Sunday, May 11, 2008

Bend Data Blow

I figure it's time for a data blow, where a lot of the local RE trends are chartified, tablefied, and finally, crucified. But first...

I noticed over at BendBB & Jesse Felder's My Back Pages that Notices Of Default have exploded in Deschutes County. We started the year with "just" 91 in January, and already in the first 4 days of May there were 43! Even Jesse posted an actual NOD he saw taped up in his neighborhood.

He said posting NOD's was becoming a regular epidemic where he lived:

3 defaults hit my neighborhood over the past week. I took this picture of one of the NOD's this morning on a walk and all the while I heard this song in my head: Come gather 'round people Wherever you roam And admit that the waters Around you have grown And accept it that soon...

And here's a related post from Jesse about the recent Bulletin piece regarding defaults:

Today's Bulletin reports that local default notices are off the charts:

Notices of early default, which are typically filed when borrowers fall three or more months behind on their house payments, rose 245 percent in April over April 2007, according to data from the Deschutes County Clerk’s Office. There were 114 pre-foreclosure notices filed last month. In the first four months of 2008, default notices are running 261 percent ahead of the same period a year ago, hitting 437 for the period. In the first week of May, 53 notices were filed.

And you see the requisite plummet in CACB shares:

Cascade Bancorp, 1 year

And CACB, after some pretty impressive short term rallies, ended this week in a final plunge to multi-year lows:

CACB, 10 days - close $8.78/sh

I still think it is a miracle that Moss Co has not been fired yet. Seems like everyone in Bend suspends their disbelief over Bad Situations for as long as they possibly can.

Although it should be pointed out the Sliver (silver?) Lining with respect to CACB, and Bend housing in general:

As things fall in price, people generally will buy more of it. We had a nice pop in units sold when medians tanked to the recent $270K for April.

CACB book value is about $279MM, while it's market value is $246.5MM. We're heading into Deep Value valuations here. We're not really well-entrenched yet, but CACB is starting to have some appeal on a buyout basis. If we see the sixes, I might actually have to have a taste....

And just another quick diversion in the stock arena. Once in awhile I watch NBR on OPB, with the fabulously tan Paul Kangas. And I just peripherally noticed that Monaco Coach scrolled across the screen around $5, which I assumed was post-split, cuz I just saw this baby around $10 not too long ago.

Monaco Coach, 5 year chart

Nope. There wasn't a split. Monaco, which used to have a decent sized presence in Bend, has just collapsed. After market trades were in the $4.60/sh range Friday. The book on this one is $315MM, and it's selling for $153MM, or less than half book.

Could go less, but MNC qualifies as Paul-doh's Lottery Ticket Investment of the Week. Buy at $4.60/sh., go Rumpelstiltskin on it for 5-6 years, and see what happens. Possible 10 bagger. Last time I had this feeling it was Perini back in mid-2002, in the $3's and $4's

PCR, 5 year

OK, now for a little of BendBB's chartified goodness.

Here is the chart of the MEDIAN asking prices for all listings, cut up by city:

Cent OR Asking Price Medians for listings

Bend itself is almost too boring for words, having been within $1,000 of $400K for many months. That belies the real trend, which is pretty clear here:

Median PPSF

The trend in Bend Price per Sq Ft continues monotonic Down. Median's a year ago for Bend were $226/sf, and are $200/sf today (down 11.5%). Similarly, Sisters was $262/sf a year ago, and is at $242/sf today (down 7.6%).

Redmond actually did OK with a relatively small decline from $183/sf in Apr 2007 to $174/sf for Apr 2008, or a 4.9% fall.

Sunriver continues to defy bad news, and rose from $279/sf to $287/sf last month. Is Sunriver the M1 Abrams tank of RE or just the Last Domino to Fall? I dunno, but that place continues to be a bastion of Cent OR RE strength, when all else is falling apart.

Here's a look at the median sqft of homes listed:
Median SQFT

Mainly a lot of bouncing around, except for Bend, which has been on a long-term increase in the size of homes being listed. At 1,900sf last Apr, we just crossed over the 2,000sf area last month, to a 2,003sf median for Apr 2008.

And finally, this is PPSF medians indexed to 0, for ease of comparison sake:
PPSF Medians, Indexed to 0.0%


You can see that in The Real Towns of Bend & Redmond, that prices have been in a grueling decline for almost the entire period.

The much lower volume, and hence probably more suspect trends of Sisters & Sunriver have diverged, with Sisters in a jagged decline, and Sunriver just marching slowly and steadily higher.

OK, now for the straight up MEDIAN for Bend residential solds, since Jan 2007 (data courtesy of Go Bend):

Bend Median residential SOLD prices, Jan 2007 - Apr 2008

The final data point in April was provided by our own Data Goddess, marge.

You can see things have gone to the unpleasant side of $300K in quite a hurry. Data from Case-Schiller shows that this sort of macro-plunge has built up a good head of steam in other larger mega-bubble cities like Vegas & Miami for well over 18 months now.

Of course the Real Story has been the implosion in sold volume. We had 289 sales in the 2 month period, Feb-Mar 2007, compared to a hideous 148 for the same period this year. This is making real estate an untenable career for THOUSANDS locally, a figure that actually does not show up in local unemployment figures due to the Independent Contractor designation of many Realtors.

I hope to see a possible copy/paste of today's Bulletin piece, With downturn, brokers adjust in different ways, possibly in the comments area soon. :-)

And if you look at the "Ask" medians vs the actual "Sold" medians, you can see them diverging quite distinctly. "Ask" medians have dropped mildly from $411,540 to $399,000 last month, or down just 3%.

But "Sold" medians fell from $356,500 last year, clear down to $270,000, or a stunning 24%+ drop.

This tells me something. Bend is a Real Town.

People are asking The Moon for the real estate that has been planted here over the past few years, and they are quite resolute in their ask.

But fewer & fewer of those high-priced homes are selling. In the minds of the sellers of real estate around here, prices look pretty darn stable. But the stuff in the Unaffordable Range (ie over $400K), where no real working Bendite can afford to buy, is simply drying up.

So ask prices continue to barely budge, and the SQFT actually continues to go UP. But no one is buying those behemoths, because Bend is a Real Town paying Crap Wages for the most part, and hence only the bottom of the barrel is even moving.

The problem is only small bits of the bottom rung of homes are moving. Real People do NOT want to live in worker shanty's (shanties?). And the "affordable" sector of homes in Bend are the STD's of the Bubble, or well located "Center" shit shacks built in the mill-town days of Bend.

People do not like to work their asses off and live in a dive. And they won't. they'll leave & they are leaving. Bend ain't "all that". Bend is a nice, middle of the road place with a nice outdoors scene, but it ain't the White Hot Center of the Universe.

The sooner we realize that, and the sooner we actually begin advocating LOWER home prices across the board (NOT Mirada style low prices, where the lot size & square footage are hacked to nothing...), the quicker this place will recover.

Did anyone notice that with the mega-plummet to $270K medians this month, that sold volume ticked up substantially?

There's the rub. If you want much higher prices then Bend will simply have to become far smaller. And there will be some hard adjusting to the fact that at $400K medians, we won't be a Real Town, there will be mass exodus, and large parts of this place will be a ghost town. I don't think that's really possible.

Lower prices are the only real outcome.

And not to say I told you so, but...

Remember how I've said, once or twice, that you should drop price to the bottom of the range in your locale to sell? Yeah... I've said that once or twice. Back in the mid $300's, there were probably quite a few starry-eyed dreamers who believed the Best Buyers Bullshit in 20 Decades crap, when really here at your humble BBB2, we have been saying all along that IF you really had to sell & needed to sell, for whatever reason, that the best strategy was to drop the price down to the sleeping point.

And you can plainly see that yesterday's mind-numbing price slashing point are all around you now. NOD's will continue this trend.

Anyway, you can plainly see that there is wisdom there. Look at the median sold prices. The range has imploded to levels that made past "lows" look positively glorious.

We might have some short term stability here, but it will not last. We've gone beyond what people want to do, and have entered into the area of what people (and banks) MUST do. Foreclosures up nearly 300% and other such dire statitics will continue to push Bend towards the NATIONAL MEDIAN, which has just sunk below $200K.

We're a real town. That means reasonable homes at reasonable prices are simply inescapable. The inequities created by the Bubble will soon be redistributed. Those who bought long-ago and sold at the height will profit at the cost of those who relieved them of their over-priced assets.

ROI will out. Should have compared renting to owning parity, and saw that owning ROI would be miniscule or negative for the next 20 years. Rent & Invest The Diff, my friends.

"But where do I Invest The Diff, Paul-doh! Where!"

Well, as you can see by the median sold prices, it almost really doesn't matter, as long as it is NOT Bend real estate. Stick it in the mattress. Bury it in the yard. Buy Monaco or Pfizer stock. Hell, almost anything is better than losing 24% in an illiquid asset that has become damn near impossible to sell at any price.

OK, I wanted to end with a summary of how the largest subdiv's are doing with respect to number of listings & median ask prices. These are listing counts for Apr 2008 vs Apr 2007 (all listings, including bare land):

Broken Top: 72 vs 65
DRW: 67 vs 75

NWX: 63 vs 57
Renaissance@Shevlin: 52 vs N/A
Awbrey Butte: 49 vs 45

RiverRim: 48 vs 45
Gardenside: 41 vs 10
Pronghorn: 41 vs 9
Orion Greens: 40 vs N/A

River Canyon Estates: 38 vs 27


A few things jump out, the first being the jump into the Top 10 Listers by Renaissance & Orion Greens from nothing a year ago. Renaissance at Shevlin has a smattering of spec homes (4 by my count), with the vast majority being bare lots. Orion is 100% bare lots as of today.

I think Renaissances' mass defaults down in Aspen Rim is well-known to all on this board. They have 19 homes down there for sale. They are almost certainly in liquidation mode.

Another lot liquidator appears to be Gardenside, with about twice as many lots for sale as homes (30 and 14 respectively, as of May 11).

Similarly, Pronghorn has hit the wall. They have 16 homes & 36 lots for sale as of right now. Pronghorn doesn't have the excuse of being a relative Bend Noob like Gardenside. Pronghorn has been around for years. They are in talks to save the poor deci-millionaires who funded the project, and just plain don't want to obey Oregon land use laws, poor buggers.

I predict outright sales of places like Pronghorn, which will go through "thin-skinned" BK's whose only purpose is to repeal the CC&R's. Can they? Is that even legal? Don't know... I'm just saying they will sure as hell try.

The rest of that list is a mish-mash of the larger well-known subdiv's around here, some up, some down. But rest assured that Dark Matter remains the Number 1 Enemy around here. It's everywhere, just waiting for a light at the End of this Tunnel.

Here are the median ASK prices for those same subdiv's (this year vs last, HOMES ONLY, no bare land included):

Broken Top: $786,000 vs $759,000
DRW: $253,750 vs $309,450

NWX: $527,000 vs $580,750
Renaissance@Shevlin: $649,900 vs N/A

Awbrey Butte: $849,000 vs $997,000
RiverRim: $473,901 vs $477,903
Gardenside: $279,900 vs $309,200
Pronghorn: $2,924,750 vs $3,900,000
Orion Greens: N/A (no homes for sale)

River Canyon Estates: $434,450 vs $392,700

Adding lots in these medians really doesn't make sense, because then places like Pronghorn would probably show a bare lot as the representative median, while BT would probably be a home, and such.

Again, these are ask prices, and may be reflective of the Kool-Aid that is still being imbibed by the Bubble junkies. Some of these places are so thick with Bubble-types, it's hard to know if there are any "Real People" there at all. The SW side is chocked full of Bubble shacks, and I would guess that many of these people are completely unable to drop their prices.

This is Rock & A Hard Place Time: So many in this town are financially unable to bridge the gap between their asking price & market that they have no choice but to futilely hold the line on their price, but they also cannot feed the beast forever, and are quickly burning through all the assets they've taken a lifetime to accumulate.

What will happen to this place in The Great Deleveraging is hard to say, but I do know One Thing: We'll Get Real. Prices will align with incomes. Incomes here are OK, but not great, which means prices will become OK, but not great, and that means sub $200K.

I want to try (more often) to end on an Up Note, so here goes.

I had the opportunity of spending yesterday doing the Monkey Face Circle Route at Smith Rock yesterday. Besides being one of Central Oregons true geological treasures, and one hell of a nice hike, one gets a panoramic view of The Ranch At The Canyons.

Now, dismissing the fact that this place is a exclusionary gated bastion for the rich, is a prime driver for the Tuscany-themed insanity gripping the Me-Too architecture of current doomed subdiv's, and finally that it has defiled one of the great pristine swaths of Central OR farmland... it still remains one of my favorite "concept" developments. The reasons are best conveyed by photographs:

Ranch at the Canyons, Southern view
Right above where the river disappears on the left, you can see the Ranch "clubhouse" or whatever it is. That red pumice road pretty much circles this baby. And you can see it is still by and large, empty space. Nice.

Monkey Face, where the Insane Go to Die. Look at that crazy bastard climbing it!


You can see from this vantage point that Ranch homes continue to be built, and by my reckoning they will be sold. Terrebonne? I know. Furnace in the Summer? I know. Poor dirt farmers on every corner? I know. Doesn't seem possible.

But Ranch at the Canyons is truly a unique location, a concept that is actually being done Right, and is being kept to a small scale that doesn't involve half the World becoming multi-trillionaires to work out. Only relative handful of cash-rich buggers need apply for the lots ranging from $750K - $1.2MM.

And by the looks of it, the houses being built are true monstrosities.

Spec homes in the shadow of Monkey Face

I guess sometimes I underestimate some of the real uniqueness of Cent OR. Everyone comes here touting the natural beauty, and I've been here long enough to take that for granted, and only focus on the "negative changes" I don't like... like Californians. And that's about it.

But this place really does have some unique positives, and Smith Rock is just one of many. The rock climbing there is World class. I met a gal from Germany there. Many of the license plates were from out of state.

And... despite the seemingly ENDLESS whaling on local money grubbing developers, there are a Very Precious Few who seemed to preserve the idea that a concept, NOT A PROFIT MAXIMIZING SHAFT JOB, was paramount. The Ranch at the Canyons, despite a few reservations on my part, is one of those concepts.

And I say this not as a UNPAID SCHILL, but as a message to those who are simply scholcking together shake and bake STD ridden pieces of crap subdiv's. It's crunch time. And slicing & dicing your way to ridiculous profits won't work anymore. You need more... a hell of a lot more.

You need to create some real durable, lasting & hopefully unique value, because slice & dice for maxed out STD placement has been done. Then done again. And again. And again. Again.

You need to actually get back to the pre-Bubble idea of building Good Places To Live For A Real Town. Am I saying that you should build a rich-bitch enclave Tuscan themed mega-gated community like Ranch at the Canyons? Of course not. I'm also not saying you should build an unsellable nightmare like The Shire or Tuscany Pines. These are merely thinly-veiled STD's with a "philosophy" schlocked on.

It ain't easy. Except when you're in a Bubble. Then everyone and their dog can & will become a builder. But this is the backside of that, and frankly most developers will not survive. But when "Normal Times" do return, and they will in 5-10 years, remember the lesson of Ranch at the Canyons. Stick to a concept, execute without cutting corners, try to bake in some uniqueness.

To summarize regarding Ranch at the Canyons, I paraphrase Ferris Bueller:

It is so choice. If you have the means, I highly recommend picking one up.

90 comments:

IHateToBurstYourBubble said...

I again ask that if anyone has access to the "Realtors Seeking Alternative Employment" piece in todays paper, that they kindly paste it. :-)

IHateToBurstYourBubble said...

And maybe this doesn't need saying, but I can highly recommend the Monkey Face Circle Tour at Smith Rock as one hell of a nice hike! Do it while it's cool out, because that place gets hella hot in the Summer.

I have pretty young kids & they made it. Then back to the Sno-Cap restaurant in Redmond for burgers, chili-cheese fries, and a milkshake. Damn, that was good!

IHateToBurstYourBubble said...

And I also took the Redmond re-route yesterday North bound to Smith Rock.

It actually sneaks up on you, and is "invisible"... you don't have to "try" to get to it, it is the Default Road Noth thru Redmond, and you have to try to get off.

I'm not so sanguine on it's impact on downtown Redmond. I've seen many a town that have a throughway & a "business loop", and many who might stop with a loop being the only way thru, will just keep driving.

Redmond is now quite easy to bypass on your way to or from Bend...

Anyone else have thoughts on this?

IHateToBurstYourBubble said...

And I forgot to put this in my post:

I was thinking of having "Guest Writers" put posts up, occasionally replacing my weekly ramblings. Maybe set up an anonymous e-mail where someone could submit a piece & that would be the post for the week. Kind of like a Letter to The Editor.

I mean, I still have a lot of "opinions" & stuff I can post, but maybe a change of pace would be a nice change occasionally?

I don't know, I was mulling that over this week...

And you might withhold your SHUT DOWN THIS FUCKING BLOG, IT SUCKS DONKEY ASS type comments, cuz I ain't gonna do that.

I never got into this to win some sort of comment numbers race (as has been implied by recent comments), and whether those numbers are high or low, I will continue to post here for my own satisfaction at the very least.

I just think it'd be a breath of fresh air to hear from those who are motivated enough to write something once in a great while, but are not quite motivated to actually start their own blog. Timmy comes to mind, and I'd love to post something by him. And BEM. Dunc too. My Lord, even Buster! And marge is of course welcome at all times.... that sultry minx. Or anyone really who has an opinion about something of merit, even if it diverges with my own.

Anonymous said...

Hey I'm really motivated to tell you about my next invention. It's a solar and mayonaise de-buttoning device with a 3rd gear. Maybe one of you real estate gurus can give me a piece of land to build these schlocky get rich quick inventions I have.

Thanks bitches!

IHateToBurstYourBubble said...

And I guess to re-explain what happened here a few months ago:

We had a huge spike in comments that roughly coincided with a "slash dotting" by Patrick.net, a HUGELY trafficked housing bubble site, with respect to the David Fisher firing story. Our daily uniques spiked higher to near 4,000 hits from a typical sleepy few hundred per day.

There was also a bit of a small-scale financial panic regarding Bear Stearns.

I don't really expect the former to happen again, but in this town, you never know. And I expect the latter to recur with what will amount to frustrating randomness.

We had our own little super-spike bubble in comments, and I guess I don't really take those exciting but short-lived event horizons as a long term indication of what goes on here.

We seem to have a core base of readers/commenters that contribute 100-300 comments a week or so, and I expect that to be the norm unless I start posting stuff to the gist of SUCK MY FUCKING COCK YOU BASTARDS, which may also happen possibly. I would expect comments to dip slightly on such litany of non-stop posts.

IHateToBurstYourBubble said...

Hey I'm really motivated to tell you about my next invention.

I think we have our first Guest Writer!

Carl said...

A suggestion, if it is possible, is there a way to eliminate the really long load times? Is it a function of the the length of your posts or the number of comments/posts that build up?

Also, is there a way to reverse the listing of the comments/posts so that the newest are at the top? Would make it easier to read the new posts.

Anonymous said...

Nice suggestion Carl but what does your rambling have to do with the price of chicken foo yung in China?


Bitches!

IHateToBurstYourBubble said...

A suggestion, if it is possible, is there a way to eliminate the really long load times? Is it a function of the the length of your posts or the number of comments/posts that build up?

Also, is there a way to reverse the listing of the comments/posts so that the newest are at the top? Would make it easier to read the new posts.


I don't know, but 5 bucks might refresh my memory.

Anonymous said...

Hey not to change the subject, but did you guys hear that Star Jones just bought a house in Sunriver? I'm so psyched! Maybe I should show her one of my very complicated inventions. One that even I barely understand its' innerworkings.


Thanks bitches!

timothy said...

Re: Load time...

For the rest of the week you can use this if you are interested in the comments section...

http://tinyurl.com/3tbglo

Anonymous said...

What the fuck is it with all this "Tuscany" shit? Central Oregon is not Tuscany, it don't look like Tuscany, its climate ain't anything like Tuscany, and we sure as hell don't make any Chianti.

Here is Tuscany: http://tinyurl.com/6q5x5u

Not much like Redmond or Madras, is it?

Anonymous said...

I've seen many a town that have a throughway & a "business loop", and many who might stop with a loop being the only way thru, will just keep driving.

When Highway 97 was rerouted around Bend long ago (the '70s?) it really hurt the downtown for a while, but downtown eventually bounced back with a different mix of shops and restaurants. I think downtown Redmond could do well with the right marketing and packaging. One thing is for sure: The traffic on 97 before the bypass was killing it, so I guess they didn't have that much to lose.

Duncan McGeary said...

I think the reroute was waaaayyyyaayyy! Back. Before my time, at least.

Anonymous said...

Sounds like the Terrebonne karma worked its magic on you. All of T-bone, from Ranch at the Canyons to the Crooked River mobile home park, is an exurban delight. BTW, the house under construction in the shadow of Monkey Face, is not a spec, but new digs for some locals. Sign me, a contented T-billy.

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

I am thinkin the Bahamas may be a great new mecca to send the Noobs too. It's kinda cheap, no skiing, many running and biking areas, water everywhere, I am sure you can jet ski for hours here.. It's only 95 degrees at 90% humidity and 4 power outages today. All those snow birds can come here. I am coming back to the crash in Bend. Time to retire.
Luv you guys.

bruce said...

Re:...is an exurban delight.

That implies there is an actual urban area nearby.

I think it's a nice place. No more, no less.

timothy said...

Exurbs are beyond the suburbs.

But sometimes "exurban" is used to refer to rural areas. It can simply mean "beyond the city."

From what I can see, a solid definition hasn't really settled onto the word yet.

jessefelder said...

what do you mean "EVEN Jesse posted an NOD"? lol...

IHateToBurstYourBubble said...

what do you mean "EVEN Jesse posted an NOD"? lol...

C'mon man.... we all know... You Rich!

IHateToBurstYourBubble said...

Lenders deserve to suffer, Buffett says

By JOSH FUNK

OMAHA, Neb. -- Billionaires Warren Buffett and Charlie Munger say the pain many financial institutions are feeling because of the credit crunch is well deserved.

The chairman and vice chairman of Berkshire Hathaway Inc. said Sunday that the financial companies that engineered subprime mortgages and the investment funds backed by those mortgages don't deserve much sympathy as they record losses now.

Buffett said the current financial crisis is a byproduct of a system that encouraged executives to "paint pretty pictures."

Munger said lots of financial institutions acted with stupidity and overreached to improve earnings in recent years.

"I think you have to start with the idea that a lot of the current troubles are richly deserved," Munger said.

The complexity of the tactics that financial institutions often employ makes it difficult to determine what those companies are worth -- even for Buffett.

"There are some financial institutions I can't value," Buffett said.

He said if someone had $1 million to invest in 10 stocks, it would be easier to find good values in the Korean stock market than among U.S. banks because the banks are so complicated.

Buffett said he recently read a 270-page annual report that an investment bank filed with the Securities and Exchange Commission, and he had unanswered questions for about 25 pages of the report.

"They're cleaning up their act now to some degree because they had to," Buffett said.

Munger said he doesn't think investment banks spend enough time thinking about risk and ways to avoid it like he and Buffett do at Berkshire.

"We try to behave as if Berkshire stock was all owned by crippled relatives," Munger said.

Buffett said the pain isn't over yet for financial institutions, but he said nobody can predict how many more times banks will have to write down the value of their assets.

The largest U.S. bank, Citigroup Inc., alone has taken more than $45 billion of write-downs and credit losses since June 30.

Buffett and Munger spent nearly three hours answering reporters' questions Sunday at their only planned news conference of the year. It is one of the events surrounding Berkshire's annual shareholders meeting, which attracted 31,000 people to Omaha on Saturday.

Buffett reiterated that he believes the U.S. economy is in a recession by his definition, even if it hasn't yet met the commonly used criteria of two quarters of negative growth.

He said his definition of a recession is when most people and businesses are not doing as well as they were three, six or nine months ago.

"I would say that we're in a recession clearly," Buffett said.

He said the Federal Reserve's bailout of Bear Stearns Cos. likely prevented a crisis among investment banks because Bear Stearns held a large number of derivative contracts with other investment banks. If Bear Stearns went bankrupt, all those derivatives would have to be valued at zero or unloaded quickly.

But he and Munger agreed that not every business or investment bank should be rescued, because failure is an important part of capitalism.

"Capitalism without failure is like Christianity without hell," Buffett said.

Lenders and investors who were dumb enough to deal in subprime mortgages should not receive any special help, Buffett said, but if homeowners were deceived about the terms of adjustable mortgages, they should be helped.

"People make mistakes in capitalism," Buffett said. "They shouldn't be penalized for being misled, but they shouldn't be protected from mistakes."

Buffett said the mortgage mess grew partly out of the belief many people had that their homes would always increase in value. And he said many of the troubled mortgages are ones that owners refinanced, taking out more cash than they'd ever paid for the home.

Those homeowners and lenders were all counting on tomorrow's home prices to bail them out of today's decision.

"People tend to forget how well the system worked when we had rules that prevented this complexity and aggression," Munger said.

IHateToBurstYourBubble said...

Bank failures: How bad will it be?
By Laura Bruce • Bankrate.com


Washington Mutual, Wachovia and National City are among the financial institutions that have announced huge losses and are looking for billions of dollars from private equity firms or others in the industry just to keep their doors open. In all likelihood, the bigger banks and savings and loan associations will survive the mortgage debacle and ensuing credit crunch, albeit somewhat battered and bruised.

But smaller banks may not fare as well, although it doesn't appear that we'll see a cascade of bank failures. Nevertheless, the increased risk has prompted the Federal Deposit Insurance Corp., or FDIC, to beef up its staffing in anticipation of banks going belly-up.

The FDIC insures approximately 8,500 institutions; 79 of them are on the agency's secret list of problem banks as of Dec. 31, 2007. Being on the problem list doesn't mean that a bank will fail; in fact, the agency says historically about 13 percent of banks on the list fail. The greater problem is that the damage done to financial institutions in 2007, and continuing through 2008 and perhaps beyond, may add many more names to the list.

"When you get on that list it means the regulators are working more closely with you on a supervisory basis," says FDIC spokesman David Barr. "We're trying to work with the institution to recognize the problems and have them work out their difficulties so they get off the list."

Community banks are the institutions raising the most concern, because, some industry analysts say, they are the ones that may be at the most risk. But Karen Thomas, executive vice president for government relations at Independent Community Bankers of America, an organization representing 7,500 community banks, says that on balance, the group is in good shape.

"The industry as a whole is coming off a period of record profits and strong liquidity. As a result, 99 percent of banks and thrifts remain well-capitalized and meet or exceed the highest regulatory capital standards. Community bankers are strong, responsible, commonsense lenders. They didn't cause this crisis and we expect them to weather this storm very well. They're looking at their asset quality and their loan portfolios and taking any actions that they deem are prudent."

Bert Ely, principal of Ely & Co., a banking industry consultant, agrees that most community banks are in good shape and that they didn't get heavily involved in subprime, but, he says, they have other problems.

"Banks of all sizes, including community banks, have gone overboard in some areas. One is home equity lending, another is lending to developers for property development, and the third area is commercial real estate. We're going to see some banks fail with these problems. But if regulators move aggressively, the problems can be resolved before the bank becomes insolvent.

"One area where we'll continue to get failures -- and recessions tend to bring this out -- is failures due to fraud; particularly when there's internal fraud of some kind. Fraud is much more likely to bring down a small bank than a large one. Good economic conditions can mask fraud, especially if it's fraudulent lending."

Ely says that failures can lag the business cycle, and if we see a burst of failures, it may not peak until 2009 or 2010.

What happens after a failure
If an FDIC-insured bank does fail, the FDIC usually shuts down the bank on a Friday and reopens it by the following Monday. Even in times such as this, it hasn't been difficult to find a buyer to take over the institution. (For more specific information on what happens after a bank failure, read a Q&A with the FDIC's Barr.)

"The FDIC can carve out all the problem loans and other assets of the bank and just pass a clean institution to the acquiring bank," says FDIC's Barr. "Even if all they want are the branches, then they just take the insured deposits and they get an instant bank. Many times they'll take the front-line employees too.

"We try to market the liabilities as quickly as possible. The FDIC is not a financial institution; we're a liquidator. If they are marketable loans that could easily be sold on the secondary market, we'll try to sell those. If they're troubled loans, then we work with the customers to get them to perform.

"The good news for the taxpayer is that this costs them nothing since the FDIC is funded by charging banks premiums for deposit insurance. Now, if we run out of money, then the full faith and credit of the United States stands behind our insurance fund. Luckily, the FDIC hasn't had to go there, but if you remember back in the 1980s, the insurance fund for (savings and loan associations) actually went out of business and it cost the taxpayers $150 billion."

While insured deposits are covered 100 percent in the event a bank fails, Barr says that over the past 15 years uninsured depositors have received an average of 72 cents on the dollar for the portion of their funds that exceeded the insurance limit. There have been instances where uninsured depositors received 100 percent of their money, but others have received much less, as was the case with the Oakwood Deposit Bank in Ohio in 2002, where uninsured depositors received just 42 percent. While you may recover your uninsured deposits, it can take a long time, even years. On the other hand, insured deposits are paid very quickly, usually within 48 hours.

There are several ways to insure more than $100,000 at a single bank. Read "Are your deposits insured?" for tips on making the most of FDIC coverage.

IHateToBurstYourBubble said...

Bank of England warns of two years of stagflation

By Edmund Conway


The Bank of England will this week admit for the first time that it is set to breach its inflation target in the coming months and warn that Britain is destined for two years of soaring costs and weak growth.

Mervyn King, the Bank's Governor, is poised to unveil new forecasts showing that the Consumer Price Index (CPI) will rise above 3 per cent over the next six months, forcing him to write a letter of explanation to the Chancellor. In a further blow to Alistair Darling's credibility, the Bank will cut its economic growth forecasts for both this year and next.

The changes will spark fears of "stagflation" - weak growth twinned with high inflation - and will be unveiled in the Bank's quarterly Inflation Report on Wednesday, which will set the tone for the economy for the next three months. They come amid warnings that Britain now faces a US-style housing crash, with plummeting prices and rising repossessions.

The Budget forecast that the economy would grow by 2 per cent this year and 2.25 per cent next, but the Bank is likely to forecast growth of well below 2 per cent in both years.
# More on economics

Despite the higher rate of inflation, the Bank is likely to indicate its readiness to cut borrowing costs again at least once - perhaps twice - in the coming months.

Although the Bank is duty-bound to keep the CPI within a percentage point of its 2 per cent target, it will this week forecast that the index will rise above 3 per cent in the coming months, economists predict. It will be the second time that the Bank has missed its target. However, Michael Saunders of Citigroup said that this time the Governor would insist that the increase had not come as a surprise.

Warning that the Bank would raise the inflation forecast to above 3 per cent not just for this year but also for 2009, he added: "The difficulty for the MPC [Monetary Policy Committee] and the economy is that shocks facing the UK both remain severe - downside growth from the credit crunch, housing implosion and high private debts and upside inflation risks from global cost pressures, the weak pound and surging inflation expectations. If anything, the shocks continue to worsen."

He added: "Although details in the US and UK differ, we suspect that the UK is starting to experience a US-style housing collapse, in terms of an extended period of extreme weakness in demand, turnover and prices."

King said in the last Inflation Report that there was a 50/50 chance of the Bank missing its target, but since then oil prices have leapt more sharply than in any previous quarter, while food prices are also on the rise. The slump in sterling is also expected to push prices higher.

Philip Shaw, the chief economist at Investec, said: "The other worry is the spectre of further gas and electricity price increases. When utility companies move, they do so not in small increments but by big margins.

"The growth numbers will probably be a little bit lower than in February, although it's difficult to imagine the Bank forecasting a meltdown in the economy."

IHateToBurstYourBubble said...

The Fire Bell In The Night And Our Real Terror
By Danny Schechter.


New York, May Day: Thomas Jefferson used a phrase in a letter that is still ringing all these years later. Here’s his thought, a candidate for “THE WORD” segment on the Colbert Report:

“I had for a long time ceased to read the newspapers or pay any attention to public affairs, confident they were in good hands, and content to be a passenger in our bark to the shore from which I am not distant, but this momentous question like A FIREBELL IN THE NIGHT [caps mine], awakened and filled me with terror.”

So many of us were content like that in the years leading up to the slow motion crash that rocked our economy in August 2007, and many still remain comatose like that today.

We were, all too many of us, confident also that we were “in good hands.” On May 2, just a year ago, our President told America’s general contractors — so many of whom are out of work today — “we’re proving that pro-growth economic policies with fiscal discipline can work. And our budgets are shrinking [sic]. The best way to keep them shrinking is keep the economy growing and be wise about — and setting priorities with your money.”

There was a fire bell ringing that very night, and he didn’t hear it, that is, if he could ever hear much besides his own voice. (Now he says the economy defies a quick fix!) Wall Street was making money by the ton just a year ago, and our regulators were cheering them on while most of our media was dozing. Worthless securities were being pedaled globally with stamps of approval from credible ratings agencies. Predatory lenders scammed customers. Protests from advocates for the victims were ignored.

At the same time, credit card debt rose 7.6% — almost $3000 a person. There were warnings of an impending collapse but few paid any heed.

A one time Republican strategist named Kevin Phillips was already ringing a fire bell about our mounting debt. He had documented the rise of the Financialization of our economy in which a credit and loan complex — using debt as its driver — was dominant, soon controlling over 20% of GDP. He warned of the consequences, of the hijacking of our future and our economy. Our system had become, he argued, a house of cards. Who listened?

In a new book, Bad Money: Reckless Finance, Failed Politics and the Global Crisis of American Capitalism, he documents how those cards started tumbling in painful detail.

This reality should, in Jefferson’s words, wake us up and “fill us with terror.” (Odd that thought of “terror,” written centuries ago. How prophetic!) Perhaps we are fearing the wrong terrorists?

Yet even now, most of the media would rather debate Reverend Jeremiah’s Wright’s words or Miley Cyrus’s photos than examine the calamity facing us and our world. Where are the investigations of the greedy and unscrupulous? That’s who gave us the subcrime crisis, or in Phillips words, the “reckless finance,” that brought the market down, sending prices and joblessness up.

You can’t really track these mounting problems by watching TV or even reading many of our newspapers who failed to cover the crisis as it was building steam from 2002 to 2006, and when it might have been stopped.

It is usually only after the fact that we realize that the official response to these crises is also making things worse.

Example: A former top Federal Reserve official now says that the Fed’s bailout of Bear Stearns will come to be viewed as the “worst policy mistake in a generation.”

Reported the Wall Street Journal: “Vincent Reinhart, who used to be the Fed’s director of monetary affairs and the secretary of its policy making panel, said the event would be compared to ‘the great contraction’ of the 1930s and ‘the great inflation’ of the 1970s.”

Run that by me again — “the great contraction?” Duh? Does he mean the Great Depression? Then, we had a government that tried to end it. As of this week, only 2000 homeowners facing the threat of foreclosure have been helped by our government. As many as three million homeowners face homelessness!

If you read the financial blogs linked on essential websites like Ml-implode.com, you get a much more sobering picture. According to the RGE Monitor, we are in the THIRD year of a housing recession—did you know that?

They report: “We are in the third year of the U.S. housing recession and the bottom does not seem to be in sight yet. Housing starts (and completions) are falling but not yet fast enough to offset the sharper fall in demand (home sales) and therefore to insure a fast absorption of the rising home inventories that keep putting downward pressure on prices.”

Do you realize the extent of the housing collapse? The number of vacant homes reached a record high of 18.6 million units, which was a 1 million increase in the past 12 months, with a record 4.1 million vacant homes for rent, and the rental vacancy rate rising to 10.1%.

One out of 194 US households are now in foreclosure. Housing prices are falling with expectations in some quarters that they will drop a further 20%.

Translation for a society in which realty is considered reality: This is an ongoing disaster with worse to come.

Patrick Net reports: “Salaries cannot pay for current house prices. This means house prices must keep falling or salaries must rise much faster. You probably noticed that your salary is not rising much, and that inflation in food, energy, and medical care has been very high. This leaves less money available to pay for housing.”

Another website, Minyanville, sees not just a subprime crisis but a deepening consumer consumption crisis as credit gets tighter. Already the overall growth rate has fallen to 0.6% as consumer spending freezes.

”It’s important to recognize that with each passing day, as credit is tightened and unemployment grows, more and more asset classes and population groups will be affected. And you need only look at the news from BMW or last week’s earnings report from Harley-Davidson and Starbucks to see that consumers can no longer afford their aspirations.”

Another site, Denninger.net, sounds angry, a sign of the ugly mood that is starting to go public as the only upturn appears to be a rise in the lack of consumer confidence:

“If you’re operating under the premise that the losses have been (mostly) recognized and we are now going to see ‘write ups’ somewhere down the road, you’re more than wrong.
You’re delusional.”

Are we delusional or just distracted by campaign circuses? Are we even aware of the link between the housing crisis and the food crisis?

Mike Whitney argues: “The global food crisis is a monetary phenomenon, an unintended consequence of America’s attempt to inflate its way out of a market failure. There are long-term reasons for food prices to rise, but the unprecedented spike in grain prices during the past year stems from the weakness of the American dollar. Washington’s economic misery now threatens to become a geopolitical catastrophe….”

So what now? Will the desperation so many people feel go inwards or outwards? Here are two stories on two tendencies likely to merge:

AP: “A man upset over thousands of dollars in fees owed to a condominium association brandished a gun and took two association employees hostage before he was killed by a SWAT team, authorities said. Deputies ‘were screaming at him to put the gun down, but he didn’t seem to be paying attention,’ said Ross Torman, 30, a resident who watched the standoff from his nearby balcony. ‘He just put that gun right to his head and that’s when they began to shoot.’”

The Housing Panic blog reaches into history to remind us of an uprising that saw martial law imposed in Iowa in 1933 after “a mob of 150 farmers dragged Circuit Judge Charles C. Bradley from the bench, manhandled the 60-year-old jurist and threatened to lynch him unless he promised not to sign further foreclosure orders.”

Don’t think never again. If it has come to this, it can come to that.

IHateToBurstYourBubble said...

This is a paid-only Bulletin piece, hence no link.

With downturn, brokers adjust in different ways

By Andrew Moore / The Bulletin
Published: May 11. 2008 4:00AM PST

Less selling, fewer in sales
2007: 1,235
2006: 2,178
2005: 1,878
2004: 1,372

• In the first quarter of 2008, there were 728 residential real estate sales in Deschutes, Crook and Jefferson counties.
Comparing first-quarter sales since 2004:
• Membership in the Central Oregon Association of Realtors, which spans Deschutes, Crook, Jefferson and Harney counties, fell from a record 2,100 in 2007 to 1,892, not all of whom are brokers.
The number of statewide members fell from 21,147 in 2007 to 20,387 in February.
“The last five years have been a whirlwind for the association and the market,” said Geneese Zinsli, executive director of the regional chapter.
Sources: Central Oregon Multiple Listing Service, Central Oregon Association of Realtors, Oregon Real Estate Agency

For Central Oregon’s real estate brokers, the pie has gotten smaller.

There are fewer sales to spread around and some are taking second jobs, pursuing different careers or leaving the business altogether.

Other brokers, who have experienced downturns before, say they are doing OK, cushioned by savings from the boom years meant to get them through the leaner ones. In the end, those still selling real estate are having to work harder.

“For a few years, we didn’t have to worry,” said Dan Evans, a real estate broker who works for Steve Scott Realtors and has sold property since 1988. “People didn’t go out and prospect and were almost passively waiting for things to happen. But now you have to turn over more stones to find those deals that make sense. You have to talk to more people. You have to figure out what they are trying to accomplish and see if you can help them.”

In the first quarter of 2008, there were 728 residential real estate sales in Deschutes, Crook and Jefferson counties, according to Central Oregon Multiple Listing Service data. To demonstrate the steepness of this year’s decline, that compares with first-quarter sales of 1,372 in 2004, 1,878 in 2005, 2,178 in 2006 and 1,235 in 2007.

Last year, the Central Oregon Association of Realtors — which spans Deschutes, Crook, Jefferson and Harney counties — had a record membership of nearly 2,100, according to Geneese Zinsli, association executive director. Its current membership is 1,892.

Of those, 1,728 are real estate brokers, Zinsli said. Others are appraisers and affiliate members, such as title companies and mortgage brokers.

Statewide, there were 20,387 active brokers in February, the latest data available from the Oregon Real Estate Agency. In September 2007, the number was 21,147. The agency doesn’t track statistics by county.

Switching gears, changing careers

Real estate brokers are navigating housing’s downturn differently.

This past September, Gilead Leventhal took a second job for the first time since starting her real estate career in 1994. She began hiring herself out as a personal assistant under the business name Wanna Wife.

“Over the summer, I realized the market was turning and realized I needed to find something else to do,” said Leventhal, who still sells real estate.

She joined Sonnie Grossman & Associates Realty in Bend in September after 10 years selling real estate with another local agency.

“I realized the market was turning … I chose to go with Sonnie Grossman, where the desk fees would be substantially lower and still be with a company with a good reputation,” Leventhal said.

Leventhal remains optimistic about real estate but said the current market is tough for brokers. Tighter credit standards have made it harder for prospective buyers to secure loans while “great buys” sit on the market, she said.

Mike Angelastro, of Bend, took the market’s downturn as a sign it was time to pursue a lifelong goal to be an educator. He persuaded his wife to return to a full-time job while he stayed home with the couple’s three children and began pursuing a master’s degree at night and on weekends.

“It was a daunting task to do, when things were going real well to say to the wife, ‘I want to quit my job,’ so the downturn made it easier,” Angelastro said.

Angelastro will keep his real estate license active because he still has a few listings and loyal friends and clients he would be happy to help. Plus, he anticipates he will be able to sell real estate during summers.

Keeping a license is relatively easy, he said. It requires 30 hours of continuing education classes every two years and annual dues to the National Association of Realtors and the local Central Oregon chapter (COAR). Membership allows real estate brokers to call themselves by the trade name, Realtor, and to access the Multiple Listing Service.

Keeping brokers in the business

Zinsli said COAR has a number of brokers like Angelastro who work in real estate on a limited basis. But most are those who have chosen real estate as a career, so the association’s numbers haven’t dropped dramatically, she said.

“The last five years have been a whirlwind for the association and the market,” Zinsli said. “So in the last five years we’ve gained lots of members, but most of them are staying in the business.”

At Keller Williams Central Oregon Realty, principal broker and team leader Cecily Parks is hiring real estate brokers. Parks said she’s hired six brokers in the last few weeks and wants to have 100 in the office by the end of the year in order to expand into Redmond. The firm has roughly 60 brokers now.

Most real estate brokers who work for realty agencies are independent contractors. They pay office fees to the agency for administrative costs and split their commissions with the agency.

Parks said the current real estate market is tough. To help its brokers, the agency offers ongoing education programs in everything from sales lead generation to the technical aspects of foreclosures and short sales (when a lender agrees to sell a property for less than it’s worth). Parks said the agency encourages brokers to think of themselves as small-business owners.

“This is a market for the professional,” Parks said. “A couple of years ago, real estate was a little bit easier. Now, you truly must be a professional, and you actually have to work” to develop business.

Parks said the current lean times are likely affecting many brokers, but she said many are doing well, especially those skilled in short sales and foreclosures. Additionally, Parks said, smart brokers put money away to ride out the lulls.

The downturn also has made some brokers band together.

Realtor Scott McLean recently stopped working from a home office and returned to the John L. Scott Real Estate agency in Bend, where he had previously worked before going out on his own 2½ years ago. McLean said he originally left the agency to slow his life down but came back to get more business. He has to pay more in fees and commissions with an agency but believes it will be worth it.

“Now is a great time to be a real estate agent, because you get to do the most fun thing out there,” McLean said. “You get to find the best deals for your clients because there are lots of great deals out there.”

McLean doesn’t believe there’s an overabundance of real estate brokers in the area and says the market’s current condition will likely discourage new brokers from entering. Those brokers still in the market are experienced agents “who can get out there and scrub,” he said.

Last month, real estate broker Robin Yeakel closed Summit Real Estate, the real estate agency she owned with her broker husband, Greg, and along with 10 of their brokers, joined Cushman and Tebbs Sotheby’s International Realty in Bend.

“During the years 2001 to 2007, we were in a rising market and many real estate brokers opened their own companies, and Portland brokers came here, and the fact is that we’re in a correcting market,” Yeakel said.

She added that the move was a chance to align with an agency with a strong brand name and “an opportunity to position ourselves for the future.”

‘Not a cheap business’

Longtime Central Oregon Realtor Becky Breeze said a lot of people jumped into real estate careers during the housing bubble’s heyday, enticed by a seemingly never-slowing market and the chance to sell five or six homes a month. But once the market returned to normal — as it is now, according to Breeze — the expenses a real estate broker must incur to stay in business became overwhelming for some.

“It’s not a cheap business to be a part of, so you have to think of it as a longtime career, and know there (are) going to be good years and bad years,” Breeze said. “The people that didn’t think of it as a career went back to their old jobs because it was difficult to find clients.”

The upside to the downturn, Breeze said, is “people run to experience to help them out of difficult times.” Breeze said business from referrals is keeping her firm, Becky Breeze & Co., busy and that she has as many brokers, 12, as she did during the market’s run-up.

“In a sluggish market, people usually go back to people with names they’ve heard,” she said.

Breeze said it will likely be a few years before consumer confidence returns, but she believes real estate activity in Bend will continue at a solid pace, thanks to the region’s attractive quality of life that continues to draw new residents, and falling home prices that are presenting opportunities for first-time buyers. Arranging financing remains difficult for many buyers, said Breeze, but she’s optimistic.

“I saw it far slower in 1989 and the ’90s … than it is today,” Breeze said.


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

IHateToBurstYourBubble said...

Posted over at BendBB by "df" (David Fisher methinks):

df
Guest

PostPosted: Sun May 11, 2008 3:03 pm

I imagine the difference is he can sleep at night and his hair stopped falling out.


Thanks, News Junkie.

It turns out that getting away from Costa isn't a cure for male pattern baldness (damn!), but all other aspects of good health are immensely improved by the experience.

In fact, I'd recommend it to the National Centers for Disease Control as a way to cure most ills. But, unfortunately, in order to get away from him you have to work for him first, which would seem to negate the overall health-tonic effect.

Oh, well ... Back to my cold fusion project ... Laughing

IHateToBurstYourBubble said...

Homeowners True Believers: 77% Believe Their Homes Held or Increased Value in 2007; Despite Housing & Credit Market Turmoil, Many Homeowners to Renovate, Refinance and/or Sell

Zillow.com® Survey Reveals Homeowner Denial or Inattention: Other Houses Lost Value, Not Mine

SEATTLE, Feb. 7 /PRNewswire/ -- Despite repeated highly publicized reports of a home sales slump and pricing slides, there's a surprising amount of positive consumer sentiment -- and perhaps a good measure of homeowner denial as well: Even in a negative home pricing environment, 77 percent of homeowners from around the country believe the value of their home has increased or remained the same in 2007, according to a recent Zillow.com survey conducted by Harris Interactive®.

What's more, sizable fractions of all homeowners -- not just those who believe their homes appreciated in 2007 -- say they are planning to do things in 2008 -- even before the Fed's latest interest rate cuts -- that you might not expect during the housing, construction and credit slumps:

* 82 percent will spend the same or more on minor home improvements
(install new garbage disposal, repaint or wallpaper a room)
* 67 percent say they will spend the same or more on major home
improvements (replace the roof, remodel the kitchen) this year
* About a third say they are more likely or equally as likely to:
o Take out a home equity loan (35%)
o Refinance their mortgage or take out a second mortgage (36%)
o Sell their homes (34%)


How Bad it is in the Reality-Based World

The Zillow® Q3 Home Value Report says U.S. home values dropped 5.7 percent nationwide year over year (2007 to 2006). Zillow plans to release its Q4 report Feb. 12 and preliminary results indicate home values in most U.S. markets have continued their descent. In a recent report, Merrill Lynch predicted "housing prices will remain in free fall," declining 15 percent in 2008 and 10 percent in 2009, "with more depreciation likely beyond the forecast period," even if the Federal Reserve continues to cut interest rates.

How Homeowners Perceive the Situation

About a third of homeowners (36%) in the Zillow.com Home Value Survey said their homes had actually increased in value during 2007. Zillow's Zindex® data proves the contrary, showing median value declines across regions as of October 2007.

Total Northeast Midwest South West
My Home's Value Has Increased 36% 31% 39% 37% 36%
My Home's Value Has Decreased 23% 22% 16% 21% 34%
My Home's Value Has Stayed the
Same 41% 47% 44% 42% 30%
Median Year-over-Year Value
Change -5.04% -2.57% -2.02% -4.02% -7.86%
According to Zillow.com


What's Driving Homeowner Perception?

"This survey reveals that despite the data to the contrary, people either aren't paying attention to their housing market or are in denial about their own home's value," said Dr. Stan Humphries, Zillow.com vice president of data & analytics. "This likely reflects the fact that most Americans have not realized home-related losses because they're staying in their homes. Even in declining markets where a greater percentage of new homeowners are underwater on their mortgage, it's important to remember most people are not really affected by declining values unless they absolutely must sell or need to immediately refinance or withdraw equity. This has contributed to the healthy investment intent, particularly in home upgrades, despite the downward trending markets."

How to Stay on Top of a Home's Value?

Zillow recently increased its database of homes with Zestimate valuations to 67 million, which equates to about three out of four U.S. homes. People can easily check a home's value by visiting Zillow.com and typing in an address.

Zillow Q4 Home Value Report Conference Call

Join Zillow's VP of Data and Analytics, Dr. Stan Humphries, on Tuesday, February 12th @ 11:00 AM PT to learn more about how markets nationwide fared in Q4 and what the results mean in the broader context of the real estate market. To join, dial toll free: 1.866.250.4375

About Zillow.com

Zillow.com is an online real estate community where homeowners, buyers, sellers, and real estate agents and professionals find and share vital information about homes, for free. In addition to having data on more than 80 million homes, Zillow provides market valuation has details on more than 7,500 neighborhoods in 130 U.S. cities that includes demographic data on the types of people who live there and information about the local area. Zillow.com, Zillow, and Zestimate are registered trademarks of Zillow, Inc.

*Methodology and Timeframe of the Survey

The Home Spending survey was conducted online by Harris Interactive within the United States on behalf of Zillow.com between December 26 and December 28, 2007, among 2,254 adults ages 18+, of whom 1,619 are homeowners. This online survey is not based on a probability sample and therefore no estimates of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact Sarah Mann (sarahm@zillow.com or 206-470-7171).


Man. They be smoking the fucking cracker all over the place....

IHateToBurstYourBubble said...

what do you mean "EVEN Jesse posted an NOD"? lol...

And I think I meant to say "Jesse even posted a NOD...."

But I can still tell by the door quality.... You Rich!

IHateToBurstYourBubble said...

The shape of things to come: STAGFLATION

British inflation in the spotlight
PPI surge raises worries ahead of BOE inflation report

LONDON (MarketWatch) - Bank of England policymakers could hardly have asked for better evidence of the dilemma that confronts them.

The United Kingdom's Office for National Statistics on Monday reported that prices for goods leaving British factories jumped at an annual rate of 7.5% in April - the fastest pace since current records began in 1986 and far above market expectations for an increase of around 6.4%.

Input prices, a gauge of the cost of raw materials, also saw a record jump, rising at an annual pace of 23.3%. On a monthly basis, input prices rose 2.4% between March and April, largely reflecting higher prices for crude oil, ONS reported.

The statistical agency said "unusual" gas market conditions contributed to the rise in April PPI. While gas prices typically fall in April, the spot price rose from March levels, the ONS said.

Also, April marks the annual price round for several companies, "so prices are particularly uncertain," ONS said, leaving input gas prices for April particularly susceptible to revision.

Monday's PPI data saw the British pound gain ground against the U.S. dollar while U.K. government bonds, or gilts, fell on ideas rising inflation pressures would make it more difficult for the Bank of England to cut rates in coming months. The pound was up 0.4% against the dollar to $1.9610 in recent action.

Meanwhile, U.K. gas utility Centrica (UK:CNA: news, chart, profile) on Monday warned that operating profit in the first half of the year would be "materially" lower than a year ago at its British Gas division due to high wholesale prices.
Centrica also promised to "take the necessary action" to deliver reasonable margins in its retail operations -- an indication that further retail price increases are on the way, according to Goldman Sachs. The company previously raised its gas prices by 15% in January.

While rising food and energy prices helped fuel the jump, core output prices also showed a strong rise, economists noted. Excluding food, tobacco and energy, output prices rose 1% on the month for a 4.6% annual increase, the ONS said.

CPI figures due on Tuesday; inflation report on Wednesday

On Tuesday, markets and policymakers will get a look at how much producers have so far been able to pass along rising costs when the ONS releases April consumer price inflation data at 4:30 a.m. Eastern.

A survey of economists by Dow Jones Newswires produced a consensus estimate of a 0.5% monthly rise in the April CPI and a 2.6% annual increase. Consumer inflation rose by 0.4% in March for an annualized rise of 2.5%.

The statistics come as the central bank puts the final touches on its latest quarterly inflation report - a guide that will update the Bank of England's latest economic forecasts and will be read as a blueprint of the rate-setting Monetary Policy Committee's future monetary policy decisions.
As inflation pressures mount, signs of economic weakness, including a weakening housing market, tighter lending standards, and rising home repossessions, are also on the rise, economists noted.

But Monday's data were seen lending support to the idea that inflation worries may be gaining the upper hand within the MPC.

"These figures lend weight to the view that Wednesday's Bank of England Inflation Report will point to increasing inflationary pressures within the U.K. economy, constraining the ability of the MPC to cut rates in response to the deteriorating economic situation," wrote economists at NCB Stockbrokers in Dublin after the release of Monday's PPI data.

"Lacking a strong currency ... [and] combined with increasing inflationary pressures, oil above $125 a barrel and slowing growth, the BoE finds itself in an increasingly difficult position," added economists at Scotia Bank.
The pound has fallen by 1.4% against the U.S. dollar and down more than 8% vs. the euro since the beginning of the year. A weaker currency contributes to inflation pressures by making imports more expensive.

2% target

The Bank of England aims to hold inflation at an annual rate of 2%, straying neither much above nor below the target.

Policymakers have acknowledged that soaring food and energy prices are likely to cause headline inflation to spike in the near term but have warned that they must be vigilant to keep longer-term inflation expectations in check or risk. At the same time, the bank has noted that a sharp downturn could potentially drag inflation below target.

The Bank of England last week held its key lending rate at 5%, refusing to follow up on April quarter-point reduction.

Citigroup economist Michael Saunders said the decision was no vote of confidence in U.K. growth prospects, but instead marked a warning shot over building inflation pressures.

The May inflation report, meanwhile, is "likely to deliver a tough and flinty message," Saunders wrote in a weekly research note. "Despite weaker growth prospects, we expect the MPC to warn again that inflation prospects have worsened for both this year and 2009."

Saunders expects the report to project that CPI will likely rise to an annual rate of more than 3% in coming months and stay well above the 2% target in 2009, in contrast with the February report that projected inflation would return to target levels in the second quarter of 2009 if the key lending rate stayed at 5.25%.

A reading above 3% requires the central bank to write a letter to the chancellor of the exchequer, Britain's finance minister, explaining the reasons for breaching the inflation target.

Saunders continues to project a fall in the key lending rate to 4.25% by year end, but at a pace that will be unlikely to spur an economic rebound.


William L. Watts is a reporter for MarketWatch in London.

IHateToBurstYourBubble said...

So... I'm getting the feeling that marge & Buster really are married!

She's definitely in the Caribbean... and not a peep from him all week.

Are you two kids really hitched? So many broken hearts over that one Mrs marge, if true... :-)

bruce said...

Excerpts from this years letter to B-H shareholders from Buffet:

Some major financial institutions have, however, experienced staggering problems because they engaged in the “weakened lending practices” I described in last year’s letter. John Stumpf, CEO of Wells Fargo, aptly dissected the recent behavior of many lenders: “It is interesting that the industry has invented new ways to lose money when the old ways seemed to work just fine.”

You may recall a 2003 Silicon Valley bumper sticker that implored, “Please, God, Just One More Bubble.” Unfortunately, this wish was promptly granted, as just about all Americans came to believe that house prices would forever rise. That conviction made a borrower’s income and cash equity seem unimportant to lenders, who shoveled out money, confident that HPA – house price appreciation – would cure all problems. Today, our country is experiencing widespread pain because of that erroneous belief.

As house prices fall, a huge amount of financial folly is being exposed. You only learn who has been swimming naked when the tide goes out – and what we are witnessing at some of our largest financial institutions is an ugly sight.
...
The U.S. dollar weakened further in 2007 against major currencies, and it’s no mystery why: Americans like buying products made elsewhere more than the rest of the world likes buying products made in the U.S. Inevitably, that causes America to ship about $2 billion of IOUs and assets daily to the rest of the world. And over time, that puts pressure on the dollar.

When the dollar falls, it both makes our products cheaper for foreigners to buy and their products more expensive for U.S. citizens. That’s why a falling currency is supposed to cure a trade deficit. Indeed, the U.S. deficit has undoubtedly been tempered by the large drop in the dollar. But ponder this: In 2002 when the Euro averaged 94.6¢, our trade deficit with Germany (the fifth largest of our trading partners) was $36 billion, whereas in 2007, with the Euro averaging $1.37, our deficit with Germany was up to $45 billion. Similarly, the Canadian dollar averaged 64¢ in 2002 and 93¢ in 2007. Yet our trade deficit with Canada rose as well, from $50 billion in 2002 to $64 billion in 2007. So far, at least, a plunging dollar has not done much to bring our trade activity into balance.

There’s been much talk recently of sovereign wealth funds and how they are buying large pieces of American businesses. This is our doing, not some nefarious plot by foreign governments. Our trade equation guarantees massive foreign investment in the U.S. When we force-feed $2 billion daily to the rest of the world, they must invest in something here. Why should we complain when they choose stocks over bonds?

Our country’s weakening currency is not the fault of OPEC, China, etc. Other developed countries rely on imported oil and compete against Chinese imports just as we do. In developing a sensible trade policy, the U.S. should not single out countries to punish or industries to protect. Nor should we take actions likely to evoke retaliatory behavior that will reduce America’s exports, true trade that benefits both our country and the rest of the world.

Our legislators should recognize, however, that the current imbalances are unsustainable and should therefore adopt policies that will materially reduce them sooner rather than later. Otherwise our $2 billion daily of force-fed dollars to the rest of the world may produce global indigestion of an unpleasant sort. (For other comments about the unsustainability of our trade deficits, see Alan Greenspan’s comments on November 19, 2004, the Federal Open Market Committee’s minutes of June 29, 2004, and Ben Bernanke’s statement on September 11, 2007.)
...
Fanciful Figures – How Public Companies Juice Earnings

Former Senator Alan Simpson famously said: “Those who travel the high road in Washington need not fear heavy traffic.” If he had sought truly deserted streets, however, the Senator should have looked to Corporate America’s accounting.

An important referendum on which road businesses prefer occurred in 1994. America’s CEOs had just strong-armed the U.S. Senate into ordering the Financial Accounting Standards Board to shut up, by a vote that was 88-9. Before that rebuke the FASB had shown the audacity – by unanimous agreement, no less – to tell corporate chieftains that the stock options they were being awarded represented a form of compensation and that their value should be recorded as an expense.

After the senators voted, the FASB – now educated on accounting principles by the Senate’s 88 closet CPAs – decreed that companies could choose between two methods of reporting on options. The preferred treatment would be to expense their value, but it would also be allowable for companies to ignore the expense as long as their options were issued at market value.

A moment of truth had now arrived for America’s CEOs, and their reaction was not a pretty sight. During the next six years, exactly two of the 500 companies in the S&P chose the preferred route. CEOs of the rest opted for the low road, thereby ignoring a large and obvious expense in order to report higher “earnings.” I’m sure some of them also felt that if they opted for expensing, their directors might in future years think twice before approving the mega-grants the managers longed for.

It turned out that for many CEOs even the low road wasn’t good enough. Under the weakened rule, there remained earnings consequences if options were issued with a strike price below market value. No problem. To avoid that bothersome rule, a number of companies surreptitiously backdated options to falsely indicate that they were granted at current market prices, when in fact they were dished out at prices well below market.

Decades of option-accounting nonsense have now been put to rest, but other accounting choices remain – important among these the investment-return assumption a company uses in calculating pension expense. It will come as no surprise that many companies continue to choose an assumption that allows them to report less-than-solid “earnings.” For the 363 companies in the S&P that have pension plans, this assumption in 2006 averaged 8%. Let’s look at the chances of that being achieved...[pretty much impossible]...What is no puzzle, however, is why CEOs opt for a high investment assumption: It lets them report higher earnings. And if they are wrong, as I believe they are, the chickens won’t come home to roost until long after they retire.

After decades of pushing the envelope – or worse – in its attempt to report the highest number possible for current earnings, Corporate America should ease up. It should listen to my partner, Charlie: “If you’ve hit three balls out of bounds to the left, aim a little to the right on the next swing.”


All annual letters are here: http://www.berkshirehathaway.com/letters/letters.html

Anonymous said...

I think Buster's been away because you guys hurt his feelings with all this "Best Time to Rent Since Forever" crap.

And I can't believe that in all his rants, Buster never mentioned two good reasons for buying instead of renting:

1. You're not flushing your rent money down the toilet every month (you're building equity)

2. It lowers your income taxes. Since I started paying $11000 of mortgage interest a year, my taxes have fallen at least $1500 per year (federal), plus at the state level as well.

PopGoesBend said...

1. You're not flushing your rent money down the toilet every month (you're building equity)

Uh... with house prices dropping like they are there is no equity gain. There is negative equity. In the last year the average home in Bend lost over 5k a MONTH in equity. Add in interest that is being flushed away too. wahoo... and I'M flushing money down the toilet? My $1200 in rent means I'm flushing 1/5 as much away as when I was owning.

2. It lowers your income taxes. Since I started paying $11000 of mortgage interest a year, my taxes have fallen at least $1500 per year (federal), plus at the state level as well.

That's fiscally smart. Spend $11,000 to save $1,500. Since it would cost me more than $750 a month more to own the place I am living in I am saving that $1,500 every two months. Without spending $11,000 to do it. pppppbbbbttttt.

Anonymous said...

Homer bitch, just a comment about the person 'climbing' monkey face.

First of all that person is 'rappelling' that is is he/she is going down, climbing is going UP.

Secondly there is a FUCKING bolt-ladder on monkey-face, any twat, even a man-twat can be taken to the mouth of monkey, now getting from the mouth to the top, thats a good 5.9 move,

Just to keep you honest.

Anonymous said...

The definition of insanity, is saying and doing the same thing over, and over, and over.

That makes all of you man-twats ( Bend-Noobs ) on this pathetic site insane.

End of fucking story.

timothy said...

If you're referring to Albert Einstein's definition of insanity, you dorked it up a bit and missed the key point.

“The definition of insanity is doing the same thing over and over again and expecting different results.”

Marge said...

Are you two kids really hitched? So many broken hearts over that one Mrs marge, if true... :-)

It's 95 degrees and 94% humidity, haven't seen Buster. Guess I wouldn't recognize him if I did. I would love to stay on this island, but gas is $7 a gallon and there is no real milk. But the fish are fuckin huge and my real turn on.
Be back in town in a couple days. Til then I am still watchin ya maaan.

Duncan McGeary said...

O.K. That's weird. Zillow has my house as having sold in Feb, 2004, for the correct price to us. And then it has it selling again in April, 2004 for 63k more.

Anyone know how to find out on official records whether there is a second recorded sale?

1385 N.E Williamson Blvd. Bend, Oregon 97701.

Anonymous said...

The county clerk's recording system shows one sale on that residence in 2004, one mortgage in 2004, and one HELOC (presumably) in 2006.

2006-041764 PDF TIF
DOC TYPE: Deed of Trust / Mortgage CONSIDERATION: $50,951 DATE REC: 6/16/2006 2:59:06 PM
DIRECT: MCGEARY, DUNCAN M INDIRECT: MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC
DIRECT: MCGEARY, LINDA L INDIRECT: COUNTRYWIDE HOME LOANS INC
SUBDIVISION: WILLIAMSON PARK LOT: 1 BLOCK: 4
2004-009967 PDF TIF
DOC TYPE: Deed of Trust / Mortgage CONSIDERATION: $152,910 DATE REC: 2/26/2004 10:19:17 AM
DIRECT: MCGEARY, DUNCAN M INDIRECT: COLUMBIA RIVER BANK MORTGAGE GROUP
DIRECT: MCGEARY, LINDA L
SUBDIVISION: WILLIAMSON PARK LOT: 1 BLOCK: 4
2004-009966 PDF TIF
DOC TYPE: Deed CONSIDERATION: $169,900 DATE REC: 2/26/2004 10:19:17 AM
DIRECT: TAPIA, THOMAS R INDIRECT: MCGEARY, DUNCAN M
INDIRECT: MCGEARY, LINDA L
SUBDIVISION: WILLIAMSON PARK LOT: 1 BLOCK: 4

Duncan McGeary said...

Alarming that zillow could be wrong about such basic information. Wonder what else they get wrong?

And that such information is easily available to just anyone.

Wonder if it makes any sense to get the information changed, since we have no intention of going anywhere.

Duncan McGeary said...

Speaking of Zillow. Linda and I have a friend who's getting married. She was talking about putting her house for sale at 300k to 325k. I mentioned that she ought to zillow her house as a "reality check."

After we hung up, I looked, and -- sure enough -- her house came in at 250k.

My sister was talking about selling her house 6 months ago, and she mentioned a price, and I told her that she need to be realistic and that her house may have dropped by as much as 15%; and when I went home, that's exactly what it came to.

The other day, she mentioned selling again, for the same price she mentioned 6 months ago.

I don't even have the heart to zillow it again.

So...what I'm saying is; this blog and others like it still have a strong purpose. Most of the people walking in my store still seem clueless about prices and trends.

I'm extremely hesitant to give direct advice to people I know. But I like to refer them to this site, and the Bend Economy Board, and lately, zillow.

Two other friends have managed to sell their houses without giving away the farm -- so it's dangerous to be too insistent. In fact, I think it best not to give them direct advice because it's such a huge amount of money.

Anyway, folks. Don't give up. There is still a bunch of outrage on the other housing blogs, but...well....they aren't Bend. Strange that we've become so quiet.

I still think we've got reality to check in. We need to remind people that we are probably running 6 to 18 months behind CA and FL. We need to focus on the ridiculous amount of commercial property. We need to keep pointing out that the whole 'westside is better so you can pay through the nose' idea is bogus.

I know that people like Buster prefer to be contrary, but -- no worries -- these opinions are still in the minority.

timothy said...

The office/retail situation in West Bend is nothing short of amazing. And there is still building of retail going on in NW Crossing and on Simpson.

And people are STILL planning more office condos and crap near the Athletic Club (although I doubt any more banks will get suckered).

timothy said...

Randy Sebastian got new financing.

Yeah, not from a bank, but from local investors who are bullish on Bend Real Estate.

Could this get any funnier?

Anonymous said...

What a bunch of pathetic losers you guys on this site are. Randy's back in the game, so take his name off your RIP Bend Bubble Victims, dweeb.

Duncan McGeary said...

Would you happen to know if he still has his balls?

I just got an offer for a 30% rate credit card. Yahoo! I'm back in the game!

Duncan McGeary said...

I mean Randy had such a strong bargaining position; loan me money or I foreclose....

Sort of like the Sheriff in Blazing Saddles who is about to get lynched until he puts a gun to his head.

"Don't come any close or I'll shoot!"

timothy said...

Randy actually may be OUT of the game.

If he couldn't get a banker to go for the deal, what kind of terms was he able to negotiate with local vultures?

I wouldn't be surprised if he gave up most of his upside to save most of his backside.

bruce said...

Re: Sebastian

That was the most interesting thing I've read in the BULL for some time. I've got the feeling this is only the start of Act 2 in a 3-Act Play.

Couldn't find bank money, so found private money. Kudos for pulling it off. Now he just has to hope the market actually comes back soon.

Marge said...

Anonymous said...
What a bunch of pathetic losers you guys on this site are. Randy's back in the game, so take his name off your RIP Bend Bubble Victims, dweeb.


You can BUST yourself out of here anytime you care to. Randy is dredging the bottom and anyone that that ties up to his boat is sinking with him for the next 10 years.

Anonymous said...

>>Randy's back in the game, so take his name off your RIP Bend Bubble Victims, dweeb.

Yes. It's merely a flesh wound.

timothy said...

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

13+ months of inventory.

Anonymous said...

Bend Bulletin(c), 2008, May 14
NAMBLA agrees, Bend is the Place - National Association of Man/Boy Love has called Bend, Oregon. Number one tourist destination. Bestiality, Incest, child-rape, It can all be found in Bend, Oregon. Mormon Group National Association of Polygamy, NAP call's Bend, Oregon the "Future of Mormonism in America". "The new Salt Lake City, a new century of sexual tolerance."

*

Tourism for the whole family
Researcher points to region’s strengths as a destination
By Jeff McDonald / The Bulletin
Published: May 14. 2008 4:00AM PST

Despite angst throughout Central Oregon’s tourism industry over how the economy could affect travel, there’s a silver lining for the region, which could be well-positioned to accommodate an American population that still sees travel as its birthright, a national tourism researcher told a group of industry representatives Tuesday.

But tourism-related businesses will need to find ways to attract more bargain-hungry consumers than ever before, said Peter Yesawich, the chairman and CEO of Orlando, Fla.-based Y Partnership, a marketing services company specializing in travel-related research.

Yesawich presented the National Leisure Travel Monitor, which surveys 2,150 regular American travelers across the country for emerging industry trends, to a group of about 180 tourism industry representatives Tuesday at the Central Oregon Visitors Association’s annual meeting at The Riverhouse Convention Center in Bend.

He cited four national factors in tourism — the increasing rate at which consumers use the Internet to find better travel bargains, the growing importance of family and multi-generational travel, consumer anxiety, and changing demographics — as “converging forces that are swirling around Central Oregon.”

Each of the four factors can be seized upon by tourism-related businesses to offer value and attract customers, Yesawich said.

“One of the opportunities is family-related travel, which Bend and Central Oregon have in abundance,” he said. “The key is value and family-oriented activities. The only form of travel that has grown in its incidence (nationally) is travel with children.”

Consumer cues like those provided by Yesawich are pivotal for the success of the region’s tourism industry, according to Alana Audette, the president and CEO of COVA, which markets tourism for the region.

Audette on Tuesday released the tourism agency’s 2008 Annual Report, which showed the impact of tourism in Central Oregon increased 5.2 percent in 2007 over 2006, to $570.7 million.

The report also showed that the region’s most marketable attractions are its outdoor and touring segments, both attractive to families with children

Audette has predicted this summer, when the region typically attracts half its annual visitors, will produce flat or marginal growth versus the same period last year.

“There is uneasiness with economic challenges, and to find out what’s going on in travelers’ minds is invaluable,” Audette said. “I was nicely surprised that our region is going to be affected positively because we’re suited for family travel and we have a great value as a destination.”

Family time

Family and multi-generational travel is booming, Yesawich said.

When surveyed in 2000, only 26 percent of respondents had taken a trip with children in the previous 12 months. In 2008, the percentage had risen to 38 percent, he said.

“Post-9/11, people are more introspective,” he said. “They want to spend more time with their family. They want to take more time with their kids.”

Bend-based Sun Country Raft Tours is well-suited for the emergence of family travel, said Dennis Oliphant, the raft tour company’s owner.

“We’ve known that was our market for a while now,” Oliphant said. “People have less time on their hands. Their vacation becomes their time to reconnect with their kids.”

Pre-summer bookings for whitewater raft tours are “way up,” Oliphant said.

“We haven’t had any doom and gloom,” he said.

Still, the national slowdown in the economy could result in the “worst-case scenario” with a 4 percent to 5 percent drop in lodging occupancy this summer nationwide, Yesawich said.

“The plot has thickened the past six months,” Yesawich said. “Gas prices have reached a tipping point. Consumer confidence has reached a 25-year low, but vacations are still a birthright for Americans.”

Gas prices, which were reported Tuesday as reaching a national average of $3.73 per gallon, have already passed “the tipping point,” when the majority of driving travelers in the past have said they would change their vacation plans, Yesawich said.

But for about six in 10 Americans, the higher gas prices won’t change travel plans at all, he said.

For those whose plans will be altered by higher gas prices, 38 percent would drive a shorter distance and 36 percent would take fewer trips and/or cancel a trip, Yesawich said.

Others would spend less or select a more affordable destination.

“The dark side is that some will take fewer trips,” he said. “People are now more concerned about home finances.”

‘Guardedly optimistic’

Consumers, wracked with credit card and mortgage debt, still plan to travel, he said.

“Inside, (they’re) a little nervous because their business isn’t doing so well, but (they) remember the wonderful times and don’t want to give them up.”

One in six, or 16 percent, of Americans surveyed in April who are expecting a tax rebate as part of the economic stimulus package approved by Congress are planning to spend their rebate on an overnight or day trip for leisure, Yesawich said.

“The tourism industry is guardedly optimistic that (the stimulus package) will have a positive impact on the summer ahead,” he said.

Tourism-related businesses may want to retool or refocus their efforts and get away from big, colorful photos in national magazines, said Justin Yax, public relations director for DVA Advertising & Public Relations in Bend.

“I think consumers are definitely more price-driven,” Yax said. “People are looking for value or price as two of their motivators. Even affluent travelers are trending toward making their decisions based on value when they had typically been more insulated.”

Travel destinations can create a fancy Web site or create a brand image, but unless there is something of value, consumers are not going to buy, Yesawich said.

“Tourism partners have to help consumers find good deals,” Yesawich said after the meeting. “It’s generally not sufficient to get someone interested in your destination unless you also tell them what they can buy. A retail message is critical in this environment.”

The presentation contained good news for Lara Wettig, the director of marketing for The Riverhouse Hotel & Convention Center.

“Central Oregon won’t be impacted as much as other areas,” Wettig said. “It’s encouraging for us in Central Oregon.”

The company has kept its prices down and maintained value, Wettig said.

The Riverhouse has discounted its room and golf prices for budget-conscious consumers, Wettig said.

“I’m encouraged that the positioning The Riverhouse has done with offering a great value proposition is right in line with today’s trends,” Wettig said. “People are looking for a deal, and we’re well-positioned during tough economic times.”

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

bruce said...

Interesting--went to pick up my latest open records request, and there is a note pointing to the item that requests any and all records of invoices or other expenses submitted by Kuratek, et al. It says "Doesn't exist at city".

So we paid over $2.5M to these guys with absolutely no documentation.

That is just fucking stupid.

IHateToBurstYourBubble said...

Sort of like the Sheriff in Blazing Saddles who is about to get lynched until he puts a gun to his head.

"Don't come any close or I'll shoot!"


Now THAT was a funny movie. Back when dropping the N-bomb was still hilarious, instead of a Hate Crime.

Thank you Jesse Jackson.

LavaBear said...

http://tinyurl.com/6hdjgy

That's not hate...that's true comedy.

Duncan McGeary said...

Sorry, I chickened out at the last second. Really has become a taboo.

IHateToBurstYourBubble said...

$11 dollar price reduction!

2008-05-13 2800058 Sisters Edge O The Pines 229011 229000 -11 -0.00 185 1

IHateToBurstYourBubble said...

youtube is so great!

UP YOURS NIGGER !!!

LavaBear said...

They was right

bruce said...

Yep, those were the days. Back when Nixon didn't feel like he had to give up golf to honor the fallen soldiers, unlike W, who has..

That's quite the sacrifice, Buster. It's like you giving up K-Y.

timothy said...

>>$11 dollar price reduction!

I bet a lot of people are like me. They couldn't afford that place before the price reduction, but after it--no problem!

IHateToBurstYourBubble said...

Reloacte-America.com has rated Bend in The Top 100 places to Live! We're around number 80, or so.

IHateToBurstYourBubble said...

So we paid over $2.5M to these guys with absolutely no documentation.

That is just fucking stupid.


That seems illegal.

Typical Bend Old-Boy network... no accountability. Can't even raise anything as a complaint, as they have "misplaced (ie destroyed) the evidence.

Anonymous said...

Check out Tim Egan's OP/ED piece in today's NY Times, in particular, the last 2 graphs:

http://egan.blogs.nytimes.com/2008/05/14/new-math-for-november/index.html

NOTE: Bigoted homeboys read it 2x.

IHateToBurstYourBubble said...

Economic 'misery' more widespread
Some experts argue that true inflation and unemployment - the components of the economy's 'Misery Index' - are higher than the government's official figures.

NEW YORK (CNNMoney.com) -- Americans are feeling a lot more economic pain than the government's official statistics would lead you to believe, according to a growing number of experts.

They argue that figures for unemployment and inflation are being understated by the government.

Unemployment and inflation are typically added together to come up with a so-called "Misery Index."

The "Misery Index" was often cited during periods of high unemployment and inflation, such as the mid 1970s and late 1970s to early 1980s.

And some fear the economy may be approaching those levels again.

The official numbers produce a current Misery Index of only 8.9 - inflation of 3.9% plus unemployment of 5%. That's not far from the Misery Index's low of 6.1 seen in 1998.

But using the estimates on CPI and unemployment from economists skeptical of the government numbers, the Misery Index is actually in the teens. Some worry it could even approach the post-World War II record of 20.6 in 1980.

"We're looking at government numbers that are really out of whack," said Kevin Phillips, author of the book "Bad Money."
No inflation if you don't eat or drive

According to the government's most recent Consumer Price Index, a key inflation reading, consumer prices rose 3.9% in the 12 months ending in April, down slightly from the 4% annual inflation rate in March despite record gasoline prices.

But Phillips argues that consumer prices are probably up at least 5% and perhaps more than 10%.

Part of the disconnect may be due to the fact that nondurable goods, such as food and gasoline, makes up only 12% of CPI.

In addition, food and energy prices are eliminated from the so-called core CPI, which many economists tend to focus more closely on because they claim food and gas prices are volatile.

But food and energy costs are a very important part of household budgets. And those prices have been skyrocketing: Gas prices were up about 21% over the 12 months ending in April.

However, due to seasonal adjustments in the CPI, the government reported that gas prices were down 2% in April, even though on a non-adjusted basis, gas prices rose 5.6% from March.

And even that number may be too low. Measures of gasoline prices by AAA and the Department of Energy suggested prices rose as much as 10% in April.

Meanwhile, food prices rose 5.1% over the last 12 months, according to the report. The nearly 1% one-month jump in food prices in April was the biggest spike in 18 years.

To that end, nearly half of the respondents of a recent CNN/Opinion Research Corp. poll said inflation was the biggest problem they face.
CPI missed the housing bubble...and bust

Another problem with the CPI figures, according to skeptics, is that it doesn't accurately reflect what's going on in the housing market. That's significant because the cost of buying a home has twice the impact on CPI as does the prices of all nondurable goods combined.

The CPI showed only an 11% rise in home ownership costs from 2002 through 2006, a time that the National Association of Realtors reported that existing home prices soared 34%.

The reason for the low CPI reading is because the CPI looks at equivalent rents, rather than home prices. So inflation was understated during this period, according to Phillips. He argues this may have helped feed the housing boom since it kept mortgage rates lower than they should have been.

Now that the housing boom has gone bust, the CPI appears to be missing the declines in home prices as well; it estimates that the cost of owning a home posted a 12-month increase of 2.6% in April.

But because the CPI figure was so far behind tracking the increase in home values, the housing component of CPI still is leading to a lower inflation reading than what it should be, Phillips said.
The inflation 'con job'

The unusual way that housing prices are estimated isn't the only peculiarity of the CPI report. Over the past ten years, there have been other changes in the calculations, particularly for big ticket items.

Cuts to estimated prices for items like electronics and cars that are thought to have improvements in quality year-after-year have lowered the overall CPI. In addition, changes in the way certain products, such as food, are tracked by the government, have also contributed to lower readings than otherwise expected.

Bill Gross, the manager of Pimco Total Return, the nation's largest bond fund, refers to the CPI as a "con job" that deliberately understates the price pressures faced by Americans in order to keep Social Security payments and other government costs pegged to the index unduly low.

In a report about the CPI, he noted that some of the adjustments don't accurately reflect how much consumers pay for goods. Pimco estimates that the changes have shaved more than a percentage point off the CPI.

"Did your new model computer come with a 25% discount from last year's price?" Gross wrote. "Probably not. What is likely is that you paid about the same price for memory improvements you'll never use."

Another flaw with the CPI numbers is that the government now assumes that higher prices for one item will lead consumers to buy more of a substitution item. That may be true. But if people buy fewer steaks and more hamburgers, for example, it's unrealistic to say that inflation isn't a problem, skeptics maintain.

"The government can claim there's no inflation but all they're measuring is a reduced standard of living," argues Peter Schiff, president of Euro Pacific Capital, an investment firm specializing in overseas investments.

With all this in mind, California economist John Williams argues that CPI is understating inflation by at least 3 percentage points and perhaps as much as 7 percentage points. So instead of an annual inflation rate of 4%, the true number could be between 7% and 11%.
Unemployed, but not counted

Finally, there's the unemployment rate. It was at a relatively low 5% in April. But according to Williams' Web site, ShadowStats.com, the actual rate may be between 8% and 12% if you use a more accurate reading of those out of work.

Even the government's own numbers show there are many unemployed people not showing up in the unemployment rate. The official reading does not include 4.8 million people who want to work but haven't found a job, for example.

Many of these people are dropped from the official calculation because they have become so discouraged from looking without success that they haven't looked in the previous four weeks. Simply adding those people to the number of unemployed takes the current unemployment rate to 7.8%.

The Bureau of Labor Statistics, which produces both the CPI and unemployment readings, says changes in both measures were made to more accurately reflect the real world. The BLS also says the changes have resulted in changes of less than 1% for each measure.

Still, the Labor Department's own broadest measure of unemployment, which includes as jobless those working part-time jobs because they can't find full-time positions as well as some discouraged job seekers, puts the unemployment rate at 9.2% in April, the highest level for that reading in more than three years.

So if you take that number and add that to the 7% that Williams thinks is a more likely annual inflation rate, you're looking at a "Misery Index" of 16.2, much worse than the 8.9 you get from the official numbers.

And while that may seem a bit high, it's probably a more accurate gauge of how bad the economy is for many Americans.

IHateToBurstYourBubble said...

Why you should NEVER buy a condo:

As Dues Dry Up,
The Neighbors Pay

By STEPHANIE CHEN
May 13, 2008; Page D1

Here's another consequence of the troubled housing market: Some homeowners associations are running low on cash.

The association at Monaco Place, a community of single-family homes and condominiums in Denver, is short $250,000 of its $9.3 million annual operating budget. It can't pay for needed roof and siding repairs to homes. Potholes in the streets haven't been filled in order to save money to keep electricity running in common areas, says Dee Tyler, CEO of Colorado Association Services, which manages the association. Monaco Place was already suffering from a high rate of foreclosures before the credit crunch hit. In the past three years, about a third of its 193 units have been foreclosed on.

Like Monaco Place, a growing number of homeowner and condominium associations across the country are raising their fees or putting the brakes on clubhouse improvements, new landscaping and other shared neighborhood amenities. The kitty is so low for some that essential services, such as building maintenance, electricity, trash removal and repairs have been cut.

As community residents lose their homes to foreclosure and new home building has slowed considerably, many of the roughly 300,000 neighborhood associations in the U.S. are grappling with shrunken budgets. One estimate puts the delinquency rate on dues at less than 5% in many markets -- higher than normal, though still not enough to threaten basic services, says John Carona, president of Associa, a Dallas-based company that represents 7,000 community associations in 26 states. Normally, the delinquency rate is about 2%, he says.

Elsewhere, the rate is much higher. At Spanos Park East in Stockton, Calif., owners of about 25% of the development's 1,500 single-family homes have been delinquent in paying their quarterly dues, according to Adrianne Bretao, a manager at M&C Associations Management Services, which helps to manage the community association. As a result, the association has put off expanding a patio area in the clubhouse and swimming pool this year, says Denise Laven, the association's president.

"It's frustrating," Mrs. Laven says. "We're seeing the people not paying the fees, so we know it's our money that has to pay for everything. And our dues will go up next year because we set them annually."

Residents on the Board

Often, the people behind the decisions to cut services are the homeowners themselves, since community-association boards are usually composed of members elected from the building or neighborhood. (Developers usually serve as the association board until the project is complete.) Some boards will also hire a third-party management company or accounting service to ensure general upkeep of the area and manage the budget.

Rules on fees and services are outlined in association bylaws, and some states have laws that cover governance of the associations. So individual homeowners often have little power to fight increases in dues and cuts in services -- as long as the board is following the rules. They also have little recourse against delinquent neighbors other than filing lawsuits, which can be costly and time-consuming.

That's why housing experts advise homeowners to read the bylaws thoroughly, asking what services are guaranteed and whether annual fees are capped. Still, since bylaws were drafted when the community was first built, few outline contingencies in the event of a wave of foreclosures.

Eric Glazer, an attorney at Glazer & Associates P.A., in Hallandale, Fla., says nearly all of the 200 condominium associations his firm represents in South Florida are short of revenue due to delinquent association fees. Five years ago, those associations grappled with only a handful of nonpaying residents, he says.

Mr. Glazer and other housing experts say a growing number of banks aren't paying association dues on properties on which they have foreclosed and now own.

Colin Hendrick, president of the Carlisle on the Ocean Condominium Units Association Inc. in Surfside, Fla., has filed six lawsuits since December against banks that failed to pay dues on foreclosed units.

One of those banks, Minneapolis-based U.S. Bancorp, says it isn't responsible for the assessment fees, saying that they are merely the trustees of the property and that the service agent is responsible for the payments. But Florida lawyers say that since the bank is the ultimate owner, it should have to pay.

So far, no overdue fees have been recovered as a result of the lawsuits. With 20 of the development's 115 luxury condominium units in foreclosure and an additional 35 units either behind on their fees or not paying them at all, the association says, it had no choice but to jack up fees 10% to $470 a month.

A Halt on Amenities

"The good owners are left carrying the baby," Mr. Hendrick says.

That's what happened to Krissy Longyear and her husband in an affluent suburb of Atlanta, where construction of new homes has stalled dramatically. A year after they moved into a custom-built, two-story brick house, the couple saw their homeowners' association fee jump 27% to $635 a year. Meanwhile, the developer has put a halt on promised amenities, such as street signs and a walking trail around the community lake.

"We aren't getting any more for the extra money we're paying," she says. "It's disheartening that we spent all this money and time. Maybe we made a mistake."

The tough economy is hurting associations even in areas where the housing market has been relatively stable. Rob Rosenberg, president of Massingham & Associates Management Inc. in Hayward, Calif., says 90% of the 350 home associations managed by his company in the Bay area of California are seeing a rise in the number of residents who pay their dues late or not at all. Some of the associations are toughening their payment policies by sending out more reminder letters, and many will have to start cutting amenities or services after another six months if they don't start collecting more fees, Mr. Rosenberg says.

Craig Koss, president of Kramer-Triad Management Group LLC in Ann Arbor, Mich., says he advised his 300 local homeowner associations to cushion their budgets with additional dollars in anticipation of the heavy foreclosures last year, but only about 25% of the associations did so. He says fiscally responsible associations will keep reserve funds, but in most states, there is not a state agency to oversee the associations to ensure that reserve funds are set up. "A lot of people won't plan until they have to," he says. "They won't have a rainy day fund until it's pouring."


Write to Stephanie Chen at stephanie.chen@wsj.com

IHateToBurstYourBubble said...

Read, then re-read the above folks... describes about half of Bend.

Note that Brooks is bailing on it's Awbrey HOA.

Awbrey Butte puts association to vote

Anonymous said...

>>NOTE: Bigoted homeboys read it 2x.

If I'm reading it right..does this mean Mel Brooks isn't funny anymore because Obama is gonna be Prez?

How about this bit, it's still funny because it's a mexican stereotype right?

IHateToBurstYourBubble said...

How about this bit, it's still funny because it's a mexican stereotype right?

The glories of being White in America: Keeping up with what is PC.

Again, thank you Jesse Jackson, you fucking racist bigot child molester.

IHateToBurstYourBubble said...

Consumer sentiment falls in May, lowest since 1980

WASHINGTON (MarketWatch) -- Consumer sentiment in May fell from the prior month, reaching its lowest level since 1980, according to a Friday media report. In recent months, high fuel and food prices, along with falling home values have pulled down sentiment. The U.S. consumer sentiment index in May fell to 59.5 from 62.6 in April, according to a Friday report from University of Michigan/Reuters. Economists surveyed by MarketWatch were looking for a result of 61.0.

IHateToBurstYourBubble said...

Blackstone Says Markets May Be in `Eye of Hurricane'

By Pierre Paulden

May 15 (Bloomberg) -- Blackstone Group LP President Tony James said banks are mistaken if they think credit markets have begun a sustained recovery.

``It's not clear to me if it's a permanent upswing, as I think many of the banks are saying, or the eye of the hurricane,'' James told reporters on a conference call today.

High-yield, high-risk loan prices have climbed from a low of 86.3 cents on the dollar in February to 92.42 cents after banks whittled down a backlog of buyout debt to less than $100 billion from more than $300 billion last year. Banks still must find a way to sell loans and bonds backing the takeovers of telephone company BCE Inc. and Clear Channel Communications Inc.

Private equity firms Bain Capital LLC and Thomas H. Lee Partners LP, which are buying Clear Channel, had sued Citigroup Inc. and five other banks for trying to back out of financing the deal. San Antonio-based Clear Channel, the largest U.S. radio broadcaster, said this week it settled the legal fight by agreeing to a reduced buyout price of $17.9 billion, 8.2 percent less than the Boston-based buyout firms agreed to pay last year.

``The Clear Channel deal moving forward was a blow to the banks,'' James said on the call, noting credit prices have moved down two or three points since the legal fight ended. ``The next big event will be BCE, which is even bigger than Clear Channel.''

Blackstone Buying

Montreal-based BCE, Canada's largest telephone carrier, agreed to a C$51.7 billion ($50.7 billion) buyout by an investor group led by the Ontario Teachers' Pension Plan. Three of the banks that committed funding to the Clear Channel bid -- Citigroup, Royal Bank of Scotland Group Plc and Deutsche Bank AG -- are also financing the BCE transaction.

Banks are willing to lend for acquisitions, though ``I would not call it aggressive but they are open for business,'' James said. ``It's got materially better,'' he said.

New York-based Blackstone has committed to buy $7 billion of high-risk, high yield loans from banks in the past 45 days at discount to face value, James said. Banks are willing to finance those transactions, he said.

Blackstone, which went public last year, reported a loss of $66.5 million as fees tumbled in every business, including deal- making, hedge funds and mergers advice. The first-quarter net loss excluding some compensation costs was 6 cents a share, compared with a profit of $838.5 million, or 75 cents, a year earlier, the New York-based company said today in a statement.

That missed the average estimate of 12 cents a share by seven analysts surveyed by Bloomberg. Blackstone rose $1.04 to $20.54 in New York Stock Exchange composite trading. The stock has fallen 34 percent since the initial public offering in June.

To contact the reporter on this story: Pierre Paulden in New York at ppaulden@bloomberg.net

IHateToBurstYourBubble said...

Hey margie... got data?

Anonymous said...

Margie's not the only realtor on this site... so just in case she's still on vaca, here's what up so far for may (bend homes on lots, no acreage, no townhomes, trailers, condos, etc):
38 sold
306k median
1678 inventory!
VS 07 same time:
71 sold @ 397.5k median

timothy said...

Yeah, but May's not a good time for real estate. Just wait until June!

Anonymous said...

Portland born Developer Joe Weston named First Citizen of the Year by Realtors association

The colorful, shrewd and thrifty 70-year-old will be honored at a luncheon Wednesday

Wednesday, April 30, 2008
ERIN HOOVER BARNETT

The Oregonian

Joe Weston hopped out of his banana yellow VW bug and strode into the Subway sandwich shop, dark jacket zippered over a starched white shirt with monogrammed cuffs.

Weston, 70, owns more than $500 million in real estate. His private foundation -- Oregon's eighth largest -- gives more than $3 million a year to charity. But he regularly lunches on $5 Subway sandwiches at the West Burnside outlet near his penthouse apartment.

His frugality born of humble roots and his assertiveness drive his success. Those values underpin the Portland Metropolitan Association of Realtors' decision to name him its First Citizen at a Governor Hotel luncheon today. And those values are serving him in an economic downturn that he believes will be a long one.

"I don't think you're going to see this recession turn like other recessions have," said Weston, over a toasted teriyaki with American cheese.

He cited all the new factors -- the role of international financial markets and record foreign-held U.S. debt; the mortgage crisis and spiraling credit card debt at home.

Weston motioned to George Passadore, the retired Wells Fargo Bank of Oregon chairman and emcee for the Realtors' event who has joined him for a sandwich.

"When George and I bought our houses . . . we didn't know what an equity loan was," Weston said. "Once you got your house paid for it was absolutely sacred. You would no more take out your equity than fly to the moon!"

"But you know what they call us?" asked Passadore. "Dinosaurs."

Weston calls such fiscal conservatism smart.

Humble beginnings

The son of a struggling salesman, Weston bought his first duplex at age 18 on contract with $2,500 from slinging newspapers and pulling Green River phosphates after class at Central Catholic High School. But he never became a high flier. He still pays outright for existing properties and doesn't leverage one building project to pay for another.

Weston isn't escaping the real estate downturn unscathed.

The Encore, his latest condo building in the Pearl, is under construction at Northwest Ninth Avenue and Overton Street. Just 12 of 177 units are sold.

But he's paid off his construction loan on the Benson at Southwest 11th Avenue and Clay Street and is poised to do so on the Metropolitan at Northwest 10th Avenue and Lovejoy Street with fewer than 25 unsold units remaining in each.

Meanwhile he's sitting on a gold mine in close-in eastside apartments. Though he's sold a few to investors who converted them to condos, he retains 2,500 units at $595 to $635 a month for an average one bedroom. Blue collar workers, he believes, deserve decent housing.

"I have no intention of eating at The Ringside," said Weston of the spendy steakhouse, "so I don't need more rent."

Weston also encourages loyal tenants. He doesn't generally accept federally subsidized renters but retains long-timers who later transition to subsidies -- particularly senior citizens to whom he otherwise offers a discount.

"If you take a senior citizen and treat them right, they'll stay with you. What kills you in the apartment business is the churn," said Weston, who named his Mel-Grace apartments on Southeast Taylor Street at 25th Avenue after his parents and moved them there in the 1960s.

Anonymous said...

"I don't think you're going to see this recession turn like other recessions have," said Weston, over a toasted teriyaki with American cheese."

As someone pointed out, the food selection said a lot about the economy.

IHateToBurstYourBubble said...

Wow, is it my imagination, or does this Weston guy actually sound smart?

Duncan McGeary said...

"A World Without Bilbobuster

Please lock me away
And don't allow the day
Here inside, where I hide with my loneliness
I don't care what they say, I won't stay
In a world without bilbobuster

Birds sing out of tune
And rain clouds hide the moon
I'm OK, here I stay with my loneliness
I don't care what they say, I won't stay
In a world without bilbobuster."

Peter and Gordon (and Duncan).

So now we know how many people really post here with bilbo stirring the shxx stick all the time. Without him prodding Bruce and Timothy and Paul-doh and me and Marge.

Yeah, yeah. Old news.

Can't live with him, can't live without him.

Still, even 80 posts is alot for most places -- I don't think I've ever had more than ten. Just seems quiet, doesn't it?

Anonymous said...

Grasshopper Ned De Flander, its always quiet before the storm, but you know this right?

Arron Switzer said...

Today I sat at the toilet and long waited, and I had a class Source Epiphany. They ask what do frisbee golfers do, when not tossing the frisbee? Why we find other surrogate apparatus for said activity. The issue of sex frequently comes up with frisbee golfers, and if you have six frisbee golfers you have six opinions. What pray tell is closest to the human vagina? Is is the Lamb? The Sheep? The cow? The Llama of Bend?

We have found the common female pitbull to be the closest of our own wives. The result? Pitbulls in Bend have become very rare indeed. In fact there is a pitbull crisis in the Bend Frisbee Golf World.

Just something to think about on a Saturday night.

HBM said...

Fear not, at Sawyer Park there will be no dog other the pitbull to soil our common Frisbee Golf Soil.

The people of Bend will band together in a common cock-ring, to prevent the false idol of other breeds infesting OUR sacred frisbee golf fields.

There shall be no other breed than the common female pitbull in Sawyer Park, and there shall be no other game, nor personage other than Frisbee Golfers on this Most Holy Mormon Soil.

Anonymous said...

It says "Doesn't exist at city".

So we paid over $2.5M to these guys with absolutely no documentation.

That is just fucking stupid

*

The resident 'cunt' has given us the quote of the week, when our little city can cut a check for $2.5M to one parasite, and its not even recorded that's some fucking awesome fucking power, and for those that don't have their boyfriends cocks in their ass at this instance in time, should realize how truly FUCKED this little cesspool of a city is-is.

Chump change $1M here $500k there, ... $2.5M over there, and no record. Remember et-all the pussy was going file a complaint with the governor over six months ago.

When the little toilet in Bend finally gets flush, its going to take everyone down. Including the pussy and his Mormon Wive's.

Anonymous said...

"I don't think you're going to see this recession turn like other recessions have," said Weston, over a toasted teriyaki with American cheese.

He cited all the new factors -- the role of international financial markets and record foreign-held U.S. debt; the mortgage crisis and spiraling credit card debt at home.

*

Yes, Bend Billionaires eat american cheese, white bread, and chicken. Your DEEP will soon be long gone, and your Newport will be empty.

I love Weston, Note the tag "$595/mo rents", this dude is set, he's already at the future 4X income/month rental rate. Just tag that to Bend, where over 10K homes will sit empty just wishing to be rented for $500/mo.

It's really fucking sad to see a cali without a HELOC eating chicken, white-bread, and Velveeta, not out of choice, but that its the only choice.

Those who aren't man-twats go back read, and re-read the Weston, after Homer WIlliams, he is #2 in the state of ownership, this is the real money of the state.

Do as they do, and enjoy your white-bread, velveeta, and chicken-fakery, because you'll be eating alot you fucking cali-man-twats.

Anonymous said...

Everyone in Bend is going to jail. Now in hindsight a little town in the desert went insane, and the bankers gave money to a guy and his dog, but mostly to his dog. Note, these are pet dogs not SORE ( Switzer ) Frisbee-Golf Ho-Dogs.


Bend developer's problems leave losses, questions in wake
Desert Sun Development is beset by liens, unpaid creditors, big employee losses and a federal inquiry

Sunday, May 18, 2008
JEFF MANNING
The Oregonian Staff

BEND -- As central Oregon's long real estate gold rush gives way to a grim new era of falling prices and foreclosures, few companies have crashed to earth harder than Bend-based Desert Sun Development.

The upstart operation, led by its intense 29-year-old founder, Tyler Fitzsimons, is under siege from lenders, suppliers and contractors who say they've been stiffed for millions of dollars.

But Desert Sun's problems go well beyond clamoring creditors, The Oregonian found in its examination of the company. It offered a homeownership program to more than 30 people, mostly employees, that has left many participants deeply in debt for houses that aren't complete or even started.




The employee program is one of several aspects of Desert Sun that have drawn the attention of FBI and IRS agents in recent months. According to people quizzed by the agents, investigators are focusing on Desert Sun's financing and its relationship with a bevy of Oregon banks, which threw millions of dollars at the company.

The unfolding saga reflects how the financial industry operated in central Oregon and elsewhere during the real estate boom. Banks lined up to back newly minted companies. They made huge loans to workers of limited means who couldn't afford the payments.

At Desert Sun, five ex-employees told The Oregonian their incomes were inflated or their signatures forged on loan applications or other financing documents.

Now that some of those loans have defaulted, banks are going after some of the employees with foreclosure threats. But in many of the Desert Sun transactions, there is no house to repossess -- only land worth a fraction of what is owed.

"I owe $290,000 for a piece of land that is probably worth $70,000," said Casey Cross, a former Desert Sun electrician who owns an empty lot in Sisters. "I'm one of the lucky ones. It's just me and my dog. There are good people with families just getting crushed."

Fitzsimons dismisses allegations of wrongdoing as unfounded "gossip" spread by bitter ex-employees. In a recent interview, Fitzsimons said Desert Sun's problems came about when the banks, rocked by the weakening economy, stopped lending.

"There's nothing malicious going on," he said. "Yes, we're a victim of the market decline. But so is everybody else."

Marge said...

Thanks to "not the only realtor here" for picking up my slack with new data. I am back from vaca now. So we know there are other realtors that read here. What do the rest of you think about the market and the BS, good news campaigns, that Yun and our own COAR are putting out there. It is a crappy time to buy!

timothy said...

"A great time to buy" can only sucker a few poor souls. Lots of people trying to buy can only get a $250k house now, and even that has the bankers frowning if you don't bring $50k. I've read about some remaining shady lenders around still who will lend to those without a down payment, but at high rates. And high rates brings down prices.

And apparently, there are still some well-heeled locals with money who are willing to put money down on situations like Sebastian's. If they want to put any kind of floor under prices, they'd better keep their checkbooks out.

Other than the cheap houses and the rich locals, nothing much seems to be happening. It's amazing how gummed up everything is. Pending signs--they come and they go.

justsharing said...

P Doh,

You must to read this article (but not while drinking cofffee). It's hysterical. You will think the author must be your long-lost brother, from which you were separated at birth (instead of that call-banger guy).

Flip this house. Please!

After two decades of renting, I finally bought my own home. What the hell was I thinking?

By Steve Almond

http://www.salon.com/mwt/feature/2008/05/23/home_improvement/index.html

tim said...

Yeah, I knew it was a fraud, but I didn't know it was a Ponzi.

I could have never guessed the precise mechanics here, where gains from Real Estate sales were commingled and used to buy property. 180 days these guys had. Which meant they needed more and more all the time. There was no way this could have continued. It was a doomed scheme.