Sunday, May 4, 2008

Bend Home Prices Go Into Freefall

I don't have a whole lot to say this week (So what's that then... 20 pages?), but I guess first is the news from marge:

Marge said...

My stats still stand at
81 sold @ $270k median
April 08,
250k here we come.
One on the side.... 77 month inventory of homes on acreage over 1 Mil.

What was last month? $293K or something?

I know the month to month stats vary all over the place, and the recent extreme low volume make any one month pretty suspect, but I think it's safe to say Bend home prices have finally gone into freefall.

Bend homes started the year at $310K medians, and are already down over 10%. Given the 40-50K households in the Bend area, and a percentage of owners around 65-70%, and the $100K+ drop from last May, the resulting $3,500,000,000 estimate of home equity loss estimate for just Bend qualifies as a total disaster.

You're going to witness what happens when every single person in a small town goes into complete panic. This Summer it's going to dawn on tens of thousands of people that Bend - The Dream has turned into Bend - The Nightmare.

As I said in the comments, around last year at this time there was almost no one who was underwater on their home. Now almost the majority of MLS pendings are short sales.

And short sales are ball busters. The bank calls the shots, drags their feet & can bag the sale at any time. Here's a summary from The Wandering Eye blog over at The Source:

Short-Selling the Bend Market

Written by The EYE
Thursday, 01 May 2008

Bratton Day – April 25, the day when appraiser Dana Bratton said the Bend real estate market would start its rebound – has come and gone with no discernible sign of an upswing. But The EYE is prepared to be patient. Meanwhile, “short sales” are becoming epidemic around here – not an encouraging development.

A quick search of craigslist for Bend this morning turned up 56 homes advertised as short sales – and, of course, that only counts the ones on craigslist, not those being sold through other channels.

A short sale in real estate isn’t the same thing as selling short in the stock market. A short sale on a house simply means you sell it for less money than you owe the bank. Sometimes the bank will agree to a short sale to avoid foreclosing and maybe losing even more money.

A short sale might look like the easy way out for homeowners who are in a deep hole, negative-equity-wise. But there are some serious pitfalls.

The worst is that if you sell short, the IRS treats the difference between what you owe the bank and what you actually repay as income. In other words, if you owe $300,000 on your mortgage, your bank agrees to a short sale and you only pay back $200,000, when tax time rolls around the IRS will say that $100,000 was income and tax you on it – even though you didn’t get one cent of actual cash in your hand.

One source who’s prominent in the local real estate industry said many short-sellers aren’t aware of this trap and will be surprised when they owe a big chunk of taxes next year.

A number of local realtors have jumped on the short-sale bandwagon, even advertising themselves as “short-sale specialists,” evidently figuring it’s better to get some commission money than nothing. But The EYE’s source said the rash of short-selling is helping to keep the local market depressed.

“It hurts the lender, it hurts the seller, and it hurts other people who are trying to sell,” the source said. “The only person it helps is the realtor who gets the commission.”

This source warned owners who’re thinking about a short sale to get some advice from a good accountant first – in the long run they might be better off going through foreclosure, even though that will damage their credit rating.


And there is a rebuttal from a local Realtor who gratutitously adds 19 ways to contact them, and I will so omit it:

Well, your source is correct about this point: homeowners contemplating a short sale should absolutely consult their accountant. However, your source seems to hold some of the same misconceptions about short sales as many others in the industry. First, the statement about a deficiency judgment against the seller needs more clarification. As of December 2007, Congress passed a bill which exempts owners short selling their primary residence from a deficiency judgment. Also, homeowners of investment properties can avoid a deficiency judgment if they are found to be financially insolvent. Lenders in Oregon have to go through a judicial foreclosure if they want to get a deficiency judgment, and are unlikely to do so because they have to hold the home for an additional six months to allow the owners to redeem their property. In this declining market, the lenders take a bath if they end up holding the property. Second, the premise that it is only the realtors that benefit from short sales is incorrect. If the lenders are not willing to renegotiate or do a forbearance with the homeowner, a short sale is the last option for the homeowner to avoid foreclosure. This option is much better for the homeowner's credit, and is therefore in his or her best interest. As for the lenders, they lose much more money in taking back a property than in a short sale. They may have to do major repairs, and hold on to the property for as long as a year before they are able to get it off their balance sheet. So here again, you can see a benefit for someone other than realtors, for whom short sales are actually more complicated and time consuming than other types of sales. They are by no means easy money, and can take months to close. Therefore, the idea that short sales hurt the lenders and sellers while only benefitting realtors simply isn't backed by the facts. I suggest that you take multiple sources into consideration before writing such a cut-and-dried article. Folks are having a hard enough time trying to figure out what to do about their difficult situations without being misinformed.

Interesting in that the "deficiency judgments" are not enforced against "insolvent" homeowners.

I would put to you that many of the deficiency judgments will be made in part or whole that will result in the homeowners BECOMING insolvent. The IRS only wants to know What Do You Have Right Now, and Give Us That.

Another interesting piece by The Source is the outrage over the ludicrous flauting of the rules by local "destination resort developers" (ie chameleon subdiv's for the rich):

The Pronghorn Caves-In

Once upon a time a developer had a bright idea. “Let’s build a high-end, gated golf community out among the junipers and jackrabbits in the high desert,” he said.

“How can we do that?” his partner asked dubiously. “Oregon’s land use laws won’t let us put almost 400 homes way outside of any urban area.”

“No problem,” the first partner replied. “We’ll call it a ‘destination resort.’”

“But won’t we have to build hotels and rental condos for the tourists to stay in?” his partner asked.

“Don’t sweat it,” the first guy reassured him. “The county won’t enforce the law. And even if they wanted to, the law doesn’t have any teeth.”

“Brilliant!” the other guy said. “What should we name it?”

“How about ‘Pronghorn’?” the first guy said.

The preceding dialogue is (as far as we know) fictional. But Pronghorn’s continued flouting of the state and county’s destination resort rules – with the Deschutes County Commission as its accomplice – is not.

State and county law says a destination resort must have at least half as many overnight units as it has permanent residences. At build-out Pronghorn will have 384 homes, which means the law requires 192 lodging units.

The Pronghorn master plan approved six years ago talked about building a 75- to 100-room luxury hotel and required the “resort” to have 150 overnight lodging units by the end of 2007. Ground has yet to be broken on the hotel, and the only overnight accommodations now available are 48 condo units.

Last week the Pronghorn developers – for the third time – asked the county commissioners for more time to comply with the law. The commissioners complied, giving them another five years to hit the target. Commissioners Tammy Melton and Dennis Luke went along reluctantly, but Mike Daly went along eagerly – in fact, he didn’t want to set any deadline. “I think what we’re doing is allowing the developer of a very beautiful development to have a little breathing room,” he said.

Sorry, Mike, but beauty is not an excuse for ignoring the law.

In fairness to the commissioners, state law doesn’t give them much of a “hammer” (as Luke put it) to use against Pronghorn. The developers put up a bond to insure completion of the hotel and the county could take it and build the hotel itself, but the county doesn’t want to get into the hotel business.

The law needs to be changed to give counties a bigger hammer. But for now the existing law is what the county has to work with, and small though the hammer is, it should be ready to use it. If it doesn’t, state and county land use regulations will become a bad joke.

From their performance so far, we strongly suspect the Pronghorn developers will be back in five years asking for yet another delay. We hope the commissioners – whoever they may be by then – will have the guts to turn them down. Meanwhile, for caving in this time the present commissioners get THE BOOT.

This article is good, but the comments are PRICELESS:

Jed said:


I agree that they should be held to their original agreement but my question is "How many property tax dollars does the county collect from Pronghorn property owners vs. barren ground"??

Native Son said:


So, lets see if I have this straight now....."tax dollars" = money............GOOD....."barren" land....
...BAD. Thanks for clearing that up for us Jed.The law be damned.

Michael Sims said:


I think the Source should look at its advertisers and see who is harmed by Destination Resorts? Seems to me that the majority of the businesses in Central Oregon survive on the people who buy there and visit the region. If the economy slows..... as it surely has, why would we not want to give a break to those that provide many jobs and are the biggest tax payers? Seems to me that the Commissioner's who voted for this should be complimented for GOOD SOUND business judgment!! But that the view of a business person, not a liberal left wing newspaper!!!!

Gadfly said:


I don't think the issue is whether you are right wing or left wing, it's whether you believe this is a temporary extension or the realization of a business plan. Right now Pronghorn isn't a Destination Resort - it's a sagebrush subdivision. A Destination Resort has accommodations for visitors hence the community disappointment. Everyone is getting hurt because they aren't bringing in the tourist dollars that they were expected to. And, to add to the disappointment, this is the third extension. Ouch.

Gotta love that Michael Sims guy. And that pretty much Sims up what is wrong with this place: So many people think that companies and industries that provide any sort of economic activity, should be SUBSIDIZED.

What?

What adds insult to injury is that this guy claims to be a business man, and not a liberal nut, but by God, he's ALL FOR CORPORATE WELFARE, especially for those WHO DON'T NEED IT.

We're supposed to give tax breaks to companies that are ALREADY DOING FINE. Nice.

My Lord, this place is a socialist nightmare.

Supposed business men are gung-ho about monster tax breaks for the hyper-rich, dismissing all statutes for the hyper-rich, and complete dismissal of OR land use laws.

And these people pretty much run roughshod over our local peanut gallery politicians. If they want it, they get it, irrespective of the gross inequities.

And just a note: If you haven't noticed, there is a dearth of RE related news in Bends mainstream media nowadays. Except for The Source. The are picking up the ball, where all others have dropped it.

It seems like a pretty damn good strategy. There's a huge hole in this town, and you can see that it was created by the mindset of Michael Sims being taken to heart of Big Bend Media: Don't run anything that even remotely pisses off advertisers. The Source seems to be flipping that shit the bird, and is going to fill that hole.

Go read The Source, if only so you are not getting your news from a bought & paid for RE whorehouse.

Another interesting trend, Realtors are starting to jump on the blogging bandwagon.

I frequent Bend Blogs, and have noticed a distinct increase in Realtor blogs, up from Zero, to something higher than Zero.

One I noticed yesterday is by Cheri Smith. As you may have guessed, I don't look for the crazy shit, where The Media Is 105% Responsible For The Bubble Bursting.

This gal has started things out right, and has some good stats. Not "marge good", but pretty good. And excerpt:

The price range seeing the most activity is still $200-$250,000. In that range, out of 195 homes for sale, 35 sold. That’s roughly a 5-6 month inventory. They say when the absorption rate is around 6 months you have a balanced market, meaning the market doesn’t favor either the buyer or the seller. The absorption rate is most accurately used to look at the market as a whole and not just a certain price range, but I simply want to show that certain segments of the Bend real estate market seem to be turning around. The slowest is the $900,000 plus range. Of the 222 homes for sale over $900,000, only 4 sold during the month of April. Now that’s around a 55 month inventory. Ouch. I suppose I’ll hold off on buying that Audi wagon. I think it’s very interesting to note that for a long period of time, the million + price range remained relatively untouched by the down turn in the market. Not the case anymore. The market as a whole has roughly a 19 month inventory (calculated by taking the number of active listings divided by the number of homes sold).

She does highlight what is becoming increasingly obvious:

Bend is a working town. Bend ain't Aspen.

Activity in the "real price ranges" of mid $250's are relatively robust, while million-dollar mega dirt lies fallow & is going to seed.

This gal has figured out what Dunc and others picked up on long ago: Blogging is a no-cost kick ass marketing option, if you do it right. Done wrong, it's just another outlet for myopic cult-driven insanity. Sort of like this dude from the always deluded ActiveRain RE blog site:

Let's combat negative media with positive real-estate news galore!

Thank you, Bernice Ross, for your profound and eye-opening article entitled "Real Estate hurt by media spin" in Inman News. Sometimes one person can give the rest of us permission to speak up, inspiring us to combat half-truths with positive, accurate information. Ms. Ross focused her remarks on the fact that media outlets are not giving readers and viewers the whole view of the real-estate industry - they are simply shining their spotlight on a few bad markets. I was amazed to learn that the "Mortgage crisis" is only really affecting seven states. The other 43 states have actually recorded fewer foreclosures this year than in 2006, according to Ms. Ross. This is the kind of information we need to hear. Yes, bad things are happening because of overbuilding, speculation and a loss of jobs in some markets, but let's not let these overshadow all of the good markets and developments.

This is one of hundreds & thousands of Realtor posts that blames Negative Media for the current RE woes. It's sort of unfortunate, but articles like this paint Realtors as completely deluded morons who think they'll be saved by the Power Of Positive Thinking and such. But I'm starting to suspect that it is also partially a survivorship bias, and those that would have written clear-headed assessments have already left the industry. All that remains are deluded Whacko's in many instances.

Can't help it, but just read this freaks Power of Positive Delusion bullshit:

Real estate hurt by media spin

I am sick and tired of the negative media constantly ranting about how horrible everything is in our business. It's time for our industry to fight back against these psychic vampires who seek to suck every bit of hope and optimism out of us just to build their circulation.

Newspaper headlines and buzzwords abound, such as: "Two million people will lose their homes in foreclosure in the next two years!" "Subprime Fiasco!" and "Mortgage Meltdown."

These are the headlines we hear every day, yet where is the positive news about the real estate market? The answer is, buried in statistics on page 15 of section 3 of your newspaper, provided you can find them at all.

Here's a typical example from USA Today, Oct. 26, 2007, page 1B:

New Home Sales Unexpectedly Rise

New homes sales posted an unexpected increase in September. But analysts were highly skeptical given the credit crunch and predicted further sales declines. The Commerce Department said sales of new homes rose 4.8 percent last month..."

By the way, here's what they didn't report. Sales in the West were up 36.6 percent. The media totally discounted these statistics. What about a different headline: "Great News! Real Estate Sales Surge Despite Biggest Credit Crunch in Decades"?

Here's another example. In Sept. 6, 2007, article entitled, "New Mortgage Foreclosures Set Record," Martin Crutsinger provided the following summary of a speech given by Doug Duncan, the chief economist for the National Mortgage Bankers Association. Here's how it was reported:

"The number of homeowners receiving foreclosure notices hit a record high in the spring, driven up by problems with subprime mortgages. The Mortgage Bankers Association reported Thursday that mortgage-holders starting the foreclosure process in the April-June quarter reached 0.65 percent, marking the third consecutive quarter that this figure has set an all-time high.

"The delinquency rate has risen to 5.12 percent ... The worsening performance was driven by two factors -- heavy losses in the Midwest states of Ohio, Michigan and Indiana, and the collapse of previously booming housing markets in California, Florida, Nevada and Arizona ... Analysts said the problems in the formerly red-hot housing markets of California, Florida, Nevada and Arizona reflected in part speculators walking away from mortgages they can no longer afford."

This article ends with the negative media's favorite theme for scaring their readers and/or listeners: "Two million people will face foreclosure in the next two years."

Here are the numbers that the negative media did NOT report from Duncan's speech:

1. Thirty-five percent of the homes in the U.S. do NOT have a mortgage.

2. Some 94.88 percent of the loans ARE performing.

3. The foreclosure problem in this country is really a story about seven states.

4. The biggest foreclosure problems are in Michigan, Ohio and Indiana. These are manufacturing states that had horrible job losses. Since 2001, Michigan has lost 300,000 jobs. These states would probably have had problems no matter what the market was doing.

5. The other four states -- California, Florida, Nevada and Arizona -- experienced significant overbuilding. Twenty-five percent of the foreclosures in these states are on properties that are held by investors who were speculating.

6. Only 25 percent of all mortgages are subprime, and of these, 75 percent are performing.

7. In the other 43 states, foreclosures have fallen in 2007 from 2006 (data from Michael Clawson, vice president, Central Texas Mortgage).

Furthermore, buyers who are waiting to purchase when the so-called bubble pops in California's major metropolitan areas are going to be sitting on the sidelines, according to the latest data from a state Realtor group.

According to Leslie Appleton Young, chief economist for the California Association of Realtors, the areas being hardest hit in California are the outlying areas where there has been overbuilding. The resale market in California's major markets continues to be strong. In fact, the closer you are to a metropolitan area, the better the sales are. In the million-dollar-plus price range, there has been essentially no change from 2006 to 2007.

There's no question about the fact that there is bad news in some markets. What irks me is that there is also a lot of good news that is either being buried or is not being reported at all.

The question is, "What can NAR, the 50 state associations, and those of us who blog or write for the industry do to combat this trend?" The answer is "plenty."

See Part 2 next week to learn how to win the war against the negative real estate media.

Bernice Ross, national speaker and CEO of Realestatecoach.com, is the author of "Waging War on Real Estate's Discounters" and "Who's the Best Person to Sell My House?"

RE types are pretty much bombarded by this cult-fueled insanity 24/7. And just like most bullshit PR, it will actually have the consequence of INJURING IT'S INTENDED AUDIENCE.

They'll stay in the business far longer than they ordinarily would, and will completely deplete their savings believing these false prophets... just like any decent cult. Too bad.

Anyway, back to Good Blogging. I would give Realtors who are thinking about it a few pointers:

  • Provide some valuable data - there's a lot of RE data hounds and they'll frequent your blog if only for that.
  • Don't go on a myopic cult-fueled rant about how good things are - that just loses you credibility
  • Be human - Dunc shows how to do this right, and admits rights, wrongs, warts & all about himself & his business.
And speaking of good data, besides our own lovely marge, another pretty good & comprehensive source of data is the GoBend site. They only give 2007 & 2008 info, but it's broken down by town & whether acreage or not. 2006 data is apparently only available to those who register. Ugh.

I haven't really charted this data, and I haven't even had a lot of time to look at BendBB's kick-butt April data, due to site outages over there, but here is a graph of The Most Important Number In Central Oregon:

Months Inventory - Bend, all residential subtypes

You can see the trend is clear in YoY comparisons, starting with 4.3 months way back in May 2006 (earliest data), to 13.1 months in Apr 2007, to the current 19.6 months.

Have we bounced hard from the 27.3 months in Feb? Yes, but is that really cause for celebration? Will we have some sort of bounce into the low teens? Maybe, but we may also have a re-plummet back to the depths also.

I will again state my oft-repeated mantra: Things are just getting "good" in Cent OR in RE. NOW is the time to Mark It Down if you really Need/Have To Sell. There's 20 months inventory out there which gives an overall about 5% of you selling in any given month.

That's a bit misleading though: Price it right (ie rock-bottom), and you have a pretty damn good (well... an OK chance) chance of selling, price it wrong, and basically it goes to 0%.

And finally to tie together a what Buster is saying with this weeks post.

First, I don't like to get into arguments of "personality". You know, You vs Me opinion-based sort of bullshit. That's how most divorces get going.

Buster seems to be saying that NOW is a good time for the young (ie 25 yrs) to get started on homeownership. He seems to intimate that starting young on building equity is a good thing to get going on right now.

But call me dense, but sometimes I don't know what the hell he is saying, despite the fact that he claims 100% internal consistency in his arguments. That's why I say "seems" a lot... I can only guess at what he is really trying to say.

But I would advocate that you dismiss such arguments of personality, and such.

Busters right, in that the forced saving discipline of buying a house usually leads to a far better long term financial situation than a lifetime renters does. Usually.

I would put to you that now is one of those extremely RARE times when that tried & true financial homily is not true, especially in Bend. It is still probably very valid in places like Wichita or Houston. But not here.

This place has the capacity to rip your financial guts out. And we are just getting started on this down cycle. It'll last years, possibly well over a decade.

Buy now? Maybe. But I hope your time horizon is measured in 3-4 decades, and you do not have any need whatsoever to somehow reap decent financial gains, above average, that is, because You Will Not.

If you are in Bend right now, you are Right Now bearing witness to the most spectacular financial catastrophe ever endured by a US City in over 100 years. Medians crashing to $270K from $293K in just the previous month is a tiny taste of things to come... do I need to draw a picture?

You're starting to see the leading edge of the implosion. 35 year veteran of downtown Bend, The Book Barn is closing it's doors. Watch for more long timers to go down.

Then it begins to cascade. People make less, then slowly but surely all the little amenity-type stuff they enjoy on their time off goes down the tubes, favorite restaurants close or are rehabbed into something so foreign it's not even the same thing (Sumi's?).

Pretty soon people LEAVE. Who wants to work all day for a pittance in a place where the skiing has gone to hell, the bike paths aren't maintained or are swallowed up by RE projects, the local politicians are driving the local economy into the ground, local business interests are only interested in bilking the tax base for their own selfish interests, the open spaces are being chopped, sliced and diced into the most ridiculously small lot sizes imaginable, where public services like parks go to seed, where infrastructure floods the streets with our own frozen sewage (SW corner of Pettigrew & Bear Creek Rd), where meth houses populated by strung-out gun toting maniacs get in gun battles with the cops live right next door?

Add to that the loss of BILLIONS in housing ATM disposable income.

Homes are going sub $200K, so be ready to watch another several billion go up in smoke.

At THAT point we can start talking about the good news. At that point I will go along with Busters long-term "Buy Bend" mantra. Down around $150K medians businesses will come back due to horrendous unemployment & therefore a pliable work force whose starry-eyed dreams have long-since been completely crushed. They will also only have to make payments (indirectly) on $125K mortgages, not $450K.

But in the meantime, crime, trash, murder, meth, mass vacancies, closing businesses, mass exodus, hyper-inflation, foreclosures, short-sales. In short, it'll be hell.

I'll end with the Best Comment of The Previous Week:

timothy said...

>>If you plan to live in a home for ten years, it does not matter when you buy.

This makes me throw up in my mouth.

The price you pay is critical to determining your return.

Suppose you buy in a time when prices are moving rapidly, either up or down, and your timing causes you to buy at either $200k or $300k. 10 years later you sell for $325k. Did your purchase price make a difference to your long-term financial balance sheet or not?

That's my rebuttal as well, Buster.

143 comments:

IHateToBurstYourBubble said...

And just a comment by the Realtor who left this tidbit with respect to short sales:

If the lenders are not willing to renegotiate or do a forbearance with the homeowner, a short sale is the last option for the homeowner to avoid foreclosure.

Why the hell would a bank that WILL NOT "renegotiate" or grant a seller forbearance give their approval for a short sale?

And it's NOT an "option" that the seller can unilaterally engage in. The freakin bank HAS TO AGREE.

You seem to intimate that the short sale only requires the will of the seller, when really it involves the will of the bank. Neither foreclosure nor a short sale is seller-driven.

IHateToBurstYourBubble said...

A lesson on putting a resort in a fire zone:

Suttle luxury

“The first lodge was built at Suttle Lake in 1925,” Schnoor said. “Fire destroyed it in 1929. Another lodge was built two years later, but fire again swept through in 1939. In the early 1940s, a third lodge was well under way with hotel and dining facilities, but the two owners were drafted into World War II and wartime gas rationing doomed the resort to decline.

“It just kind of sat there until 1974, when a remodel sparked new hope … but once again, a fire broke out, seven days before the grand opening.

IHateToBurstYourBubble said...

First news on the "convenience store" over in NWX:

Riley’s Market

Kacy and Shain Logeais own Riley’s Market in Bend’s NorthWest Crossing neighborhood. The 1,500-square-foot store sells organic produce, dairy items and meat as well as canned goods and beer and wine. It also has a deli and stocks plenty of snacks for the neighborhood’s lunch crowd from nearby businesses and Summit High School.

“People use us in different ways,” said Kacy Logeais. “There are lots of grocery family shoppers and then some people stop in only for lunch.”

Convenience is a big selling point for the store’s shoppers who need a gallon of milk or a clove of garlic and they are willing to pay a little extra for it, she said. Logeais said rising food prices have affected her deli products, but she said she hasn’t had to raise her prices yet. She added that the store, since opening in November, is experiencing 15 percent to 20 percent sales growth per month.

But like Devore, Logeais needs her kitchen to make the store profitable. Logeais estimates the store derives 30 percent of its revenue from its deli and another 30 percent from beer and wine sales. Logeais said the state’s regulation of alcohol sales means she can offer beer and wine at prices competitive with big-box supermarkets.


15-20% MONTHLY GAINS! WOW!

Ummm... if you have a spare brain cell you know that is from a near-zero revenue base. Increasing sales from $200 to $240 is not exactly setting the World on fire.

And there is the incidental mention that OF COURSE, despite near UNCONTROLLABLE GROWTH, the place is still losing money.

Uh huh. I feel bad for these people, but this is Yet Another Me Too Business that has resulted in 2,000% saturation in virtually every industry around here. Count the coffee shacks. 80% are losing money.

IHateToBurstYourBubble said...

Hmmm... so they are saying the methers over by St Charles had NO GUNS.

Hmmmm... I say SHOOT TO KILL THOSE FUCKERS ANYWAY.

They're fucking methers. Whether they have guns or not, they are KILLING PEOPLE, and deserve to die.

Of course, they'll hang the cop instead. Nice.

timothy said...

>>Count the coffee shacks. 80% are losing money.

Is that true? I was wondering how a downturn in Real Estate could affect the coffee shacks. It's one thing if you're Dutch Brothers in a primo location with gals in tight shirts who were raised on hormone-laced milk, but it might be another for the zillions of little nondescript coffee shacks on Greenwood.

I'm really curious about the coffee business. There's a great explanation of how it all works in one of the books that illuminates economics for the layman (maybe The Armchair Economist, maybe Freakonomics).

Coffee costs next to nothing per cup (even FairTrade--and some places will buy all FairTrade for simplicity and still charge you extra when you choose FairTrade). All drinks cost pennies in materials.

You decide what you WANT to pay for your 8 cent cup of coffee by which deluxe drink you want. The main cost is rent. In the best spots, the landlord raises rent until the coffee shop makes almost nothing.

Aside from the Awbrey location being for sale, does anyone really know anything about the state of the Bend Coffee Economy? Are Realtors buying cheaper drinks? Or brewing at home?

IHateToBurstYourBubble said...

I don't know about anyone else, but my sphere of friends includes an inordinate number of people who own more than 1 spec home, in addition to their primary residence.

I have never known this to be true in my life. I've never been to a place where the local population owns such a huge number of superfluous homes.

And not a single person wants ANY of them. Not that I know of at least. Almost all of them are "For Sale OR Lease", which is code for I'LL DO ANYTHING! PLEASE! JUST GIVE ME MONEY!

Most of these people are saddled with multiple mortgages that are sucking well over 100% of their work earnings. Usually many times that. They're watching a lifetime of savings get blown away with breathtaking rapidity.

Sad.


Anyone else notice the ridiculous number of people in this situation?

timothy said...

>>Anyone else notice the ridiculous number of people in this situation?

It's like the top of any boom. Some people, like Buster and my brother-in-law, bought properties when they were cheap.

But the suckers all piled in at the top, just like the NASDAQ boom and bust.

Suckers love assets when they should be hated, and hate them when they should be loved.

IHateToBurstYourBubble said...


Is that true? I was wondering how a downturn in Real Estate could affect the coffee shacks.


Yeah, I vaguely remember a Bulletin piece maybe a year or two ago regarding the terrible failure rate of coffee stands. I remember it saying the number of unprofitable stands was incredibly high; 70-80%, or so.

Anyone else remember that piece? I seem to remember it was about someone in the coffee supply business.

IHateToBurstYourBubble said...

I also had a friend whose Mom owned a coffee stand. She tried desperately to get rid of the place, at breakeven. She basically manned the place with a few lowlifes, and that swallowed all possible profits. When she did actually work, she made near-minimum wage, and certainly never made a cent on her "capital investment" in the place.

Coffee stands are a recipe for 18hr slave labor.

IHateToBurstYourBubble said...

But the suckers all piled in at the top, just like the NASDAQ boom and bust.

Right. But even at the NASDAQ top, I personally knew a relatively few number of speculators involved.

But here in Bend, after more than a few casual discussions, I am finding out that many, MANY of my friends & co-workers are undercover RE speculators.

I just find that amazing. This whole town was swept away by this thing. The magnitude of it just boggles my mind. It's actually RARE for me to meet someone who is not currently the owner of multiple spec properties.

No other town in America can probably boast this. The Cult of Bend. It'll be the death of this place.

IHateToBurstYourBubble said...

And I know more than a few people in THE COMPLETELY FUCKED UP SITUATION of living in a rental, while their 2-3 Bend spec homes sit vacant & for sale (or lease).

What the hell?

Anonymous said...

Destination resorts are nothing more than subdivisions outside of the UGB. Land bought for pennies on the dollar and no infrastructure improvements done outside the resort. There will never be a Pronghorn hotel or a Tetherow hotel. It's all about selling homes and moving on.

bruce said...

(To be cont.)

Good credit BRUCE-PUSSY. I'm getting $100k for 4% right NOW from BofA, and USBANK. That be about $398/mo. Do the math for $112k, $500/mo would do it easily.

How does one get $100k for 4% from a 'bank'.

Get off your ass and talk to bankers, and if you don't have a FICA of about 800, well then that's why your a bruce-pussy.



$398 * 12 mo * 15 yr=$71,460

That doesn't even cover the principle.

Who's your banker, Buster? I would love to meet him. If he really hands out loans like this he may be useful in a few months, depending on how fast things fall.

Just checked Bankrate, and USBank is showing an estimated $837 monthly payment on a $100K/15 yr fixed with prefect credit. BofA is at $844. Hmmm....

You know, I got a degree in Finance, and I just can't figure out how you do it, Buster.

Just had two more neighbors leave town last week, BTW. More for rent signs starting to dot the nieghborhood. Also, 20% of the kids I work with have or are moving this spring. Small sample, but quite a large proportion.

Anonymous said...

Hey while you fuckers are cleaning each others dildos, I'm busy working on a new invention. It's a solar powered ass-vapor cleaner. I'm setting up a factory in Madras. Plenty of Mexicans will do the work that you fucks won't...

Anonymous said...

Bend - The Dream has turned into Bend - The Nightmare.

*

Yes, Homer its here now, almost every one knows, ergo it can't get any worse, now its just a slow grind halt.

Regarding 'coffee stands', what about food? I know Long-Board-Louie is hurting bad, his east-side hwy-20 store isn't paying rent. His sales at both locations are down YOY 50% why? Realtors and contractors no longer going out to lunch.

How about Super-Burrito, the new place has no parking, and you know he signed a 5yr triple net lease to get that corner.

So what honestly, time for P&J on white bread, bought at 'food4less'. I'm sure 'marge' would tell you how realtors survive these times. Me yuppies who had prior bought $50 Zin, are now doing $2 buck chuck at TJ. My how times are changin'

How does one rationalize not buying a $4 break-fast burrito at long-board? For me its a two meal package, with free coffee that can be re-heated all day in the microwave.

Most notable is my $50/bottle zin crowd, have CUT-OUT the $20/day capacino at village-baker, ... NWXC ,... those people got to be hurting real-bad, again YOY -50%, and the fucking leases. What about the commercial? When 50% will fail, how do you lease the new stuff?

What I yet to see in Bend, that I saw while traveling in the 80's in say Colorado-Springs, was pawn shops on every corner, like they had in the 90's in Riverside, CA, pawn shops on every corner. That's who will be leasing Bends commercial.

timothy said...

>>Just had two more neighbors leave town last week, BTW.

Where did they go? In the last year I've seen a lot of people leave to go back to California, and a couple of people who went to Arizona or New Mexico.

IHateToBurstYourBubble said...


Good credit BRUCE-PUSSY. I'm getting $100k for 4% right NOW from BofA, and USBANK. That be about $398/mo. Do the math for $112k, $500/mo would do it easily.


Payments on $100K, 30yr, fixed:

0%: $277.78
2%: $369.62
4%: $477.42
6%: $599.55
8%: $733.36
10%: $877.57
12%: $1,028.61
14%: $1,184.27
16%: $1,344.76

timothy said...

>>What about the commercial? When 50% will fail, how do you lease the new stuff?

The signs on all the empty commercial in NW Bend are actually getting bigger. It's like they are shouting at you now.


L E A S E !

IHateToBurstYourBubble said...

traveling in the 80's in say Colorado-Springs, was pawn shops on every corner

I remember that also. C-Springs was a disaster.

Came back with a vengeance during the Bubble, though.

IHateToBurstYourBubble said...

So what honestly, time for P&J on white bread, bought at 'food4less'. I'm sure 'marge' would tell you how realtors survive these times. Me yuppies who had prior bought $50 Zin, are now doing $2 buck chuck at TJ. My how times are changin'

I see survivors in the rubble though. Toomies, who owns their building, is getting a low-priced demand squeeze of sorts; people who can't afford $12 ham sandwiches at Sintra, are getting corralled into Toomies. That place is busy everyday at lunch. $4.95 for lunch special... can't beat that.

Toomies... classic case of long-timer with deep equity. Noobs cannot compete with that.

Duncan McGeary said...

I love this. 30% of sales from beer and wine.

Like I said when they opened. Spend one twentieth as much on decor and machines, and fill the space with beer, wine, cigarettes, chips, snacks, donuts, etc. etc.

bruce said...

Interesting link:
Historical Stats on Bank Failures
http://www4.fdic.gov/HSOB/hsobRpt.asp

Looking at Oregon from 1970 to 2007, we see there were 29 failures between '81 and '91. Wonder if that will change soon?

Anonymous said...

Just checked Bankrate, and USBank is showing an estimated $837 monthly payment on a $100K/15 yr fixed with prefect credit.

*

They don't advertise the 'good stuff' on the internet, you got to know the bank manager.

Right now for people with a FICO of 800, you can get 1-1/2% off prime, I think prime right now is 5%. You got to know the bank. The deals aren't on the internet.

The $500 wasn't for the 15yr fixed payoff, it was an example of how cheap money is if you 'know' the banker, and have good credit.

A $160k low-ball with 30% down, would be around $800/mo at 15yr, and 5%, which I CAN GET TODAY.

That will pencil just fine.

These homes will be back up to $500k in 15yr by inflation alone. They're basically $240k homes ( 4X $60k Bend income ), but with the man-twats paranoia you can low-ball under $200k.

Hang tight for 15yr, and payoff your house, with inflation at 5%, using the rule-of-72, the house will double with inflation in 14yr. Just a simple fact. Bends RISE 2002->2006 was PR&MARKETING, but average is and will continue to be inflation, and we'll have plenty of inflation in the next years to payoff the worthless dollar, and the debt.

Obviously I don't give a fuck about the difference between $800/mo and $500/mo, your talking cracker shit tiddly winks money.

If you can't afford $800/mo, then your a man-twat big time loser.

The obvious test for a BEND MAN-TWAT is do you got the 800 FICO? Do you got the 20-30% down? Do you have the BALLS to FORCE a realtor to write lowballs? Do you got a job? Are you going to NEVER play HELOC and be a bend-loser??

99% of this forum is middle age man-twat losers, perhaps somewhere out there in bend nirvanna land the message will trickle down on how to NOT be a Bend man-twat loser.

Most of the losers here, we're losers when they came to bend because of the PR&Marketing, they don't have the DOWN, they don't have the credit (800 fico), and they don't have a job, because there are NO professional jobs in Bend ( con-artist PR&Marketing jobs ), ...Everyone all flocked to Bend, now they'll all flock out of Bend.

Folks get ahead by setting down young, and BUYING a lot of real-estate when its cheap, and paying that SHIT off before they're 40, this is how its done, Your first house is always the hardest after that it becomes easy.

The more shit you have the more the bank will work with you, as you have proved yourself.


99% of the man-twat parasitic losers on this site, have tons of excuses of why it can't be done, of course it can't be done, from there point of view there is no reason to even get out of bed in the AM.

Man-Twats of Bend, your wives will not always be supporting you.

Anonymous said...

Bulletin (c) 2008 "Bend Blogger's Eats Their Young"

son: "Mom are we losers?"

mom: "Where the fuck did you hear that?"

son: "School, the kids say that a middle age guy thats rent a home is a loser, and that make dad a loser"

mom: "No son, we're winners, homer tells us so"

son: "What you mean mom?"

mom: "Remember the Bend prayer, I tell you every night", "The baby jeebus loves us so, because homer tells us so"

son: "Mom, the kids at the school say that homer is a false prophet, that he is leading his lemmings off the financial cliff"

mom: "Oh, no Homer has an MBA."

son: "The kids say that buster says that they should buy a home when they're young, so they can have it paid off by the time their forty."

mom: "That buster is full of shit, Homer tells so.", "Its ok to be a renter until your say 80, then you live in a poorhouse, and die"

son: "But mom, what happens to us, if you go to live at the poorhouse?"

mom: "Homer hasn't told us yet, but I'm sure he has a plan for all of us"

son: "Buster says that Homer is a POVERTY-PIMP, that people who buy into his proselytizing will become perpetual losers, and there children such, and the poverty cycle will never end"

mom: "Son, money isn't everything, we're all a family here, this is Bend we're exceptional. I'm sure all of Homers flock we'll be sharing the little food we have when times get really tough"

son: "So self reliance is completely thrown out the window? We're basically in the lines at the gallows waiting for homer to tell us what to do?"

mom: "Homer tells us that the baby-jeebus works in strange ways"

son: "I'm getting the hell out of Bend, and I'm going to buy a house, and pay it off on a 15yr fixed, and I'm not going to raise my children to be part of an endless poverty cycle"

mom: "Son your speaking blasphemy, do you realize that Homer could have us excommunicated from his flock for such talk"

son: "Fuck Homer, he's a loser"

[ All heard by Bart ]

bruce said...

Re: Payments on $100K, 30yr, fixed:

Hsn't Buster been talking 15 yr. fixed?

Anonymous said...

Toomies... classic case of long-timer with deep equity. Noobs cannot compete with that.

*

Thanks, dunc, but long-board has been around a long-time, and the owner is hurting bad, but I agree, like I have told you a FUCKING million times, own your fucking building.

The long-board guy is a renter too,

The ONLY WAY biz pays off is that you work 20-30 years at your biz, pay off your building, and then rent it out on a 5yr triple net to a NOOB, and then let him fail after 1-2 years, and collect 5yrs of rent in claims court, and rent it to another NOOB, and start over, you start a biz when your 25, you can be collecting rent on your building by 45, and on easy street the rest of your life.

I hate fucking TOOMIES, I agree they're cheap at lunch, but the a zillion years ago their vege's were rotten. The new thai has already gone down-hill, and $12 for noodles, ... The best deals downtown are the old super-burrito, whole meal for $3, anybody been yet to the new place?? I just can't go into that the fucking mall. I like little locations.

Ah there's one place I enjoy, but its only open during week, but the best food, and I can eat for 24 hours for $5, taco-shack, ah so excellent. Get the special with rice&beans on the side, and I got breakfast, lunch, and dinner,

IHateToBurstYourBubble said...

Hang tight for 15yr, and payoff your house, with inflation at 5%, using the rule-of-72, the house will double with inflation in 14yr. Just a simple fact. Bends RISE 2002->2006 was PR&MARKETING, but average is and will continue to be inflation, and we'll have plenty of inflation in the next years to payoff the worthless dollar, and the debt.

I agree. Once we hit $160K medians. Then it's up, up and away... with pathetic inflation-par returns. Whoopee.

Obviously I don't give a fuck about the difference between $800/mo and $500/mo, your talking cracker shit tiddly winks money.

Prove it, and gimme $300/mo for 30 years.

99% of this forum is middle age man-twat losers

Possibly. But we can at least amortize a loan correctly.

The more shit you have the more the bank will work with you, as you have proved yourself.

So... rent & invest the difference?

IHateToBurstYourBubble said...

Ah there's one place I enjoy, but its only open during week, but the best food, and I can eat for 24 hours for $5, taco-shack, ah so excellent.

Agreed. Awesome stuff there. Still a cool local feel. Owner works the hell outta the place. Good, L/T employees.

I even like that they only are open weekends. Owners want a life for themselves & their employees. I applaud that. Make a living... don't sacrifice your life.

Anonymous said...

The $500 wasn't for the 15yr fixed payoff, it was an example of how cheap money is if you 'know' the banker, and have good credit.

A $160k low-ball with 30% down, would be around $800/mo at 15yr, and 5%, which I CAN GET TODAY

*

The above is what I wrote BRUCE-PUSSY. I think you got 30% down confused with 30yr.

I'm consistent, but you need to go back and read all I have written for the past 1-1/2 years, you only showed up here less than six months ago.

I have said if you young do 15yr. ( buy at 25 and be done at 40 ).

I was done prior to 40, but then when I got to my 60's, I didn't care anymore, now I do 30yr, because I don't care about paying off anymore, but that said +90% of my shit is paid off.

I advise the young to payoff, for instance that means NO heloc and games, just that alone would keep you out of trouble.

Like dunc's prior comment on TOOMIES, your sitting pretty when you own your building free&clear, ...

Likewise in the rental biz, your sitting pretty when your free&clear, you can quit working.

I used to despise my old friends that took out equity, but now I too have a change of heart, I can't take it with me, and I don't sell. My CPA reminds me that all the money I extract is tax-free. I can borrow all day long for 4%. I don't have to touch my cash savings. Especially in the current down-turn where post of my NON-RE businesses are YOY down 80%.

It's too late for you bruce-pussy, I don't even know why you engage in the debate, your a loser when you came to Bend, and you'll be a loser when you leave.

Duncan McGeary said...

I didn't comment on Toomies. But I'm pretty sure they don't own the building cause it's the same building I'm in.

And there are about the 5th or 6th restaurant in that space since I've been around.

timothy said...

I have no problem with buster's thoughts on this. You only need ONE SOLID WAY to make money. Once you find it, you're set. Buster found his way and that means he's way ahead of the 99% of jokers in this country.

He doesn't do what I do, but I listen to the guy. I listen to everyone who makes money. You have to zero-out the ego meter and pay attention to the successful, just like Bansir the Chariot Builder.

If Buster is getting 1 1/2 percent off, I'm really impressed. I actually want to meet Buster (if he'll meet a mantwat renter loser like me), and get him to introduce me to his banker friends.

IHateToBurstYourBubble said...

I have to say, I empathize with this guy:



I Got Freaked Out
May 4th, 2008 by peter

People have wondered why I bugged out. This blog, which seemed like a good idea, bummed ME out! I mean, I had to find bad news every day!

IHateToBurstYourBubble said...

But I'm pretty sure they don't own the building cause it's the same building I'm in.


Maybe I'm getting bad info, but I have a friend who claims to know "Toomie", and they claim to own the building.

Maybe not. Maybe they simply have a LT fixed lease, which I also equate "roughly" to owning.

Duncan McGeary said...

I don't know that I buy the 'deep pockets' idea. The more money you have to throw at a problem, the more money you have to lose.

If you can throw so much money at the problem that it doesn't hurt you, you're already sitting on an island, somewhere, not in the trenches.

My own feeling is that almost every business is pretty near the edge. Longterm businesses like Hans and the Book Barn (and Toomies) are just further along the cycle.

I've been holding back a blog entry on the 'life cycle' of small business, because I was afraid it would be perceived as too negative.

But I'm going to go ahead.

IHateToBurstYourBubble said...

I listen to everyone who makes money.

Not all renters are poor man-twats:

Commercial Success

To grasp what's happening at Yahoo, look at two snapshots, then and now. Start with the late 1990s: The founders, Jerry Yang and Dave Filo, are barely out of their twenties, but these two boyish, scrawny Stanford computer-science grad-school dropouts still look and act a lot like teenagers. Infused with the idealism of the early wave of Internet pioneers, they say that they're motivated not by starting a business or making money but by creating something useful for the community. Even though they've become instant multibillionaires, Dave -- who grew up on a commune -- remains compulsively frugal: He still lives in a cheap rental apartment, and he often sleeps on the floor of his open cubicle at work, which is strewn with junk. He wears T-shirts that he got free at hacker conferences, even if the shirts have logos of Yahoo's rivals. Jerry and Dave's colleagues play soccer inside the office in an open space across a glass wall that looks right into the boardroom, even while the board of directors -- the grown-ups! -- meets there. And they race their mountain bikes through the hallways of the company's Silicon Valley headquarters. Jerry and Dave's idea of a "power lunch" is the greasy glory of the In-N-Out Burger, which pulls its delivery truck into the Yahoo parking lot.

IHateToBurstYourBubble said...

I've been holding back a blog entry on the 'life cycle' of small business, because I was afraid it would be perceived as too negative.

But I'm going to go ahead.


Go, baby, GO!

I got a fever, and the only cure is MORE COWBELL!

IHateToBurstYourBubble said...

And Yet Another Great post by Jesse over at My Back Pages:


The Consequences of Bubble Logic

On Monday, I wrote about the record vacancies currently plaguing the housing market. Today the New York Times gives us this lovely graphic:

From the chart, it's plain to see that the country has never before witnessed this kind of oversupply - not even close. And to think that it will soon work itself out is precisely the same type of bubble-logic that got us into this situation.


Check the graphic here.

Shows just how deep the vacancy problem is. We have NEVER had even close to this many homes unoccupied, not in the last 60 years.

bruce said...

Sorry, Buster, you had me confused. Yeah, with a great long-term relationship you could do $500/mo on $112K in a 30 yr fixed. All that talk about paying it off in 15had me thinking that's what you were talking about.

When all I need is $120K plus my 20-25% down for a decent place, I'll be ready. But I'll wait for the next 20-30% or more price drop first. More people moving out than in, thousands of Siberian shit shacks waiting for occupants, etc. It's going nowhere but down for another 12 months at least. We are nowhere near the bottom, and haggling over lowball offers just doesn't appeal to me. Let the market do it's work, while I focus on mine.

A few folks on the Irvine blog seem to think things may just have started to stabilize down there, although more thought not and shouted them down. They are 12+ months ahead of us.

One thing that I find kind of fascinating is that when I was a kid, houses were priced so that a single wageearner could afford them. Now, it's both adults working that seems to the accepted median household income. Big structural change, one that leads to many other problems. Starting with latchkey kids with little supervision.

bruce said...

I wonder what the vacancy rate is in Bend? Higher than 2.9%, I bet.

Anonymous said...

Lots of 25 year olds I know have 800 FICOs, long-term relationships with banks and own multiple properties so they too can get the low rates you can.

Douchebag.

I don't know why I let buster irritate me so much. He is just some inconsistent old fuck who can't do math. it costs him $500 a month for the loan. I mean 398, I mean $800. In reality it is $885 + taxes + insurance. But fuck it.

If you notice the difference between $500 a month and $1100 then you OBVIOUSLY don't know what you are talking about. I'm lighting $100 bills in the can after I take a shit. I don't need your man-pussy, sense talking, amortization understanding, business knowledge having, cracker ass broke, renter twat telling me I am wrong. I already know that. But if I call you enough names and insult you maybe you will believe me because obviously someone who is as fervent as I has to be right.

Anonymous said...

I don't know why I let buster irritate me so much. He is just some inconsistent old fuck who can't do math.

*

Anybody who believes buster is telling the truth about who he is and what he does for a living is fooling themselves. He sure knows how to irritate people though, you've got to give him that.

Anonymous said...

Homer, you cannot REBUTT a rebuttal, because every sunday you publish the same fucking shit over&over and over&over.

A thousand times the troops have called you on "Rent and Invest the Difference", and in 'invest' in what??

Right now 'risk free' is a 2% ROI.

End of fucking story.

I have said all along 1-1/2 year, that every twenty years the bottom falls out in the BEND RE, that is here NOW, today you can buy RE by writing low-balls and get nice homes for under $200k.

With regards to BRUCE-TWAT, you know the cunt has a 620 ( sub-prime ) fico, so whats the fucking point. There is NO point, IT shouldn't even be in the conversation.

What I said is ..

1.) If your 25 or younger, get a 15yr fixed, and get yourself comfy for life, be done by 40.

2.) Today I can get CASH from the bank at 4%, obviously if the terms are under $400/mo, that be interest ONLY.

3.) TODAY you must have close to 800 FICO, 20-30% down, and a fucking JOB. 4X income that be around $180k in Bend as income is $40k-60k depending on how read wiki, I assume about $40k.

4.) As a landlord I see lots of app's, and I require 4X on rent, thus on the average for a renter I turn away 90% of app's because even though upfront I say that app's will be returned if you can't PROVE 4X, they submit app's anyways. Most households I see in Bend have a HARDTIME proving $4,000/mo income (GROSS).

Now back to 'rent and invest the difference'. Sure I have been telling my renters that since 2002, that be six years, but today, I tell them to RENT and save the difference to BUY YOUR OWN FUCKING HOUSE.

Me thinks that HOMER is really a fucking 'stock-broker', since 2000 NOBODY has made money on the stock market. S&P has gone NOWHERE the past six years or more.

Folks that bought 8% bonds in the last five years are now ( high interest country-wide, ... etc ) looking at -40% loss in principal or more.

Today if you BUY a low-ball for $180k or less, and do a 15yr fixed for around $800 give or take, you'll be getting a $250k home ( 4x of $60k ). In 15yr you'll be sitting on a $500k home because of inflation ( assuming a conservative 5% ).

I call this a CANNOT LOSE proposition. Playing the stock market or 'investing' as you would call it, is NOT an investment it is a SURE LOSS of your principal.

Most great fortunes in history were made on real estate. BUY LOW, and perhaps SELL HIGH. I BUY & HOLD, because "LONG TERM" its all going to double every 14yrs ( 5%/yr inflation means 2X every 14 yr ).

If you do the rental racket then others are pay your MTG, even a better racket when your ready.

When you have your own business, you BUY your office building, so that someday you can rent it to a sucker, this is even a better racket.

Now what fucking part of the above do the cunts NOT understand??

Anonymous said...

When all I need is $120K plus my 20-25% down for a decent place, I'll be ready.

*

Bruce-Pussy, perhaps in a STD out by the BadLands, you can today get a little deer-mice crap-shack for $120k.

I don't think that you'll see nice little homes near your wifes bike shop going south of $160k.

The reason is that I have already pointed out, at that point the pencil. As I said earlier today in prior post, at $160k that's 4X of the low bend ( wiki ) median income, perhaps 20% down is stopping most BUYERS, and the 800 fico.

But for 'landlords' this is pencil time, if & when the shit goes big below $150k it will be swoop up bigtime, and qucik by investors.

If you note, right now to get the deals I have said you must 'low-ball', and that is a lot of work, but if you focus on good stuff, and only deal with people who OWN the house, you can get the deal, folks that MUST sell have no choice, as BUYERS are so far and few right now.

"There hasn't been a better time to low ball in 20 years" - Buster.

Anonymous said...

How low is low?

Remember that most of us here, that include me & homer, have been predicting -50% since day-one around here.

I have gone a little higher in the past six months to 60%.

Yet, the national still called Bend 70% over-valued in 04,05,06,07, and 08. Of course I don't even consider STD's in MY debate, but let's look at Shevlin Crap shack. Bought in 2004 for $500k, going to $1M, today can't be sold for $250k, probably going south of $150k, and even worse out east of COSTCO. Now that shit will be DOWN 70%, no problem.

I have also since day-one here taught history on the great-depression. It was the BIG-STUFF that gets hit the worse. The little 1100 sqft inner city homes I advise on simply will barely get hit 50%, course for NOOBS who paid NUTTIN-DOWN they're hosed for life. These homes were selling for $495k and now sell for $250k or less, if your lucky, that's just ASK, low-ball it all depends how hard-up the seller is and how much equity.

BP ( bruce-pussy ), say you want a little home near your wifes shop, hell yes low-ball you cannot lose, but if you find a nice home with off-street parking, and trees, thats a nice house with a new foundation, and remodeled in the last 10+ years and you can get it for under $200k, you really can't go wrong in the long term.

All these 4X homes, e.g. homes that are REALLY WORTH $240k in today's Bend market will be up to $500k in 15yrs just because of inflation.

I have already written articles on how-to-low-ball, I have already written articles on how to buy rentals, and how to manage rentals. It's all been said in the past.

To those 'offended' by buster, all I can say is the truth hurts, and somewhere out there, there is a crocodile crying on your behalf.

I'm not that much different than HOMER, are NOOBS fucked ( dunc's word NOOB it works for me ), HELL YES. NOOB's are VERY fucked.

Did every fucking secretary at a title company in Bend buy a flipper or two?? Hell yes, are people in BEND losing their homes today left&right?? Hell yes. Whose fault is it?? Their OWN fucking fault, stupidity, and greed,

Owning a home is NOT instant wealth, but 15yrs is NOT very long, especially once you get past 45, it starts going very quickly.

Regarding me picking on the middle-age bloggers, well as my 80 yr-old CPA says, "Look in the mirror by 50, cuz you ain't changing, and what you got by then, is basically what your going to get".

Are our middle age bend bloggers going to get ahead, now that they're in Bend, on the most recent 'fad', hell no, as ME & HOMER have written ad-nauseum, Bend is a town that takes your 401k, the folks from LA-PINES will fuck your 14yr old daughter, and some board-head will fuck your middle age wife, and end up living in your house, post divorce.

Welcome to Bend.

Anonymous said...

A few folks on the Irvine blog seem to think things may just have started to stabilize down there, although more thought not and shouted them down. They are 12+ months ahead of us.


*

Sorry, brucey, but historically we're always 18months, you can't go wrong with that number.

Is cali out of the woods? There's lots of real money down there, and smart 'busters' are buying the good shit cheap. Is the worst here?

My gut tells me this is an election year, and next year there will be pain for the little guy, big pain. By then the corporations will rebound in 2009,

Yesterdays WSJ had a very complex story about 'subprime-numbers', for loans written in 2007, 40% are now 60days late, and the number is rising, so we're almost at the end of the tunnel. That said country-wide bonds just keep losing more&more principal, which means that ALL MTG money will soon be gone. As this touches all.

A year from now, all new loans will be subject to new rules, and thus late-payment will drop. Like the WSJ said, right now were seeing the worst later roll-over in history, that said we just had the easiest money ever.

Oregon lags everyone 18 months, always been this way, I would look closely at Atlanta, as they couldn't sell shit at auction 1-2 years ago, if they're now selling STD's at auction, then you know its turned.

But on the Wall-Street level, the news is still getting worse.

But like I have said for a month now and caught hell from homer, but here is what I said "When the man-twat are hysterical is the time to BUY", this is what we now have in cali, the man-twat are hysterical, but cali like bend, those with DOWN, and good credit, are far and few, there isn't enough people who have money to fix the problem, I have said that over & over.

Nationally it will improve in 2009, as by the then the worst MTG's will be KNOWN. Bend will most likely not recover until 2012, by that I mean the commercial will start filling, the next 3 years in Bend is going to be misery. More people leaving than coming, businesses dropping like flys, tourists not coming.

bruce said...

Re: I don't think that you'll see nice little homes near your wifes bike shop going south of $160k.

I know of a very not-so-nice one going for $150K. I think there will be quite a few under $200K in 12 months.

You're right, though, that lowballing business is hard work. I'll stick to teaching and software, and keep trying to save more each month for now.

One thing--I was always of the belief that prices were 3X median incomes. As in only a third of your income should go towards housing when you were haggling with the bank. The last time I did that was in 2002, and it still held true, although even then your income could be stated.

When did we go to 4X's?

bruce said...

Re: Sorry, brucey, but historically we're always 18months, you can't go wrong with that number.

That's why I went 12+. I think this time around it will be more like 20-24, with a bottom by Feb/Mar 2010 if we're lucky. I can't foresee any scenario in which things get suddenly better.

But I can foresee several where things get much worse. Things are systematically fucked right now, from energy prices to the LIBOR/FedFunds rate spread to the astounding number of surplus housing units in many markets to the fact that we are now spending more per capita on health care than on anything else. Although the recent food price increases may put feeding ourselves at number 1 soon.

Simply put, with no credit and the level of increase in the basics of food/fuel/housing/healthcare, there isn't any money for anything else. It takes quite awhile for things to ripple through the greater economy, so the real effects of the current credit crunch are probably at least next Christmas away. There have been serious structural changes to our economy over the past 5-7 years that are going to be bad for at least 80% of the population.

And the Fed is still printing money hand over fist: I just read that so far this year M2 has increased at annualized rate of 10%. I can dig up the source if you want.

From Calculated Risk today:
Prices are falling faster this time, probably because the bubble was larger.

It might be reasonable to expect that the dynamics of the current bust will be similar to the previous bust. After another year (or two) of rapidly falling prices, it's very likely that real prices will continue to fall - but at a slower pace. During the last few years of the bust, real prices will be flat or decline slowly - and the conventional wisdom will be that homes are a poor investment.

The (early 90's)Los Angeles bust took 86 months in real terms from peak to trough (about 7 years) using the Case-Shiller index. If the Composite 20 bust takes a similar amount of time, the real price bottom will happen in early 2013 or so. (But prices would be close in 2010).


Meaning we won't get near the bottom until spring, 2011.

Personally I'm looking hard at export opportunities, as well as green energy. And saving as much as I can to be prepared at the bottom.

IHateToBurstYourBubble said...


One thing that I find kind of fascinating is that when I was a kid, houses were priced so that a single wageearner could afford them. Now, it's both adults working that seems to the accepted median household income.


Notice where that's really taken hold:

Liberal Strongholds

I thought long & hard about doing a "Coasts" overpriced RE post, and blaming it all on liberal fruits.

I give 'em this: Motherfuckers love to work & let the kids raise themselves. And all that disposable income goes straight into homes. And Hummers. And big fucking titties.

Yet Another Reason Liberals Suck Big Fucking Cocks.

bruce said...

Re: M2 source

Graph here:
http://research.stlouisfed.org/fred2/fredgraph?chart_type=line&s[1][id]=M2&s[1][range]=5yrs

Note that until very recently the increase in the money supply actually accelerated significantly in 2008. Can you say stagflation?

It almost looks like the Fed is purposefully trying to build exports and devalue the holdings of other countries by devaluing the dollar. Unfortunately there is that little problem of oil prices that messes that macroeconomic play up.

IHateToBurstYourBubble said...

I'm lighting $100 bills in the can after I take a shit.

Dudes, that there is a financial genius at work.

IHateToBurstYourBubble said...

Playing the stock market or 'investing' as you would call it, is NOT an investment it is a SURE LOSS of your principal.

I'll call Warren Buffett and tell him he's full of shit.

bruce said...

Re: liberals

We prefer the term "progressive" ;)

I think we are going to see a real return to populism. The mainstream media is starting to really lose control of the message, like this recent Rev. Wright thing. It is still "news", but the journalists on the ground that were part of the Sunday panels today said that the voters they talked to didn't give a shit about it. No matter how much time Tim Russell, et al. spent talking about it.

They cared about things that affected them directly. Jobs. Energy prices. Healthcare prices. Etc.

And a lot of this is coming from the mass grassroots communication via the Net. Just like here on BB2.

Look for a big push to rein in the freedom on the Net, for security or some other reason, in the not too distant future.

You guys have no idea how fucked up our healthcare system is compared to every other industrialized nation. We're paying Hummer prices for Suzuki Samurai performance. But, hey, we got the best healthcare system in the world!

bruce said...

Re: I'll call Warren Buffett and tell him he's full of shit.

ZING!

The stock market is just like RE--the uneducated ones with dreams of glory eat shit. Educate yourself. It's the simplest form of self-preservation.

bruce said...

RE: When all I need is $120K plus my 20-25% down for a decent place, I'll be ready.

*

Bruce-Pussy, perhaps in a STD out by the BadLands, you can today get a little deer-mice crap-shack for $120k.

---

Buster, please read my comment before taking a shit on me...you would be just a bit more credible.

bruce said...

Re: More people leaving than coming, businesses dropping like flys, tourists not coming.

One, I think the Journal may have been a bit optimistic. ARM resets are heavy every summer through 2011.

But, hey, they are the Bible. And now that Murdoch owns them, I'm sure they are an even better paper.

The thing I disagree with on the comment I quoted is that the tourists will stop coming. If we can keep this place together, it is a pretty nice place to vacation. And it will get cheaper (well, except for trans costs) making it more attractive.

The tourism could be the one thing that keeps us afloat.

I still think we should spend some of that $800K or so a year we give to COVA an assuring the place looks decent when the tourists get here. Trash picked up, streets swept of glass, potholes filled, etc. That way they will come back, and a returning customer is almost always more profitable than a new one.

bruce said...

Re: And Hummers. And big fucking titties.

Are you serious? That's the NASCAR crowd. No even partly liberal/progressive person would own a Hummer. Be more likely to key one.

Big titties are a personal thing...

bruce said...

The words of a real progressive:
http://www.youtube.com/watch?v=_D3vuvPQeVM

Feel free to flame away--AFTER you watch the whole two minutes.

timothy said...

>>I was always of the belief that prices were 3X median incomes.

When I was a kid, it was 2.5x maximum, but that was in the midwest.

Anonymous said...

FWIW:

"During the next three to five years, real estate prices could fall to as low as their 2001 levels. That means declines in some regions of 20% or even 35%, and potentially more. Goldman Sachs recently said that home prices in California are overvalued by 35% to 40%, for example."

Robert Wiedemer, president of Business Valuation Center in Reston, VA.

bruce said...

Re: When I was a kid, it was 2.5x maximum, but that was in the midwest.

Same here. Wisconsin.

IHateToBurstYourBubble said...

When I was a kid, it was 2.5x maximum, but that was in the midwest.

Right. See any Hummers? See any big old motherfucking monster double D's?

Fuck no. Midwesterners eat motherfuckers like that. And they don't get caught up in RE Bubbles either.

Overpriced RE is a liberal abortion that's been lying on the floor rotting for so long, everybody thinks it's perfectly normal.

IHateToBurstYourBubble said...


Feel free to flame away--AFTER you watch the whole two minutes.


Can I go now?

I like Obama, but I KNOW that motherfucker is going to get some big payback on Whitey for slavery. Sum bitch hung onto Wright until it became clear that White baiting motherfucking nigger was going to cost him the election.

Be clear: When we elect Obama, he will exact a pound of flesh from every White ass in existence, because seething White-hating motherfuckers like Wright will takeover the poor bastard.

At least with Hillary, we know that she'll be busy getting her gigantic cock sucked by Monica Lewinski, leaning up against the wall screaming:

"YEAH, MY MOTHERFUCKING BACK HURTS TOO! YOU WATCH HER SUCK MY HUMONGOUS COCK YOU WORTHLESS SON OF A BITCH! YOU WATCH! I'M GONNA SQUIRT ALL OVER HER JEWISH ASS, AND YOU'RE WATCH IT AND LIKE IT!"

IHateToBurstYourBubble said...

No even partly liberal/progressive person would own a Hummer.

Dude, do a swing thru Cali... you'll see fake titties lib's practically growing out of the ground. Dude, Hollywood is the white-hot seething capital of the Liberal Universe.

Dude, the only thing they worship more than liberal bullshit down there is fame, which is why Arnold is the Governator.

IHateToBurstYourBubble said...


The tourism could be the one thing that keeps us afloat.


Note that we are supposedly up to $542.5MM in tourism dollars per season, despite the fact that The Big Draw, Mt Bachelor, was WAY DOWN this year.

This tells me that the $542.5MM is 100% MADE UP. Absolutely ZERO FACTS backing up this number. Which tells me that the previous number, used for years, is also 100% FAKE. Just like all the titties on the Westside.

IHateToBurstYourBubble said...

Yet Another Reason the Bulletin Sucks Gigantic Donkey Schlongs:

Buying a Bulletin Ad Is Tough for Union

Bend’s Only Daily Newspaper must be so flush with advertising dollars that it can afford to be really picky about what ads it accepts – at least if they come from the union representing Bend Area Transit bus drivers.

Back in mid-April, Amalgamated Transit Union Local 757 tried to place an ad in The Bulletin urging the city not to raise BAT fares or cut service to cope with its budget crunch. The ad also claimed there is a “gross disparity in wages and benefits between BAT workers and every other city worker.”

The union originally wanted the ad to run on Tuesday, April 15, to publicize a press conference and rally to be held at Bend City Hall the next day. But when Catharine Alexander of the union submitted the ad to Bulletin account executive Lisa Legg, she was told the contents had to be vetted by the paper’s higher-ups before it could be printed.

“I sent your ad for approval to our management, who would like you to provide a back up for the claims in the ad,” Legg wrote to Alexander April 10 in an e-mail provided to The EYE.

Alexander responded by sending some supporting documents. Shortly afterward Legg e-mailed: “For each claim in the ad, we will need to know what page of the information you sent over pertains to that particular claim. We do not know how to look through each page and decide what goes with what.”

The next morning, Legg asked if the ad could run on Wednesday instead of Tuesday. “Can we still get Tuesday?” Alexander responded. “I can possibly get it in late, pending approval from management,” Legg replied.

But later that day, Legg e-mailed: “I just spoke to Sean Tate, our advertising manager, and Jay Brandt, our advertising director. They would both need to review every page of the documents that you sent, which wouldn’t be possible in time to run the ad. We would be happy to run an ad inviting people to come to the Press Conference and Rally.”

Alexander next asked Legg if Tate and Brandt could review the ad in time to get it into the Wednesday paper. Legg told her they wouldn’t be able to review it until Monday, when they both would be “on the road, which means we’d miss the deadline for Wednesday as well.”

Alexander then wrote that “we’re thinking the contents of the ad are timeless,” so it could run after Wednesday. She asked again when the ad could run.

Legg responded that “once our directors have gone over and approved the content of the ad, then we can get it put in the paper. If they approve it Monday while they are on the road we could get it in for Thursday.”

But as of April 21, Legg was telling Alexander that her “manager” – Tate, presumably – still wanted more corroboration: “He said that we will require verification of your information and not a list of phone numbers and people to call.”

The Bulletin still hasn’t published the union’s ad. But on April 28 it did publish an ad from Paratransit Services, the Bremerton, WA-based private company that operates BAT, attacking “the Portland union” for allegedly being uncooperative in negotiations.

And on April 20, it published an editorial calling the BAT drivers’ demand for a pay raise “astonishing.”

By April 21, Alexander apparently was getting exasperated. “The Union has placed similar ads in the Eugene Register Guard, the Corvallis newspaper, the Grants Pass newspaper and the Salem newspaper without having to prove anything,” she e-mailed Legg. “This has been true even when the editorial page has been against the Union’s position. If the publisher of the Bulletin doesn’t want to take our ad for political purposes the publisher certainly has that right. But the publisher should say so.”

IHateToBurstYourBubble said...

And that's saying a lot cuz I hate motherfucking scumbag Unions.

bruce said...

Re: Dude, do a swing thru Cali...

I do regularly. Through some strange notion of fate my wife's sister and my sister live within a mile of each other in Orange County.

And my Dad bought a house in Temecula about five years ago when it was semi sane. OC was too rich for him even then.

Re:...made up.

I'm just going on what I see when I'm downtown, maybe 2 or 3 times a week. Men's Journal just ranked us second in the Best Place to Live for whatever. We do actually have good trails, etc., although we could have good fishing, too, if we ever got flows up to historical levels.

My type of progressive doesn't fucking care what you and your boyfriend do with each other, as long as it doesn't involve my son or daughter. But it does fucking care when we waste billions of dollars on a war we started that gets us nothing.

Fucking nothing.

Other then more brain-damaged vets holding their signs on on 3rd.

Hey, if you want to sign onto that, feel free. I think it sucks.

Bart said...

I have decided to quit using the term, man-twat, cunt, ... now it will only be BeNoob [ Bend Newbie ], it's someone via PR&MARKETING that came to Bend post 911.

-bart son of homer

bruce said...

Re: And that's saying a lot cuz I hate motherfucking scumbag Unions.

Why, exactly?

Do you hate people getting together to fight for a living wage?

Or do you hate the BS rules created by too powerful unions?

Unions created the middle class.

bruce said...

PS I do agree that whomever is running the BAT union is a fucking idiot. He's burning public trust, rather than ponying up and helping out to get it going.

IHateToBurstYourBubble said...


Do you hate people getting together to fight for a living wage?

Or do you hate the BS rules created by too powerful unions?


"People getting together to fight for a living wage"? Do you really think that's what Unions are?

Unions are NOTHING BUT rules made up for the benefit of the Unions. The membership is simply a necessary evil to extort employers.

Unions = Jesse Jackson. They're just white dudes.

IHateToBurstYourBubble said...

Wanna know the upshot of entrenched Unions?

Go to Flint, MI.

Whereever Unions go, death & misery follow.

I have family in the Detroit Unions. The LAST THING on their minds is helping each other, or helping create decent products, or anything else.

Unions are 195% responsible for the collapse of the American auto manufacturers. And they know it. And they don't give a fuck.

I have family that is Union, and family that is lawyers, and I don't know which one is more pathetic & deserving of extermination.

bruce said...

Re: I have family that is Union, and family that is lawyers, and I don't know which one is more pathetic & deserving of extermination.

That is an issue.

Unions created the middle class of the last half-century.

Show me otherwise.

timothy said...

I don't like unions, but I don't like the Bulletin picking its ads based on politics, either.

IHateToBurstYourBubble said...

Unions created the middle class of the last half-century.

Show me otherwise.


Can't prove a negative.

Dude, you been to Flint? Let's go, and You show Me The Vast Middle Class created by the munificent auto Unions.

timothy said...

I think unions were terrific when they were really needed.

What they do today is make a company globally uncompetitive.

(I'm operating under the assumption that robots can't form unions.)

And ICBINB, get a copy of Rivethead--best Flint book ever. Hell, just an incredible read period.

IHateToBurstYourBubble said...

I think unions were terrific when they were really needed.

What they do today is make a company globally uncompetitive.


Right. Anyone who believes that Every Man bullshit about Unions, ain't been keeping up with current events for about the last 100 years.

Unions are like religions, built for the perquisites of those at the top, nothing else. Liberals co-opted the Unions, while Repulicans co-opted religion, and neither could give a shit about either one, except for the votes.

You think Cheney gives a fuck about religion?

You think Billary cares about Unions, after having made OVER $100,000,000 since leaving office?

Fuck, Unions are just cocks sucked by the Dem's for votes.

bruce said...

I'm confused here. Was it unions who designed 6000-lb SUV's and Hummer's, rather than Prius's, etc.?

timothy said...

Brucey, you read Rivethead, too. You'll love it. Ben Hamper is a union guy.

Anonymous said...

Just give the BAT union all the money it wants, and watch this become a great town.

Provide the bus, and they will come.

It will deliver us from evil.

The bend-bubble would be over, if all BENOOBS tomorrow could/would become BAT Union Men.

Unions are best, when fed at the public trough by taxpayer funds.

timothy said...

ICBINB, don't even get pulled into the politics. It's boring. Zealotry.

Let's stick to information. We still have a whole to go with this damned thread.

Anonymous said...

Suckers love assets when they should be hated, and hate them when they should be loved. - TT

*

Even timmy knows that we have passed the point of inflection.

BENOOBS are now running from BEND-RE,

It's time to BUY folks.

LavaBear said...

>>And ICBINB, get a copy of Rivethead--best Flint book ever. Hell, just an incredible read period.

I just noticed over on http://www.nakedcapitalism.com/ blog he has a link for a specified amazon cart that has books for purchase that somehow are related to his site.

http://astore.amazon.com/nakedcapit-20

A decent idea since I assume he gets a kickback for it. Then again since most here are anonymous fuckers who'd all be to afraid to purchase anything with our real names attached. Interesting thought though. I'd imagine it would be a diverse (or is that perverse) list.

LavaBear said...

>>BENOOBS are now running from BEND-RE,

It's time to BUY folks.


Reading that just makes me think of CNBC and how they are fucking obsessed with calling the bottom. This it IT!!! It's only up from here.

I agree the benoobs are getting a bit scared. Fuckin finally. But we are still a long ways from "It's time to BUY". As soon as you make an eyeball bleeding offer that is accepted and closed, you've just created the comp for everyone else. The next smart guy is going to toss out the low ball hand grenade 10% below your shit. And then we have a new comp. And the shit keeps going clockwise down the toilet. I'm not willing to take one for the team and jump on the grenade just yet. I need to see much, much, much more blood on the street. And yes, I will be putting my money where my mouth is...I'm just certain you are at least a year too early.

bruce said...

We'll admit it. We didn't think sales of the 2008 Ford Focus would take off like they have, even after we had a 2008 Focus SES Coupe in the Autoblog Garage and for the most part liked it. The redesign for 2008 just left a bad taste in our mouths, and we didn't think anyone would fall for those garish fender vents. For whatever reason, be it the car's smooth ride, competitive pricing or exclusive availability of the SYNC system, the 2008 Focus is selling like crazy. Ford says that it sold 49,070 Focuses this year through March alone, which is up 23 percent compared to last year. More importantly, all of those additional Focus sales were to retail customers, not fleets. Last year the Blue Oval built 191,000 Focuses, but today it has announced that production will be ramped up at its Wayne Stamping and Assembly Plant so that 245,000 units can be built in 2008.

See for the rest: http://www.autoblog.com/2008/04/15/it-has-a-nice-personality-ford-boosts-focus-production-by-30-t/

Imagine, cars that make sense are good for both management and union members.

As far as the BAT union, I think I noted in an earlier comment that their timing is stupid. Not the fact that they have a union--the fact that they want more money when there is none to be had. They are shooting their own nuts off. Enough said.

bruce said...

RE: Brucey, you read Rivethead

I'll have to check it out.

We finally get to see what our new water rate structure will be today. Hopefully it will get away from charging a flat rate for the first few hundred gallons whether you use it or not. I'll probably go listen.

IHateToBurstYourBubble said...

An ever-evolving downtown

By Andrew Moore / The Bulletin
Published: May 05. 2008 4:00AM PST

Small businesses come and go, and with more than 200 merchants in downtown Bend, the city’s core is ever changing.

Now is no different, with at least 11 locations in various states of transition.

“Every year, we have lots of turnover,” said Chuck Arnold, executive director of the Bend Downtowners Association. “Retail is a fickle environment.”

Linda Torres, the owner of The Book Barn, a presence on Minnesota Avenue in downtown Bend since 1973, announced last week she will close the shop’s doors at the end of the month and move the business online. Competition from online retailer Amazon.com and big-box stores, coupled with a slow spring, spelled the end, Torres said.

“It’s been dead down here,” she said. “It’s like the ’80s.”

Arnold said that after several boom years, the city’s downtown retail environment is normalizing. But as Bend says farewell to a familiar face, new ones are arriving. Two new restaurants are slated to open downtown in the next two months, as well as some new retail ventures.

Some of the recent comings and goings downtown:

• The Book Barn is leaving its downtown location at 135 N.W. Minnesota Ave. The building’s owner, Joel Gisler, doesn’t have a new tenant lined up and said he’s sad to see Torres go.

The Book Barn’s departure concerns Arnold, who works out of a second-floor office above The Book Barn he sublets for free from Torres. If the association were asked to pay rent, Arnold worries the association’s downtown beautification and other programs would suffer.

• Volo, a “New American” restaurant located on the ground floor of the new 919 Bond building at 919 N.W. Bond St., plans to open Wednesday, according to co-owner Chris Jones. Jones said the restaurant will focus on sophisticated food in a relaxed atmosphere and will have seating for 100, including cafĂ©-style seating on the sidewalk in front of the restaurant.

• Ciao Mambo, a “high-energy, family restaurant” serving “immigrant-style Italian food with a bit of American twist,” will open in mid-June in the space at 915 N.W. Wall St. formerly occupied by Hans Restaurant, according to Ciao Mambo owners Gary and Linda Sather. The restaurant also has locations in Whitefish and Missoula, Mont., and Hayden, Idaho.

• The Painted Pony Trading Co., which sold Western wear, closed at 933 N.W. Wall St. a few weeks ago, Arnold said. Attempts to reach owner Ruth Grouell were unsuccessful.

• Get Wireless, which sells cellular services and products, closed its downtown location at 818 N.W. Wall St., on April 29 in order to consolidate, according to Arnold. The company retains its existing location in the Crossroads Plaza on Bend’s east side. Owner Karen Creasy confirmed the move.

• Blue Windows, a women’s fashion boutique, closed its 806 N.W. Brooks St. location recently, Arnold said.

Attracting foot traffic to Brooks Street — which was designed as a pedestrian mall — has been a consistent problem for downtown, according to Arnold.

• Brasada Ranch, a Crook County resort development, is vacating its realty office/showroom space on Brooks Street and will move to a new storefront in The Old Mill District. Sales assistant Megan Cecil said the Brooks Street location wasn’t visible enough, and the resort office expects to capture more foot traffic at its new location.

• A hat store is slated to open in the D.H. Sphier Building, according to Arnold.

• In addition, Arnold said women’s shoe and handbag retailer Stuart Weitzman is set to open later this month in the space formerly occupied by Jill’s Wild Women & Friends Gallery, at 920 N.W. Bond St., Suite 107.

• Blue Moon Marketplace, located next to the post office in the city’s parking garage, is expected to open May 15, Arnold said. The store will sell art and other handmade goods from local vendors.

• Construction continues on the Oxford Hotel, at the corner of Minnesota Avenue and Lava Road. The building’s second floor is visible. The seven-story, 56-room hotel is slated to open later this year.

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

IHateToBurstYourBubble said...

Interesting piece. In raw numbers though, it looks like more are leaving than arriving.

And some of the additions see, well... pretty crappy.

A hat store?

Nothing but clothing retailers & restaurants.

I've seen what are the beginnings of that Blue Moon Marketplace, and that could be interesting. But the location?

Far & Away the most interesting quote is the highlighted one by Torres.

How bad is it Dunc? I thought I heard you rolling your estimates down over the course of this year.

Anyway, a decent piece on what looks to be a pretty heavy net outflow from the downtown core, with a partial replacement by some total noobs.

IHateToBurstYourBubble said...


Linda Torres, the owner of The Book Barn, a presence on Minnesota Avenue in downtown Bend since 1973, announced last week she will close the shop’s doors at the end of the month and move the business online. Competition from online retailer Amazon.com and big-box stores, coupled with a slow spring, spelled the end, Torres said.


I hate to tell her, but Amazon also has a bit of an online presence as well.

IHateToBurstYourBubble said...

I'm predicting that Umpqua will close that downtown location when the lease is up. Never once have I seen a single person in there.

Worst bank branch location EVER.

timothy said...

>>I hate to tell her, but Amazon also has a bit of an online presence as well.

She's assuming there are some people who might feel more comfortable buying in an online barn than an online river.

Perhaps she'll be an eBay or Amazon store. I've bought a lot of Amazon store items. I like it because only Amazon has my credit card info. I like to minimize my database exposure. These companies are sloppy as hell with customer info.

Duncan McGeary said...

From my blog:

Downtown Turnover.

“It’s been dead down here,” she said. “It’s like the ’80s.” Linda Torres, owner of the soon to be gone Book Barn.

"Interesting piece. In raw numbers though, it looks like more are leaving than arriving.

(SAYS: I Hate Too Burst Your Bubble.)

And some of the additions see, well... pretty crappy.

A hat store?

Nothing but clothing retailers & restaurants.

I've seen what are the beginnings of that Blue Moon Marketplace, and that could be interesting. But the location?

Far & Away the most interesting quote is the highlighted one by Torres.

How bad is it Dunc? I thought I heard you rolling your estimates down over the course of this year.

Anyway, a decent piece on what looks to be a pretty heavy net outflow from the downtown core, with a partial replacement by some total noobs."


Duncan's Answer:

If you don't mind, a 'yes, but we're different answer.'

On a scale of 1 to 10 for walk-by traffic, Pegasus has spent most of it's existence at a 2 or less.
For the last 3 or 4 years, that shot up to a 7 or 8.

Meanwhile, the Book Bark probably has been in the 7 or 8 range for many, many years.

Now? We may have dropped to a 5 or 6 in foot traffic, and so has the Book Barn, probably. So while I'm still doing way more foot traffic than I was accustomed, Linda has probably seen an overall drop.

We also have maintained the 70 or 80% destination by regulars status, whereas most downtown stores are probably the reverse of that.

You can sort of feel it, as I've said before, just by the number of parking spots outside that are open. I can sort of feel it when I walk to the parking garage and see the restaurants don't seem very busy. And there are still stores that I walk by every day that never seem to have customers.

Pegasus has gotten a bit lucky. Pop culture has surged to the fore -- the Iron Man movie being an example. I'm optimistic. We had a HUGE turnout for FCBD.

But yeah, our sales are down from a year ago, and I had been guessing that other downtown stores were feeling it. As bad as the 80's? Oh, that was shoot a cannon down the middle of the road bad. If it ever gets that bad, most of these noobs won't last a month.

I have to say, I think the number of new restaurants and new clothing stores is simply nuts.

New stores don't mean much, except the the downtown is a desirable location. It doesn't mean everyone is thriving. Just that there is another noob for everyone that leaves. I don't expect this to change for awhile, yet. So far, I haven't seen any boutique location last very long on Minnesota or Wall.

timothy said...

Lousy time for a vanity store. Hats, purses--those are already in a nationwide downturn.

Who does this crazy kind of thing? Someone who has been waiting to open a shop and who will show zero interest in the numbers until they prove to be abysmal and embarrassing.

IHateToBurstYourBubble said...

Well, I think Pegasus & a very few others are not the Me Too business model that has swept downtown.

I know some Pegasus customers, and they are most assuredly Walk To types... they go straight there & straight back to work. That subscription model is killer. I think Leapin Lizards & Birkenstock are other survivors. I just hope Mondo, the taco Shack, Toomies, and Super Burrito II make it... so many survive on the Cheap Work Lunch.

Duncan McGeary said...

What I remember of the 80's was parking in front of my store to lure customers. Of playing cribbage on the sidewalk with Jerry of the Sole Shop.

One of the problems I see with the higher rents downtown is that is almost guaranteeing that only high end stores will go in.

But not guaranteeing that those high end stores will do well.

If you get the distinction.

So we end up with beautiful corpses, that attract the noobs. Failing upward, so to speak.

Hard to say. Birkenstock has sold in the recent past, and I know Leapin' Lizards was for sale. I don't know how Goodies is doing.

If it's the old stores that are struggling, it's because they are at that cycle of their business.

The noobs just haven't got there yet...

Duncan McGeary said...

Blue Moon?

That appears to be a high end, what we used to call, crafter's mall. I thought those were gone from Bend. They usually colonize struggling downtowns, like Redmond, say...

Model is more based on mini-rents, which would seem doubtful with the high cost per foot.

I think, the huge space, will be hard to fill with viable spaces.

But then again, maybe there is a whole colony of 'high-end' crafter's just itching to sell their stuff -- and pay a huge dollar per foot rate.

50 sq. ft. at 4.00 a foot is still only 200.00 a month, much cheaper than anything else they could do downtown...

Anyone know how 'crafter's malls' are doing elsewhere?

Anonymous said...

This comment on the ActiveRain blog pretty much lays things bare:

"For change to occur, we must move beyond facts and figures and into benefits that are emotional dirvers. Reasons to buy now."

When you can't make a rational case to buy something, the huckster's last resort is an appeal to emotions...

Anonymous said...

Battle of the Economists?

Krugman (NY Times today): "Cross your fingers, knock on wood: it’s possible, though by no means certain, that the worst of the financial crisis is over. That’s the good news...." [recall that Krugman was harping about the housing bubble in summer 2005]

Rogoff (Bloomberg)``It is very hard in the middle of a crisis to know where to draw lines,'' said Harvard University professor Kenneth Rogoff, a former research director at the International Monetary Fund. ``They reduced the immediate risk of a crisis, but upped the ante of raising the possibility of a bigger crisis down the road.''

So, who's right?

timothy said...

Downtown parking is important to me. Free parking. No complications.

I always hesitate when thinking about going downtown. I have to think where I will park. In Portland, I KNOW what's I'm going to do--park in a parking garage. Bend is too small for that. I have never parked in a parking garage in Bend and I never will. What I do is cruise the Mirror Pond parking lot. If it's full, I just drive away. Or sometimes I'll drive around and if there's anything easy, I take it.

If I have a business lunch, that's different. I'll go early, park in residential near Drake Park, and walk. I don't mind a long walk, but I do hate fiddling with parking.

I really think it's the concept of huge parking lots of Fred Meyers and such that make the parking hassle go away that has killed off downtown retail. If I had to think about parking at Fred Meyers, I'd go there maybe 1/4 as often.

timothy said...

As for the economy, I'm still leaning toward think there's a lot more down for Real Estate and Financials, but the stock market ex-financials is in good shape.

Duncan McGeary said...

Timothy.

Why not the garage? It's easy to use, almost always has parking.

Marge said...

Brucey..you have gmail.

timothy said...

>>Why not the garage? It's easy to use, almost always has parking.

I've just never liked the parking garage "experience." They all smell like urine. You can't see how many spaces are open before you commit. People park over the line, meaning you have to negotiate their sideview mirrors and inconveniently placed steel pillars. You get "stuck" waiting to get out. I've had friends who were mugged in parking garages, etc.

Does anyone like parking garages?

Anonymous said...

So, who's right?

*

We knew all along it would take until 2010 to clear the bad loans. It's still not know how bad the ones from 2007 will perform, right now its 40% 60 days late, but that's it, after spring of last year, the door was slammed,

With interest rates so low now, the ARM reset issue isn't big, its just clearing the bad loans. In 2-3 months the worst will be known. Then its a matter of getting the deadbeats out, and flipping the houses over to people who can pay the MTG.

Most people think 2009 will improve, so that puts Bend on the road for fall of 2010.

It's going to be here before you know it, right now bottom-feeders are shopping in Atlanta, and Cali, by summer this year they'll be picking over the dead in Bend.

I'm sure by next year their will be lots of ETF's, REIT's and funds that just target on 'deals', picking from the bottom.

All this problem was caused by easy-money, and we're into the closure now for a year, actually just considering that the 2007 folks are averaging 40% at 60 days late is simply amazing, showing you by that time, they were loaning to the corpses.

By late the summer, the losses will be well know, insurance cost will be priced into PMI, post-election they'll have to raise interest rates to protect the dollar, then old people can start making good money again, ....

18 months Bend lags, ... From the national economy, and ditto for all of Oregon,

timothy said...

The two "pending" hats have disappeared from the For Sale signs on the Newport Moderns.

Surprise.

timothy said...

Funny. Just saw this. The dangers of a parking garage...

SALT LAKE CITY — A woman has survived a three-story plunge from a parking garage in Salt Lake City.

The Toyota RAV 4 landed on its roof after its driver, Sandy Creswell, drove over a small parking barrier and through a railing before falling three stories, according to the Salt Lake Tribune.

Creswell, a paralegal, was taken to a local hospital where she is listed in fair condition, officials told the paper.

Parking attendant Dave Robertson said he heard a loud crash around 8 a.m. Monday and thought it was a car wreck on the street.

Anonymous said...

Is this housing-related?


Bend animal shelter flooded with stray dogs

Posted: May 5, 2008 01:55 PM PDT


Dozens of stray dogs like this have flooded Bend animal shelter in recent days

Plea for owners to come, reclaim pet

From KTVZ.COM news sources

The Humane Society of Central Oregon is asking every person who has lost a dog to visit the shelter to reclaim their pet. The shelter received 19 stray dogs Saturday, May 3rd. The shelter has received 49 stray dogs in the last week. Currently there are 52 dogs in the shelter. The number includes 29 stray and 23 owner relinquished dogs.



The Humane Society is pleading that you come to the shelter immediately to find and reclaim your pet.


"Critical situations like this can be avoided if pets have identification and if owners report and come to the shelter to look for their missing animal immediately. A black Labrador Retriever looks similar to another one. Only you can properly identify your pet," says Karen Szymanski, shelter manager.


"Current identification tags, microchips and dog licenses are essential to quickly reuniting you with your companion," said Szymanski. She added, "It is imperative to reclaim lost pets quickly."


The Humane Society of Central Oregon is located on 27th street just south of Reed Market road. Stray animals are posted on our website at www.hsco.org but it is best to visit the shelter to properly identify your pet. The Bend shelter is open Monday through Friday from 10:00 am to 5:30 pm and Saturday 10:00 am to 5:00 pm. For more information call 382-3537.

timothy said...

It could be housing related. We had the same thing last year.

As far as I know, there are two big spikes annually for lost dogs.

1) When the weather first turns nice.

2) July 4th, when scared dogs run away from home.

IHateToBurstYourBubble said...

Interesting... if you ever wondered what Ray Kuratek looks like, he was one of the interviewees in the burned down feed store video on KTVZ

Maybe they'll post it online, but so far they've only posted the May 4 piece, which doesn't have Kuratek. Look for the May 5 video piece if you're curious... should be posted later today, or tomorrow.

foz said...

Yeah I tend to stay away from parking garages. Not even sure how to get to the one in bend. I also was living just off galveston so riding a bike was way easier then driving. I also had my car stolen from the parking lot in front of the Martini Bar. And I was sitting right there at one of the outside tables. I think that is when my adoration of Bend shifted.

IHateToBurstYourBubble said...

Yup, Ray Kuratek on the KTVZ.com video, "Owner of burned Bend feed store says, 'We'll be back'."

IHateToBurstYourBubble said...

What high tech company has the most cash?


SOFTWARE NOTEBOOK
Apple takes a bite of tech industry cash


Todd Bishop, Seattle Post-Intelligencer

Monday, May 5, 2008

The biggest cash pile in the technology industry historically has belonged to Microsoft Corp., but now it has some company, and it's a familiar name: Apple Inc.

Microsoft has reduced its cash balance to $26.3 billion through large stock buybacks, dividends and acquisitions. The balance was more than $64 billion less than four years ago.

Apple's balance has been growing - reaching $19.4 billion at last count - as a result of the cash generated by its Mac and iPod lines. Less than four years ago, its stockpile was $5.5 billion.

The trends have implications for both companies. Cash translates into the ability to consider acquisitions and other potentially business-boosting deals. Apple has cited those types of possibilities when Wall Street analysts have asked about plans for its cash. Microsoft had been planning to borrow money for the first time, before it withdrew its $44.6 billion Yahoo bid Saturday.

Keeping too much cash on the balance sheet can raise eyebrows among investors, who often want companies to reinvest the money in the business - where it holds the promise of a greater financial return - or to return the money to shareholders through dividends or stock buybacks.

"Stock buyback programs and other forms of returning the cash are discussed with the board from time to time," said Peter Oppenheimer, Apple's chief financial officer, in a Jan. 22 earnings conference call. But Apple's current preference is to "maintain a strong balance sheet in order to preserve our flexibility to make strategic investments and/or acquisitions," he added.

Investors are now watching Apple's growing cash balance in much the same way they did Microsoft's a few years ago.

"From purely a financial standpoint I think they're overcapitalized," said analyst Andy Hargreaves, who covers Apple at Pacific Crest Securities in Portland. "You'd like to see them return that in one way or another, or put it to work."

Apple historically has built its business from the ground up, preferring smaller strategic acquisitions of technology and talent. If the company continues to follow that pattern, that means it's not likely to reduce its cash pile through a blockbuster deal.

"I don't really expect them to do anything with it in the near term," Hargreaves said. "I think that (Apple CEO) Steve Jobs' experience with this company and the cycles that it's been through has taught him to be very, very conservative, and save for the rainy day."

Microsoft's Bill Gates has traditionally taken a similar approach. But as the company's cash pile reached legendary proportions a few years ago, and it settled some of its most costly antitrust challenges, investors were pressuring Microsoft to do something with the cash. A Barron's magazine cover depicted Gates clutching a bag of money - calling on him to "share the wealth."

In July 2004, the company announced plans to spend about $75 billion in cash - including $32 billion in a special dividend, a $30 billion stock buyback, and a commitment to increase its regular dividend over four years. The company continued to make regular stock buybacks in recent years.

One idea behind stock buybacks is to reduce the number of shares on the market. That, in turn, helps increase a company's key ratio of earnings per share.

But Microsoft's $44.6 billion bid for Yahoo cast the situation in a different light. The company's proposal funded the deal half in cash and half in stock. Even at that, Microsoft said it would have needed to borrow an unspecified amount to fund the acquisition.

The situation changed Microsoft's approach to stock buybacks. In the quarter ended March 31, Microsoft bought back slightly more than $1 billion worth of its own stock - compared with more than $6.7 billion repurchased during the same quarter a year ago.

Microsoft finance chief Chris Liddell, in an April 24 conference call with Wall Street analysts, said he wanted to "maintain the most amount of flexibility" for the Yahoo deal.

At the same time, the reduced buyback demonstrated just how quickly Microsoft can still amass cash. Its $26.3 billion balance of cash and short-term investments represented an increase of more than $5.2 billion in three months.

IHateToBurstYourBubble said...

And of course you KNEW the whole RENTS ARE GOING UP was 100% total bullshit:

Rental Rates Begin To Drop With Home Prices
Rent Concessions Can Include Up To Three Months Of Free Rent

MIAMI (CBS4) ―

If one were to describe house prices to falling rocks, then, it would be safe to say that rents in South Florida are dropping like boulders.

"We're just trying to stay competitive," said Frank Leonor of Design Place to CBS4 David Sutta.

After years of price increases, property managers like Leonor are doing the unheard of: offering not one, not two, but three months free rent to get you in the door.

"It's a drastic measure, but in today's economy, most people are on a tight budget, so we have to try to offer to balance out, try to offer them something that they can afford now," he added.

Design Place in Miami is just one of thousands of bargains appearing across South Florida.

"This listing has been available on the market for 3 months," explained Guillermo Puig of Mymiamipad.com; luxury buildings in Sunny Isles dropping in price by five to six hundred dollars.

He added, "The prices are coming down dramatically, I would say; and going like that once they have someone interested in that property, because they don't want them to leave."

For homeowners turned landlords, the market is squeezing them. They can't sell, and they now have to compete for tenants.

Aldo Rivera, who owns property, said, "Many people who are looking to rent a place have a lot of options, so they want to get a good deal."

The good deals landlords are cutting often don't come close to what the bills are.

"Oh, that kills me to write that $1150 check to pay up the difference," added Rivera.

However, renters should be cautious when renting from a private owner who are more likely to offer a better deal than a developer.

Puig said, "Lets say they go through a private owner and they foreclose on them, then you are at risk for being taken out of the apartment you rented and losing your deposit."

IHateToBurstYourBubble said...

It ain't close to over....

Wall Street CEO Chorus Is Singing Out of Tune:

Commentary by Caroline Baum

May 5 (Bloomberg) -- It's become fashionable in certain circles -- primarily among administration types and Wall Street chief executives whose banks are losing gobs of money -- to say that the worst is over for the subprime/housing/credit/economic crisis in the U.S.

Whether they express their optimism in baseball terms (``in the eighth inning or maybe the top of the ninth''), as a percentage (``maybe 75 percent to 80 percent over'') or in the form of a timeline (``closer to the end than the beginning''), these faith-based predictions contain the audacity of hope.

I mean, where's the evidence? Let's start with Public Enemy No. 1: housing. For all the false claims of a bottom in the last two years, real residential fixed investment, as it's called in the gross domestic product accounts, keeps registering increasingly larger declines. In the first quarter, residential investment fell at a 26.7 percent annualized rate, the ninth consecutive quarterly decline and the biggest since 1981.

Home sales and prices continue to plummet. Until buyers step in to absorb the glut of homes on the market, compounded by foreclosed properties dumped on the market at a time when credit availability is constrained, it's hard to see why home construction should pick up anytime soon.

The deterioration in the value of a household's main asset has sapped consumer confidence and spending. Spending rose 1 percent in the first quarter, the smallest increase since the 2001 recession.

Relief, in the form of a tax rebate check, is on the way and in the mail, according to the U.S. Treasury. If consumers spend half the $117 billion expected to be distributed, mostly in May and June, it would add 0.5 percentage point to 1 percentage point to real GDP in the second and third quarters, according to Joe Carson, director of global economic research at AllianceBernstein.

Rebate Debate

That estimate assumes ``all things equal,'' which they never are. Whether consumers who are increasingly delinquent on interest payments on homes, autos and credit cards use their rebate check to buy some trifle or pay down debt is a question that will be debated for years. (Even after the statistics are in, conservative and liberal economists view them through their own respective filters and come up with different conclusions.)

For what it's worth, just three in 10 consumers surveyed by the University of Michigan in April said they planned to spend their rebate check. Most consumers favored saving their refund ``as a safeguard against worsening future conditions,'' according to Richard Curtin, director of the Reuters/University of Michigan Surveys of Consumers.

The Michigan index that gauges consumer expectations plunged to a 17-year low of 53.3 last month, a level consistent with past recessionary periods.

Saved by Exports

Without the consumer's heavy lifting, final domestic demand fell in the first quarter of 2008, the first decline since 1991. The 0.6 percent increase in real GDP was a function of rising inventories (hardly voluntary) and exports. The Federal Reserve, which has been trying to stimulate demand at home, can't do much to prod foreign consumers to spend, especially if the weak dollar cuts into their exports.

It is against this backdrop that Friday's employment report for April was somehow seen as ``bullish.'' Non-farm payrolls fell 20,000 last month, less than both expectations and the average 80,000 monthly decline in the first quarter.

The difference is statistically insignificant. (Don't ask me; ask the Bureau of Labor Statistics, which says a change of less than 100,000 is meaningless.)

Private payrolls fell for the fifth consecutive month. While the magnitude wasn't significant -- a drop of 29,000 -- the message was.

Private Payroll Signal

``Since World War II, there has never been a five-month decline in private payrolls except during a recession and its immediate aftermath,'' says Chris Low, chief economist at FTN Financial.

Financial markets are throwing their hat in with Wall Street CEOs. Stocks have rallied in the last month as bond prices fell, credit spreads narrowed and the lowly dollar found some sponsors. The Fed took out another quarter-point of insurance last week, lowering its benchmark rate to 2 percent and indicating a preference to pause after a seven-month, 325-basis-point rate- cutting spree.

Yet the Fed clearly isn't done with ministering to the financial system. Early Friday, before the employment report, the Fed announced another step up in the size of its bi-weekly auction to banks and another step down in the collateral it will accept from bond dealers. AAA-rated asset-backed securities will join the list of AAA-rated mortgage-backed securities and collateralized loan, debt and mortgage obligations that have been added over the months to the existing basket of Treasuries, agencies and agency MBS.

`Eye of Hurricane'

So what should we believe the talk or the actions? The spread between the London Interbank Lending Rate and the expected funds rate has remained stubbornly high at about 78 basis points, suggesting an increased preference to hoard dollars rather than lend them. The Fed increased its swap lines with European central banks on Friday, hoping to alleviate the pressure in the interbank market overseas.

The financial strains will eventually abate, but the effects from the credit channel will linger, taking their toll on the real economy.

``Phase Two of the crisis is coming from rising unemployment, rising commercial real estate vacancy rates and falling profits,'' says Paul Kasriel, chief economist at Northern Trust Corp. in Chicago. ``This will precipitate problems in credit card, auto loan, commercial real estate and high yield corporate debt. We are in the eye of the hurricane right now.''

Even the eye isn't looking so great.

IHateToBurstYourBubble said...

Rent-free homeowners keep economy from stumbling

This year, 93,000 California homeowners received a Notice of Default, meaning they had not paid their mortgage for at least 3 months. Since last September, 145,000 borrowers have the privilege of living rent-free.

If we assume the average mortgage payment is $1500, and the average borrower lives rent-free for 9 months from stopping a mortgage payment to being booted out of his home after the auction, that is (145K * $ 1500 * 9) = about $ 2 billion. Californians have an extra $ 2 billion to spend, because they don't have a mortgage payment. I wonder how bad our budget situation would be, without this boost! (I didn't even add all those not paying their HOA dues or property taxes, but I've seen $25K and up annual property taxes go unpaid for several years.)

So California alone is adding $ 2 billion in additional spending to the economy, as these "mortgage free" homeowners get to use their mortgage payment on movies, clothes, trips, etc.

No wonder the economy is not turning down as quickly as economists had expected. Every dollar not paid on the mortgage, is a loss on another bank's balance sheet, but a gain to a retailer somewhere. The losses are quietly piling up on the banks' books. Just because there has not been a front-page story about bank losses in a few weeks, does not mean all is well. We have to remember, that each foreclosure reported in the news, is another loss to a bank's balance sheet.

I also realize that banks are hoarding their bank owned properties. I counted 6000 REOs on property tax records last week, but only 2200 listed for sale on the MLS: that leaves about 4000 bank owned homes that are being hidden by the banks.

No wonder our inventory has stood steady below 20,000 homes for a few years now. Sellers who are upside down live rent-free for 9 months instead of going on the market for sale sellers who have equity choose to "stay put" or rent their homes, and banks are hoarding homes to prevent taking losses. All this adds to up to a lot of hidden losses, which will come into the pipeline eventually.

In another trend, we see buyers are rejecting the higher end homes. To all those realtors who tell me their high-end area is not going to decline: please wake up. The losses are in the pipeline. You just have to ask the right questions, and it is obvious. Ask: what is the months supply? Anything over 4 months supply predicts price declines. I don't care if you are in Santa Monica. You are not immune from the laws of affordability, supply and demand, gravity.... Your homes went into the bubble-o-sphere, and bubbles pop.

IHateToBurstYourBubble said...

From Housing Panic:

HOMEDEBTORS OF AMERICA - EVERY ONE OF YOU - STOP PAYING YOUR MORTGAGE IMMEDIATELY IF YOU WANT BARNEY FRANK & BIG DADDY GOVERNMENT TO TAKE CARE OF YOU

Every homedebtor and housing gambler in America now has the incentive to stop paying their home loan, immediately.

People who pay as promised get nothing. No cut in principal. No reduction in interest rate. Nothing.

People who DON'T pay get everything. Not because Big Daddy Government cares about them, but because it wants to make sure the banks don't fail and home prices don't fall to their natural levels. Bankers and the REIC gave all that money to Dodd and Frank for a reason you know.

Play by the rules and act ethically - the government tells you to go F yourself.

Break your contract, stop making payments, don't honor your commitments - the government is there to shower taxpayer money on you to make sure you don't walk away from your depreciating debt-trap.

This is what's become of America folks. A country whose corrupted Democratic and Republican leaders screw honest, hard working and ethical people every chance they get, doing the bidding of their bank and REIC masters, redistributing taxpayer money from the honest to the dishonest.

IHateToBurstYourBubble said...

Someone over at BendBB said Tuscany Pines has been pulled from MLS. I also think the owner has put their house on the market. VASTLY overpriced, of course.

Maybe time to go on the RIP board?

Anonymous said...

Homer, If you carefully 'read' your last 4-5 posts, the trend here is that 'investors' are going to get fucked.

I concur that rent is NOT as you have meant, now it means to RENT-FREE.

Where we're heading is the UK model, where virtually everyone SQUATS in a house for free, and pays nothing, its been that way since WWII. Great incentive to work for the young.

Today WSJ has two good articles, #1 the RE crisis is over, of course 'over' means its over for the banks, and WSJ. THE PAIN, for Main-Street has just begun.

Then the second article in today WSJ is that 80% of all banks since spring of 2007, and cut back loans. This is of unheard of going back to the 1930's.

So here we are as I have predicted, the Bend RE collapses, but money is NOT available.

The PAIN of wall-street is now closed, the people who bought MTG bonds, now they themselves MUST kick out the RENT-FREE crowd from the homes. Given that your article defines 90-day non-pay as foreclosure, and saturday WSJ said that 40% of 2007 loans were 60day late, my guess its in NOBODY's interest in the late days to pay their rent.

#3 today's WSJ had an article mandating that banks now have only five days to respond if a non-payer demands to have their terms renewed. Essentially the 'contract' is GONE, only a complete fool will be willing to loan MTG money the future.

Today Fannie&Freddie are in the toilet. Yes, the housing crisis is over ( for the banks ), now the liquidity crisis hits main-street.

Where are we?? Own your own home free and clear, have lots of cash and good credit. Be ready to lose your job. Think about moving to where things are looking up. Anybody involved in the upcoming WWIII with IRAN should do well, back east in general around MD,NC, ...

Anonymous said...

Hey while you puny humans are arguing about stupid man-made crap like houses and crap, we fuckin' robots are designing new ways of making ourselves better. We're gonna rule you puny humans by the year 2155.

Get ready for blasto rays and laser friggin' machines...we're comin' for ya.

Oh, by the way my human master is almost done with his next invention. It's a donut shaped solar powered gas nozzle ya fuggin' douche bags!

PopGoesBend said...

Get ready for blasto rays and laser friggin' machines...we're comin' for ya.

Oh,
I'm ready

timothy said...

pak chooie unf

LavaBear said...

>>pak chooie unf

shoving or pushing?

bewert said...

My greatest invention is now working. The Bend "bend-noob" detector. Using the common Capstone ButtPlug as the prototype, I was like "IronMan", able to modify the device with artificial intelligence algorithms using old cpus from my TRS-80.

Soon I'll have oral version.

Why? Many in Bend like to say or act that their not a Man-Twat, or Bend-Noob, or 24/7 bend-blogger, or even hairless BendBB'er. On the street they look average. Soon will be able to insert the Capstone device into any Bend deviant either anally or orally and in minutes know whether they're pure or non-pure.

If our long term goal in Bend is rid ourselves of the plague of Calis, and Bend-Noobs, then today is our greatest day.

With Duncan's cash-flow, and my brains, we'll make Bend into a future city that will never again be called the most over-value RE in the USA.

timothy said...

brewert,

Awesome post. I'd like to hear more from you. Reminded me of this classic...

http://tinyurl.com/4n73bx

Anonymous said...

Wanna buy a partly-finished condo clubhouse? Strawberry Heights in Madras. Apparently there are lots of condos for sale too. You could go to the website, strawberryheights.com, but it appears to have been disconnected.
Another one for the RIP list?


http://portland.craigslist.org/mlt/rfs/670785636.html

bruce said...

"bewert", please flame on.

It's most appropriate, since you don't actually acknowledge your true identity. Like few here do.

You just try to latch onto mine.

So do you feel as pathetic as you seem?

bewert said...

I'm Beowert. I'm here to kill your monster.

bruce said...

Love this quote from Councilor Peter Gramlich in the BULL article announcing his run for election:

"We are credible, we are transparent, and if you do your research, we've [been] moving forward from past mistakes and are going in a good direction."

Transparency is not coming out of an Executive Session to announce a multi-million dollar settlement of some sort with no public discussion or debate, Peter.

Funny how only four of seven councilors could be bothered to make it to a work meeting about a $50 million dollar bill for water works on Monday.

Anonymous said...

>> This is what's become of America folks. A country whose corrupted Democratic and Republican leaders screw honest, hard working and ethical people every chance they get, doing the bidding of their bank and REIC masters, redistributing taxpayer money from the honest to the dishonest.

-----------

Off Topic Alert

Homer, have you read the new Ron Paul Book (Revolution: A Manifesto)? Released on 4/30 and was #1 on Amazon. All sold out in Oregon. I found a copy in KFalls (who reads there?) and grabbed it. Good read if you really want to get pissed off.

cheri said...

ahhhhh haaaa haaaaa. plz post this on your blog! hopefully the bj is from one of the ladies and NOT from one of the 3 dudes in the picture.

http://buyinbend.files.wordpress.com/2008/05/att71157.jpg

bruce said...

Re: Cheri

Now that is funny.

Anonymous said...

Kumbaya

http://tinyurl.com/2vvpyj

LavaBear said...

Cracker Ass paid their dividend yesterday and then tanked today.

Anonymous said...

The Bend Real Estate Bubble breaking will hurt men more than women:

"The Slump: It's a Guy Thing"

by Peter Coy, Businessweek

They eat from the same dishes and sleep in the same beds, but they seem to be operating in two different economies. From last November through this April, American women aged 20 and up gained nearly 300,000 jobs, according to the household survey of the Bureau of Labor Statistics (BLS). At the same time, American men lost nearly 700,000 jobs. You might even say American men are in recession, and American women are not.

What's going on? Simply put, men have the misfortune of being concentrated in the two sectors that are doing the worst:

manufacturing and construction.

Women are concentrated in sectors that are still growing, such as education and health care.

This situation is hardly good news for women, though. While they're getting more jobs, their pay is stagnant. Also, most share households—and bills—with the men who are losing jobs. And the "female" economy can't stay strong for long if the "male" economy weakens too much.

The troubles for the American male worker, while exacerbated by the current slump, are hardly new. The manufacturing sector is in long-term decline, and construction goes through repeated booms and busts. Meanwhile women are graduating from college at higher rates than men. Some analysts even argue that men are less suited than women to the knowledge economy, which rewards supposedly female traits such as sensitivity, intuition, and a willingness to collaborate. "Men have tended to do better in the hierarchies, following orders and relying on positional power," says Andy Hines, a futurist at the Washington (D.C.) consulting firm Social Technologies, who previously worked for Kellogg (K) and Dow Chemical (DOW).

Problem Industries
Whether you buy that argument or not, it's clear that right now men are in a bad spot. The share of all men aged 20 and over with jobs has fallen since last November, when private-sector employment peaked, going from 72.9% to 72.2% in April. For women the ratio rose, from 58.1% to 58.3%. The adult male unemployment rate has risen twice as much as the female jobless rate since November. Those figures from the BLS' household survey are echoed in its separate survey of employers.

To see why, go sector by sector. Manufacturing is over 70% male and construction is about 88% male. Meanwhile the growing education and health services sector is 77% female. The government sector, which has remained strong, is 57% female. The securities business, which is filled with high-paying jobs, is likely to be the next sector to get whacked—and more than 60% of its workers are men.

Men are having a harder time than women getting back on track after losing a job. "For a man to move from a $20- or $30-an-hour union job to being a Wal-Mart (WMT) greeter is devastating," says Claudia Goldin, a Harvard University labor historian. Men also shy away from some of the growing fields, such as nursing. Only about 10% of nursing students nationwide are male, notes Harriet R. Feldman, dean of the Pace University School of Nursing. Some retired nurses are actually going back to work because their husbands have lost jobs, says Lois Cooper, vice-president for employee relations and diversity at staffing firm Adecco Group North America in Melville, N.Y.

The weakness of the male economy is squeezing people such as Brian Day, 45, a union carpenter in Ossian, Ind., who made about $35,000 in construction last year but only $1,500 so far in 2008. The family of five is living off his jobless benefits and the $35,000 salary of his wife, a supermarket supervisor. Says Day: "I feel guilty about it." Jeff Bainter, 53, a railroad worker in Muncie, Ind., has enough seniority to keep his job but sees younger men getting the ax. He says there's more security but lower pay in what his wife, Cynthiana, does for a living: medical billing.

Marge said...

Update from the Bahamas.
Bend solds, Residential only.
91 Sold
$270,000 median
190 DOM
Hope you boyz are well while I am on vacation.

Quimby said...

Marge, say "Hi" to Buster for us! (snicker snicker)

bruce said...

AIG posts huge loss. From CNN Money: " American International Group (AIG) joined the ranks of the credit crisis's biggest losers Thursday, reporting a $7.81 billion first-quarter loss and announcing plans to raise $12.5 billion in fresh capital as losses on complex securities soared.

The insurer said profits were hurt by a $9.11 billion hit on its portfolio of derivatives sold to hedge securities that have plunged in value and $6.82 billion in losses on investments. AIG reported another $6.82 billion in impairments that for accounting reasons only showed up on its balance sheet.
...
The insurance company reported a net loss of $7.81 billion, or $3.09a share, compared with year-earlier net income of $4.13 billion, or $1.58 a share. Analysts polled by Thomson Reuters were expecting a much smaller loss of 76 cents a share.
...
The massive losses spooked investors and could deal a blow to optimists who have bet the worst of the crisis has passed.

"No one expected a clean quarter, but this is a lot messier than I had expected," Haines said."

Duncan McGeary said...

Wow. 24 hours without a comment.

Has Elvis left the building?

Here's a thought; Doug Farmer's stats. Interesting how a 'only' a 20% drop can look pretty good.....

Anonymous said...

duncan says:
"Wow. 24 hours without a comment.

Has Elvis left the building?"
===

Yep. And his maid... his dog, and even the dog's fleas. Everybody has bailed on this sad blog.

Everybody, except for one lame soul:

brucey-pussy says: "Transparency is not coming out of an Executive Session to announce a multi-million dollar settlement of some sort with no public discussion or debate, Peter."

Still beating that dead horse, are you, BP? I thought that you'd have been too embarassed to ever again mention "Exec Session" around these parts. How is that 10,000 page manifesto complaint coming?

IHateToBurstYourBubble said...

Whew! That was close...

IHateToBurstYourBubble said...

Doug Farmer!

APR 08

Listings Sold: 121
Listings Expired: 88
Avg Square Footage: 1907
Avg Days on the Mkt: 192
Avg Sale Price: $ 343,871.
Median Sales Price: $ 277,000.
Active Listings Apr 30: 2140

Previous Month

MAR 08

Listings Sold: 95
Listings Expired: 83
Avg Square Footage: 2025
Avg Days on the Mkt: 177
Avg Sale Price: $ 378,514.
Median Sales Price: $ 293,000.
Active Listings Mar 31: 1991

Previous Year

Apr 07

Listings Sold: 152
% of Inventory Sold: 8.49%
Listings Expired: 61
Avg Square Footage: 1973
Avg Days on the Mkt: 171
Avg Sale Price: $ 424,164.
Active Listings Apr 30: 1986


About $80K drop in the AVG YoY.

Aren't you glad we had a real estate bubble... lately?

IHateToBurstYourBubble said...

Promising articles in tomorrows Bulletin:

# As the number of destination resorts in Central Oregon increases, so does the debate. See Perspective.

# After the bubble bursts: Some real estate brokers find a second job or start new careers; others work harder to find the deals. Read about it in Business.

timothy said...

>>Wow. 24 hours without a comment.

What's left to say?

Bulls are scarce.

We know we have to fix city gov't, but that's all been said.

Right now we're just marking days on the wall like a prisoner of war.