IHateToBurstYourBubble said...
“We’re still a growing area — we’re adding people and residents,” Williams said...
That's not what I heard.
Other customers say they can’t find jobs or afford housing, and so they are moving elsewhere.
“We can’t keep trucks in, especially on the weekend,” she said.
I heard that local truck renters have dramatically raised outbound prices, because Bend is experiencing a mass exodus like nothing these businesses have ever seen before.Their inbound, one-way truck count has gone to near zero, while outbound numbers are so overwhelming, they have had to raise prices several fold to recoup costs of getting trucks back to Bend.
Again, a damn reliable source.
What's the upshot of things like this?
First and foremost is the edict to Think For Yourself. This place has "officially" 2-3X the construction base employment levels of Oregon overall. That is almost certainly low. "11.6% involved in construction"? Yeah, right. Try 25-40%.
Anyone with half a brain knows that RE & RE-related industries practically overwhelm the Cent OR economy. Health care is the only thing that comes close. They talk about manufacturing being a big driver, but tell me how the mass layoffs at Brightwood are NOT RE related.
I'd say maybe Les Schwab is RE-resistant... but they do own Juniper Ridge...
Second, DO NOT believe statements like the following:
"People are still moving to Central Oregon to enjoy our unique lifestyle, climate...."
This is one of those HORRIBLY contrived statements, with some parts truth, and some parts bald-faced lies. Remember this:
The buyers have come “from all over the country,” Breeze said. One is from England. About half are planning to use their units as primary homes. The other half are second-home buyers.
Uh huh. Look at all the implied bullshit in this statement. "International demand". "Such a flood of buyers that we have to hastily make up off-the-cuff estimates of what sort of buyers they are, whether super-affluent second home buyers, or just the local idle rich". "Breeze can barely contain the flood of buyers coming from every corner of the US"....
In case you've been in a cave, The Plaza was taken off Breeze & husband Wurzel's hands by their lender.
Here's more:Closer to home in Bend, some developers are dialing back, at least for the short term. DesertScape LLC President Craig Glazier said his group has shelved plans for a new mixed-use building on the lot next to the Deschutes Brewery on Bond Street, although it has already demolished the building that stood there before, partly because the group is preoccupied with its work on the new Red Rock shopping center around Redmond’s new Wal-Mart Supercenter, and partly in response to market conditions.
“We’re not worried that things aren’t gonna move,” Glazier said. “It’s just that you can only do so much.”
Hmmmm. Of course there is more hilarity:Local real estate agent Becky Breeze and her husband are building a 42-unit condominium project in the Old Mill District. Breeze already has sold most of her units. She said buyers know what they want and they don't balk at prices.
"They want to live in a custom home," Breeze said. "And they don't want to sacrifice quality. They want to be close to walking trails and the mountains. They're really mobile and they have a lot of money," she said.
Ah yes. Breeze's hallucinations still haunt the Old Mill to this day. So many rich, international, jet-setting billionaires coming here from Dubai & Tokyo that they've queued up in their Bentley's at her office with their trunks stuffed with cash.Of course, The Bulletin was more than happy to report these fantasies. And they do to this day.
More praise heaped on Bend
"Bend is a growing city filled with our kinds of readers," Weeden said. "A lot are active in the outdoors. They are working hard, playing hard, drinking good beer and listening to good music. There also is good nightlife, which is key."
Then we find maybe not is all on the up & up:
DVA, which worked with Bend writer Tim Neville and Outside's editorial staff on content for the article, contracts with the Bend Visitor & Convention Bureau to promote tourism for the city.
Then we get the obligatory Good News quote from a local retailer:
"The magazines have been rating Bend highly for years, so we don't pay as much attention as we used to," said Don Leet, co-owner. "But there are more tourists who come into town that rent bikes and mention the articles. We definitely noticed."
Uh huh.Just so you are not confused, realize that Bend has grown into a grifters paradise with the complicity of our local bought & paid for whorehouse of a paper, local RE developers, and the City Council, all working in concert to entice, reel in, land, and finally fleece of every last nickel marks (ie patsies) from every corner.
And fleece them we have. We happened to engage in this game at a time coinciding with the greatest credit expansion ever recorded, in an industry that just happens to run this 2 horse shithole. Of course, the players have chalked up their success to personal brilliance.
And have no doubt, this coincidence has had an almost belief-defying effect on Bend.
Who would have known that 25 years ago, this sleepy little busted logging town would go from one of the most under-appreciated housing markets in the US, to the single most overvalued, standing out in a sea of Florida & California bubble markets as an oddity too strange for explanation.
It's OREGON. It's CENTRAL OREGON. Go down the litany of over-valued markets & tell me how that makes sense. Please.
Prineville? No. Madras? No. Lots of people want you to Buy The Dream, but look around. They bought the dream & tried to transplant it in Prineville via Ironhorse. Result? Someone woke the fuck up one day, and realized they were in fucking PRINEVILLE, and Prineville is PRINEVILLE, and you can't sell dreams in Prineville. Same in Madras. Only more so.
Believe me, it's simply a matter of time before people realize that Bend is more like Prineville than Dubai or Tokyo or London, or any of the LONG LONG list of places that people have come from to SWARM our PR-fueled little outback meth-runner town.
This is Bend. Not Santa Barbara. Not Aspen.
And I heard from an inside source that a LOT OF PEOPLE who moved here under the pretense that Bend was an outdoor paradise (it is) with a myriad of wonderful outdoor activities (yes) and a bountiful work/play scene of almost all millionaires sipping Margaritas, drinking beer, living in mansions and in general enjoying life 24/7 (um, no), are now leaving in droves.
See, they mixed truth & lies in just the right amounts, so it's really hard to figure out that while Bend IS an outdoor wonderland, it has just about the WORST EMPLOYMENT ECONOMICS IN THE UNITED STATES. This has ALWAYS been true, except for the brief & fleeting period of 2003-2006, when Bubble-nomics took hold, and the mixed truth/lie PR fueled insanity became as close to 100% truth as it ever has, or ever will.
We are now on the unhappy side of things, and I have heard in no uncertain terms that Bend Is Getting Smaller Everyday. People are leaving In Great Numbers That May Even Rival The Rate At Which They Were Arriving Over The Past Several Years.
And the Mathematics of Growth, while rudimentary, are nonetheless easy to follow:
Each person has some level of residential RE demand. For me & the fam, it's about 400/sf each person. Now Bend is near 75K people right now. But blow that up to triple over a decade or so & even in our glutted RE market, we'd need a hell of a lot of building. That's basically what's happened here for 10 years. Coupled with a bubble, we rode this wave to good result.
But, reverse this trend, and you've got a death spiral. Here's Clive's latest inventory graph for Bend:
This actually doesn't look too bad. We're headed up towards record territory, but it looks like we've been there before. Not too bad.
Oh right. There's that little bugaboo that demand has FALLEN 50% during the course of this graphs time-line. So in terms of "inventory turn", which is the only relevant measures, we've got a real problem here.
There's the FURTHER bugaboo that Bend, in all it's perverse glory, will actually respond to the DECLINE IN HOUSING DEMAND BY BUILDING MORE HOUSES. Remember my little Mirada speech?
This point is so pivotal to Bends future, it bears repeating via analogy.
Remember golds bubble? Back in the early 80's that run to $800/oz? I barely remember it, but I do remember my father getting caught up in it, and buying old gold coins right at the top. There were infomercials 25/8 on buying gold. All sorts of little gold-related insanity got started.
Including gold mining. There was a HUGE amount of capital invested in NOT-EASILY-ABANDONED equipment, men, and infrastructure resources. Gold mining was never bigger than it was AFTER the gold bust.
And as gold prices fell, THEY MINED MORE of it. They had to sell more at lower margins just to make the same money to pay off their capital investments. And gold, like houses, has a nasty habit of accumulating above ground. Supply is never consumed, it just abounds in ever-growing quantities.
Lots of things are going cock-eyed in a situation like this. Traditional economics says that MORE gold should be demanded at lower prices than higher prices, and LESS supply should come onstream at lower prices.
But this is Bend.
The cost of bringing a house out of the ground for a SUPPLIER (builder) is now so much lower than just about any RESELLER (current homeowner) that the GOLD MINER is the only one who can even remotely come close to break even. And even they are losing money.
"Wait! People won't conduct business and knowingly LOSE MONEY you idiot!"
Ahem:
“Your average truck gets five miles to the gallon,” Dyas said. “So when you travel from here to say, Prineville, that’s 45 miles, times two. ... So I haven’t even covered my fuel to do a local move from here to Prineville. I’m actually paying the customer to let me do the move — isn’t that terrible?”
Like gold miners (and the far more applicable industry, AIRLINES), businesses can, do and WILL conduct business at losses for LONG PERIODS, if they believe there will at some point be a respite from the misery. Gold miners, airlines, and home builders are especially susceptible to this condition.
And so it goes. Bends response to the enormous glut of homes will actually be TO BUILD THEM AT A RATE NOT SEEN BEFORE. And they will sell them, or at least try to, at prices that will leave current $800/oz holders aghast.
Remember Picto-Plummet? Ah yes, the August sun beat down on crazy optimistic shit like this:
Ah yes, Eagles Landing, where all your dreams come true. I wonder how they doin'?
Welp, all you have to do is head over to The Garner Group website, and you see that they have SOLD a home! It's this 3,225sf model home beast:
A quick looksie on DIAL shows they hauled down $389,900, slightly lower than the $525K they were hoping for. Possibly due to the strange "His-N-Her dual walk-in" garage configuration.
Of further interest is the fact that the builder, Stonebridge Homes, bought the property for $80K, and then flipped it THE SAME DAY for $389,900! Good Job! I'm sure there was no double-dealing bullshit hanky-panky there.
That's of tertiary interest though. The Real News is that this GOLD MINER... err, builder, is now selling their product at a price they hadn't quite bet on given their starburst laden placard:
Lot 72, NE Dogwood Drive, $229,900 3 Bedrooms, 2 Baths, 1,432 Sq. Ft. Convenient Great Room Plan With Master Suite Separation
Uh oh. What were visions of half-million dollar mega mansions for as far as the eye can see has become artist renditions of labor shit shacks, doubling as high density, illegal alien meth dens for less than half that.
Yup, this is the VISION of a town FULL OF PEOPLE who either bought at $800/oz, or worse, refi'd at $800/oz. Your gold will remain ABOVE GROUND AND USELESS in the gold market, while suppliers continue to accelerate their production at LOWER & LOWER PRICES.
Do you see why I SHRIEKED REPEATEDLY to SELL, SELL, SELL last year at $500/oz? Mmm. Yes, it's cuz NOW we're at $300/oz and plummeting. It will not get better either. It'll just keep getting worse to the ASTONISHMENT of all. Even me.
The Point? We're still running the BUY BEND GOLD INFO-MERCIAL that reeled in all the people that have lost their $800/oz gold, and everything else for that matter in this little grift-fest. To wit, the NOD count for Deschutes County:
And what's worse, our City Fathers have started to believe their own grifting bullshit. From Dunc's blog:
I've been trying to wrap my brain around this paragraph in the Bulletin's front page article today:
"Pepsi first started looking at Juniper Ridge land about two years ago but was told it's warehouse didn't fit the city's vision...."
This reminds me, as many things do, of a quote from the Simpsons:
We can't afford to shop in any store that has a philosophy. We just need a TV.
Marge Simpson
OK, Bend City Councilors: We can't afford your asinine dreams. You've bought into your own munificence, when really you were just the people who happened to be in the right place at a miraculous time. Without the gloss of a teflon bubble, you will be exposed as the mediocre grifting frauds you are. Except Telfer who is presciently getting the fuck out of here.
Juniper Ridge, like most things, is just an industrial park in a 2 horse shithole in the middle of nowhere.
But the WAKE UP WHITE PEEPUL phase has begun. The Kool-Aid is wearing off, and Whitey is starting to see the coyote-smugly he woke up with is truly worthy of a arm-chewoff.
Folks, Bend does have a great outdoors scene. BUT, except for this BRIEF period when insanity gripped this country at large, and practically overwhelmed the common sense of everyone in Central Oregon, Bend remains a TERRIBLE ECONOMIC PROPOSITION. I do not believe I, nor do 90% of the current population have a sense of "steady state" economics in Central Oregon. We've just never seen it.
I think Duncan has. I think Marge has. Even Buster. That's 30+ years. Not 5. Or even 10.
Do NOT buy the bullshit. PEOPLE ARE LEAVING BEND EN MASSE. I know they are. Common sense, and looking around and thinking on YOUR OWN are all you need to KNOW that it's happening.
NOD's are on par with or EXCEEDING home SALES. Do you think these people will stick around? Do you think the market is GLUTTED with homes because PEOPLE ARE STILL COMING TO BEND TO ENJOY THE FREEWHEELING LIFESTYLE?
The Bulletin, KTVZ & everyone they quote, Realtors and COVA says it's happening.
So is it?
4.5 years of acreage properties. 24+ months of residential inventory. Plummeting medians. Huge owned (second homes) and rental vacancies. Low cost supply glutting the market. Commercial vacancies up over FOUR FOLD in a year. Does this sound like ALL IS WELL?
Bend media repeats the same tired mixed truth/lies bullshit so often, so that YOU will become a parroting zombie that BELIEVES this crap, and so hence YOU WILL DECIMATE YOURSELF ECONOMICALLY by making BAD DECISIONS. They want to reel you in, land you, and gut you. That's all this town knows how to do.
But we used to EAT YOU. But now people are leaving, so we've begun to eat each other. Our little powers that be are the gold miners that are running us down the cutthroat gauntlet. Your $495K shitshack is worth $239K and falling. It'll soon be at $149K.
Look at that Garner Group meth hovel: Then go to Jett Blackburn, and look at similar homes in Burns. You'll see that meth dives there similar to Garners fancy schmancy 1,200sf meth den on Bend's Eastsiiiiiieeeede go for UNDER $50K.
OK, Bend ain't Burns. But it's CLOSE.
Read that movers article. We're headed back to POVERTY WITH A VIEW at warp speed. Everyone losing money. Craptacular economics. Crushed dreams. The Bend Equity Sinkhole.
One part is true, one is 100% dead false. But you need to open your eyes, look around, and think about it critically, or you will become one of the VAST majority that accepts statements like this at face value.
Happens EVERYDAY in Bend media. And it will continue to happen. And, it's about the best propaganda for separating people from their money that there is.
It was the second time this year that the Bend metro area has ranked nationally in the top three for the highest unemployment rate increase. In February, the area ranked first in the nation, tied with Cape Coral-Fort Myers, and ahead of Punta Gorda, with a 2.6-point year-over-year increase.