% including Friday's sell-off. The beaten-down U.S. dollar, for its part, has stabilized against some of its rivals, though it continues to notch new lows against the euro.

But a new worry has gained ground. Even as credit markets loosen up, the aftereffects of wide spreads and tight lending standards -- the hallmarks of a credit crunch -- could further punish an already floundering U.S. economy.

"The fear now in the markets is that we won't only have recession, but we'll have deep and prolonged recession. ... It's the knock-on effect of the credit squeeze," Quinlan added.

General Electric, the largest U.S. corporate borrower, showed that convulsions in the financial world can derail even the most diversified of firms. The conglomerate said that "extraordinary disruption in the capital markets in March" hurt its financial division's ability to sell assets and caused it to take higher losses on the current market value of its assets.

End in sight?

Finance ministers and central bankers from nearly 200 countries will weigh in with their own takes on the length and severity of the global financial system's recent troubles, and the related setback to the world economy, when they meet for the G7 meetings in Washington, D.C. this weekend.
Plenty on Wall Street, though, say further financial stresses like could surprise markets, sending stocks reeling as they did Friday and credit spreads further apart.

"People underestimate the impact troubles in financial markets have on other sorts of companies," said Steven Bleiberg, chief investment officer for Legg Mason's global asset-allocation division, which manages $6 billion. "We still have to deal with all the negative fallout from the collapse of the real-estate bubble."

Renewed optimism about the state of the financial system had been helping the market move higher, according to Bleiberg. But buying stocks based on an expected end to the credit crisis may be little more than wishful thinking. "There's more bad debt probably lying in wait. To say we're almost done is premature," he said.

Nonetheless, the optimists have a growing pool of forecasts and statements to draw on.

Goldman Sachs Group Chief Executive Lloyd Blankfein on Thursday became the latest investment banker to report a glimpse of light at the end of the tunnel, telling shareholders he felt like the financial system was closer to an end to the credit crisis than the beginning, according to media reports.
Morgan Stanley chief John Mack puts the U.S. economy in at least the ninth inning of the subprime crisis, and at least halfway through problems from commercial mortgages, reports say.
Recent outlooks on the broader economy also are projecting relief. Economists at Lehman Brothers, UBS and Nomura Securities all see a rebound in the second half of this year after a mild recession, or a least a contraction, in the first. Bernanke and some other Fed policy-makers are predicting a recovery in the second half, helped by the roughly $110 billion in tax rebates that the U.S. government will send households starting in May.

"We expect economic activity to strengthen in the second half of the year," Bernanke told lawmakers last week.

Meanwhile, estimates for the size of the pain facing the financial system have been trickling out of brokerage houses and research groups. Global financial institutions already have written off nearly $300 billion in bad loans and investments; they could have as much as $900 billion more to go.

The International Monetary Fund projected earlier this week that the potential losses from the credit crunch could top $945 billion globally over the next two years. Analysts at Goldman, which lost $1 billion in mortgage and securities investments in its fiscal first quarter, put the size of total credit losses at $1.2 trillion.

At the other end of the spectrum, on Friday Credit Suisse put a $650 billion price tag on credit-related losses from the U.S. banking crisis. Lehman predicts that the global write-downs could reach $400 billion by the end of 2008.

Putting a cap on the credit problems, even if it's a high one, has helped boost morale among investors. They spent the second half of last year trading without having much sense of the eventual size or severity a wave of subprime-mortgage defaults would have on the overall financial system.

"It's a critical piece of info for investors to chew on," according to Bank of America's Quinlan.
"Whenever you can quantify the problem, it helps the investors evaluate the risk still in the market."

The S&P 500 Index has risen along with the improved sentiment, though it took a hard fall Friday on the GE news. The benchmark index is up 6% from its 52-week low reached March 17, one day after J.P. Morgan said it would buy Bear Stearns with as much as $30 billion in financing from the Fed. In a first, the central bank also opened its discount lending to securities dealers.

These moves appeared to assure investors that the Fed wouldn't let big Wall Street dealers go bust. They "put a floor beneath financials," Quinlan said.

Earnings signposts, economic worries

The next slew of indicators will come from the biggest banks and brokerages, which are expected to do a spring housecleaning of their questionable credits when they report first-quarter earnings.

Merrill Lynch & Co., Citigroup Inc. and several regional banks report earnings next week. It's likely to be bloody.

Analysts have slashed earnings forecasts in the expectation that financial institutions will wipe off as much bad loans and trades as they can. UBS AG already have announced a combined $23 billion in write-offs.

An end to that housecleaning is key to turning the credit cycle around. But one problem is that credit is still inaccessible for some, particularly in the mortgage market, and much more expensive for businesses there than it was a year ago. Those higher costs have lingered despite the 3 percentage-point drop in the Federal Reserve's federal funds rate since September.

Rates on Baa corporate bonds, or bonds backed by riskier but still investment-grade credit ratings, have risen to 6.87% from 6.47% a year ago. Their spread to 10-year Treasury notes has widened by 1.6 percentage points.

The costs banks charge one another also have jumped. While mortgage rates for traditional, 30-year fixed rate loans have fallen, the gap between those rates and 10-year Treasurys has expanded.

Even though we have had some good news, "you will have to see the end of write-downs before the fixed-income and interbank-lending markets return to normal," said Michael Moran, chief economist for Daiwa Securities.

Before that happens, consumers and businesses will continue to find it tough to borrow, making it harder for home sales and prices to reverse and exacerbating an overall slump in the economy.

"The consumer is stretched," said Russ Koesterich, head of investment strategy at Barclays Global Investors. "The U.S. consumer will need a long period to repair his balance sheet. It's unrealistic to expect a very quick, robust economic recovery." End of Story

Laura Mandaro is a reporter for MarketWatch in San Francisco.

This GE hit is essentially an admission that absolutely NO PART of this WORLD is exempt from the crushing credit collapse.

I had actually just looked at GE in stunned amazement for many months defy any sort of acknowledgment in the stock price that it was being adversely affected. I was just amazed, because GE is an economic behemoth, and they are in everything.

The Fall of GE is essentially a parallel to The Fall of The Have's: It's like the heretofore unaffected Westsider super rich are actually starting to take it on the chin. No one is exempt from this thing. And unlike all the prognosticators who simply cannot believe their eyes, this will be WORSE than anyone thought possible. This AIN'T the ninth inning of ANYTHING.

And I'm sort of surprised that no one posted the full article du jour. I know, I know. The prospect of warm weather kept me from the bloggage as well. Slow week. Here it is:

Double -digit price drops for Redmond, Bend homes
Sunriver, Crook County prices rise

by Jeff McDonald / the Bulletin

Median home sales prices in the first three months of 2008 fell almost 12 percent in Bend and 14 percent in Redmond from the first quarter of 2007, according to a report Wednesday from the Central Oregon Association of Realtors.

Bend’s median sales price — the price at which half the homes sold for more and half for less — for single-family homes on less than an acre was $306,500 in the quarter. Redmond’s median was $220,000.

Elsewhere in the region, home prices dropped 15.5 percent in Sisters, 27.5 percent in La Pine and 9.1 percent in Jefferson County, but prices rose 16.5 percent in Sunriver and 8.1 percent in Crook County, the report said.

The number of homes sold in Bend in the quarter dropped 44 percent, to 222 units, and 30.3 percent in Redmond, to 92 homes, according to the Realtors association’s report of data provided by the Central Oregon Multiple Listing Service.

Local real estate officials weren’t surprised by the declines in sales and prices, citing more stringent lending requirements, a lack of buying urgency due to excessive inventory, and concerns about the national economy.

“That’s the market,” said Tom Greene, president of the Realtors association. “Sellers aren’t going to get what they got in 2006.”

Greene expects prices to stabilize during spring and summer but said the market could weaken further in fall and winter.

At the end of March, Bend and Redmond had 12 and 13 months’ worth of homes on the market, respectively, Greene said. That means it would take about a year or more for those homes to sell at the current rate of sales.

The average days a house sat on the market before being sold in the first quarter was 185 in Bend, up 6.3 percent, and 179 in Redmond, up 20.1 percent. La Pine had the highest average days on market, at 288.

The national economy, which two authorities — former Federal Reserve Chairman Alan Greenspan and former Treasury Secretary Lawrence Summers — said this week was in a recession, could pull the local housing market down further later this year, Greene said.

“We’re coming to the realization that the recession is one of the reasons we’re down,” Greene said. “There is some optimism — at least through summer — but it’s not going to be gangbusters.”

The year-over-year declines seen in Wednesday’s report aren’t surprising because the first quarter of 2007 was the strongest quarter last year, said Rockland Dunn, a broker for Summit Mortgage Corp. in Bend. The market started declining last June, Dunn said.

Several issues, including buyers taking their time to purchase and a perceived lack of financing, are keeping the market soft, he said.

The tightening credit markets and difficulty that some prospective buyers have in securing a loan have made it more difficult to close sales this year, said David Block, an appraiser for Bend-based Cornerstone Appraisal Group.

“Lending practices have changed dramatically,” Block said. “People can’t get out of their properties because values have dropped and they can’t get a loan.”

The region’s two highest-priced markets — Sunriver and Sisters — both maintained year-over-year gains in median sales prices, according to the MLS data.

Sunriver’s price gain was based on 11 sales, however, a 65 percent drop from the same period in 2007.

“January and February were not good for anybody out here,” said Mike Riley, general manager and principle broker for Coldwell Banker First Resort Realty in Sunriver. “But for March and April — so far, we’re up (number of sales) compared to the first two months.”

Heavy snowfall this winter contributed to the sales drop — so did people’s reluctance to drop their asking prices, Riley said.

“Sunriver is a second-home market — it isn’t affected in the same way,” Riley said. “A lot of owners haven’t budged in their prices or panicked.”

Jeff McDonald can be reached at 383-0323 or at jmcdonald@bendbulletin.com.

Funny. This is it. This is The Public Admission That Bend Is NOT Different, that the wave of destruction sweeping this country CAN happen here, that we are not the slightest bit exempt, and in fact are suffering through a price drop that is more severe than just about anywhere.

But it really wasn't a reason to stand up & cheer, or other such nonsense. I mean, if there is some sort of validation for this blogs existence, this would be it. Sure, we've had announcements of a severe slowdown is sales, but no really precipitous price drop.

And I guess it should be reiterated that there are some strange inconsistencies: A computation of months-inventory that looks 20-25% low, statements that Sisters is down & up, and the inane statement that March & April sales are up & "looking good!". Your standard retard could have "predicted" the same. It's like every Realtor in town has "discovered" this UNEXPECTED UPTURN in sales in the Spring. If you are a Realtor & are reading this, this is EXACTLY WHY you people are losing massive credibility.

This is it. It's started. The actual dropping of prices, and in a large amount, too. By my guess a 15% evaporation of home values wiped about $4 billion dollars out of the local RE housing equity stock. That ignores the inevitable hit that commercial is taking, and the monster hit on the Extreme Speculative red-headed stepchild: raw land.

But it passed with merely a whimper. And so it will go on.

We'll start to see the real slimey underbelly of just what this thing means soon: Property crimes, Bachelor scaling way back or closing, homelessness, mass vacancies downtown, Arson Fireclosures, and it goes on. It's really nothing to celebrate.

And the real horror is when it starts taking down regular people who participated to no extent. The de-leveraging is already hitting Main St. Even our favorite Mayor-To-Be, Dunc!

Had my Countrywide Home Equity Loan suspended yesterday. Now this shouldn't have bothered me -- I had no intention of doing anything but paying it off. Still, it was nice to know it was there.

Called them, and they said they were doing it to 'everyone' and that the terms could be 'reviewed.'

Asked the girl on the phone. "If someone who has made double payments on their initial loan for 21 months, and double interest payments on our HELOC, isn't worthy of credit, who is?"

This is just a chunk, and you should really read the whole thing. This thing will leave no one untouched. From GE clear down to Duncan, and you & me. I am as "delta neutral" on this thing as a person can be: I rent, cars are paid, I make ALL purchases in cash, my job is pretty removed from housing & credit problems. But I'm sure that I will at some point be adversely affected by this thing. If it's even from lessened quality of life by living here, that just makes me want to move on.

And as proof that you can learn things from the strangest quarters, I actually had a look at a book recommended by Tim a week or 2 ago, Fooled By Randomness. It's a fairly interesting look at randomness & it's effects on daily life, it's focus being largely on financial markets.

I use the term "strangest quarters" not to deride our brilliant Timmy, but the fact that I was reading a book about randomness, made me think about what a "long strange trip it's been" to the actual reading of the tome.

I was thinking about why I am married to my wife, and my conclusion is that it was a far from deterministic endeavor. It actually involved the strange intertwining of losing someone in my family, losing a job, the confusion of someone involved about these 2 events, their subsequent attempts to get me another job out of sympathy, and my subsequent meeting of my bride to be at this new job.

Such million-to-one happenstance is a common thread in the vast majority of my life. I am writing this blog SOLELY because I saw a short piece on the housing bubble many moons ago on KTVZ, I searched out & found BEM's original blog, I began commenting furiously, and started this blog because of the perceived vacuum of the closing of BEM's kick assery. This sum bitch has taken up a lot of my life. And I had no real Grand Plan for EVER doing anything like this. Almost pure chance.

Anyway, it made me distill my 2 fundamental investment thesii (Timmy?): If there does exist any sort of non-random, exploitable investment situation, to me it is these:

1) The stock market is NOT a pure random walk, there is an UPWARD bias. Otherwise we would be just as likely be where we are as we would stand to be at DJIA 30, at the depths of the Depression.

2) The prediction of the ascent of Bubbles is NOT a formula for making money. But the inevitable bursting of one comes as close to an investment sure thing as such things exist.

Now, I KNOW FULL WELL, that both of these statements violate some long-standing financial dogma: my "idea" of a random walk is that an "upward inexorable long-term bias" means that it's not TOTALLY random. And that even defining a "Bubble" is an exercise fraught with peril.

But there are some "rules of thumb" that seem to exist that allow one, on exceedingly rare occasions, to extract long term excess financial returns, by vaguely being aware of these 2 thesii, and they are really mirror images of each other:

1) Following extraordinarily negative volatile events in World Markets, (OK, I said WORLD MARKETS), you should accumulate stocks. This means once per decade type stuff... max.

2) Following"Bubbles" of extraordinarily large scale & magnitude, you can count on prognositcators to call for The End early & often. They will be wrong, and wiped from memory. The unraveling will be long, painful, self-reinforcing, and durable.

I am even more sure about Bubbles bursting than just about anything. Why? Remember the discussion about how almost any Bubble, left to expand without bounds, would soon consume all Earthly resources? And let to grow beyond that for just a few years would necessitate the creation of a solid gold sphere several times larger than the Earth to continue transacting. I'm not not sure of much, but I'm pretty sure that won't happen. Bubbles bursting are an investment sure thing. They will happen.

Notice that Buffett, whether wrong or right, rarely sells. He seems to follow some sort of philosophy based on Rule 1. He just buys when he believes a companies stock is well below some sort of "norm" valuation, and once he owns, he basically forgets about selling. I believe he bought US Air, watched it go higher, subsequently crater to single digits, publicly state he doubted things would get better, and the stock subsequently skyrocketed... and he sold.

He seems to realize that extraordinary volatility & randomness are inherent in owning stocks. He seems to abolish the "trading" mentality from Day 1. And he seems to make money in a way that seems a bit non-random to me. This is something at odds with this book which states flat out that there had to be a "Buffett" somewhere.

It should be noted that Buffett is a fairly extraordinary investor, but by purchasing via insurance entities, he employs huge amounts of leverage. His Super-cat lines WILL suffer a huge loss at some point, possibly after he dies, but he has piled up enough cash reserves, that he can currently swing bets in the billions without a problem.

The "Best Way" to capitalize on thesis 1 is to: 1) Wait for an exceedingly rare event of large negative magnitude. 2) Buy in wanton excess, and 3) Do not sell. Certainly do not be panicked out.

We are in the throes of thesis #2. I, and many on this blog, and the Original BEM foresaw that the bust would come. And if you recall, there were a non-stop litany of "experts" who said that it might come to others, but it sure as hell would not come to Bend. They were wrong.

And to me, it was no real guess that they would be wrong. If I had the slightest doubt, I would not have ever started this blog. Remember: I did NOT go along with CACB Shorters idea about shorting that stock, because I saw all sorts of peril & uncertainty in that particular bet. My margin of safety is quite thick. I did NOT fully understand their situation, and given a similar choice today, I would again decline.

And the nature of this thing gives people precious little way to capitalize. You can't "short" a house, Case-Schiller indices's notwithstanding. All I can do is wait for a bottom.

So capitalizing on thesis 2 is a bit harder, it is 1) Wait for the INEVITABLE bust of the Bubble 2) Do NOT buy when pundits tell you It's Over 3) Only buy when you are literally being PAID to enter a transaction, practically.

Problem there is these things go farther, harder, and longer than anyone dreams possible. And LONG after the rest of the country begins the slow agonizing process of recovery, we will still be mired in a financial quagmire. Bend, believe me, is going broke. It will be DECADES before this place recovers.

You can either leave or wait. And if you choose to wait, you should have 10 years of BURNABLE cash in the bank. But rest assured that at Rock Bottom, way out past 2015, there will be some spectacular bargains of a lifetime around here. Dunc bought Pegasus for $10K(?), only $5K down. It now provides a fairly comfortable living. THAT is a hell of an investment. Took 27 years, and gallons of sweat equity.. but still, not bad. That there is LONG WAVE, buy at the bottom thinking.

Author Nassim Taleb would have you think similarly that there had to be a "Duncan" who capitalized at the bottom, lo those many years ago. And he "may" be right. But if you are aware of such bargains and believe that economic depressions are not permanent, they just feel that way, that you can buy post-Bust at prices that may never be seen again in your lifetime. But today, is not that day.

Remember: Life Is Funny. It is 90% luck, and 90% certainty. If someone told me 3 weeks ago that it'd snow almost every day this past week, and it'd be 80 & sunny by the weekend, well... let's say I'd have bet against it.

Bottom line: This is NOT the ninth inning, it's the second for Bend.. maybe the 4th for the rest of the U.S. We are going below $200K medians. This town WILL go broke. Cessna IS LEAVING. This is going to hurt like hell. This is all pre-ordained, at least it is to the extent that anything in life can be.

Realize you are living in a fairly extraordinary set of circumstances, in a extraordinary place. The type & severity of financial Armageddon that will happen here, won't happen to 99.95% of the U.S. population in your lifetime. But I am equally sure that it will happen again... someday. Probably long after I and my kids are dead.

But at the end, ROCK BOTTOM, you might have the chance to get an asset, investment home(s) or business, that pays for an acceptable lifestyle for a pittance. THAT is what you should stay attuned to, that is what you should look for. But we are nowhere even remotely close to that today, nor will we be for years. Look for owner financing, look for people who will GIVE you money to get themselves out. Because that is all they will care about at Rock Bottom.

185 comments:

Anonymous said...

Let me just begin by saying: "Thank Jeebus Raisin Face's ugly mug is gone."

Secondly, I saw this book promo and thought of you all:
"Greenspan's Bubbles — The Age of Ignorance at the Federal Reserve"
by William Fleckenstein and Fred Sheehan

No matter who you are-investor, trader, homeowner, 401(k) holder, or CEO-you are bound to feel the impact of Alan Greenspan's "Age of Ignorance" for years to come.

According to MSN Money columnist William A. Fleckenstein, Greenspan's nearly 19-year career as Federal Reserve Chairman is even worse than anyone imagined. Labeled "Mr. Bubble" by the New York Times, Greenspan was nothing less than a serial bubble blower with a long history of bad decision-making. His famous "Greenspan Put" fueled the perception of a Goldilocks economy-but, as this explosive exposé reveals, the bear has finally caught up with Goldilocks.

Using transcripts of Greenspan's FOMC meetings as well as testimony before Congress, this eye-opening book delivers a timeline of his most devastating mistakes and weaves together the connection between every economic calamity of the past 19 years.

Fleckenstein explains just how far-reaching Greenspan's mess has been flung, and presents damning evidence that contradicts the former Fed chief's public naiveté concerning shifts in the market and economy. He also points to a disturbing fact, that throughout his career, Greenspan not only made costly mistakes, but made the same ones-over and over again. And not only was he never able to recognize or admit to those mistakes, he constantly rewrote his own history to justify them.

Anonymous said...

Homer,

Cessna has long said they want the tower. Trouble is $25M, and its the City of Bend Airport. Who is going to pay? We just spent $20M on the Les Schwab 'shovel ready' site, and now $20M is missing from our treasury. They couldn't use public-bonds for Les Schwab corporate welfare.

They could in theory spend $25M on the tower, Cessna wants the tower, the pilots want the the tower, but where is the money going to come from??

Investment wise, my guess its a bad idea. Redmond is close, with a tower, and a very large airport, that doesn't have the noise problems. Bend Muni has many noise problems to the east, a tower would mean more traffic.

When the airport had a new strip put in last year for millions, it was a kluster-fuck. A tower would create another kluster-fuck.

The other issue is the 'columbia' now cessna operation, I liken it to a ship built in a bottle. I was out there friday, and flying there yesterday. There is actually more going on at lancair, on friday their parking lot was packed, and cessna was almost empty.

Many people want a tower for Bend Muni, but hell we still got to put that water-slide on the top of Powell Butte.

HELL YES Homer Cessna is leaving. So if we put in a tower, what's the point? Who does it enrich??

The re-pavement last year enriched the same old 'good boys', e.g. Knife-River & company, tar, roads, ... A tower wouldn't necessarily enrich the good old boyz, and its NOT going to keep Cessna building a bigger factory in a bottle.

Cessna has publicly said they want a tower, I'm sure Columbia wanted a tower. Cessna hasn't even had the ink dry, that class of plane built at the factor is very expensive, we're in a recession, and going into a depression, sales aren't going to be strong in high aircraft of that type.

I think the less expensive Lancair kit-planes will be more attractive.

Cessna bought Columbia for a marketing niche ( mid-range ), the future of aviation is China & India, and South America.

Anonymous said...

He also points to a disturbing fact, that throughout his career, Greenspan not only made costly mistakes, but made the same ones-over and over again.

*

Great 'blame-neutrality', like blaming Gay-Edgar-Hoover for crime.

I note very well that Greeny tried to stop the bubble on the stock-market in the late 1990's and caught hell, he was loved by all in 2002 with cheap rates.

It's only now that all have partied for 20+ years, post Raygun 1980+ that the party is over, and the Republicans have gotten us a +4TRILLION dollar party bill, that we have to blame, it was a hell of a party.

Greeny's fault?? It's everyone's fault.

Like to say that Duncan didn't participate in the bubble, hell yes he did, all these customer in the last +5 years spent easy money in his shop, and lived the bubble, and enjoyed thus.

It's over, and the blame-game has started, go read 'madness of the crowds', all bubbles end with the blame-game.

Anonymous said...

GE, like Ford, and GM, have long ( since early 1980's ) made almost all their money on credit.

GE acceptance, ... credit cards, ...

Auto makes less than 10% ROI from making auto's but since the 1980's everyone makes 20% off credit-card debt.

It's all imploding, nothing to build, no customers, easy money is gone, credit-cards next to go.

It's a slow unwind.

Now how are we going to pay for that $100M water-slide from the top of Powell Butte to Mirror Pond??

Bend is going going back exactly like 1983 in the next two years, Bend is about 18 months lag, 1983 was a sad time, 25 years later, we're back their again.

Bend can still get into debt but what do we spend our money on?? Given our boss-hoggs are BORGMAN, HOLLERN, & HAP-TAYLOR. The PORK must be on projects that goes in their direction, just watch the news. If the project involved excavation or construction you know it will get the green light. Anything else is fucked.

Talking about building in a bottle, this new Les Schwab campus will be classic, the only practical way in I97&COOLEY which is a kluster-fuck. The correct thing would be a backside NE road to Priny, but that would go through Pronghorn, can't do that.

Bend, a town that has optimized the wasting of money, but what do you expect when a town is OWNED by excavation&construction, and ran by MAN-TWATS ( city hall, & city-staff are ALL man-twats ). Man-Twats are electable in a amenity-parasite town like Bend, and the OWNERS don't give a fuck who runs the town, so long as they get all the money.

IHateToBurstYourBubble said...

These are some of the problems with that article:

Elsewhere in the region, home prices dropped 15.5 percent in Sisters...

The region’s two highest-priced markets — Sunriver and Sisters — both maintained year-over-year gains in median sales prices, according to the MLS data.


Duh.

The number of homes sold in Bend in the quarter dropped 44 percent, to 222 units, and 30.3 percent in Redmond, to 92 homes...

At the end of March, Bend and Redmond had 12 and 13 months’ worth of homes on the market, respectively, Greene said.


I just counted 1,425 Bend homes on lots for sale this morning (an exercise I think Marge also completed). That's about 6.4 QUARTERS worth of inventory, or 19.25 MONTHS. I count 591 homes on lots for sale in Redmond, and 92 sales yields 6.42 QUARTERS worth of inventory, or 19.27 MONTHS.

OK, think McFly. Think.

Several issues, including buyers taking their time to purchase and a perceived lack of financing, are keeping the market soft, he said.

Yup this thing is a perceived phenomenon. It's NOT really happening.

Stupidest line ever?

“But for March and April — so far, we’re up (number of sales) compared to the first two months.”

Wow! Really! Damn! This have turned the corner! It's Over!!

IHateToBurstYourBubble said...

“Sunriver is a second-home market — it isn’t affected in the same way,” Riley said. “A lot of owners haven’t budged in their prices or panicked.”

Nice! Now price dropping is akin to PANIC! Don't PANIC!

Notice that for their Lack of Panic Sunriver-types got exactly what they had coming: next to NO SALES. 124 homes for sale out there, 11 sold last quarter. That's 34 months of inventory in Sunriver.

We could do the same, and we have in large measure. Keep prices high, DON'T PANIC. We just won't move any homes, period. This "solidarity" of pricing is why we have nearly 20 MONTHS of inventory.

But as I said last week, the INABILITY of individuals to lower price, will soon be overwhelmed by those who can & will. The emerging rock-bottom builder's ability to sell will be POOR, while existing home owners will go to nil. They will build CHEAP, NEW homes, and all the Bubble-fueled STD's will stand vacant.

Despite having a heinous glut now... it's about to get far, FAR worse.

IHateToBurstYourBubble said...

From Duncan's blog:

Anyway, just about everyone downtown has been there for five minutes, or so it seems. No one has a clue -- nor do they care -- about the history of the place. But I think the free exchange of information is one of the more important aspects of business. I feel kind of sorry for most merchants because they are so guarded, so frightened, they don't seem to want to know about anything but what's right in front of them. They don't care about 10 years ago, or 20 years ago, nor do they care about 10 years from now. Yet, so many of the things we are going through right now, have already happened before.

This leads me to one of Paul-doh's axioms: Observed without context, it is IMPOSSIBLE to distinguish selfishness from stupidity.

These people are selfish as hell, they're Cali-bangers almost sure as shit. They are stupid.

I always find myself asking if someone is insanely stupid or just plain selfish after cutting me off in traffic, running stop signs, or otherwise endangering their own life & others.

"Are you STUPID or just plain SELFISH!"

Yes.

People don't want to know anything except that which directly IMPACTS THEM, period.

History of downtown Bend? Who cares! That has nothing to do with MY STORE. Talking to YOU about MY business? Fuck that, that gives YOU some sort of PERCEIVED advantage, and anything GOOD for you MUST BE bad for me. Picking up my dogs shit off the sidewalk? Fuck you.

This overwhelming commercialization of Bend by knee-jerk selfish ASSHOLES is what just brings tears to my eyes. This place is fucking RUINED by these selfish, STUPID fuckwads who came here to slaughter the Golden Goose.

And it manifests itself in EVERY WAY. Don't TALK to anyone. Leave your cart in the driving lane. Don't pick up your dogs shit. Drive 120mph coked-up on 3rd st at 2AM & splatter a woman all over the street. Mt Bachelor is an overrun shithole. THIS is what we've drawn from parts South.

To get rid of this locust invasion, we'll have to pour copious amounts of Agent Orange on ourselves & them, just to KILL THEM OFF. Problem is, some of us will DIE in the process. 40 % downtown vacancy rates are coming, mark my words.

Again, I thank all RE-types & Realtors for selling out to the Cali-Locust invasion. Good job.

IHateToBurstYourBubble said...

You know who else we'll lose?

People, like me, who are looking for that Undiscovered Gem.

That's sort of what drew me to Bend, even though it was already sort of "quasi-discovered".

There's a large number of people who CAN'T STAND living in a place that's been DISCOVERED. I am one of them.

Maybe it's my bent for holding "undervalued assets", or some such, but Undiscovered Gems are something I am drawn to, in all forms. Cars, restaurants, towns, etc.

And Bend will probably NEVER revert to it's undiscovered virginity of olde. It's like violating a virgin. It's over. Forever.

Which is why I am having fond thoughts about Baker City, and other parts East. Bend is like a crack whore that's been used up, fucked 50X day, strung out on the cracker, and just vile. She'll NEVER, EVER be the same.

Time to go.

Anonymous said...

That's sort of what drew me to Bend, even though it was already sort of "quasi-discovered".

*

Here I am sitting in the D&D having a beer, watching people kick teeth knocked out every night. It's 1983.

We're thinking, Somewhere out there are cali's or some folk looking for an undiscovered place, a special place, the next Aspen.

The guy at the end of the bar a town drunk with no teeth says "Let's PR&MARKET BEND as that place!"

The rest is history.

IHateToBurstYourBubble said...


I think the less expensive Lancair kit-planes will be more attractive.


FAA seems bent on killing the DIY market...

The aviation market in Bend looks to be grim medium-term...

Anonymous said...

Bend is like a crack whore that's been used up, fucked 50X day, strung out on the cracker, and just vile. She'll NEVER, EVER be the same.

*

Go back 20+ years ago Homer, and Bend, Redmond, Sisters, La-Pines, Madras, Priny, were all ONE thing. Trailer Parks. One of the BIG things that Bend did in the last ten years is turn dim trailer parks into crap-shack sub-divisions, and they called it 'Aspen'.

What ever had been the difference between Bend and say Sisters, La-Pines, all things equal?? Drake Park, and Mirror Pond. Once Bend loses Mirror Pond and it will, it will be no different than Redmond.

In the day most people worked in Bend doing two service jobs, so they could live in a trailer in Tumalo, Sisters, or 'LA'-Pines.

Central Oregon was NEVER 'quaint', in the Day it was loggers and cowboys. The loggers were gone 40+ year ago when the timber was gone, cowboys are two folks married and un-married. The married are bible-folk and got a woman. The single cowboys look for pussy, but usually get into fights.

This is the real central oregon, and what goes up, always comes down.

Anonymous said...

I think the less expensive Lancair kit-planes will be more attractive.

FAA seems bent on killing the DIY market...

*

1.) AOPA ( pilots club ) is as powerful as the NRA. Don't under-estimate pissed off voters.

2.) Imagine if the FAA had told the wright brothers that they were bike-builders, and not to experiment. It's NOT going to happen, nobody is going to close down USA inventiveness, nobody is that stupid.

It all makes a good story. The above said, Lancair is NOT going to save Bend. Building a 'tower' for Landcair is NOT going to save Bend.

Bend is dead & dying, and YA'LL killed it when YOU fucking moved here.

foz said...

If a control tower is built a big chuck of the funding will come from the FAA's Airport and Airway Trust Fund, which is overflowing with surplus bucks.

Anonymous said...

If a control tower is built a big chuck of the funding will come from the FAA's Airport and Airway Trust Fund, which is overflowing with surplus bucks.

*

FED's over-flowing with money, HomeLand security, ... FEMA, ... too much money. So lets say its 100% FED money, who gets the job?? Who gets the job? Who gets the money??

The BEND-BUS fiasco was all about FED matching Federal-Block grants, just buy any fucking bus, no need that it runs, block grants just say you have to have a bus-system in place.

Now let's look at that dinky Bend Muni airport. No cross runs, just a single North/South runway, not very long for this elevation. Redmond is a great runway system. Bend first needs to develop the runway, but that requires destroying all the existing building in order to have east/west, and diagonal runways, ... Now we're talking $100M, what about the existing NOISE?

Why put a tower in a dinky little airport? With a single runway?

Yes, Airway Trust Fund has money to burn, plenty of money for inspections, thats why planes always fly, and commercial is never been better, and nobody ever goes bankrupt.

Oh yea, and the average age of commercial is over 30 years, we have to put 100's of BILLIONS into our commercial fleet, yea enough money for everyone.

Let's put the Bend MUNI tower on MOUNT Powell BUTTE along with the water slide.

Anonymous said...
This comment has been removed by the author.
Anonymous said...

IHateToBurstYourBubble said...

I just counted 1,425 Bend homes on lots for sale this morning (an exercise I think Marge also completed). That's about 6.4 QUARTERS worth of inventory, or 19.25 MONTHS. I count 591 homes on lots for sale in Redmond, and 92 sales yields 6.42 QUARTERS worth of inventory, or 19.27 MONTHS.


For clarification only...I just counted 1440 active in Bend.
Of those 66 are contingent and are counted as active. Most of the contingent homes are short sales awaiting lender approval for the sale. That means there are 1374 active.
So far April sales numbers are way down YOY. This year 23 sold as of 4.13.08 @ 298k median. In the same period of 07 there were 59 sold @$374k median.
Yup sales are up!! They always picup in the Spring.

IHateToBurstYourBubble said...

Most of the contingent homes are short sales awaiting lender approval for the sale.

WHAT!! Really? Fuck me.

Holy shitballs. I didn't think we'd reached THAT level of despair. Shit I thought THAT was still a year or two off.

This year 23 sold as of 4.13.08 @ 298k median. In the same period of 07 there were 59 sold @$374k median.

Wow. Apr 2007 was no boom either.

TWENTY THREE.

Go back to comments in Nov & note that people were predicting the complete demise of Bend RE if we went below 100 sales per month.

DAMN.

IHateToBurstYourBubble said...

My last comment imputes (implies?) the idea that Apr 2007 had 154 total sales for the month.

We won't have 100 this month. No way.

Anonymous said...

Right now there are 87 short sales as active listings and 1 sold since Jan 1, 08. The median price on active shorts is $299k and $249k on contingent ones.
I think it is possible for more than 100 sales a month, but it will be close to 100 for a long time to come.

Anonymous said...

"Time to go."

===

Yep, but please behave responsibly in your exit. Save BC, so Fake down and go right. Send em south, closer to their original home, Cali.

I hear that K Falls is the next "Bend-is-Aspen". Close to Cali (road trips to Grandma's house in Palo Alto), nice big lake, close to "Bend-is-already-Aspen" Ashland and their thespians (GoBart!) and very cheap real esteate.

K Falls, already with a Jack Nicolas golf course, it's everything you want it to be.

IHateToBurstYourBubble said...

Right! Go to K-Falls! It's a paradise! You'll love it!

Go! Go NOW!

Anonymous said...

I might be time for some burrito bets on things that will soon happen in Bend. Or at least post some dates, for all to remember, fo likely to happens.
Like Cessna leaving in a year!
Friedman going to jail this summer!
Pape being indicted by the Attorney general for cheating everyone at the Inn of 7th.
Large RE offices shutting down by fall.
What else?

Anonymous said...

"According to MSN Money columnist William A. Fleckenstein, Greenspan's nearly 19-year career as Federal Reserve Chairman is even worse than anyone imagined. Labeled "Mr. Bubble" by the New York Times, Greenspan was nothing less than a serial bubble blower with a long history of bad decision-making."

What else could we have expected? Greenspan was an ardent disciple of the crackpot Ayn Rand -- actually not merely a disciple but a member of the inner circle of the cult. Buying into Rand's harebrained philosophy when one is a teenager is forgiveable, but any grown man who still buys it is a fool and should not be entrusted with any position of responsibility.

IHateToBurstYourBubble said...

Large RE offices shutting down by fall.

My initial bets on this were Morris & Hasson, in Ye Olde Mille.

I've changed to Cushman & Tebbs, as my surefire loser, absolutely will go down hard, sucking air all the way, franchise RE type DOOMED TO FAIL.

I'll give 'em to the end of this year.

IHateToBurstYourBubble said...

If you look at BendBB's latest new listings for Apr, you can see the builder over near the parkway has gone wholesale. (Oikos?)

This new subdivision is located just off Boyd Acres Road just north of Empire

39 lots hit MLS in one fell swoop this past week. Pock marked, CC&R's be damned, sell 'em at all costs builder.

Turn shotgun to face & pull trigger.

Anonymous said...

RE offices going down big....

My guesses are:
Southeby's Cushman&Tebbs
Keller Williams
Windermere
I bet Remax cuts their affiliation with ReMax and goes back to just Equity Group.
There are agents all over town looking for desks at companies that use the OLD split method and not desk fees that they pay every month whether or not you sell anything.
In the boom agents were jumping ship to the 2k a month desks plus all other expenses incurred. Now, with lean times, they are paying out more than they are making. They will either quit or split.
I can see that the bigger companies are losing market share to smaller non-franchised offices by 2 to 5%.

Anonymous said...

3 new listings in our office this were calibangers leavin cuz they didn't know we had winter.

Yahoo Skippey.

Hope you find some ice on the way out. Better go before August when we have summer.
If we have 5,000 leave this year, there will be enough homes to house the homeless. Maybe we should chip in and buy oneways for them too.

Duncan McGeary said...

"If we have 5,000 leave this year, there will be enough homes to house the homeless. Maybe we should chip in and buy oneways for them too."

Better than whacking them with a baseball bat for using your laundry room.

Anonymous said...

18 years ago, I worked at an office that was in the downtown alleyway from Drake. There was a bathroom that the public could access and the Rice Building occupants also shared it. Shit...I got crabs from it. Dunc, if you meant laundry room that is better than the bathroom! I'd rather not share any room with them. Don't know about the bat however. I think a ticket out of town would serve them well.

Anonymous said...

I love it K-Falls, the next 'Aspen'.

Ya'll know that k-falls is the murder capital of Oregon? Right?

I think its injuns getting in fights and killing each other, here in Bend they just cripple one another in the bars, but down in k-falls, they settle things the old fashion way, with guns.

Ya, K-Falls, I can see all the BEND Marketeers moving down to K-Falls to do their magic.

So close to California, and so far from God.

Anonymous said...

So close to California, and so far from God.

***
Hell Ya! if ol' K-Falls was paradise, them calibuttbangers they would have seen it on the drive up to Bend -- and buried it in asphalt by now.

Calis is used to mexis, but don't like injuns.

Anonymous said...

I should be outside like the rest of you, but I am holed up in the house watching the Masters, windows closed, with the junipers outside going PUFFF with their yellow clouds. Can't breath in that shit. Where is that nice cold weather that keeps the allergies at bay?

Anonymous said...

Masters? I love golf. There is only one thing on earth better than playing golf.... and that's watching golf one TV. I was gonna go mtn biking after my spring skiing today, but you done inspired me, Marge, to also sit on my butt and watch TV golf.

Hows Tiger doing today? He is a machine. I heard he was going to come to Bend-is-Aspen to do his debut golf course in the US (he got one going in Dubai... got paid in millions of barrels of oil), but didn't like doing one so close to Bandon-Dunes-Bend-Tetherow, so he is doing a new course next to Jack Nicolas' Running XYZ. Tiger is making KFalls the next Aspen. Has Tiger done won yet?

Duncan McGeary said...

Tiger in the clubhouse at second place, 5 under.

Immellman in the bunker at 17 with at 8 under.

Anonymous said...

"3 new listings in our office this were calibangers leavin cuz they didn't know we had winter."

"Better go before August when we have summer."

aren't sellers required to make a disclosure to buyers if a house is subject to winter and/or summer weather? These people should sue on their way out! coastal california would never subject someone to winter or summer weather--it's unseemly.

Anonymous said...

I worked at an office that was in the downtown alleyway from Drake. There was a bathroom that the public could access and the Rice Building occupants also shared it. Shit...I got crabs from it.

*

I wonder if them are the same crabs and lice that the Bend Bloggers have?? Public Toilet seats, Drake Park, 18+ years ago, things never really change.

It will be as funny as hell to see Tiger Womb come to Bend to play Bandon-Tetherow-Kidd-DVA, cold day in hell.

Another slow weekend, IMF today announced one TRILLION lost so far in housing collapse, and bad news isn't yet out!!!

I predicted over 2 trillion this time last year, I might have been conservative.

What's most surprising, is you really would expect the bad news to be out.

The most perplexing thing is astronomical food prices and riots all over the world, and farmers holding back to get 3X or better for basic food stuff.

It's more & more looking like 1932, it is ...

Anonymous said...
This comment has been removed by the author.
Anonymous said...

Actually, Tiger has been to Bend many, many times in the past 5 years. He and Steve go flyfishing down the Deschutes with a friend of mine. No...I have never seen him. I am not a groupie:)

========
Lice really don't ever change. They still make ya itch no matter what.
We know what's a comin in the near future. You newbies better take cover and jingle key your way out of C.O.
The early 80's are comin back to haunt us.
I'm tellin ya plant spuds, carrot, radish, beets, spinach they all grow well here as do garlic and onions and they store well in dark cool areas. Plant garlic now. Actually it should be planted in Oct. but now is better than not at all. Spuds and onions now. The rest should wait til June or when the snow is off Black Butte.
Need any more vegi advice?

Anonymous said...

St Paddy
Don't forget about the rather large Coldwell Banker office in the Mill that bad boy is gonna shut down soon enough.

Anonymous said...

"The most perplexing thing is astronomical food prices and riots all over the world"
____________________

Time to start knocking down fallow McMansions to make room for corn fields.

Anonymous said...

Can't grow corn in Bend...growing season is tooooo short..no rice either...few types of beans and peas. See above for the few you can grow here, without a green house. Limes would be nice to go with the Tequila. Oh well.

Anonymous said...

Anonymous said...
St Paddy
Don't forget about the rather large Coldwell Banker office in the Mill that bad boy is gonna shut down soon enough.


CB is too well financed to crumble. Ingrained in Bend forever. I would slit my throat if they went belly up...won't happen. they would lease out offices within(as they are now doing) before that happened.

Anonymous said...

Fellow 'Realists', now this is something to chew on "China is planning to shift much of its $1.4 trillion national currency reserve from dollars".

It's over, do ya'll remember Homer writing about hyper-inflation six months ago, and people carrying wheel-barrows of money to buy beer?


They have said "The bad news isn't out", I don't know how much worse it can get. Remember what the Chinese are selling is T-Bill's, & T-Bonds. Having a T-Bill hold toxic paper is actually going to look good, when you consider the intrinsic value of the inherent FED-RES paper. Note the Chinese are no longer playing the fools game.

I wonder if any of this is embarrassment over Tibet, and the Olympics?

We're in a race to the bottom with Zimbabwe.

*

Meltdown of U.S. Dollar Underway as China Dumps the Currency
Sunday, April 13, 2008 by: David Gutierrez | Key concepts: china, U.S. dollar and investors

(Singapore News) Comments by China that it intends to move away from its reliance on the dollar triggered a sharp drop in the Dow Jones Industrial Average and heightened worldwide fears about the U.S. currency's stability. Chinese Central Bank Vice Director Xiu Jian said that his country is planning to shift much of its $1.4 trillion national currency reserve from dollars to more stable currencies, such as the euro or Canadian dollar. After these comments, the dollar fell to record lows relative to other currencies -- the lowest ever against the euro, the lowest in a generation against the British pound, and the lowest in 57 years against the Canadian dollar.

"The big issue on any currency is if its rate of depreciation is so fast that it scares away all capital, and the announcement that we heard from China sort of feeds those fears," said Larry Smith, chief investment officer at Third Wave Global Investors.

China is the world's largest investor in U.S. Treasury bonds and securities, holding more U.S. debt than any country but Japan. Because China's currency is linked to the dollar, the country also maintains a massive reserve of the currency.

But this policy had already begun to shift at the time of Xiu's comments. China has divested approximately 5 percent of its $400 billion holdings in the U.S. Treasury and established a $200 billion fund to help diversify its investments in equities and stocks around the world.

"We will favor stronger currencies over weaker ones, and will readjust accordingly," said Cheng Siwei, vice chairman of China's National People's Congress.

It is not just U.S. investors who are concerned. Because the dollar's fluctuations have driven up the euro, exports in Europe have fallen and sparked fears for the stability of that continent's economy. In a recent speech, French president Nicolas Sarkozy added his voice to those calling for the Bush administration to act to stabilize the currency.

"The dollar cannot remain 'someone else's problem,' " Sarkozy said. "If we are not careful, monetary disarray could morph into economic war. We would all be its victims."

Anonymous said...

The rest of the world has been silently plotting against the US for decades. Now their plans are bearing fruit.

We have no good leaders in this country -- we've shot ourselves in both feet and the face.

Get ready to become slaves to a foreign overlord.

Anonymous said...

We have no good leaders in this country -- we've shot ourselves in both feet and the face.

*

Cheney is a good leader -- he shot a lawyer in the face.

Anonymous said...

Hey...I've just about pervected my latest invention. Solar and wind powered jetliners. Anybody got any cheap land I can build these goddang contraptions on?

The Natives Are Restless said...

History of downtown Bend? Who cares! That has nothing to do with MY STORE. Talking to YOU about MY business? Fuck that, that gives YOU some sort of PERCEIVED advantage, and anything GOOD for you MUST BE bad for me. Picking up my dogs shit off the sidewalk? Fuck you.

I know a kid that got a "B" on an otherwise "A" paper at school, because she wrote about the history of Downtown and said that Goody's use to be Mode-O-Day.

Her teacher told her that no, it has always been Goody's since back in the 20's. Well her dad came in with a picture and proved the stupid fucker wrong.

Think anyone downtown knows of Jack Wetle, Ray LeBlanc, Maren Gribskov, etc.,etc.

Anonymous said...

Maren opened the Pine Tavern, Wetle had Wetle's Department stor down town and Ray had clothing store next to the Tower Theater.

Anonymous said...

... next to the Tower Theater.
***
I loved seeing movies at the Tower Theater as a kid in the 60s -- my memories feel like sepia-toned movies themselves.

The only other businesses I remember are Pine Tavern and JC Penneys (across the street). Ah, the good ol' days.

The Natives Are Restless said...

Marge, you're awesome...and a rarity.

Duncan McGeary said...

Brandeis Drugs. Upstairs had the toys.

Owl Drug.

For newcomers: Cascade Stationary, which was called Ericksens' Stationary. And Masterson St. Clair hardware.

I remember a grocery story across from the old Jr. High, (which was the old High School) Wagners? Safeway?

Newport Mrkt. I think was a Piggly Wigglys.

And next to where my wife's store is, in the Mini-Pet mart another market.

And of course, Rollies Market downtown; used to go there every day from my store in the eighties and get jojos and corndogs.

Anonymous said...

RE:
He also points to a disturbing fact, that throughout his career, Greenspan not only made costly mistakes, but made the same ones-over and over again. And not only was he never able to recognize or admit to those mistakes, he constantly rewrote his own history to justify them.

***

Of course he made the same "mistakes" over and over again. I hope we are all starting to realize these are not mistakes at all... but rather all part of the plan. The Federal Reserve should not exist, was never legally created, and is ran by the ultra elite (Rockefeller, Warburg, Rothchild etc)... they create money out of NOTHING and lend it to our gov't at an interest (which we pay back via federal income tax which was also never properly ratified and absolutely illegal... there is no law that requires us to pay fed income tax if you don't know that already)...

SO, mistakes? Not at all. The Fed Reserve has intentionally created all bubbles, recessions and depressions since it's inceptions making the elite insane amounts of money for nothing. Oh, yeah, and it has funded BOTH SIDES of most wars since it was created as well... with the help of the CIA, NSA, multinational corporations etc. Are we all starting to see the big picture yet?

Anonymous said...

And of course, Rollies Market downtown; used to go there every day from my store in the eighties and get jojos and corndogs.

It's a miracle you're still alive after eating jojos and corndogs for 10 years!

Duncan McGeary said...

I always figured I'd be like Roger Gunson of Magill Drug (talk about old Bendites) and they'd pretty much find me slumped over my cash register.

(Not meant to be disrespectful, I liked Roger a lot.)

Anonymous said...

Dunc,
Remember when Newport Mkt.. was Green Mindt? Or when Pat and Mike's was upstairs in the Penny's bldg? That was 79ish. I don't remember when Eddies market and tire place opened out on Hwy 20, but those guys put tires on my truck and let me make $20's a month payments on them, in the last recession and bubble burst.

LavaBear said...

>>Remember when Newport Mkt.. was Green Mindt?

Or before it was Green Mindt is was 3 Boys Market? That's way back.

Anonymous said...

That whole thing about Countrywide HELOC sounds fishy. As long as you maintain 100K equity over your principle they're not going to cut your HELOC. Sounds like someone ran out of equity.

Anonymous said...

Can't grow corn in Bend...growing season is tooooo short..no rice either...few types of beans and peas. See above for the few you can grow here, without a green house. Limes would be nice to go with the Tequila. Oh well.

--------------------------------

But wait. There ARE things you CAN grow... and having lots of empty houses HELPS.

Duncan McGeary said...

So you'd rather believe good old Countrywide, because you know they are so credible?

IHateToBurstYourBubble said...

There ARE things you CAN grow... and having lots of empty houses HELPS.

I GUARANTEE you this will start happening with FAR more frequency here.

Duncan McGeary said...

Go read my blog entry. I told it the way it happened.

Meanwhile, go read

From Today's New York Times:

"You Thought You Had an Equity Line":

IT was the nation’s lending institutions and mortgage originators that got us into this credit mess, but it is consumers, taxpayers and those companies’ shareholders who will end up shouldering most of the costs.

The latest example of this is in the mass freezing of home equity lines of credit going on across the country. Reeling from losses on their wretched loan decisions of recent years, lenders are preventing borrowers with pristine credit and significant equity in their homes from tapping into credit lines that they paid dearly to secure.

In the last 30 days, lenders have sent several hundred thousand letters advising borrowers that their home equity lines of credit are frozen, estimated Michael A. Kratzer, president of FeeDisclosure.com, a Web site intended to help consumers reduce fees on home loans.

Major lenders — including Washington Mutual, IndyMac Bank and the Greenpoint Mortgage Unit of Capital One — say that declining property values are prompting the decisions to cut off credit.

Banks have the right, of course, to rescind these credit lines at any time under the terms of the contracts they struck with borrowers. And as home prices have tumbled in many parts of the country, banks are undoubtedly trying to protect themselves from exposure to additional losses.

But these actions are being taken even in areas where property prices are rising, Mr. Kratzer said. What’s worse, the letters provide no explanation for how the lenders determined that the property values underlying the equity lines had fallen.

Frozen home equity lines will surely intensify the consumer spending downturn and put added pressure on an already weak economy. Indeed, on Friday, consumer confidence as measured by the University of Michigan plummeted to its lowest level since 1982. The drop was attributed mostly to higher fuel and food costs, but consumers’ views on their current and expected personal financial situations dropped to their lowest readings since November 1982 and April 1980, respectively.

One especially exasperating aspect of now-you-see-them, now-you-don’t equity lines is that borrowers are not receiving refunds for fees they paid to secure the credit in the first place.

These fees can be significant, Mr. Kratzer said: on a $50,000 line, for example, fees of $1,500 are common. If the line is being frozen at, say, $25,000, why shouldn’t the borrower be entitled to receive a refund of $750?

Borrowers who have an excellent credit score may also find that status hurt when a home equity line is frozen. That is because when a lender suddenly caps a $50,000 line at $25,000, the borrower will appear to have tapped the entire amount of the loan, a factor that can reduce a person’s credit score. Never mind that, based on the original amount of the credit line, the borrower is using only half of it.

Ronald Martin, 31, a United States naval aviator deployed in Iraq, received one of these letters recently from IndyMac Bank. “We regret to inform you that your IndyMac Bank Home Equity account has been temporarily frozen,” the letter began.

Mr. Martin’s wife, Leigh Anne, a substitute teacher who lives in their Camarillo, Calif., home, said the notice surprised her because she and her husband have excellent credit scores and have not even tapped the IndyMac line. While home values in the Martins’ neighborhood have fallen, the couple are not underwater on their mortgage, which was taken out in spring 2005.

“YOU paid to use that equity line and now they are saying you can’t use it,” Mrs. Martin said. “We’ve never been late on our mortgage. We have a good savings account. We pay every bill we ever had on time — what did we do wrong?”

The IndyMac letter said the Martins’ credit was being suspended because “the value of the dwelling has declined significantly below its appraised value used at origination.” IndyMac said it would re-evaluate the property value each quarter and, if it improved, the freeze would be lifted.

Officials representing IndyMac declined to comment.

Sara Gaugl, a Washington Mutual spokeswoman, said the bank actively manages the amount of credit it extends to customers. “We have a process in place for customers who wish to appeal a credit line decrease decision,” she said. “We also will continue to assist homeowners who may have unique or special situations.”

Mr. Kratzer, who has recently fielded calls and e-mail messages from more than 500 borrowers in straits similar to the Martins’, said lenders who were reining in credit should provide an explanation of how they determined that property values associated with the lines had declined sharply.

“How are lenders arriving at the new loan-to-value ratios?” Mr. Kratzer asked. “When you secure a loan or home equity line, a full appraisal is generally required. But these processes aren’t being used when the lender calculates a new value to reduce an existing credit line.”

Mr. Kratzer said he had heard from frozen-out borrowers in 11 metropolitan areas where the median home price actually increased in the last quarter of 2007, the most recent figures available from the National Association of Realtors. They include Yakima, Wash.; Appleton, Wis.; Raleigh-Cary, N.C.; and Champaign-Urbana, Ill. Borrowers in areas where prices remained flat have also contacted him.

“Are they applying blanket values to ZIP codes, neighborhoods or entire regions?” Mr. Kratzer said. “We’re all left to wonder about the process.”

Luckily for the Martins, they are not in need of additional credit on their IndyMac line. But other borrowers who have contacted Mr. Kratzer say they are in the middle of home improvement projects that they can no longer finance, or have college tuition bills that they were going to pay using the credit lines. Now they can’t.

Medical expenses, another reason that borrowers tap their equity lines, are also posing problems for some homeowners.

And small-business owners who use home equity lines to bridge cash-flow gaps throughout the year are also being stricken by these curbs, Mr. Kratzer said. He has also heard from people who paid down some of their home equity lines, expecting to be able to draw on them again. Now they are out of luck.

“In a perfect world, lenders would fully disclose the process and criteria used to make these valuations and decisions,” Mr. Kratzer said. “These borrowers have a solid payment history, good credit scores and plenty of equity to satisfy most of the lenders’ loan-to-value formulas. Instead, the banks are just shutting them off.”

Anonymous said...

Ah..Good one LAVBEAR..I forgot about 3 boys.

Duncan McGeary said...

And before that (I think): Piggly Wigglys. No joke.

Duncan McGeary said...

That 100k figure is interesting, though. Is that an automatic trigger? because it seems like they were loaning money up the the actual value of the house, in some cases. (not mine.)

Our house would have to drop more than 20%, after we invested 30k in improvements.

LavaBear said...

Hey Duncan, Tanta at Calculated Risk wrote a funny (in her way) review of that NY Times article.

http://calculatedrisk.blogspot.com/2008/04/heloc-nonsense.html

Check it out.

Duncan McGeary said...

Yeah, I read that. I think Gretchen is closer to the truth.

I think this may be a political/philosophical divide.

Duncan McGeary said...

Also, this little tidbit from the Los Angeles Times about Countrywide's loan practices.

2 states probe Countrywide home loans

By E. Scott Reckard and Marc Lifsher, Los Angeles Times Staff Writers
December 14, 2007

The nation's No. 1 mortgage lender, Countrywide Financial Corp., is under investigation by California Atty. Gen. Jerry Brown and the attorney general's office in Illinois, the Calabasas company said Thursday.

Countrywide said it had received subpoenas for documents from California and Illinois but declined to elaborate, citing company policy. It said it was cooperating in the two probes.

Related Stories
- U.S. investigates Countrywide fees
- Groups protest Countrywide actions

A spokesman for Brown said he couldn't comment. The attorney general has said he was taking a broad look into the lending practices of mortgage bankers and mortgage brokers and what roles they might have played in the mortgage meltdown crisis.

The investigation in Illinois, which was first reported in the New York Times, grew out of a probe into broker One Source Mortgage, which the state has charged with luring borrowers into loans they couldn't afford. Countrywide was the chief provider of these loans -- known as pay-option mortgages -- which allow a borrower to pay less than the full interest that comes due each month, sending the loan balance up.

A former employee of One Source told investigators that the only Countrywide loan the broker tried to sell was the pay-option type because the rebates were so huge, said Veronica Spicer, an assistant Illinois attorney general in the consumer protection division.

Spicer said her office sent a subpoena for documents to Countrywide in mid-September.

Mark Belongia, a lawyer for One Source, said the broker would be vindicated because the nature of the loans was disclosed carefully to borrowers. "We originated a legal product in a legal manner," he said.

In Sacramento, Brown has said he was particularly interested in loans with yield spread premiums. In these mortgages, people who could qualify for a lower interest rate are lent money at a higher rate, with a rebate -- the yield spread premium -- being paid by the lender as a commission to brokers.

Many in the mortgage industry say the rebate can be used to offset borrowers' closing costs, making the loan more attractive to borrowers trying to hold down costs. Critics say the yield spread premium more often is simply pocketed by the brokers to make more money on loans.

"That's a big temptation, it seems to me," Brown said in a recent interview.

In previous investigations of alleged mortgage abuses, officials from various states formed task forces that negotiated settlements including refunds to borrowers and changes in lending practices. In the largest such case, Household International agreed to a $484-million settlement with 50 states in 2002. Early last year, Ameriquest Mortgage agreed to pay $325 million in a similar settlement with 49 states and the District of Columbia.

There was no indication that any such task force had formed to investigate Countrywide or other lenders as a result of the latest mortgage meltdown. Many of the easy-money lenders that fed the housing boom this decade have gone out of business.

Battered by delinquencies and unable to sell riskier loans such as pay-option mortgages, Countrywide reported its first loss in 25 years for the third quarter, a $1.2-billion deficit. It has said it would lay off as many as 12,000 employees -- about a fifth of its peak workforce of 61,000 -- and has been trying to reshape itself as a maker of traditional loans, funded through its Countrywide Bank, that can be sold to the government-sponsored loan buyers Freddie Mac and Fannie Mae.

In Washington, Countrywide is being investigated by the Securities and Exchange Commission in connection with stock sales by Chief Executive Angelo Mozilo.

Countrywide shares fell 45 cents to $10.08, their fourth decline

Anonymous said...

Our house would have to drop more than 20%, after we invested 30k in improvements.
The real point is that they are shutting down all helocs. Doesn't matter how much you could borrow. Bend is a declining market on the maps and they are all getting shut off. If you need a business loan let me know. Private money, now is the better investment.

Duncan McGeary said...

"The real point is that they are shutting down all helocs. Doesn't matter how much you could borrow."

Yeah, but he doubted me. Called me fishy!

Interesting, I've noticed in my store too. Despite our vaunted independence as Americans...most people will believe big over small, institutions over individuals, and the internet over the storekeeper.

I call it the unicorn effect. I could sell a unicorn over the internet and you have no way of challenging me.

If I tell you I have a unicorn in my store...well, I have to produce it.

So why would someone assume the story is fishy? Especially since it is under my own name? And I have a store in town?

I have nothing to hide, my mongering friend.

Anonymous said...

U.S. debt could lose triple-A rating

from the Wall St. Journal:

GSEs Could Affect U.S. Credit Rating
By PRABHA NATARAJAN
April 15, 2008

The performance of government-sponsored enterprises like Fannie Mae and Freddie Mac could have a direct impact on the national economy and, more importantly, U.S. credit standing.

So-called GSEs enjoy implicit government guarantees and could cause the U.S. to lose its sterling triple-A rating if the government were forced to come to their rescue, Standard & Poor's said in a report Monday.

"Even though...credit damage from GSEs is unlikely, the greater risk to the U.S. lies with them than with broker-dealers," the report noted.

The demise of Bear Stearns Cos. and the Federal Reserve's efforts to alleviate strains at broker dealers has captured the attention of market participants who feared the financial system itself might seize up last month.

While this credit crunch has hurt financial markets, S&P notes that it hasn't threatened the standing of the nation's credit quality upon which U.S. Treasurys and debt priced off this government debt depend. But should a protracted recession cause Fannie and Freddie to buckle, the U.S. rating would be in danger.

The cost to the U.S. government in such a scenario would be as much as 10% of gross domestic product. The maximum potential cost of aiding the broker dealers during a prolonged economic downturn would be below 3%, S&P analysts found. The Federal Reserve's bailout of Bear Stearns and its extension of credit facilities to brokers so far costs less than 1% of GDP.

Freddie and Fannie's exposure to the housing market heightens the risk of future losses should borrowers run into trouble as home prices decline. That the two companies are guaranteeing larger loans as part of the government's efforts to shore up the housing market adds to this risk.S&P says, "These potential risks are not a prediction, but a risk worth monitoring."

tim said...

Amazingly, there really was a Bend Piggly Wiggly. I've been in many Piggly Wiggglys but I had no idea that there had ever been any on the west coast.

But sure enough, there are plenty of references to the old Bend Piggly Wiggly. A nice unicorn on the Internet told me so.

IHateToBurstYourBubble said...

The cost to the U.S. government in such a scenario would be as much as 10% of gross domestic product.


From wikipedia:

The U.S. economy is the largest national economy in the world, with a nominal 2006 gross domestic product (GDP) of more than US$13 trillion (over 19% of the world total based on purchasing power parity)

Duncan McGeary said...

Timothy,
I just asked my older sister and she doesn't remember a Piggly Wiggly.

Googled it, and it says Safeway bought out the west coast PW in the
20s.

So, this may be a false memory.

And after I made such a big deal about my credibility.

Anyone out there remember a Piggly Wiggly in Bend, say, after 1958 or so. (As far back as I'm likely to remember.)

tim said...

O.C. Hart...

"General contractor in Redmond in the 1930s and 40s. Built the Meda-Butler Building, the Bend Piggly Wiggly Store, L.R. Down House, the Hart Duplex, Bend and Redmond Safeway Store, the Redmond Funeral Home, the Walter Franks Building, the Lew Franks Building, and the Moty & Van Dyke Building in Bend."

If he was a contractor in the 30s and 40s, seems like you still have a chance of it being a real memory. Nothing about the 20s in there.

The Natives Are Restless said...

Duncan, I for sure remember Piggly Wiggly...and Three Boys...and Buy Rite!

Bewert said...

CC Budget Work Meeting Update:

36 jobs cut or not filled.

Overtime cut by 22%/$417K

Elimination of Code Enforcement proposed

Building and Planning still sucking dollars, even with huge cuts. Clinton stated they should pay there own way--of course if this had been true three years ago we wouldn't be in such bad shape.

JR dead in water, leaving us $6M in hole, if land not sold this fall. Everybody's got their fingers crossed that Garz can work some magic. (From Sonia) Madras has the prison work sewn up into the foreseeable future, so that's out for now.

Public Safety (fire/police) staffing levels being cut back to 05/06 levels. Fire is planning on closing Tumalo Station about 15% of time. Lots of talk about finding another $100K to keep it open. Finally decided to use half of Mirror Pond money to do so. Even with six stations, we still run out of ambulances at least part of the time two days out of three.

Street maintenance more than halved: $1.7M to $700K.

They finally recognize that commercial fees are too low, "they've been subsidized by residential", but no talk of increasing them. Only grumbling from Clinton that they should pay for themselves.

Question: When was the last time a developer paid his true SDC and fee costs in Bend?

Answer: Never. Feel free to correct me if I'm wrong.

An aside: The new SDC structure is only increasing fees about 30%. COBA has had about 200 contacts with the City staff over increases in construction fees. Five of the seven councilors are directly involved with development and/or real estate in some way.

Back to "news": UGB will be delayed, of someone sues City may run out of lawyer money. Is this bad?

Accessibility, affordable housing take big hits. Transit not so much. Still, Capell talked about killing it.

Planning and Engineering both take huge hits, still far from paying for themselves.

Commercial permit fees for this fiscal year second highest in history--do they really expect this too last? Besides, they are still far from paying for themselves.

Increases? Community Development and Economic Development. Also $250K to airport debt service, $180K to Juniper Ridge debt service. They are trying to build out economic areas with debt in the hope of recouping the outlays...somehow. Not entirely clear. Sonia said "if they sell 50 acres at $5 a sq ft, great! Thats $10M, and I'm even." But then agreed that she didn't know where the $40M for the interchange was coming from, and stated that wasn't really her concern. It's more on Garz and John Russell.

Her not-shovel ready price point seemed like she realized what it was really going to go for, if at all. I mentioned all the current commercial built and in process on the market and she glumly acknowledged it: "it's going to be tough". She really may be the sharpest tack in the bunch up at City Hall.

Also, reserves are being cut back to bare minumums, 1-2 months in many departments, and only two weeks in transit. Scary.

Eric kept coming back to "structural problems". I think this is an allusion to the lack of realistic SDC's and fees, both in the past and present. I sketched a diagram that led from LOw SDC's and Fees-->Planning, Engineering, Street, Utility deficits-->General Fund hits-->Public Safety Cuts. Until these fuckers man up and stand up to the RE/dev community, this place will always be in trouble, except for that once every generation bubble.

Sad. Especially when five of seven are directly involved with said industries. You can see it in their preference to cutting poor peoples' benefits (housing/transit/etc.) rather than cutting Economic and Community Development, rather than mandating realistic SDCs and permit fees.

The fucking head (Mel?) of the Planning and Engineering Departments was stating that the subsidizing of commercial inspections by residential fees was killing us now, and Clinton was the only one who even fucking stated that the developers should pay their own way in fee-based departments. Everyone else maybe thought that was a good idea, but action? Never.

That's all for now, back to taxes, etc.

PS Who ordered the fucking snow today? On the good side, some Cali's may be thinking Tucson ;)

Bewert said...

PS That jobs cut number is close but there were so many different layoff and not hired numbers being thrown around it was hard to get a real handle on it. They are cutting or not filling a bunch, though.

Bewert said...

On another note, both Johnson and Friedman were absent.

IHateToBurstYourBubble said...

Bend budget blues, Pt. 2: New layoffs total 21

Posted: April 14, 2008 10:46 PM

Another 15 budgeted jobs to go unfilled; service cuts eyed

By Barney Lerten, KTVZ.COM

The city of Bend, almost halfway through its first 2-year budget, is on a painful path toward cutting about $12 million, or 12 percent, from its original 2008-09 spending plan. That would scrap 36 new or existing positions, halting code enforcement and trimming transit in the next round of its battle to balance the budget amid a sharp downturn in building-related revenues.

City councilors got the grim specifics of those staff proposals at a work session Monday evening, and while all want to protect vital services such as police and fire to the greatest extent possible, they raised no objections to proceeding toward public hearings and votes in coming weeks.

The biggest cuts, once again, are proposed in the community development and public works departments, which laid off 10 people late last year and left another dozen positions unfilled in the initial round of cuts from the current year.

But actually, the larger cuts, through not filling new positions, do come in the public safety sector, with 13 budgeted positions left vacant this year and another 11 in the coming year.

Put them all together, and Bend intends to cut its budgeted FTE (full-time equivalent) positions by 72, or 13 percent, over the two-year budget, dropping the city's staffing ratio to six per 1,000 residents, which is below the level of five years ago (6.3).

To balance the budget, the city staff, led by Interim City Manager Eric King, also plan about $4.7 million in cuts to materials and services, down 16 percent, along with a 22 percent ($417,000) reduction in overtime and program reductions.

Those cuts will boost turnaround and wait times for building and other permits, for example, and defer maintenance and technology upgrades, but the council was told the plan also includes consolidations for efficiencies.

The 21 layoffs would occur Aug. 1, giving staff members three months notice on May 1.

The proposal would eliminate the city's code enforcement program, and possibly delay the UGB (urban growth boundary) expansion, as well as the Central Area Plan. The city also would eat into its reserves, cutting them to about 1 ½ to 2 months or revenue for the building and planning departments.

Beyond the current revenue drop, King said the long-term problem is that the city's general fund is not growing enough to address the cost to provide services, largely due to the continued impact of the Measure 50 property tax limitation.

One focus, ahead of a Wednesday evening City Hall rally by unionized transit workers, is the proposed cuts to transit of 21 percent from the original budget, which would cut Sunday Dial-A-Ride service, starting in June, and cut both Bend Area Transit and DAR service for an hour a day at midday. The "Ride the River" summertime program would be eliminated due to lack of private sponsors.

Though the budget issues are not on Wednesday night's council agenda, councilors will then review a citizen committee's proposal to ask voters in November to approve a separate transit district to fund the BAT operation.

Among other issues that could cause widespread pain: a cut in the city's snow removal contract, from $280,000 to $150,000 - after a snowy winter that saw the city spend about $550,000. The street overlay program would be slashed almost in half, to $700,000.

Then there's public safety, where city staff propose not filling seven police vacancies and four fire vacancies. Those and other changes will increase both police and fire response times, city staff warned.

City administration would cut four positions, largely in accessibility, which has grown from one to six people in the past two years. That would cut education and outreach, instead focusing efforts on complying with federal requirements.

An affordable housing fee would be boosted, as the administrative fee would rise from 5 to 15 percent on the fee collected on new building permits, until the economy improves. At the Bend Airport, general fund dollars would be invested in a new taxiway, to aid Cessna and economic development, with hopes of increased federal funding for airport infrastructure.

The cuts would not jeopardize the city's bond rating, staff said, but it will hurt the city's goals of maintaining its financial position and not using one-time revenues or debt for ongoing operations. The staff recommended rebuilding the general fund reserve fund to at least $7.5 million, because other reserves would be used to shore up operations and keep cuts from having an even greater impact.

King mentioned another option, of cutting in half the $200,000 devoted to Mirror Pond dredging or other fixes to siltation, using the money to "back-fill" the fire department, rather than dip into its reserves. King said they will try to find other funding partners to address the pond's problems, and councilors appeared to agree, as long as it doesn't delay solutions.

The city Budget Committee (seven councilors and seven citizens) will meet April 23 for further discussion with staff, and hopefully council approval on the path going forward, officials said. A public hearing (required for transit due to its partial federal funding) is planned for May 21, with adoption of an adjusted '08-09 budget resolution set for June 18.

The full staff presentation to the council can be found on the home page of the city Website at http://www.ci.bend.or.us.

IHateToBurstYourBubble said...

The "Ride the River" summertime program would be eliminated due to lack of private sponsors.

Watch the death count from DUII go way up. Luckily we have no cops to catch these drunks.

IHateToBurstYourBubble said...

At the Bend Airport, general fund dollars would be invested in a new taxiway, to aid Cessna and economic development, with hopes of increased federal funding for airport infrastructure.

Anyone for pork?

IHateToBurstYourBubble said...

...cutting in half the $200,000 devoted to Mirror Pond dredging or other fixes to siltation, using the money to "back-fill" the fire department, rather than dip into its reserves.

And the deferred maintenance begins. Look for overgrown "parks" (ie meth distribution points), blown sewage lines, flooded underpasses, moon-sized potholes, and the like.

Yeah Bubble!

IHateToBurstYourBubble said...

Then there's public safety, where city staff propose not filling seven police vacancies and four fire vacancies. Those and other changes will increase both police and fire response times, city staff warned.

Aren't you glad you got a deal on the SDC charges for your McMansion? Now when it's burning down or getting robbed, there'll be no one to help.

Woo Hoo Bubble!

IHateToBurstYourBubble said...

largely due to the continued impact of the Measure 50 property tax limitation.

I thought this was the $1/pack cigg tax?

Electionhttp://www.ktvz.com/Global/story.asp?s=7220966 '07: Smokers upset over Measure 50

Last Updated: Oct 16, 2007 08:50 PM

By Eric Rucker, KTVZ.COM

There are only two measures on the state ballot this year, but one of them is huge for cigarette smokers.

Measure 50 would increase the tax almost $1 per pack.

The idea behind Measure 50 is to increase the cigarette tax in order to provide health care to more children.

Jo Wheaton runs Tobacco Jo's, a drive-through cigarette shop in Redmond. Her business motto is cheap cigarettes and good customer service.

But if Measure 50 passes, she says she'll be out of business.


Is there another Measure 50?

IHateToBurstYourBubble said...

Oy, blew that last link, it's here:

Election '07: Smokers upset over Measure 50

Anonymous said...

Sorry about the aerospace biz... when it rains, it pours.


http://www.bizjournals.com/portland/stories/2008/04/14/story3.html?b=1208145600^1618604


Just remember, Resident Lush and the GOP are doing this to you. Pay them back in November.

tim said...

>>She really may be the sharpest tack in the bunch up at City Hall.

Bruce, you may as well look for the sharpest marshmallow in a bag.

Anonymous said...

Jo Wheaton runs Tobacco Jo's, a drive-through cigarette shop in Redmond. Her business motto is cheap cigarettes and good customer service.

But if Measure 50 passes, she says she'll be out of business.
--------------------------------

So... somebody sells DEATH for a living, and I'm supposed to care?

Why doesn't she rent a bunch of empty houses, set up some lighting, and make some real money? She'd do better to lobby for legal pot than to waste her breath crying about the inevitable. Sorry, merchants of death get no sympathy from me.

IHateToBurstYourBubble said...

halting code enforcement

What does this mean? That midnight meth shacks will once again spring up in Alfalfa?

Is this police "code" or building "code"?

Bewert said...

It's a sunny day in Bend!

"Bend home sales up as prices drop"
Houses spend fewer days on the market

"For the first time since September, 2005, the median home price for single-family residences in Bend has dipped below $300,000..."

"...there has been a slight bump in the number of sales month to month and a decline in the number of days properties are sitting on the market..."

Somebody has to post this whole piece of shit.

Also, I posted to new articles to juniper-ridge-info.blogspot.com, and they should also be up at bend weekly.com later this morning. I have a slightly different take on the budget cuts:

BULL-"City services in Bend face big cutbacks"

Bruce"the sharpest marshmallow in the bag" E-"Public safety staffing may be cut to 05/06 levels"

Bewert said...

Re: Is this police "code" or building "code"?

City codes, not state and federal codes, like building codes. Things like sign ordinances.

tim said...

>Until these fuckers man up and stand up to the RE/dev community, this place will always be in trouble, except for that once every generation bubble.

During a city's boom, it MUST attack all infrastructure problems with a gusto. If it misses that rare chance, it's doomed, because it'll built a backlog of trouble that slower, saner cities don't have.

I talked to someone running for councilor at a party once. All she could talk about was subsidized housing. I told her all her efforts along that route would just keep prices high and hurt the people she wanted to help. You don't build new, cheap housing--you keep old shithouses and shitmobilehomes from being torn down if you want affordable houses. I thought I had her pinned down to listen to me, but she escaped before I was finished.

And then she lost anyway.

IHateToBurstYourBubble said...

FAA grounds kit plane makers
Delayed evaluation of new models could cost local companies $100M


Oregon's robust kit plane manufacturing industry faces turbulence this summer, as potential changes in federal regulations could halt sales and prompt layoffs.

Executives at Bend's Epic Aircraft and Redmond's Lancair International Inc. say a Federal Aviation Administration decision regarding new product inspections could equate to a $100 million hit on plane makers, suppliers and ancillary businesses.

The FAA is delaying evaluations of new kit-plane models as it considers revamping rules regarding manufacturers' involvement in actual assembly of the planes. The agency said that delay could last until October.

Sen. Ron Wyden, D-Ore., who's working with area manufacturers on the issue, hopes to reach a compromise that would allow evaluations to begin this summer. Wyden and manufacturers question why FAA officials are targeting the kit plane industry after saying the planes do not pose safety issues.

"They admit that this is not a safety issue, and they have not given a logical reason for the change," Wyden said. "If this policy had been in effect in 1903, the Wright Brothers wouldn't have been able to fly their plane at Kitty Hawk."

The delay dramatically affects Epic's 2008 plans, as the company is developing three planes that are nearly ready to market. Each plane costs between $10 million and $15 million to develop.

"We're at a big air show in Florida this week and we can't even exhibit here," said Rick Schramek, Epic's CEO. "This is very important to us. It's a matter of life or death."

The FAA wants to clarify whether fabrication of the plane's parts, which often contain composite materials produced at manufacturing plants, should constitute part of the actual assembly.

Purchasers, typically hobbyists willing to spend as much as $1 million to build planes from manufactured parts, usually assemble the planes at suppliers' factories or airport facilities. The end-flyers must participate in at least 51 percent of the planes' assembly process.

The FAA is also concerned by the emergence of specialty assembly businesses whose services exceed the intent of the FAA's kit plane regulations, said Dick VanGrunsven, founder and CEO of Aurora-based Van's Aircraft Inc. VanGrunsven serves on the FAA committee studying kit plane rules.

The evaluation delays bring uncertainty to an industry that provides hundreds of specialized Oregon jobs. Already, Epic, which collected $10.2 million in 2007 revenue according to the research firm Dun and Bradstreet, has laid off 30 of its 190 workers as it addresses the delays.

Van's, which reported $4.7 million in 2007 revenue, employs 70 workers, while Lancair, an $8.3 million company, employs 55, down from 85 in late 2006.

"It just happens that the region has several manufacturers with reasonable employment levels," VanGrunsven said. "And it's a rather unusual segment of aviation because of the unique licensing policies associated with home (aircraft) building."

Van's Aircraft isn't introducing any new products in the next few months.

"It won't have that much effect on us, but that's just because of timing," said Tom Green, Van's president. "Because we don't really have a kit that we want to push through, we can sit back and wait for the rule" to be issued so that evaluations can start again.

Oregon's kit plane manufacturers command an estimated 80 percent of the industry's manufacturing segment, according to Wyden's office. The manufacturing side comprises more than half of the overall industry, which includes sellers of plane-making blueprints.

Wyden and Oregon's other U.S. senator, Republican Gordon Smith, along with Gov. Ted Kulongoski, have pledged to help alleviate the current FAA issues.

Les Dorr, an FAA spokesman, said the agency will announce on April 14 that it will grandfather in approvals of existing planes. However, he wouldn't predict whether new kit plane evaluations would take place before October, nor how any new rules might affect the industry.

The agency, in a Feb. 14 report on potential changes regarding assembly and fabrication regulations, said its rules don't adequately address how much commercial assistance kit plane purchasers should receive. It also wants to better gauge how long it takes purchasers to assemble the planes, as compared to how much time manufacturers spend making the parts.

"FAA is concerned that amateur builders are using more commercial assistance than is allowed," according to the February report. "Some complex kits include advanced composites structures, state of the art avionics systems, special tools and gauges and close tolerance fixtures. These builders must use commercial assistance because the aircraft cannot be fabricated and assembled outside the factory environment by the average amateur builder."

FAA may also be concerned that if owners don't perform enough of the assembly, they may not learn how to repair their planes. The agency hasn't significantly revamped kit plane-making rules since 1964.

But tighter rules regarding fabrication could hamper what Wyden calls an important industry, particularly in Central Oregon.

"These are tough economic times, and one of the bright spots is the growing aviation sector," Wyden said. "There are untold small firms that feed off of this. When our economy is this vulnerable, I'm not going to let this agency put an important Oregon industry under."

Plane builders expend far more time assembling the plane than manufacturers spend in producing the plane kits, said Joe Bartels, Lancair's CEO.

Lancair will continue designing and manufacturing new planes, said Bartels. The company expects the FAA to add much tougher rules for newly developed planes.

He's confident, though, that Oregon's kit plane industry will survive.

"I think at the end of the day, FAA will allow us to do what we've been doing," he said.

agiegerich@bizjournals.com | 503-219-3419


Did anyone see one drop of ink regarding these layoffs? I don't remember seeing anything about this. All I remember is "Epic just got $200 million from Liberache! YEAH!".

And that's it.

Bend's economy was a 2 legged stool, and the final (weaker) leg, aerospace, is being kicked out.

Bewert said...

Re: Just remember, Resident Lush and the GOP are doing this to you. Pay them back in November.

Telfer made a comment about how we need to send someone to Salem (her, I'm sure) to fight for the City's right to fix the "structural problem", i.e. that they can only increase property taxes by 3% annually.

Not much mention of the actual structural problem: the stupidly low SDC's and permit fees are not paying for the new development like they are supposed to. Only mention of the was Oberst's statements on how bad his department is hurting now that residential fees are no longer propping up commercial planning and inspection costs.

Not a word about maybe increasing those fees so they would cover direct costs. But then when you have someone like COBA making close to 200 contacts with the City to whine over proposed fee increases, they just don't happen as needed.

IHateToBurstYourBubble said...

It's a sunny day in Bend!

"Bend home sales up as prices drop"
Houses spend fewer days on the market


Yeah, every funnel cloud has a silver lining in Costa-ville... OR YOU'RE FIRED!

Remember how I said they would stratch farther & farther into the past to "smooth" out this little "temporary" dip? Now the "dip" is the Grand Canyon, so they have resorted to DISMISSING SEASONALITY.

"Things slowdown in the Winter & heat up in the Spring? No, I had no idea! Really? Wow!"

The contempt for Bend citizenries IQ rolls on.

IHateToBurstYourBubble said...

Foreclosures jump 57 percent in last 12 months

By Lynn Adler Tue Apr 15, 5:26 AM ET

NEW YORK (Reuters) - Home foreclosure filings surged 57 percent in the 12 month-period ended in March and bank repossessions soared 129 percent from a year ago, as homeowners struggled to make mortgage payments, real estate data firm RealtyTrac said on Tuesday.
ADVERTISEMENT

For the month of March, foreclosure filings, default notices, auction sale notices and bank repossessions rose 5 percent, led by Nevada, California and Florida, RealtyTrac said.

The rise in March to filings on a total of 234,685 properties followed a 4 percent decline in February, RealtyTrac reported.

RealtyTrac said the peak has yet to be reached.

"What we're really looking at is ongoing fallout from people overextending themselves to buy homes they couldn't afford and using highly toxic loan products to get into the houses in the first place," Rick Sharga, vice president of marketing at RealtyTrac, based in Irvine, California, said in an interview.

"We're going to see quite possibly a record amount of foreclosure activity in the third or fourth quarter," reflecting sharp payment increases on adjustable-rate subprime mortgages in May and June, Sharga said.

One in every 538 U.S. households living in single-family dwellings received a foreclosure filing in March. The single-family dwellings can include condominiums.

There are three phases of the foreclosure process in most states -- an initial default notice, notice of a scheduled auction, and an "REO" filing if the property is not sold at auction but instead repossessed by the bank, Sharga said.

REO refers to real estate-owned property.

All of the households in the report received at least one of these filings last month.

AUCTION NOTICES UP 32 PERCENT

While default notices and repossessions soared in March, auction notices rose a relatively small 32 percent, James J. Saccacio, chief executive officer of RealtyTrac, said in a statement.

That suggests "more defaulting homeowners are simply walking away and deeding their properties back to the foreclosing lender," he said. "This deed-in-lieu-of-foreclosure process allows the lender to take possession of a property without putting it up for public foreclosure auction."

The states with the highest foreclosure filing rates -- Nevada, California and Florida -- also are among those that had the biggest price appreciation in the five-year boom before the housing meltdown that began in 2006.

These states tend to also be plagued by defaults on unoccupied homes bought by speculative investors. In many cases, home prices have now fallen below the size of the mortgages and some owners are walking away.

In Nevada, one in every 139 households received a foreclosure filing in March, keeping the state at the top of the ranks for the 15th straight month.

The 7,659 Nevada properties receiving foreclosure filings last month represented a 24 percent jump from February and a nearly 62 percent spike from March 2007.

California had the second highest rate of foreclosure filings, one for every 204 households, followed by Florida with one of every 282 households.

Arizona's filings fell about 5 percent, but it retained its standing as with the fourth highest pace of foreclosure activity for the third month straight.

Foreclosure activity in Colorado dropped 8 percent in March from February and 1 percent from a year ago, but it ranked No. 5, with one filing for each 339 households.

Georgia, Ohio, Michigan, Massachusetts and Maryland were the other states with the highest foreclosure rates in March.

The states with highest total number of foreclosure filings were California, Florida and Ohio.

Foreclosure filings were reported on 64,711 California properties in March, the most of any state for the 15th consecutive month, up nearly 21 percent from February and up almost 106 percent from March 2007.

Florida posted the second highest total, with foreclosure filings reported on 30,254 properties in March. While down about 7 percent from February, filings were about 112 percent higher than last March.

Georgia, Texas, Michigan, Arizona, Illinois, Nevada and Colorado were the other states with the highest foreclosure totals in March.

IHateToBurstYourBubble said...

While default notices and repossessions soared in March, auction notices rose a relatively small 32 percent, James J. Saccacio, chief executive officer of RealtyTrac, said in a statement.

That suggests "more defaulting homeowners are simply walking away and deeding their properties back to the foreclosing lender," he said. "This deed-in-lieu-of-foreclosure process allows the lender to take possession of a property without putting it up for public foreclosure auction."


Walk away, don't pay.

I think people are fully aware that this "talk to your lender" bullshit is NOT meant to help you... do you honestly think they are going to try to negotiate ANYTHING that is in your best interests?

They do care if you live or suck dirt.

They are trying to suck you dry as long as possible. Financial institutions will ONLY do something that helps you if it happens to be aligned with their own selfish interests.

This whole "we are all about keeping people in their homes" line is just hilarious.

IHateToBurstYourBubble said...

They do care if you live or suck dirt.

They "don't" care...

tim said...

>>The contempt for Bend citizenries IQ rolls on.

Yeah well the citizens are only important as a commodity you use to fill up the buildings you build.

Bruce mentioned commercial. Holy shit, the big money in Bend is in sign making. You can't go anywhere without seeing empty or near-empty office space.

It's as if someone thought we were magically going to have 200 more 10-person Internet startups than we really have. What we really have are a couple strong tech companies, a bunch of weak ones, and then a whole bunch of one-man shows that work at home.

Who the hell is going to rent all that office space?

Bewert said...

This FAA thing could really hurt Gordo if he doesn't man up and get his Repug buddies to bury it. But then, sometime in the not too distant future, the FAA may suddenly change their mind "due to Senator Smith's concerns"...

IHateToBurstYourBubble said...

"Bend home sales up as prices drop"

See, the PROPER, "non-contempt for reader IQ" way of covering this is straight up Year over Year.

Of course, sales figures are DOWN HUGE, AND SO ARE PRICES YoY.

But no. Costa FORCED this reporter to puke out a piece laced with Kool-Aid, and report this idiotic Month to Month BS, or they would be fired.

Costa, you dumbshit, you validate the existence of blogs like this one every time you report bullshit in this 100% misleading way.

IHateToBurstYourBubble said...

>Bend home sales up as prices drop
Houses spend fewer days on market

By Andrew Moore / The Bulletin

For the first time since September 2005, the median home price for single-family residences in Bend has dipped below $300,000, according to a report released last week by the Bratton Appraisal Group.

Bratton’s monthly report, which analyzes Multiple Listing Service data for Central Oregon and is sold to subscribers, also said that home sales jumped more than 64 percent from February to March and that Bend homes spent fewer days on market, falling from 193 in February to 137 in March.

Bend’s median home price in March was $292,000. In September 2005, it was $289,000. The median price means that half of the 92 homes sold during the month of March, according to the report, were more than $292,000 and the rest were less.

The new median price continues a downward trend in Bend since median prices reached their peak of $396,000 in May 2007. In the 10 months since, median prices in Bend have fallen more than 26 percent.

Ruth Lindley, the marketing manager for Economic Development for Central Oregon, a nonprofit whose goal is to recruit employers to the region and retain existing ones, said the median price drop benefits the community.

“It means that when people are looking at the area, and hearing about utility costs, land costs, the availability of incentives, and then looking at what it would be like for employees, (Bend) becomes a community that doesn’t get crossed off,” said Lindley. “We can stay on that short list.”

The Bratton Report cites the sale of single-family residences only and does not include condos, townhouses, manufactured homes or acreage. It differs from a recently released report from the Central Oregon Association of Realtors, which summarizes quarterly data. That report gave a quarterly median price of $306,500 for Bend.

The Bratton Report also broke out monthly data for Redmond. There, the median home price in March dropped to $225,000 on sales of 38 homes. In February, the median home price was $230,000 on sales of 30 homes. Days on market also dropped, to 123 in March from 198 in February.

A year ago, in March 2007, Redmond’s median home price was $259,000. It reached its peak of $289,000 in November 2006.

Doug Farmer, a Realtor with Village Properties in Sunriver, said national concerns about credit and stricter lending guidelines are making it harder for would-be buyers to enter the market. Although home sales in Bend climbed in March, Farmer believes most of those were due to cash buyers without traditional financing needs.

“I think people were holding out for a while … and prices are coming down, but it depends probably more on the people that are in the market. A lot of them are cash buyers and are not real dependent on banking right now,” said Farmer. “There are some deals going through, but … I think the market will be back, particularly in Central Oregon, because we have a desirable location.”

In Bend, 257 houses were listed for sale in March that were priced between $250,000 and $300,000 and within range of the median price. Twenty-three of those sold, according to the report.

The price range with the most sales, 25, was the $200,000 to $250,000 range. It had 141 listings during the month.

Jessica Dickinson, the principal broker at Bend Real Estate, said houses that are accurately priced are selling.

“I think people are becoming more realistic in their expectations,” said Dickinson. “Houses priced right will sell.”

Dickinson said the housing market in Bend was overinflated for a time, but she doesn’t believe home prices will continue to decline for long.

Dickinson predicted population growth will continue to eat away at existing inventory. A slowdown in the building of new homes — only 17 building permits for detached single-family residences were issued in Bend in March, according to the report — coupled with ongoing delays in the city’s expansion of its urban growth boundary, means demand will soon outpace supply again.

“I think the oversupply of homes will be drawn back into the market, and when that is depleted, prices will be on the other side, because there are not enough homes being built in time,” said Dickinson. “I think we are going to run out of land way before the UGB maneuverings reach any type of a solution.”

Andrew Moore can be reached at 617-7820 or amoore@bendbulletin.com.

IHateToBurstYourBubble said...

Ruth Lindley, the marketing manager for Economic Development for Central Oregon, a nonprofit whose goal is to recruit employers to the region and retain existing ones, said the median price drop benefits the community.

“It means that when people are looking at the area, and hearing about utility costs, land costs, the availability of incentives, and then looking at what it would be like for employees, (Bend) becomes a community that doesn’t get crossed off,” said Lindley. “We can stay on that short list.”


Wow. So now a plummeting median helps us?

Well, I'll be darned.

My first inclination is to pull out, highlight & comment on the Kool-Aid tinged excerpts from this piece... but that would require highlighting the entire thing.

Bewert said...

State pledges $8.96M for 820-job plant

A subsidiary of home retail giant Williams-Sonoma will open a manufacturing plant in Hickory, creating 820 jobs and investing $2.7 million over the next five years, Gov. Mike Easley's office said Monday.

Sutter Street Manufacturing, which already employs about 50 people in Hickory, will open a product development, distribution and upholstered furniture manufacturing facility for Williams-Sonoma (NYSE: WSM).

The new jobs will pay an average of $42,000 plus benefits, ahead of the Catawba County average of $33,332, Easley's office says.

If Sutter Street Manufacturing creates the 820 jobs called for in its agreement with the state and keeps them for 10 years, it could receive a state Job Development Investment Grant worth up to $8.96 million.

"There is a great tradition of furniture-making in our state, and I am glad Williams-Sonoma is bringing it back," Easley said in a statement. "I hope this is the first in a long line of furniture-related industries we will be recruiting with better skill and higher pay."


Boy, we sure didn't do very good with LS, spending over $10M for 350jobs...

IHateToBurstYourBubble said...

median prices reached their peak of $396,000 in May 2007.

Remember, this is one of those very unreliable stats. May 2007 was so thin on sales, that the $396K figure is pretty unreliable.

The "real top" was way back in May-Sept 2006. That's when prices were peaking & volume was sufficient to extract reliable data.

IHateToBurstYourBubble said...

Medians down 25%? CACB below $9?

1) Remain calm.
2) Put your oxygen mask on before assisting others.

3) Brace yourself for impact.

IHateToBurstYourBubble said...

"There is a great tradition of furniture-making in our state...

The words of a true lunatic.

IHateToBurstYourBubble said...

Where the hell is Hickory? I looked for this town in OR & WA & found nothing. What state is it in?

Hickory is a great name for a little red-neck town.

Bewert said...

Back east--click on the headline link for details

tim said...

>>"There is a great tradition of furniture-making in our state...

Did I wake up in North Carolina?

IHateToBurstYourBubble said...

Did I wake up in North Carolina?

You wish! :-)

IHateToBurstYourBubble said...

In Bend, 257 houses were listed for sale in March that were priced between $250,000 and $300,000 and within range of the median price. Twenty-three of those sold, according to the report.

The price range with the most sales, 25, was the $200,000 to $250,000 range. It had 141 listings during the month.


This actually is an interesting stat. The elasticity of demand is illustrated pretty clearly here.

9% of homes in the $250-300K range sold, while 18% in the $200-250K range sold.

The mid-point between that upper range & the lower is 18%... but sales DOUBLED in the lower range.

Attention Realtors: YOU NEED TO START TALKING THIS THING DOWN, NOT UP.

You will make MORE MONEY at lower medians. It's RIGHT THERE, do the math.

tim said...

Looking a Clive's chart, we seem destined to hit what must be an all-time high for inventory in a couple months. Doesn't it also look like we're already at an all-time high for under-$300k, despite it only being April?

tim said...

>>You will make MORE MONEY at lower medians. It's RIGHT THERE, do the math.

Cross your fingers that they are better at math than spelling.

tim said...

Hey ICANTBELIEVEITSNOTBUTTER,

http://davidfoster.biz/Market08/index.html

Bewert said...

Hey, Marge, there is someone over in BBMLand that needs your input.

http://bendeconomy.informe.com/reasonable-realtor-commission-dt3892.html

Anonymous said...

Thanks Bruce! I gave em some info.

Anonymous said...

According to PMI, Bend's price risk is right there with Sacramento and the rest of the Central Valley. Ouch! See the nationwide risk map.

http://media.corporate-ir.net/media_files/irol/63/63356/PMIERET_Spring08.pdf

Anonymous said...

Interesting that our county is the only place in Oregon that is tagged that badly. Guess we should expect it with such a huge runnup. I have a feeling we are going back to 2003-2004 medians in the not too far off future. That's $195-$225k. All we need is one really bad summer of sales and this will be it.
Besides what the economy does to us we will be more royally screwed than some. It is hard to get out of Bend without a ticket. With the price of gas most will only get to Weed:) Oh good, stay in Weed at least it's Cali country.

Anonymous said...

Can't get on BEBB whaaaattsss upppp?

tim said...

>>Can't get on BEBB whaaaattsss upppp?

Free provider for that site has a lot of downtime.

tim said...

Speaking of economy, I know of several more people looking for jobs now. Anything above $40k is getting snatched right up by people used to making a lot more.

Anonymous said...

Thanks Timmy

Anonymous said...

Sorry to hear it, may the old-timers land on their feet.
Weed's kind of a neat place - nothing to do since the mills are about done, but still a neat place if you don't need to live high on the hog.

By the way, the Oregonian RE section is pushing vacation houses and there's some vacation trade show at the Crowne Plaza in LO. I might stop by to see how crowded it is. Brasada's advertising over here for some special golf/lodging deal for "only $900 for two nights/two rounds of golf." I don't get that. This is frickin' PORTLAND; we don't have that kind of money to blow on a two-day deal! Are they running that ad in Beverly Hills too?

Anonymous said...

They are so off base! Even P-land wouldn't pay that. That there is Beverly Hills Billys. Pure Gold..Black Crude. Or is that Krud?

Bewert said...

Latest from the Inn7th mess (first of two):

Notice of Mediation Set for May7,2008 in Eugene
April 15th, 2008

Mediation Announcement

Mediation is on the Calendar!

Everyone, at long last the lawyers have scheduled mediation in our dispute. It is set for May 7th at the US Federal Court in Eugene. A notice of the mediation is attached. The mediation is being conducted by Judge Michael Hogan (who is presently a Federal Court judge) and Judge Lyle Velure (who is a retired Lane County Circuit Court judge).

Many of you have asked questions about the mediation and what is generally going on, so we will hopefully answer these questions.

What is Mediation?

Mediation is a negotiation between the parties (us, the AUO board, the Papés, and INNspired); with the two judges acting as facilitators to get people to work out a solution to their dispute. For our mediation, there are a number of issues that we need to work through, with a lot of parties, so it was agreed that these two judges (who have worked together to settle a lot of complex cases) would present the best situation for us to resolve the cases.

How Does Mediation Work?

Typically, each party is in a separate room and the mediators have private meetings with each of the parties to work through issues and go over proposals that the party can live with. The mediators then shuffle between the parties in an attempt to reach agreement on common issues. The meetings themselves are private and confidential; in fact there are specific laws regulating the conduct of mediations and the confidentiality of communications made during mediation. The hope is that this process gets everyone to think realistically and honestly about their case and what they can live with by way of settlement.

Although the meetings are private, and there is a lot of “down time” during mediation (although there will be less at our mediation with two mediators), folks may come to the court house and observe the process. While many of your “board” will be involved in the private meetings, and you won’t necessarily be involved in the direct negotiations, this would be a great way to show our solidarity and to communicate with folks there about the progress of our discussions.

What is Being Mediated?

As some of you know, there are two lawsuits going on right now. The first is our lawsuit against the AUO board, the Papés and INNspired over the $17.7 Million special assessment and Inn repair plan. The second is the AUO’s lawsuit against us (and indirectly all of you) seeking a judgment that they are the legitimate AUO board and that we lost the December 31, 2007 board removal election.

We see the mediation as dealing with three primary issues (although there are a lot of sub issues in each group):
1. The validity, amount and terms of the $17.7 Million special assessment
2. The validity and amount of the credit available to INNspired under the Sublease and Management Agreement for the special assessment
3. AUO reform to enable us and INNspired (and the Papés) to co-exist in the future to avoid these types of disputes

Each of these issues will require some give and take (and compromise) by everyone in order to be successful.

In addition, there are specific issues relating to the fractional owners that will hopefully be discussed at the mediation.

What is the Status of the Two Cases?

In the event that we cannot resolve our dispute with INNspired and the Papés, then the two cases will proceed to trial. Both have been scheduled for later this year.

Even though it was filed later, the trial in the AUO case (regarding the board removal vote) is scheduled for June 17 and 18 before Judge Brady in the Deschutes County Court. We encourage you to attend if you are interested.

What may ultimately be the more significant is the trial in our case, regarding the $17.7 Million special assessment. That is scheduled for November 12-14 and November 18-21, also in the Deschutes County Circuit Court. This will be tried to a jury, and you are definitely encouraged to attend this trial.

In addition, there are some motions that have been filed by the AUO that will be argued before Judge Brady on July 21st at 9:30. These include a motion to dismiss our claims on legal and technical grounds. It is highly unlikely that these motions will effect our November trial date.

In both cases, there will be a significant number of depositions (mostly in our case) and additional discovery conducted.

We will do our best to keep you apprised of developments as they occur. We thank you for your support and perseverance during this trying time at the Inn. Brighter days are ahead.

Bewert said...

More:

Clarification on the Fractional Lawsuit
April 15th, 2008

Posting Re Fractional Owners

Everyone:

There has been some confusion regarding the present lawsuits and the individual claims of fractional owners against INNspired, which we want explain.

There is a definite overlap of claims between the fractional unit owners and the whole unit owners. Maybe a better way to say this is that there are common claims to everyone at the Inn. There are also claims that are, as we understand them, unique and specific to the fractional owners.

The general claims that are common to us all are:

• The improper assessment of $17.7 Million dollars by the Papé/INNspired controlled AUO board
• The improper assertion of a $6.2 Million credit against that special assessment by the Papés and INNspired
• Oppressive and self dealing conduct by the Papé/INNspired controlled AUO board

The individual claims that are specific to the fractional owners are:

• Claims relating to the purchase of fractional shares from INNspired, including fraudulent inducement or misrepresentation claims with respect to Inn repairs and assessments
• Unit management issues, including voting rights, payment of unit specific assessments, and other contractual enforcement items

While these last claims are of vital concern to the fractional unit owners, they relate only to the contracts that were signed with INNspired when the fractional shares were bought, and not the general conduct of the Papé/INNspired controlled AUO board. This means that each fractional owner needs to present specific evidence of misrepresentations and the disputes will be specifically governed by the contracts (including the Co-owner Agreement) with INNspired. This is why many fractional owners have been advised to seek their own counsel with respect to these claims.

As for the general claims against the Papé/INNspired controlled AUO board which affect everyone, we are continuing to address those in our lawsuit against the Papé/INNspired controlled AUO board, the Papés and INNspired. Our success in that case will benefit everyone by invalidating the improper special assessment, eliminating the credit to INNspired and regaining control of the AUO. Your continued support will make these goals a reality for everyone, and will, in turn, benefit the fractional owners in their individual discussions with INNspired.


I wonder if Freidman, et al are pushing for a private settlement.

Anonymous said...

http://www.slate.com/id/2188982

We're sorry, this year's migration from California is cancelled, due to insufficient equity. Please tell these people that there are NO jobs in Bend, even if there ARE thousands of cheap places to RENT. Thanks.

Anonymous said...

** Can't get on BEBB whaaaattsss upppp?


it's back

Bewert said...

Re: even if there ARE thousands of cheap places to RENT. Thanks.

Just saw a rental house at Widgi. I thought that was prohibited at those fancy types of places. Of course, if I recall correctly, that house was for sale last summer.

Anonymous said...

Just saw a rental house at Widgi. I thought that was prohibited at those fancy types of places.

Have you had your head in the sand trap? Widgi Creek has had rentals for years, it's like a mini-Sunriver for vacation rentals.

Bewert said...

Re: Have you had your head in the sand trap? Widgi Creek has had rentals for years, it's like a mini-Sunriver for vacation rentals.

I work there in the summer, and this is the first time I have ever seen a For Rent sign in front of a house. Quite a few For Sale's, though.

Anonymous said...

I work there in the summer, and this is the first time I have ever seen a For Rent sign in front of a house. Quite a few For Sale's, though.

Your eyes deceive you. There are more rentals than for sales in Widgi Creek.

Bewert said...

Where, perhaps, are the signs. I was just there yesterday afternoon, I was there 5 days a week all last summer, we use the roads for shortcuts regularly, I note the signs, and this is the first For Rent sign I have actually seen. I have no idea about rentals through the management or otherwise that are not signed, though, since I'm grounds crew.

Anonymous said...

Bingo, you figured out that not all rentals are signed.

Anonymous said...

IHTBYB:

You know who else we'll lose? People, like me, who are looking for that Undiscovered Gem...Maybe it's my bent for holding "undervalued assets", or some such, but Undiscovered Gems are something I am drawn to, in all forms. Cars, restaurants, towns, etc.

Bend is like a crack whore that's been used up, fucked 50X day, strung out on the cracker, and just vile. She'll NEVER, EVER be the same. Time to go.


Your blogs continue to be great as always, but this again supports those who think you're just talking down the market so you can finally pick up those undervalued homes you want.

You kindly explained your theses about buying stocks after a catastrophic event, and that dealing with bubbles is similar and also takes the form of long cycles, where again the savvy investor buys at the bottom and holds.

This blog is marketing. It is a psychological operation. You want people to be scared into pricing their homes super low, low enough so that they sell and the new lows become a precedent leading the market as low as it can go. Only then will you and the others buy.

Rent and invest the diff; walk away and don't pay; wait until the time you are being paid to enter a transaction; all of this is sound advice. As a buyer you describe accurately the signals of a true buyer's market. I don't question the morals or ethics of this; buy low and sell high is the clear common-sense mantra.

What I don't understand, though, is why you as a writer resist when I or others ask you to just admit you're actively trying to talk down the market. I'd say lots of others here help you do this, some of whom are disgruntled locals, and others are investors like you who immediately understand what it means to talk down a market.

Keep bashing away, though -- I learn a lot here. You have every right to speak freely and you do that very well.

My point is that when you deny your obvious bias and try to present yourself as just a helpful guy, it flies rather in the face of your more passionate posts where you indicate your true motives. You don't need to avoid this concession, and in fact by admitting it I think it adds to your credibility.

Anonymous said...

Yellowbeard - how's the RE biz these days? Or perhaps it's the chamber of commerce you work for. You're taking all of this WAY too seriously. Face it- Bend is HOSED. Go read that Slate article I posted the link to above, and you'll see why. There is **** NO MONEY **** in SoCal. NONE. ZERO. This blog has only the TINIEST impact on the market, because so many people (yourself included?) walk around with bags over their heads, stumbling their way through life. Jeez, relax. Prices will return to their present levels within no more than ten years on the outside.

Duncan McGeary said...

Geez,

There's also the possibility he's just saying it the way he's seeing it.

Anonymous said...

Keep bashing away, though -- I learn a lot here. You have every right to speak freely and you do that very well.

*

Buster just got out of jail for beating that transient with a baseball bat. I got BENDBB to float my $100k bail.

WRT to this assertion, I think 'yellow-beard' is giving ALL these cunts way too much credit.

They're all a bunch of fucking BORING loser renters.

Fact is there were KILLER DEALS last year, this year, and there will be next year.

Talk down the market?? I don't think so, the market here was FUCKED by TEAM Hollern/Capell, &ASS.

99% of the fucking bloggers here are middle age, fat, lazy, blogger-renters. The normal asocial losers.

You think 'Homer' is a fucking marketing guy talking down, no he's just a loser obsessed with his 15 minutes of fame. Look at virtually EVERYONE on this blog, they're a fucking RENTER, even duncan rents his building for his comic shop.

It's all fucking sad.

If these birds had an intention to BUY real-estate they would have already done so when you could still get credit/cash. Now its too fucking late.

I'm simply coming to Homers aid in a twisted fucking way. I'm the only fucking landlord here, and besides BEM, and Dunc&Marge, nobody else here even owns their fucking home.

Talking down the market does nothing here to help the loser's here like Homer & Bruce-Pussy. They're newbies in this town, and by the time it its bottom, they'll be long gone.

If you think the 'bashing' here is about 'bashing bend homes', your wrong, its about 'bashing' the people who created the Bubble, and FUCKED BEND, and those people be Hap Taylor, Dick Borgman ( Les Schwab ), and Mike Hollern; and the people they own.

That's who we're BASHING here, the boss hoggs that OWN BEND.

Nobody here is BASHING Bend RE per-se.

That said, for almost six months PMI has recognized Bend as TOXIC as Sacramento, CA; and HONESTLY I think its MORE toxic.

This is the town that HOLLERN built, and he's going down with it.

Homer & his bruce-pussy, are just minor players; in this kluster-fuck of a town.

- buster

Anonymous said...

Bend is like a crack whore that's been used up, fucked 50X day, strung out on the cracker, and just vile. She'll NEVER, EVER be the same. Time to go.

*

Bend was always a crack whore, if you know your history. Its just that around 1998, Mike Hollern spent millions on PR&Marketing, and got the city-hall to fund the game, and exempted SDC's, and then DUMBYA delivered easy-money, and we had the greatest BULL-BUBBLE in RE-HISTORY right here in Bend.

Now we're TOXIC #1 in the nation, whats goes up #1, goes down #1.

There are a few people here that care about Bend. BEM has done a good job ( link is above ) in explaining what needs to 'fix' Bend. We're NOT here to talk Bend down. We are pissed that our taxpayer money is still being used to "TALK BEND UP". ( Throwing good money after bad )

There's NOT a single LOSER-RENTER here that will profit from this collapse. The reason is they don't have the CASH. Like Homer has eloquently said "By the time this town hits bottom, you'll NOT want to live here".

Me ( buster ) & Marge, we like the trailer-park lifestyle, I'm happy on horses or dirtbikes. I look forward to pickups again, and dirty streets, dive-bars downtown instead of salons.

The cops in Bend today remind me of RENO-911, fucking faggots in shorts with blond-hair, all a bunch of MAN-TWATS.

ALL YOU FUCKING CALIS will leave when Bend returns to its true self, and it WILL in the next 2-3 years. That said, I agree by 2018, we 'may' be back up to 2004 price levels, 'maybe'.

Enjoy the fucking ride. I have been in this town forever, and have seen too many fucking UP's & Down's. I like the down times the best, been looking forward to the quiet times, when nobody can afford to drive their FUCKING CAR.

Homer is right 'diversify', if you must sell get the hell our ASAP, damn right, soon nothing in this town will sell.

COBA is spending a TON of money on 'best in 20 years' this spring, Pedal,Pole,&Paddle is being sponsored by the banks to sell RE. They're all going to lose, by summer NOT a nickel will be spent on PR&Marketing for a long time.

CACB is going down, and ALL regional banks that have BEND in their portfolio. The bad news is only 20% out, you have seen nothing yet.

Bewert said...

Re: Bingo, you figured out that not all rentals are signed.

You must live out there or something.

Bewert said...

Re: You want people to be scared into pricing their homes super low, low enough so that they sell and the new lows become a precedent leading the market as low as it can go.

Actually, the almost daily foreclosure auctions are doing that already. Example: Pinebrook Pahse III, Block 10, Lot 5, a pretty nice 2-story that looks to be about 2500 sq ft, sold for $329K in Oct, 2005, and was sold at auction for $220K last week. Bank took a $45K bath at that price, but sold it anyway.

The one I'm curious to see repriced is at 23163 Switchback Court in Pronghorn. Sold for $595K in Jan 06, $495K owed on mortgage, due to be auctioned next Monday at 11 AM. That will be interesting.

If your curious to see how many auctions are coming up, search for Affidavit of Mailing / Publication at recordings.co.deschutes.or.us

as of this moment, 202 so far this year, including 39 so far in April. Two more today so far.

Ole Ted Himler is taking a beating, with seven of his properties being auctioned in April. There's only a 5-10 day lag from the mailing date to the auction date, so repricing will happen pretty quickly.

There's a lot of pain out there.

Anonymous said...

Me ( buster ) & Marge, we like the trailer-park lifestyle, I'm happy on horses or dirtbikes. I look forward to pickups again, and dirty streets, dive-bars downtown instead of salons.

Ya got me :) Trailer park will be my next move and I want my 1960 ford pickup back. Will you marry me?

Anonymous said...

Just took another look at home sales this month. BOY have they picked up. ARGGG
In March thru the 16th there were 44 sold. April(the hot spring month) stands at 33 today. Summer should be very interesting.
Lot o traffic going south today..HUMMM

tim said...

There's always something compelling about a train wreck. I think that's really why most of us are here.

Bewert said...

http://www.youtube.com/watch?v=yUc3wd4It8g

Bewert said...

Re: continuing train wreck theme

Fro this mornings BULL:

"Bend will shell out $275K to settle 3-year-old lawsuit"

Announced with no discussion, according to the article. I didn't go last night, and this wasn't on the agenda, so it must have been discussed in Exec Session. Someone should post the whole article.

The continuing, endless lawsuit losses, water company, pumping station, soon the buses, etc. Makes it even harder to fill potholes and hire cops and firemen.

tim said...

>>Makes it even harder to fill potholes and hire cops and firemen.

Was driving last night. On the radio the DJ was making fun of the city being unable to pave roads and pay for emergency services, but managing to have two more dog parks available by the end of the year. He did his interpretation of the council discussing the issues, making them sound like morons.

It was a dorky point, but it shows how it's becoming common knowledge around here that we're a city of fools being run by a council of greater fools.

Anonymous said...

Makes it even harder to fill potholes and hire cops and firemen.

The other day The Bulletin had a story about how the city might have to go to a once-every-40-years street repaving schedule.

40 frickin years.

In the throes of Growthmania the city let development race far ahead of its ability to pay for and maintain the necessary infrastructure, and this is the result -- we'll end up with a city that can't even provide the most basic services to its citizens. Some frickin' "paradise," eh?

I can't wait to get outta this shithole.

Bewert said...

Note the confluence of mine and Marge's posts above:
Me:
If you're curious to see how many auctions are coming up, search for Affidavit of Mailing / Publication at recordings.co.deschutes.or.us...39 so far in April.

Marge:
Just took another look at home sales this month...April(the hot spring month) stands at 33 today.

Will there be more foreclosure auctions than home sales this month? How many of those home sales are auction sales?

This is getting scary. But the quicker we fall, the quicker we get back up.

I've been doing some analysis on SDC's and permits, and things like how our one ERU charge for sewer hookup of $2038 compares to Troutdale's charge of $4426 reveals the true structural problem with the City's finances.

When I get a chance to finish it I'll post the spreadsheet comparing Bend to Troutdale and Ashland.

Anonymous said...

Bruce asked:
How many of those home sales are auction sales?
++++++

My answer NONE.

True, we will have more autions, but most won't sell at auction. They will end up as MLS inventory.

Anonymous said...

I guess since the bad news is out of the bag, it's hard to find a few more things to talk about.

Anonymous said...

Hypothetical situation: Let's say you bought for $250,000. If you had to sell today you can get $190,000. Your mortgate is $200,000. So you're $10,000 in the hole. May not matter if you can keep making payments, and if you plan to stay in the house.

But what if the house continues to decline in value. At what do you walk, even if you can make payments, and intend to stay in town?




*

Anonymous said...

If your house is being used as your home, versus an investment (ie stock or bond) that you will need to liquidate soon, and you like living there, and can afford to live there, and expect to be there through the trough (down period) then why would you sell? Maybe you want to move to a different house, neighborhood, city or country?

Only if you want to maximize your investment (sell now, rent, invest the difference, buy at the bottom, ride the next wave up [might stay down for quite a bit], and start all over again in a new house) should you make the change. If you use your house as a home versus an investment, you should treat your house as a home, not an investment, and continue to live there instead of sell now and buy later.

Anonymous said...

Long term investers (regardless of home or stock) don't sell every time they see other panic sellers dumping shares.

Bill Gates kept his founders MSFT stock trough many down turns that other people who did not have Gate's multi-decade approach to investing. Gates donated it to his foundation, and still hasn't sold much. Same with Buffet. They are buy and hold.

Don't sell your Bend Villa... save it for your children's children, and donate it to them.

Bewert said...

I know Buster will hate me for this, but CPST is off the fucking wall today. Huge volume, and it is close to 4X last summers price. This new CEO they got it is really doing a good job.

http://finance.google.com/finance?q=CPST&hl=en&meta=hl%3Den

I happened to sit next to one of the top Public Works guys on Monday, and we discussed my little project again. I'm waiting on real numbers on the methane being vented, and Paul said they should finally have good sensors in by late June. Rather than venting a greenhouse gas that 20 times worse than CO2, we can use it to create usable energy. I like that.

Flamesuit on.

IHateToBurstYourBubble said...

Don't sell your Bend Villa... save it for your children's children, and donate it to them.

Or do sell it, invest in something that won't plummet for the next 10 years, and then donate a LOT more to your kids.

IHateToBurstYourBubble said...

If your house is being used as your home, versus an investment (ie stock or bond) that you will need to liquidate soon, and you like living there, and can afford to live there, and expect to be there through the trough (down period) then why would you sell? Maybe you want to move to a different house, neighborhood, city or country?

I actually strongly agree with this. Especially if you are a deep equity type... maybe older, been there since the mid-90's or earlier, no refi's or payment risk & have almost no risk of going into the red... I wouldn't sell either. It's ridiculous to sell if your payments are dead low, you'll have to go through the pain of moving, possibly renting or whatever, only to buy in 5-10 years.

If, on the other hand, you got little equity, the chances are HIGH you may have to move in the next 7-10 years, and you're already getting squeezed on payments, or you've got a killer reset coming... then BAIL OUT. This thing will get far worse before it gets better.

Bewert said...

Just went to fill the propane tank to grill some steaks, and the guy filling his alongside me stated he lives off Brookswood, in a house he moved into "because my Dad is a builder and he can't sell them..."

IHateToBurstYourBubble said...

...why you as a writer resist when I or others ask you to just admit you're actively trying to talk down the market.

I actually don't think that's really possible.

Would you mark down your house cuz some dude on a blog told you too? Not me.

The natural forces of the deflation of this Bubble will force home prices lower, not me.

Bewert said...

Re: ...why you as a writer resist when I or others ask you to just admit you're actively trying to talk down the market.

I actually don't think that's really possible.


No, we are merely catologing the totally expected collapse of a bubble. Do you truly think that Bend could actually support median housing prices at eight times median income?

It can't. Meaning a collapse is inevitable. We are just talking about it, unlike most.

Anonymous said...

There's always something compelling about a train wreck. I think that's really why most of us are here.

I've been reading this blog since August 2007, when I listed my house in the MLS. I moved away in November 2007 and checked this blog weekly to see what was really going on, cuz we all know that Realtors and the Bulletin lie.

I can't tell you how happy I am being 1300 miles away from Bend, and even though my house sold for 60K under my asking, it SOLD, but not until March, 2008. DOM? I don't wanna know.

What I do know is that I was damn lucky to sell, especially with foreclosures and short sales in the neighborhood, driving prices down.

So, yes, the whole situation in Bend is like a train wreck and that is what keeps me coming back. As a former EMT, I admit I like train wrecks, and as a former home owner in Bend, I keep coming back to see how bad things have gotten.

This blog makes me damn happy I don't live in Bend anymore!

IHateToBurstYourBubble said...

Well Fuck Me.


Selling luxury at a big loss
Modern, green homes selling in short-sale agreement

By Jeff McDonald / The Bulletin
Published: April 18. 2008 4:00AM PST

Struggling with bank debts, the 35-year-old builder of five high-profile homes constructed at the peak of the housing boom adjacent to Newport Avenue Market is now selling them at a loss.

“We built too nice of homes that weren’t supported by the market,” said Cary Martinez. “There was a certain amount of excess that if we were really trying to make money, we wouldn’t have done it that way. We were more concerned with the impact of our project on the earth.”

He and his partner designated the project, Lux Eco-Modern Homes, after efforts to unite green building practices with modern luxury, he said. Martinez originally listed them for sale last summer for more than $800,000, he said. The project was the biggest in his career, he said.

Each of the skinny, 2,000-square-foot, three-bedroom homes has its own hue, and all are geared toward luxurious, green living, Martinez said.

They feature Southern Oregon-grown Madrone wood, butcher-block countertops, German-engineered, stainless-steel drawer boxes and Italian ceramic tile, according to a brochure available at the site.

The builders also installed a wide array of green fixtures, including a sub-zero commercial refrigerator with a glass front that allows users to see what’s inside without opening and closing the door. The entire five-home project cost more than $3 million, he said.

Martinez and his partner, Barry Seaton, started construction in 2005. The median price for homes in Bend was climbing toward the $351,900 mark that it would hit in 2006, although Martinez said signs of a slowing housing market had started to appear.

“We could have made money on this project if we weren’t so passionate,” he said. “Forget about the $7,000 refrigerator and some of the finishes. We lost the idea of what it takes to keep this idea moving forward — profit.”

When none of the homes sold, and Seaton and Martinez were unable to make the payments on the homes, they received pre-foreclosure notices, the earliest stage of entering foreclosure, late last year on all five homes.

To avoid foreclosure, the owners decided to enter into a short-sale agreement with each separate bank to which they owe money. That means they would sell the homes for less than they owed the banks. Martinez said they owe, on average, between $575,000 and $600,000 on each of the remaining homes, along with attorney fees.

“We’re getting rid of all our inventory,” he said. “I’m over the real estate thing. It’s recovery time. It’s a better option to let it go, rather than handle the monthly overhead.”

The short-sale process could result in a heavy income tax bill next year for Martinez and Seaton on the amount still owed to the banks, or the banks could sell the remaining debt to debt collectors, or both, Martinez said.

The owners sold the first of the five homes in February for $450,000, according to Heather TenBroek, a broker with Keller Williams Central Oregon Realty, which represents Martinez and Seaton. Three others have offers.

Seaton and Martinez, whose company was called Abacus GC, own a total of 16 homes in Bend that they have put up for short sale, TenBroek said. Three have sold to date, she said.

“The whole west-side neighborhood is affected,” she said.

Home sales in Bend started to show some sign of recovery last month with 92 sales, an increase of 36 homes from February, according to a report from a local appraisal firm. The number of sales was still down from 159 in March 2007, according to the report released last week by the Bratton Appraisal Group.

For the first time since September 2005, the median home price for single-family residences in Bend dipped below $300,000, according to the Bratton report. However, first-quarter figures from the Central Oregon Association of Realtors show a median price of $306,500 in Bend.

Three of the four remaining homes in the Lux Eco-Modern project have received offers and could avoid foreclosure, TenBroek said.

In a short sale, the banks make the final decision about whether to accept a buyer’s offer, and that process could take anywhere from six weeks to six months, she said.

The Newport Avenue homes received nationally recognized Earth Advantage certification for environmentally sustainable building practices, but they could have been built more affordably and still been considered green, according to Bruce Sullivan, a green building consultant for Earth Advantage Inc. in Bend.

Earth Advantage is an organization that offers green building consultation and training for local builders and real estate professionals.

The Earth Advantage standard measures homes for their energy efficiency, indoor air quality, environmental responsibility and resource efficiency, according to Sullivan.

“The costs of green building are not as much of a factor in terms of it not selling,” Sullivan said. “There are Earth Advantage-certified homes in Bend that cost under $200,000 to buy.”

Martinez agreed that the Newport Avenue homes could have been built at a lower cost and still been green.

“I would never build like that again, ever,” he said. “Especially on a spec level.”


Jeff McDonald can be reached at 383-0323 or at jmcdonald@bendbulletin.com.

tim said...

>>Just went to fill the propane tank to grill some steaks, and the guy filling his alongside me stated he lives off Brookswood, in a house he moved into "because my Dad is a builder and he can't sell them..."

Hmm. The Millstone houses?

Hopefully the builders around here have procreated madly.

IHateToBurstYourBubble said...

String Character?

Looking for the strong quiet type? Step into this traditional home and feel the string character...

There's your house Timmy. You can get some real programming done there...

tim said...

WTF? Is it old skool or unicode?

IHateToBurstYourBubble said...

WTF? Is it old skool or unicode?

Don't ascii me.

Anonymous said...

Three of the four remaining homes in the Lux Eco-Modern project have received offers and could avoid foreclosure, TenBroek said.

How long does it usually take for a transfer of property to the bank after foreclosure take to record with the county? One of these homes was at foreclosure auction on the courthouse steps on Wednesday with no bidders. There has been no recording of it at the county website yet. Is that unusual?

Anonymous said...

I don't believe the Lux Eco-Modern homes would have sold even at the peak of the boom. Their architecture is too avant-garde to appeal to the typical Bend homebuyer, who wants a conventional faux Crapsman cottage, faux English Tudor mansion, faux Spanish Hacienda, faux Ponderosa Ranch house or faux Tuscan villa. In Marin County they probably would have sold very well.

Anonymous said...

I can't tell you how happy I am being 1300 miles away from Bend

Damn, I envy you. Where did you move?

Anonymous said...

Sioux Falls

Anonymous said...

Wow ... could the following ever be the future of Bend? I hope not.



The incredible shrinking city:
Youngstown, Ohio

By Les Christie, CNNMoney.com staff writer


YOUNGSTOWN, Ohio (CNNMoney.com) --

Youngstown, Ohio, has seen its population shrink by more than half over the past 40 years, leaving behind huge swaths of empty homes, streets and neighborhoods.

Now, in a radical move, the city - which has suffered since the steel industry left town and jobs dried up - is bulldozing abandoned buildings, tearing up blighted streets and converting entire blocks into open green spaces. More than 1,000 structures have been demolished so far.

Under the initiative, dubbed Plan 2010, city officials are also monitoring thinly-populated blocks. When only one or two occupied homes remain,the city offers incentives - up to $50,000 in grants - for those home owners to move, so that the entire area can be razed. The city will save by cutting back on services like garbage pick-ups and street lighting in deserted areas.

"When I grew up in the 1950s, the city was at its peak," said Father Ed Noga, who heads St. Patrick's on Youngstown's South Side. "There were kids everywhere and everyone converged on downtown. You went to eat, to shop and to go to the movies."

Today, downtown is positively sleepy and even somewhat derelict. Residents have to drive out of town to shop for clothes or housewares. And while foreclosures have long been a scourge in this city, they have recently skyrocketed along with the rest of the country, up 178% in February from a year ago.

"Abandoned houses here are like rainfall in the spring," said Mayor Jay Williams, "That has gone on for decades."

Growth strategy failed
For a while, Youngstown, with its population at just over 80,000, hoped to return to its boomtown roots, when 165,000 residents called it home.

"We long pursued a policy of growth," said the city's energetic young mayor. "We went after all these things that would make Youngstown a city of 150,000 again."

There were some harebrained schemes.

"A blimp factory was going to put the city back on the map," Williams said. "That represents a whole lot of the promises made and broken. They sound ridiculous now. President Clinton promised a defense facility employing 5,000. We were waiting for a savior."

They never got one. But now, Youngstown's infrastructure-paring strategy may yet become a model for other Rust-Belt cities that must recreate themselves after years of decline.

Already, delegations from smaller, post-industrial cities like Flint, Mich.; Wheeling, W.Va.; and Dayton, Ohio, have come to Youngstown to study the plan.

"We're one of the first cities of significant size in the United States to embrace shrinkage," said Williams.

It's an odd way to pioneer. "The American narrative always includes growth," said Hunter Morrison, Director of the Center for Urban and Regional Studies at Youngstown State University, which works closely with the city on plan 2010's implementation. "No one wants to talk about shrinkage. That's too threatening to politicians, civic boosters and Chambers of Commerce."

The Natives Are Restless said...

I don't believe the Lux Eco-Modern homes would have sold even at the peak of the boom. Their architecture is too avant-garde to appeal to the typical Bend homebuyer, who wants a conventional faux Crapsman cottage, faux English Tudor mansion, faux Spanish Hacienda, faux Ponderosa Ranch house or faux Tuscan villa.

I agree wholly with this one. The fit just wasn't there. In Bend Over Oregon, I'd be just plain embarrassed to live in one of those boxes.

Anonymous said...

Had the best clam chowder for lunch at the D&D today. Finally found out what D&D stands for, as I sat with Creak, one of the owners. Anyone out there know this oldie question. Also had a shot of Patrone,,,Yummm

Anonymous said...

SandyVag Wrote: "Damn, I envy you. Where did you move?"

Just fuckin move then you pussy! I get so tired of people talking about how Bend is a cold desert wasteland. If you don't like, beat it kook! Why did you show up in the first place? I actually like the idea of a mass kook exodus. Don't let the door hit you on the way out...

Anonymous said...

Glad to be out of Bend and into Sioux Falls..... Wow dude, you're one twisted MoFo. Enjoy!

Anonymous said...

"Glad to be out of Bend and into Sioux Falls..... Wow dude, you're one twisted MoFo. Enjoy!"

x2, that guy is probably one of those people who thought that buying an SUV and slapping a BND sticker on the back would be some sort of magical, life changing experience. Don't expect Bend to change who you are. Kooks are still going to be kooks after they take up residency in Bend, Oregon. You know that Disco Stu doesn't advertise...

rotorman said...

What's up with the Bend Economy Board? Haven't been able to get it since 4/15.

The Natives Are Restless said...

Had the best clam chowder for lunch at the D&D today. Finally found out what D&D stands for, as I sat with Creak, one of the owners. Anyone out there know this oldie question. Also had a shot of Patrone,,,Yummm

Daley & Daley ?!?!

Anonymous said...

Sioux Falls is a great town. The median house price is 1/2 what it is in Bend and it's only a 400 mile drive to the ski resorts in the Black Hills.

Anonymous said...

As I predicted the luv-guv didn't kill the one golden-goose in aviation, and that is innovation, so it looks to ME that Epic ( Lancair ) will survive out at Bend Muni, but I do feel that Cessna will be gone, ... very soon.

*

FAA Notice Answers EAAers’ Call to Protect 51%-Approved Aircraft Kits

April 18, 2008 — As foreshadowed in an announcement made at Sun ’n Fun last week by the FAA’s Small Airplane Directorate manager, the agency today posted to the Federal Register a policy decision to not re-evaluate any previously approved aircraft kits under its forthcoming new policy on amateur-built certification.

“The policy published today represents a significant victory in the EAA community’s ongoing advocacy to preserve the enormous recreational and educational value of the vast majority of today’s amateur-building practices,” said Earl Lawrence, EAA vice president of industry and regulatory affairs.

The FAA’s statement reassures aircraft-kit manufacturers and customers that - as the agency firms up its policy on interpreting and enforcing the requirement that amateur builders personally perform more than half (51% or more) of the construction tasks in building their aircraft - the FAA will not disqualify any kits that it had already approved. (See list of approved kits.)

“The FAA continues to forecast more stringent standards for determining the amateur builder’s contribution,” Lawrence said. “Now, however, aircraft-building enthusiasts who are working on or planning to purchase a kit already on the FAA’s ‘approved’ list may rest assured. They won’t have the rug pulled out from under them.”

For more than two years, the FAA has expressed concerns that prefabrication and commercial builder assistance are diminishing some amateur builders’ actual contributions to construction. The agency has indicated it will announce revised enforcement policies as early as the end of this month.

“Because a comprehensive policy revision is still coming, we in the EAA community must remain vigilant,” Lawrence added. “As we have from the beginning, we must continue to protect the amateur builder’s privilege to construct aircraft of any technical and performance specifications.

“Furthermore, we must be ready to respond once we’ve seen the FAA’s policy revision. Many questions still confront aircraft-building enthusiasts, so the FAA’s new vision of how to interpret and enforce the 51% requirement remains a concern.”

Accordingly, Lawrence reminds amateur builders that certification of a completed aircraft construction project is not a foregone conclusion - even for kits on the approved list. “This latest notice reminded us that the FAA determines whether an amateur builder personally contributed enough to the construction of a particular aircraft when the FAA performs the airworthiness inspection,” he said. “The builder still has to show that he or she did the work.

“Theoretically, a kit could be on the approved list with the assumption that it qualifies only if the amateur personally performs all of the construction tasks that remain after the kit manufacturer prefabricates and preassembles certain components. This is why we must be careful to fully understand the new enforcement criteria that the FAA will soon publish.”

In the mean time, Lawrence advises all amateur builders to adopt scrupulous record keeping practices. “The best practice is to carefully document your work as you progress through a project,” he said.

Anonymous said...

The Natives Are Restless said...

Daley & Daley....

Yes, you win the 64 million dollar question. They were brothers. Creak has a picture of the building with a wooden boardwalk out front.

Bewert said...

Funny how quiet things have become. It's like we know the shit has really hit the fan, the "repricing" of local real estate is in process, and there's not much else for us to do.

It's happening.

So let's keep an eye on the CC, and their "ideas". Budget Work Session next Wednesday...I'll be there.

Facts to agree on:
1) We have enough housing to last us ten years, counting platted subdivisions.

2) Our SDC and permit fees need to be raised to a level that actually supports the departments that rely on them. No more General Fund support, no more one-time land sales to provide support.

3) Transparency, especially when it comes to the endless Executive Sessions. They can at least tell us what the topic are talking about.

Anonymous said...

BruceyPussy wrote on April 19, 2008 5:10 PM:

3) Transparency, especially when it comes to the endless Executive Sessions. They can at least tell us what the topic are talking about.
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BruceyPussy will write on June 30, 2011 4:31PM

4) Transparency is really important when it comes to the secretive Executive Sessions. Some day I am going to write up a complaint and submit it to Judy Stiegler on the Ethics Commission.
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BruceyPussy will write on May 30, 2018 10:31PM:

38) Executive Sessions. The CC can at least tell us that they are having these sessions. They don't bother sending out notices. Maybe somebody should write up a complaint, since what they do is against the law.
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BruceyPussy's grandchild will write on December 20, 2078 10:31PM:

38) Executive Sessions. The CC doesn't hold Exec Sessions anymore. They went the way of Regular Sessions, which stopped happening around 2061. They don't bother sending out notices or nothing. They just publish their decisions without people knowing that any meetings were even held. In fact, they don't bother holding meetings anymore. Hap Taylor's grandson, Hank Taylor (son of Todd Taylor) just makes all the decisions, and doesn't even bother telling the City Council first, they find out along with everybody else, when they read the decisions online.

Maybe I should summarize my 12,346 pages of notes into a complaint form to the Ethics Commisssion?

The Natives Are Restless said...

Joe Taylor is Todd's son, not Hank.