Why Medians Are Going Below $200K In Bend Oregon.

There is NO Surplus Of Homes In Bend. None.

OK, the caveat is when you compare the number of homes for sale vs bare lots. Bare lots is what we have piles of, and BARE LOTS... NOT HOMES... will be the undoing of this place.

And since a picture is worth a 1,000 words, let's have a little looksie at a few places where the matter is so dark... welp, they could barely be photographed.

A Triad Homes Big Empty Waiting "for the market to improve"

This right here? Yup, this is your standard nightmare. The Old Builder with 10ac waiting for the market to improve so they can slice & dice this thing into the smallest allowable lot sizes possible. Triad is still in True Believer mode, because they will STILL buy plots of land.

Triad is "waiting" for the slightest uptick & they will build this thing out with 80 homes. In a sec, you might start to see why the former (the uptick) will NOT happen, but the latter (the building) WILL.

I'll give you three guesses on the name of this place...

The above nightmare had it's naming committee swept away by the Italian-themed mania sweeping this idiotic town. Is it:

1. Merenda
2. Mercato
3. Mirada
4. Murder, She Wrote

Give up? I know, it's tough.

In the housing resale biz, this is MURDER... she wrote.

Yup, this right here epitomizes, distills & clarifies just exactly what's going to happen to this town. Mirada is going to unleash 250+ homes on land that was repossessed by the former deluded Kool-Aid holics. BUT, unlike others, Mirada is NOT going to wait...

Mirada is building NOW.

Here's another little favorite of mine, Eagle's Landing.

Eagle's Landing, the land of Busted Dreams

Now, it's hard to see, but you can actually see the 2 homes that been sold & built over the past few months here. The first is the 2 story maroon job directly below the Butte, the other is the single story cream colored job, just to the right of the 2 spec homes on the left, which you can see are far larger. Here's a close up:

Eagle's Landing, opposite perspective.

See, that maroon job, a nice little 2,500 +/- sqft job was actually the first home that's sold here in over a year. Something tells me it was a "plant"... a fakeroo done to grease the skids. What was it that made me think that... hmmmm... oh right! It was the $75,000 Mercedes out front. And it was out front every day while this place was being built. I don't know many people who can afford a $75K Mercedes, and sit on a job site every day supervising the crews. Except a developer or one of their friends.

But apparently, this worked to some extent, because then we do see an apparent non-developer home go up a few lots away:

Uh oh. Laborer shit shack, Meth Lab goes up.

Yeah, THIS is The Real Future Of Eagle's Landing, and almost everywhere else in Bend. Yup, Ye Olde Meth Lab whose 800sf carcass will almost certainly be blown all over the neighborhood within the first year.

Lemme MC Hammer what happened here, and BREAK IT DOWN: Eagle's Landing had rapturous delusions of grandeur, and thought the UNLIMITED SUPPLY OF MILLIONAIRE CALIFORNIANS WHO LOVE LIVING WALL-TO-WALL would soak up this inventory overnight. Alas, this has not come to pass, and the powers that be began to DOWNSIZE their dreams. Even this was not moving dirt, so Eagle's Landing OPENED 'ER UP; Uh huh, now you can pretty much bring in your own builder, and build whatever you want!

Yup, these developers don't realize this is essentially like shooting yourself in the face. The Ultimate Fuck You To Those Who Came Before. And that reminds me....

"Tetherow... The Ultimate Fuck You!"

Yup, had a go through Tetherow. A few observations:

First, the fucker is HUGE. This fuckin place is gigantic. I hadn't ever been up there and figured there were a few acres, some fairway, little clubhouse, and that's it. No. This badboy is HUGE. It's EVERYWHERE you wanna be. Unless you're in Broken Top:

One of the many pleasant cul de sacs between BT & Tetherow

I actually got a picture of that sign pointing towards Broken Top:

A census taker once tried to test me. I ate his liver with some fava beans and a nice chianti.

I actually thought Tetherow is an inspired idea. They took the cream of the crop, the best & brightest Bend has to offer... and fucked them right in the ass! This is the Classic Way That Bend Works: If you are already here, you're fucked, you'll be used as fodder to get the next crop of rubes. They of course, will then be fucked like the rest of us.

When you wanna know why long-time Benders are fuming over Cali-Bangers, it is this. THEY have been fucked more than the rest of us combined.

And then there is the long-time Bendites who are basically selling us out to this onslaught of Cali-locusts. These are The Jews (Realtors) who are selling out Jew friends & family (the rest of us) to The Nazi's (Californians) to ingratiate their own ass to the enemy, and the enemy will ultimately follow their nature & destroy you as well. This is why you fuckers are reviled almost as much as Cali-bangers.

I was a little confused about what the hell these things are over in Tetherow:

There's a lady who's sure all that glitters is gold
And she's buying a stairway to heaven
And when she gets there she knows if the stores are closed
With a word she can get what she came for

My guess was they were hunting-hides used by Tetherow Minutemen to shoot illegal aliens, or possibly Broken Toppers trying to get a freebie hole or two in. These little stairways to nothing are all over the course up there.

They are definitely already thinking about how to keep the rabble out up there:

All kinds of fencing & gates up at Tetherow

Yup, Tetherow is still just a gleam in David Kidds eye, but they already figuring out ways to exclude, and possibly shoot, The General Public.

I'll give 'em this: It's Impressive. There ain't shit up there, except a half built club, but the scale of the thing is impressive as hell. And the course DOES look like it holds the possibility of some sweet ass rounds. But they're going to have to keep it from going to hell 24/7. How they will maintain that monster, even at $250/round, is beyond me. That course looks like it is going to be a maintenance nightmare.

Anywho... enough about Tetheorw...

"But we have only so much land inside the UGB! We'll run out. Then we're screwed!"

Uh huh. Yeah, if you think we'll even remotely soak up existing in-UGB inventory, you're nuts. But you know what? We're covered!

34.3 acres, ready in the UGB reserve for homebuilding in 2038.

Yeah, for every acre inside the UGB, there are at least 50 outside READY to be built. And they're some sweet ass acreage. The above ~40/ac spread will get you some desirable neighbors:

Why pay for trash collection, when you can leave it in the driveway?

Yup, when you move to Bend, you are moving to a sweet ass place, where people just throw their shit out a window. This place is STACKED with crap just sitting out on the driveway. And they've left their neighbors (the 34.3ac owners) with the Hard Sell, of trying to get some idiot to live The Bend Millionaire Dream, by developing a 'hood right next door. Good Call. They could probably get twice what the place is worth by selling out to the developer, who would summarily burn the site & it's garbage filled driveway down. That's strategic thinking there.

It becomes part of your genetic code to fuck over your neighbors here. It's real nice.

And don't think we don't have our intellectuals, we do.

My name is Buck, and I like... this truck

People in Bend go beyond just personalized license plates. We paint our fuckin' names on the back of our cars. Why? Cuz we are smart as shit. Other acceptable possibilities are:

• Pussy Wagon
• Friends Don't Let Friends Drive Chevy's
• They Can Have My Gun When They Pry It From My Cold Dead Fingers
• I swerve to kill Man-Twat faggots
  

Yeah, if you are coming from Cali with a mill or two to spend on a macro-shack, you are in good hands.

I stopped to have a bite during this photo-fest and I overheard 2 dudes talking about recent RE buys:

Hipster 1: Dude!
Hipster 2: Dude!
Hipster 1: What up Dude!
Hipster 2: Nut'n Dude, just hangin! Dude! How 'bout you... DUDE!
Hipster 1: Dude, nut'n Dude, just hangin' at my new crib over at The Mews.
Hipster 2: The What?
Hipster 1: The Mews, Dude! It's shagadelic!
Hipster 2: The Mews, what the fuck is that?
Hipster 1: I bought a crib over at Tedstone Mews, Dude. It's killer!
Hispter 2: Dude, you live in a place called "Tedstone Mews"? Really?
Hipster 1: Yeah Dude, it's cool. It's like an English neighborhood, and the first floor is this adobe facade.
Hipster 2: Yeah Dude, I know that adobe stuff worked out real well for The Phoenix Inn. It was covered in parachute pants for like 3 years.
Hipster 1: Yeah... well... The Mews is pretty tight.
Hipster 2: Uh huh, yeah it sounds real "tight". I gotta go dude.
Hipster 1: Dude, gimmee a call later we'll do something!
Hipster 2: Dude, I'm sorta busy from now on... uh... hmmm yeah
Hipster 1: DUDE! Why the cold shoulder! Is it The Mews?
Hipster 2: Dude, I gotta go, cuz I don't wanna be around when someone uses the term, "The Mews". OK, later....

Yeah, Good Call. This is in a tight race with "Garag-Mahol" as the stupidest name ever.

Tedstone Mews is just so damn strange, it might just work. I mean you get a nice little water-stained shit shack that has been placed atop an adobe base:

Adobe always works as a building material in Cent OR

Yeah, The Tedstone Fucking Mews is a great idea. It's just weird enough that it'll give The Shire a run for it's money.

Well, I have quite a few more pictures, and for every pic I snapped there were about 10 similar "FOR SALE" signs that I just passed by.

Back to the first sentence: The number of homes in Cent OR for sale has NOT really gone up. Really! Here are the stats:

Mar 07 lots for sale: 1,246
Mar 08 lots for sale: 1,520

Mar 07 all listings: 4,065
Mar 08 all listings: 4,375

So the total number of listings is UP 310 from last year at this time. Lots account for 274 of this increase, or 88%. There are not many more homes for sale. It's LOTS that are FLOODING the market.

And it will be LOTS that are the undoing of the Bend market.

Remember Eagle's Landing? Breaking down & basically saying ANYTHING GOES! Build whatever you want, where ever you want. The first Free Market house to go up there looks to BARELY be 1,000 sf, if that. They've taken down the signs & flags (remember: WHITEY LOVES FLAGS) stating that home sizes were between 1,800 and 3,400 sf. Now there is NONE of that.

This is the Fundamental Nature of Bend Development: Zero demand, so they are NOT building spec homes anymore. Sounds good right? No. They are building PIECEMEAL, whatever anyone wants, WHERE EVER they want it.

Of course then it takes 5-6 shit shacks to queer the entire fucking deal. Everyone wants out because the developer insists on turning shotgun towards their own face & pulling the trigger. Bend turns into a pock-marked nightmare of dog crap. This is what is happening.

YOU WILL ALWAYS BE THROWN UNDER THE BUS IN BEND, IF IT MEANS SOMEONE CAN SELL A HOUSE TO SOMEONE, EVEN IF YOU ARE SCREWED IN THE PROCESS.

The collapse in Bend homes has not really started yet. It will start because raw land prices are IMPLODING. Bare land listings represent 34.7% of all the listings in BendBB's data, 1,520 of the 4,375 total listings.

But bare land listings make up 55% of all the listings with 25% or greater price cuts.

In fact in the rarefied atmosphere of listings with price cuts over 50%, bare land makes up almost 90%.

Yup, we had ourselves a good old fashioned land rush. And the Land Bust is what'll take down EVERYTHING. Why? Think about it:

1) Cali-banger arrives
2) Cali-banger announces they are going to, "Own This One-Horse Shithole!"
3) Cali-banger wants to max out 401K buying power
4) Cali-banger goes shopping, and leaves cart square in the driving lanes.
5) Cali-banger looks at pre-existing homes for sale
6) Cali-banger declares these hovel's too crappy to house their awesomeness
7) Cali-banger looks at bare-land
8) Cali-banger arbs-out the fact that they can get EXACTLY the home they want, even if it busts CC&R's for A LOT LESS MONEY than buying a house right next door
9) Cali-banger RENTS, while shack is erected.
10) Cali-banger walks dog, and leaves dog shit everywhere.
11) Dog is poisoned, Cali-banger is confused

This is EXACTLY what will happen. This is why we can go DOWN 75% and other places CANNOT. This scenario CANNOT happen in Mahattan. No Bare Land. The closest thing to bare land in a big city is a teardown, or possibly a crane collapse.

Remember just a few scant months ago when it was declared that there was NO LAND IN BEND, and you'd better by God BUY before it was all gone? Well, builders drank that Kool-Aid to the bottom, and strangely there is now NO END TO THE LAND IN BEND. It's everywhere.

Every square inch has been sliced & diced & is available for a home. 90% of this stuff is OFF-MLS. 100% DARK MATTER. And THAT is what will collapse the prices of existing homes. More homes will be BUILT, and THOSE homes will be The New Comps.

And they will be killer comps. Mirada itself is going to take $100K RIGHT OUT of the pockets of hundreds of owners on the East side. And that's $100K minimum.

Imploding lot prices, and people's desire to own THEIR OWN home (not yours), is the death knell for Bend. It'll be slow & grueling, but it WILL HAPPEN. Noob's will be able to own for A LOT LESS if they build it themselves, and skip your 10 yr old shit shack. They don't want yours, they want theirs.

THIS is WHY Bend homes prices are headed below $200K. The onslaught of building will continue. East siders will be fucked over by New East Siders. The West sieeeede will be fucked in one fell swoop by Tetherow.

And so it goes... In Bend Oregon, the mantra is:

Go ahead and hate your neighbor,
Go ahead and cheat a friend.
Do it in the name of Heaven,
You can justify it in the end.
There won't be any trumpets blowing
Come the judgement day,
On the bloody morning after....
Mike Hollern rides away.

Paul-doh! feeling a little religious on a Sunday morning....

Addendum:

OK, I was going to write about the whole Bulletin Sellout by Selling RE in the Sports Section, with their lame NWX Is A Great Place For Runners/Bikers BS. But my main question is this:

Who is This Woman? Why was her picture in the article? She's not even mentioned.

Heather Clark? Hot or Not?

10 Ways To Prosper In Bend's Coming Housing Depression

Let's take a short trip in The Way Back Machine, shall we?

It was last November, the air was crisp, Paul-doh was bearish, "TimToe" was not yet "Timothy", and duncan asked an innocent question over on BendBB...

duncan: Did you guys remove that last message or did the writer? Just curious.

TimToe: Hmm. What was the message? If it was the one about the lesbo strap-on movie, it was probably me. Sorry.

rdc: It was a long message with writer being a guest with name Becky Breeze
I did not delete it.

bendbb: I removed it. It's okay to post anonymously under a handle or a nickname, but it's not okay to post under someone else's name.

Guest: That was a very legitimate letter, It was written by Becky I assure you.

bendbb: Nope, it was clearly written by a troll. If you're that easily fooled, I've got a bridge in Portland to sell you.

not John Melton: Your heavy handed redaction is getting old. What evidence do you have that the post was not legitimate?

Paul-doh!: It WAS real. Don't worry, you'll see it again.

bendbb: Here's a picture of the bridge for sale:

Retail price is $3,000,000, but I have a special deal for you, only $1,999,999.

Paul-doh!: Say what you want, I know the source... it's legit

TimToe: Is it posted on your blog, Paul? I didn't get to read it.

Guest: My mother works for Becky, it was indeed written by her.

bendbb: Let me get this straight -- are you saying Becky Breeze posted that message on this bulletin board? And are you saying you know Becky Breeze?

frazzled: Why don't you just put the post back, so we can all judge for ourselves? We don't need BB being our censor. Instead of deleting a post remove the username or any signature.

bendbb: If you don't like how this bulletin board works, nobody is forcing you to read it and you're free to leave. For those who have trouble remembering the concept of not posting under someone else's name, I've added a reminder in the Welcome topic under the General category.

Guest: Welcome to the bendeconomy bulletin board… Participation is open to everyone. I'll contribute to the discussions when I have something relevant to say, but my opinion is just one of many here. Everyone's opinion is welcome.
That is, unless your opinion is that censorship isn’t wonderful.


bendbb: Your opinion that you don't like censorship is fine, but you also need to recognize that there's no absolute right to post anything anyone wants anywhere on the Internet. If someone wants to participate on a bulletin board or blog where there are no rules there are plenty of them out there. That's not how this bulletin board works though, so if you're going to post here you need to follow the rules.

Guest: What rule did Becky break?

TimToe: The rule is that a person posting under a known name has to be that person. We get people all the time pretending to be other people. I'm sure if Becky signed up, she could post as she likes. It's easy to be skeptical when people post as guests.
Having said all that, WHAT DID THE DAMNED POST SAY? Was it a claim that everything is all fine and dandy? Or an admission that the Plaza is a disaster?

guest: Are those of us who read it allowed to post a summary here or would that be against the rules? I would never claim to know who wrote it--I have no idea--but I saw what it said.

bendbb: Posting a summary isn't against the rules.

bendbb: TimToe is right, if Becky Breeze registers she can post as she likes.

becky breeze: Know how to do this blog stuff. ADMINISTRATOR Please re post my response that I provided under guest before. My smart systems guy Tarris is standing over me and showed me how register and respond properly. The administer will know @ not worry it was me. Dealing with a possible 'real demise' of Ovarian cancer starting 2 years ago this coming Jan, this all seems weird. Just remember when you are all being tough on each other most people are just like you in a lot of ways. No one in this life gets by on a free pass. Stay healthy and get as much happiness out of each day as you can. Come by and see me anytime you want and I will talk face to face with anyone that wants to. It is always good to meet a new friend. It kind of makes me sad that the guy that posted the blog said 'I told her not to do it' There was only one person that said that to me and he knows who he is. That person was told a million times not to do almost everything in his life and has gotten some success from just trying everyday and has avoided financial demise many times by just persevering. Some people want to get theirs and not want anyone else to get anything. Thanks again for all the nice responses you posted that Tarris showed me. One last thing, if people really want the small developers to fail only the big rich good old boys get the products in the sales. If you dislike a few people running your city now and setting their rules then it will be even worse when only a few big guys own everything. It is bad enough now in this small city. I do not understand why anyone would want failure of all the projects mentioned or anyone. We all reflect on each other financially city wide. If a lot of people loose their homes in an area then everyone is affected. I started real estate when % rates were in the high teens and low 20's. For all of you under 50 you may not remember those dark days of empty store fronts and people loosing everything. Tough times and no one except a few people again with the big pockets get richer during those times. Today rates are low, there is tons of loan products and prices are low. These are the best of times for buyers with decent credit. Do something good for yourself and the economy. Buy a home. You do not even have to buy from me. Just buy a home. In a couple of years you will be glad you did. Thanks for reading Becky

Guest: Can I get a better deal on that bridge BB?

Guest: bendbb what in her first post and now second post makes you think it's not Mrs. Breeze?

bendbb: Primarily the history of people posting under other people's names. I think it's prudent to verify that Becky Breeze is actually the person posting these messages, rather than taking it on faith. Becky, if you're the person who posted the messages in question please respond to the email message I sent this afternoon asking for confirmation.

Guest: I was really getting to appreciate bb filtering out the comments I don’t need to see, but now my confidence is shattered- he can’t distinguish a troll from a genuine person making heartfelt comments. It almost makes me question the benefits of arbitrary censorship.

becky breeze: Tarris said some of you asked for stats on the MLS sales in affordable housing in Bend. Here it is and I will be happy to talk face to face with anyone that has questions. All of these stats are from our local Multiple Listing Bureau as of about 3 minutes ago.
Today in BEND residential only(no condos, townhomes, businesses, land,lots,or even residential w/acreage is not included. So remember that for the next numbers provided THESE ARE ALL HOMES STATS ONLY FROM 100K TO 300K
Today 366 homes are for sale in Bend priced from $154,250 to $300,000
Since Jan 1 O7 to today (same price as above only 1K to 3K)
440 homes closed sale and 48 are pending for a total of 488 sold and pending 07
YTD 2006 605 homes closed and 46 went pending 1K to 3K
2005 THE YEAR EVERYONE WAS BUYING HIGH 1675 HOMES SOLD AND 48 PENDING 1k to 3k only
2004 1710 sold and 48 went pending (same 48? no) 1k to 3k only
2003 1471 sold and 48 went pending 1K to 3K only
2002 1266 sold and 44 went pending 1K to 3K only
total dollar volume of each year SOLD
2007 $113,900,514 million CLOSED VOLUME
2006 $161,337,700 million CLOSED VOLUME
2005 $390,093,667 million !!!!!!!!! EVERYONE BUYS WHEN EVERYONE IS BUYING IT IS NOT THE RIGHT TIME. BUY NOW LOOK AT THE STATS
2004 $355,335,929 million CLOSED VOLUME
2003 $283,074,314 million CLOSED VOLUME
2002 $230,599,099 million CLOSED

For the person hoping for 2002 2003 and 2004 prices. DON'T
Look at these stats hard. This is sad stuff for people who want to sell their homes. Forget the developers and builders. Think about yourself owning a home and just being transferred or having to go into an assisted living place. Think about all the guys who want to work in the trades. It is gruesome out the upside is it IS the best BUYERS market I have seen in 28 years. It all has a ripple effect and it can effect you no matter who you are. I got an email from someone from this site and I told them it was me and to re post that first response. So here we go.
Thanks Becky

Ducnan(sic): Becky, Out of the last 205 price changes that this bulletin board has listed, 202 were down and only three were up. Why wouldn't a buyer wait? If there is the slightest concern they'll miss an upturn, then need only watch the list and if, let's say 25% go up, THEN start looking.

Paul-doh!: Agreed. You say "Buy a house now"... are you glad you jumped into the development business when you did? You own 38 "houses"... are you glad? Seriously. "Buy a house, you'll be glad you did." is advice that does not seem to be working. Prices went to levels that are unsustainable, IMO. WHAT IF prices go down 30-40%, and STAY THERE. I'd be happy to BUY at those prices, but I'd be quite upset to buy today & lose so much that I'm underwater. Especially if I HAD TO sell & move. That amount would wipe out many, many people. And why BUY a house for $2500-3000/mo mortgage, when you can rent it for $1,100, and invest the difference? That financial equation will NEVER make sense. I agree that "buying" a house HAS ALWAYS been a dominant investment in the past -- leverage works for you, and prices seemed to steadily inch higher. No more. This thing will be a bloodbath. And not to be facetious or cruel, but honestly, you own 38 residences... are you "glad you do"?

bendbb: I'm pleased to report that Becky Breeze replied to my email message and confirmed that she registered on the bulletin board earlier today. She requested that I repost the message I deleted earlier in this topic, so here it is.
--------------------------------------------------
The article for my demise is kind of weird. A wonderful guy Tarris Rogers who has been with my company for 12 years told me to look at this BLOG you have on your site. There were some nice things said in yesterdays BLOG and some bad things. You BLOGGERS do NOT know I was diagnosed with ovarian cancer a few months into the Plaza project. Miss Healthy here, who never gets sick ,what was that? Then I learned that prostate and ovarian and breast cancer has nothing to do with diet. AND the PAP smear has nothing to do with diagnosis because the PAP smear is a viral situation and Ovarian cancer is not detectable unless a good doctor like Dr Mary Ellen Coulter is able to find it in an examination or by a pelvic ultrasound. WOW what a bummer that was, and chemo and two major sugeries NOW THAT IS DEMISE! My wonderful husband not only stayed at my side through 2 major surgeries & chemotherapy he had to deal with keeping the Plaza going to be the best built 130,000 sq ft building in Bend. Super guy and I love him more every day. It is strange to me that a Blog Person would hope for my demise in a business deal (no big deal there will be another one if this deal it REALLY does not work out because of our present market. If BLOGS were around when Bill Smith was begging for money from Les Schwab & Matt Day in the original days of his dreaming of an extension of town in the middle of an old abandoned mill site, DEQ disaster, fixed, now known as the Old Mill. Thank goodness Blogs were not around then. He would have been on your hot plate. Blogs were not around to call for Haydens demise for his BLUFFS above the REED MKT round about that has been selling product for 5 years, OTTER RUN on the market for 6 years, OLD MILL QUARTER or any other product. ALL of these projects have their struggles but never had BLOGS to call for their demise. For all of the BLOGGERS, please come by any day of the week to see THE PLAZA. To the Blog that said we had, cheap anything, finishes they are confused with other products on the market. We are all custom, and gorgeous. No plastic inserts or plastic anything. Bathrooms & kitchens are all custom finishes. But only you can see for yourself. Remember if you come by it is the BRICK BLDG on Bluff Drive next to AMERITEL INN not THE BLUFFS above the REED MKT round about. You do NOT have to buy one if you come and see it, I promise, but you should have the real knowledge. By the way, this is my first BLOG so I hope I did it right. I am 58 years old last October 24 and have been working since I was a kid every day for my up keep with no gimmees from anyone. I love my life here in Bend (19 years now) and I love my grandbabies. I love my job and my health which is hopeful. I even like all the bloggers because we are just people trying to get by and live through the day whatever the day gives us. You all take care and stay healthy. BB

TimToe: And Becky, I know you want people to buy now. But the Case-Shiller S&P housing futures predict a national downturn in house prices until 2011. When you tell people to buy now, you're giving advice that's contrary to some of the smartest people in the world betting big money. The country went from 61% to 69% home ownership. It's obvious that many of those people couldn't really afford the houses they were being shoveled into. Those poor people were done a great disservice and they AREN'T coming back to buy houses soon. We've run out of suckers. You tell people to buy, but there are no more buyers. Sure, investors could buy, but they aren't dumb enough to buy when YOU tell them to buy.

There follows a tedious enumeration of the evils of censorship, but this thread does illustrate 2 things of particular interest:

1) First, that "censorship" in whatever form is inherently BIASED. Is it WRONG? I'm not sure how to define that, or if it's even relevant. But when you CENSOR people, you are typically working from pre-conceived notions that can terribly misplaced, as you can easily see above.

Is BendBB the worst offender around? Hell no! Cascade Business Buttbangers will go down in my book as the most ridiculously biased rag to ever grace our scrub. The Bulletin & KTVZ are a (distant) second.

But unfortunately this thread & another regarding the tracking of IP's for the sake of "banning" marked my quiet departure from BendBB. Again, it wasn't a Virtual Walkout or anything, it just became quite apparent that BendBB had a wholly different philosophy than I did about what gathering opinions, making decisions, and voicing your thoughts on this place. No one really wrong or right, just different philosophies.

You can say whatever you want here, uncensored, and I don't track fuckin' IP's. I don't want to know who you are (unless you're like Dunc, and you want us to know), and know full well that technological attempts to do so are riddled with impossibilities.

2) You see the bias inherent in people's own opinion's with "Becky's" repeated encouragements for you to "buy a house now"! As a quick aside, let's see how this advice works out.

First, NOD's filed:

Nov 07 - 80
Dec 07 - 70
Jan 08 - 91
Feb 08 - 109
Mar 08 - 113 through 3/27 (nine on 3/27 alone)

Or units sold? Again, MST:

2007
Sept. 113
Oct. 112
Nov. 94
Dec. 79
2008
Jan. 72
Feb. 55

OK, so maybe prices are better? Hmmm... from "MST" over on BendBB:

2007
Sept. $330k
Oct. $320k
Nov. $340k
Dec. $339k
2008
Jan. $312k
Feb. $315k

And the latest medians that I am "hearing" are in the high $200's.

Becky's pleas for you to purchase a home last November seem.... uh, wrong. Why? She is an expert in Real Estate right? She & others just like her are interviewed with nauseating regularity in our local media, as Real Estate Experts, right?

The first, and most obvious reason, is a point covered with pendulum-like frequency here: This town employs "three times" the state average in the real estate trade, a figure so laughably low I have to chuckle every time I see it. Real Estate IS Bend. Take away the RE Bubble, and what do you think this town would be? Sleepy little mountain town, no Trader Joe's, no Bend River Promenade (oh God), no STD's... just a little town without many economic prospects.

This town is literally run by RE-slanted Boss Hogg's. You can see it in the predisposition of the COBA-fueled nightmare; they assumed that firing up an onslaught of biased PR was How You Got Things Done. "We'll run real stories, national in scope and negative in opinion, off the local front page, by unleashing a torrent of Good News written by Us". They saw & to this day, see no problem with such tactics. Bias is their tool of choice.

But second, these people literally cannot see any other point of view. I think that Becky, God bless her, in her heart of hearts BELIEVES that real estate is a Great Idea And You Should Buy, and that she will believe that to the bitter end. She believes it at $340K medians, she believes it today at $285K medians, she will believe it in the future at $195K medians. She isn't wearing rose colored glasses; they've been lasik'd to her eyeballs.

Now I just love Becky and think she's a sweet gal, and BendBB is probably a good guy & if I met at a bar, we'd probably be exchanging sweet, sweet man love in the back of his BMW after a six-pack of Abyss, and Costa & Hollern are also probably good guys, too.

But folks, these people DO NOT have your best interests, nor mine, at heart. They do not give a fuck if you live or suck dirt. They are out for themselves, like most, and cramming a fuckin house down your throat AT ALL COSTS is what about 50-60% of Bends economy is geared towards.

When you read something along the lines of "Who could have predicted things would get this bad...", you are reading the thoughts of the SELF-DELUDED. I have now seen this phrase used in virtually EVERY Bend Bulletin issue for months. It's been in the national media even longer. Bernanke says it all the time, this countries top economist, local economists, Economic & Finance professors, Realtors, our President, our Chamber members, and on and on.

This country is STILL deluding itself EN MASSE about just exactly what is going on. This IS NOT like all the other "slowdowns". It is so radically different, this country will NEVER BE THE SAME when it's over. NO ONE wants you to think that; that's like screaming "Fire!" in a crowded movie house... or is it screaming "Movie!" in a crowded fire house? Anyway, NO ONE is going to be "made whole" if Armageddon actually happens. No one, not me, not you. It'll be hell.

Wonder how BAD it'll be & why this is The Big One, and you ain't never seen the Big One before? Ok, ask yourself these questions:

1) Did you ACTUALLY lose money in the 1987 crash? That was a Big One, but I don't know many people who lost a "lot". In fact it was a few short years before the Dow was at new highs. Hell, I actually made money in Eastman Kodak puts!

2) Did you get hurt during the Gulf War fall? Again, this was a short-term up & down affair.

3) What about the Thai baht collapse or Long-Term Capital collapse? Nothing here, and I don't know anyone who personally suffered big losses.

4) What about the collapse of the NASDAQ bubble? I DID have friends who suffered some substantial losses on this one. But nothing permanent. They had other assets, and besides they were young & their future income stream was really their biggest asset.

5) Who do you know that will be negatively affected if their home price is CUT IN HALF?

See, that last one is The End. That's just Game Over, because it affects SO MANY PEOPLE & IT AFFECTS THEM TO A DIRECT FINANCIAL DEGREE UNMATCHED IN THEIR OWN EXPERIENCE AND TO AN EXTENT UNMATCHED IN THE HISTORY OF THIS COUNTRY.

Bend is headed for a 50% off sale. The rest of the US, is probably not going that far.

But is it safe to say that the evaporation of $5-10 TRILLION dollars of wealth from 67% of this countries population is an absolutely unhearlded event that we have never even come close to witnessing?

You're damn right it is.

I don't want it to happen, I just see absolutely no other rational outcome. I keep hearing about this being the unfolding of the worst possible (and most unlikely) scenario unfolding in a serial fashion, each financial event even less likely to recur than the last.

Let me say this: It's NOT done.

We're having a little respite from the Bear Stearns plummet, and everyone seems to be coming out with Rosy forecasts galore, Maria Bartiromo saying ad nauseum that It Is Over, Bear Stearns marked The Bottom, and it's up and away from here.

This is a fundamental MISUNDERSTANDING of what is going on. This is chalking THIS phenomenon up to Business As Usual, and every negative financial event is a reason to Buy Stocks, Cuz Stocks In The U.S. Go Up, and anyone who violates that rule Gets Punished.

Bartiromo attests that each financial setback "rhymes" with all the others in U.S. history, and that the thing to do has always been BUY.

Folks, this one does not RHYME with anything. It is totally unprecedented. NEVER before have SO MANY stood to lose SO MUCH. This is not Wall Street that is losing. It is you & me, and virtually ALL the people we know. People at work, people in your neighborhood, people on this blog, me, Timmy, BendBB, Buster, Becky Breeze, Norma DuBois, Prineville, Sisters, Oregon... this fiasco is literally uncontainable.

The Fed has purchased junk bonds to shore up Friends Of Bush, but it's STILL JUNK. It will still go into default. But instead WE own it, not Bear Stearns exec's. This is our Minsky Moment.

The US is headed toward a fundamental shift in it's economy; the aftermath of this bubble bursting will go on for what amounts to the rest of our adult lives. Japan's bubble is still collapsing, almost 2 decades later. This will not be short, and it won't be pleasant.

What do I want to know?

Is there a way to mitigate losses, and even do well DURING this thing?

Well first, I would avoid purchasing a house at all costs, unless you are prepared to make, in economic terms, nothing for at least 20-30 years. Rent & Invest The Difference is my #1 Investment Thesis... maybe you've heard it before :-)

But Invest where? Well, if I definitively knew that, I wouldn't be writing this, but one idea that people seem to be flocking to seems bothersome to me: US Treasuries. There is massive flight-to-safety buying of treasuries, and yields are incredibly low now.

I do NOT see this being the case in 10 years. We have gone the STAGFLATION route in "solving" this bubble bursting problem, and I see treasuries as one of the WORST investments for the next 1-2 decades.

Of course, debt in general is completely toxic for the moment.

Stocks? This actually looks OK, given the horrible alternatives. Within sectors I would look for stuff as non-cyclical as possible, with ZERO debt. Pharma... Food & Beverages...hell, even take a flyer on commodity inflation & buy some gold stocks.... just a little though.

But real, large scale fortunes will be made in catering to The Great Unwashed, those who finally had to "Walk Away, and Not Pay". There will be MILLIONS of these debt-addled zombies walking the streets in the decades to come. Getting these people into homes, getting them cars, food, and life's other necessities will be Big Business.

"Bad Credit is OK" type businesses. Bartering. Day Laborer outfits. "Work For Food". My God, who knows what people will come up with to accomodate these people just surviving.

And remember: This WILL NOT be some small, insignificant "fringe" group; there will be MILLIONS AND MILLIONS of these people. They will be like blacks & women have been in past millenia: A huge addition to the workforce, that if utilized, will bring untold wealth "back" into our mainstream. Mark my words: There will come a day when broke ass Whitey will be implored by our Goverment (hopefully Obama, for the maximum cruel irony) to "come back to work", after being SOL & marginalized for years.

The stigma of being a deadbeat will eventually mostly go away.

Just remember this when you are reading pieces like the recent "Region's still growing, just not as quickly", from the Bulletin. Wonderful News, yes? We're Top 5 still, and all is well.

Hmmm.... but they buried the fact that we are 17th for the last year measured, which ended LAST SUMMER. A more recent survey of movers show a recent reversal and a VAST OUTFLOW from Central Oregon.

What's happened? Right, THEY went ELIZABETH TAYLOR on us, and smeared the lense with vaseline on some OLD ASS DATA. They want you to NOT PANIC, ALL IS WELL.

What's TRAGIC, is this strategy is backfiring; people are buying this line of BS and refusing to lower their asking prices. So no homes sell. Because there is no money. But Costa & Co do NOT understand that, and are relying on the past rhyming with the future.

"We did this last time & got the greatest explosion of local wealth EVER... we'll by God, do it again!".

Costa, you fuckin idiot, it is DIFFERENT NOW. The money is gone. Your pie-in-the-sky bullshit is burying this place. Nothing will sell until prices COME WAY DOWN. Why? Again, THERE IS NO MONEY left. Read about the money multiplier if you do not understand why.

Do people want to buy? Yes.

Can they buy at these prices? OF COURSE NOT!

Until the vast Bend RE complex REALIZES this Fundamental Truth, we are headed for an economic quagmire. We will NOT ESCAPE until there is some balance between INCOMES & HOME PRICES, AND we have built a diversified economy not utterly dependent on the extreme cyclicality of RE.

I know you have Good Intentions Becky, Norma, Pam, Hollern & the Rest, but Pollyanna scenarios cannot & will not happen here AGAIN. We had our shot, and instead of bringing sustainable industry of some sort, we doubled down on REd, and now we're screwed. OK, we're in the shits, and there's nothing to do about that.

BUT, we can End This Thing as quickly as possible. Stop trying to convince everyone that Bend is different. You are convincing sellers TOO, and they will NOT lower their expectations OR prices, and hence the quagmire continues.

Be straight. Stop REDACTING reality. We Can Take It. Your LIES only make things worse and they make it last LONGER. Stop saying there is ALWAYS A SILVER LINING in Bend, there is NOT. COBA is NOT going to change the fact that NO ONE can borrow ANY MONEY, no matter whether this is the Best Buyers Market in 20 Years, or 1,000 YEARS, and no matter whether rates are 5% or 0%. None of this matters anymore.

THE MONEY IS GONE, THE DREAM IS OVER. GET FUCKING REAL.

Well, Buster complains I'm not "local" enough... too much video... so here's what I thought was the most forward-looking piece I could find about the future of Cent OR:

Back to the farm for jobs

Laid-off workers line up for limited number of spots

By Lauren Dake / The Bulletin

Published: March 29. 2008 4:00AM PST

MADRAS — In two weeks, the water will come.

Sucked up from the irrigation canal, it will spew out through the wheel-line irrigation system on Martin Richards’ Fox Hollow Ranch in Madras, softening the cracked soil.

Thirty-year-old Madras resident Walter Rivera will make sure the thirsty land on Richards’ farm receives the necessary water. Rivera was hired to help during the irrigation season on Richards’ farm this year. A laid-off Bright Wood worker, he was one of many searching for farm jobs this spring but one of the few who has actually found one.

Recent layoffs — at Bright Wood Corp., Contact Lumber in Prineville and the wood products manufacturer in Warm Springs, to name a few — are hitting the Jefferson County economy especially hard. The county also saw the indefinite postponement of the 1,223-bed, medium-security portion of the Deer Ridge Correctional Institution and the jobs that would have come with it. And last year, the Culver operation of the boat manufacturing company Seaswirl Boats Inc. closed, eliminating around 170 jobs.

For farmers, that has translated into an inundation of laborers looking for work.

“Two years ago, if I said I need 14 people by Monday, it took me two weeks to drum up bodies,” said Rob Gallyen, co-owner of Williams Land and Livestock in Madras. “And right now, heck, if I wanted 20 people I could probably have them here by this afternoon.”

At Bright Wood, Rivera earned $12.25 an hour, plus benefits. Now, he’ll be working longer hours, for $10 an hour, and without benefits.

“Ag jobs are at the bottom rung of the ladder,” Richards said. “Industry jobs are preferable, construction or Bright Wood, that pays better and it’s easier work. ... Farm work is dusty and dirty, and people look at it as menial. You use your brain at Bright Wood a little more.”

Farming in Jefferson County

The county’s climate is ideal for high-value seed crops — carrot, radish, garlic and grass seeds do well in the High Desert’s sunny days.

In the Willamette Valley, farmers fight the weather. The rain can hinder both the harvest and planting season. But in Central Oregon, the cloudless days lead to longer hours spent irrigating.

It depends on the farmer, the acreage and the crop, but most farmers prefer to hire seasonal labor to plant their crops and oversee irrigation to relying on machinery, Richards said.

“You have more quality control,” he said.

Mike Macy, of Culver, has around 1,600 acres of carrot seed, bluegrass seed, peppermint, wheat and potato crops. In past years, he’s replaced some manual labor with machinery.

“Two years ago, we bought some machines to help plant carrot seed; it requires one-fifth of the people we used to need,” he said. “And the main reason we did that was because two years ago we had a rough time finding people. Now, there are people everywhere.”

Long lists

Macy, of Macy Farms, Stan Sullivan, Kip Light, Jack Ickler and Phil Fines all have something more in common than being farmers in Jefferson County.

Each of them has a waiting list of farmworker hopefuls who stop by their property on a daily basis looking for work.

“They drive around, it’s been that way since I was a young kid,” Light said. “They knock on the door, or they see you out working and ask if you have any work.”

Gallyen said he has a list of around 70 people. And most farmers say they have two or three people stop by on a daily basis.

“Unfortunately, I can’t hire 240 people,” Gallyen said.

Many of the farmers, such as Gallyen, may eventually hire a few extra people when carrot seed planting goes into full force. But, for the most part, they keep the same crew they’ve had for the past 10 or 15 years.

Jefferson County has a short growing season and less labor-intensive crops than other areas, said Bart Eleveld, a professor at Oregon State University in the Agricultural & Resource Economics Department. That could translate into a tougher time finding farm jobs than other places in the state.

“I think people looking for jobs in that sector, well, there isn’t a huge backlog or a number of unfilled jobs,” Eleveld said. “In the Willamette Valley, or some places in Central California or orchard areas like Hood River or The Dalles, there is more hand labor required in agriculture, but I’m not sure if Central Oregon is bleeding in this area.”

Lucky break

There is one area, Eleveld said, where he has heard that Jefferson County farmers consistently need seasonal labor.

“One thing farmers use shorter-term labor on is irrigation,” Eleveld said. “Moving pipes and whatnot, but there isn’t a shortage of people in those positions.”

And Rivera had a connection.

His brother-in-law is Richards’ only full-time employee. On Feb. 25, Rivera received his last paycheck from Bright Wood, his employer of two years. With it came a pink slip. For two weeks, Rivera spent his days driving from farm to farm.

He applied for jobs online. He drove to Terrebonne, Redmond, Bend and Prineville. His name was one of the 70 or so on Gallyen’s list.

Rivera said he’s more relaxed now that he has an income again.

“As long as I’m making money,” Rivera said. “It’s not as big of a problem.”

But with a $500 truck payment, $900-a-month mortgage, two kids and an unemployed wife, money is tight.

At the Rivera residence, Sami Rivera, 36, explained how she hurt her back working at Contact Lumber in Prineville. Once she felt better and tried to get her job back, there was no job to get back.

“I had good credit,” she said, “but it’s taken a nose dive. I’m worried about the house. If we sell it, will we be able to get another one? We could lose everything. I’ve heard of people losing everything.”

The phone rang in the Rivera household, interrupting Sami.

“Not today,” Sami tells the creditor. “I’m not able to pay it today.”

She paused.

“Not for a while,” she said.

Still looking

Since most agricultural work is seasonal, farmers can’t afford to offer their employees benefits and therefore don’t report numbers to the employment office. So finding data on agricultural jobs is difficult and leads to mainly anecdotal information.

“Every shoe store, every dry cleaner, every staffing agency reports their employees to us,” said Mary Lewis, a monitor advocate for farmworker services with the Oregon Employment Department. “But federal unemployment insurance law doesn’t require every agricultural employer to participate in the unemployed system. Therefore, they don’t report to us. From the data perspective, it makes the data in agriculture different.”

Employment numbers for the county, however, are far from anecdotal.

The county saw a 9.9 percent unemployment rate for February, the highest February unemployment rate since 2001. The Bright Wood layoffs have not yet been factored into the unemployment rate.

Francisco Espinoza, 35, of Madras, said his job search has brought him face to face with the competition. On his job-seeking trips to Redmond and Prineville, he often runs into others who are doing the same.

“There are so many people who don’t have work,” Espinoza said.

Necanor Sanchez, 27, also of Madras, was out looking for work when it started to slow down at Mid-Columbia Lumber Products in Madras, and his days were reduced. Now, business has picked up again, and he’s working four days a week, which is keeping him afloat. But like Rivera, his name is on Gallyen’s wait list, just in case.

“Farm work is less skilled, and it’s lower pay,” Richards said. “Everyone wants to better themselves. And initially, when workers come, if they don’t speak English, they take these jobs. And as they learn English, it’s easier to get jobs at Bright Wood. If I was in their shoes, I think I would do the same thing.”

Richards said if he had enough work, he would keep Rivera year round — Rivera has already proven himself a capable, hard worker.

“It’s hard to find that kind of quality. If Bright Wood hired him back, he would probably go back,” Richards said. “We do see a higher quality of labor to choose from. I guess that’s the plus side of it.”

Lauren Dake can be reached at 419-8074 or at ldake@bendbulletin.com.

The high unemployment in Madras is the shape of things to come in Bend. But it's happening there now, instead of later like it will in Bend, because:

1) Brightwood is a "centralized" decision maker about whether half that town working or not, not a lot of individuals, like Bend's RE industry... so we keep hanging on by our 401K's.

2) Most of the people in Bend RE piled it up for at least a few years, unlike Madras, and believe it'll turn around soon, and are burning through their cash

But once the reality DOES sink in, this piece will illustrate what will happen in Bend: EVERYONE in the industry will be "kicked down a notch" in their employment skill set. It's called Underemployment. You make less, you do grunge work, your life sucks.

Yup, even in the shadow of an outdoor wonderland, your life still sucks.

You think we won't hit that 9.9% unemployment rate like Madras? Hell yes, we will! Not this year, but probably next. Sometime within the next 4-5 years we'll probably see the highest unemployment rates we've had in 20 years in Cent OR. We're at 8.3% right now! It was at 5.7% last Feburary! Hell, 10% unemployment for Bend is a slam dunk in the next few years.

All those $120K/yr Realtors will be working at coffee huts. All those mortgage brokers will be working at ski shops. All the "assistants" to these people will be working at Bachelor... and unemployed the rest of the year.

The INCOME is going away folks. And our esteemed Bend Mass Media is STILL trying to talk this thing up again.

People are leaving. Why? Hell, it's fun making money in Xanadu! But once the novelty has worn off, Xanadu ain't so hot anymore.

Stop trying to "convince" people that this place is a paradise & hence, All Will Be OK. It is a paradise, but that don't mean dink. But no force on Earth will stop Bend from imploding on itself, certainly no PR or Marketing crap. There's not enough money to save this town. We'll be littered with the Walking Dead, just like Madras, in a few years.

What will work?

1) Property Manager - rental numbers aren't going anywhere but up, and all the foreclosures will ultimately get bought by someone... and turned into rentals

2) Lawyer (legal asst) - Again, foreclosures galore, and scumbag vulture lawyers will be there to suck us dry.

3) Move out cleaners & painters - Residential mobility going UP, and you gotta clean the place each time.

4) Used stuff - Consignment shops might make a comeback when the money gets tight

5) Used RV's - People will need to live in something once their life in wrecked, typically a "one-payment" domicile.

6) Moving & storage - I think there's even a piece in todays paper about the ever increasing need to store stuff.

7) Cut rate Realtors - I think 6% is going bye-bye, and pay-for-service & cut-rate guys will take over the market. This is already big & getting bigger.

8) Car repair - We'll be fixing what we have, not buying new.

9) Ebay, etc - Since Bend's economy is a one-trick pony (Buy this overpriced house, PLEASE!), people will need to start to diversify their own economics geographically, if they actually do decide to stay here.

10) Gas station, Les Schwab - Hey, it's state mandated that someone fill our tank. And spike tires are just a given around here.

So there you have it! I ended on an upnote, even.

10 ways to make cash in the collapse of Bend.

February in Bend -- The Real Estate Calamity Continues

ALERT: Over 200 comments... now in pagination mode.

BEM is Back!

Well, first of all, BEM has Come Back & posted to his blog, http://bendoregonbubble.blogspot.com/.

Awesome! And as usual he posts regarding a topic near & dear, the INANE anchoring on, and reuse of local spending estimates as The God's Truth. This is simply an editorial standards issue... or a lack thereof, of local media. Some are so outside the realm of reality that they've lost all credibility -- notably, Cascade Business Buttbangers.

COVA's Sleep Number is "498", and you can pretty much google any local media site on this figure & up comes COVA and their To The Penny Dead On The Money BS figure about "tourist spending", $498 million. Of course, this is bullshit.

The only function this sort of thing has is buffaloing local government into funding Mega-PR/Marketing bullshit programs at taxpayers expense.

"If we don't get funded, say BYE-BYE to every nickel of the $498,000,000 tourist trade!"

Uh huh. Right.

Anyway, BEM's first post in over a year is a good read, and you should go have a read... NOW!

Brucey...

Brucey did some more good stuff recently. Over on BendBB, he posted some good pics of the whithering of the local market. I think I did my own last August, Picto-Plummet - A Graphical Novel.

Actually, my first picture of Eagle's Landing is now, a totally different picture! Well, sorta different. I'm happy to announce that since I documented the 100% vacancy rate on spec lots over at Eagles Landing, that 1 LOT HAS SOLD & A HOUSE WAS BUILT! Yeah!

That does leave about 80 lots or so to go, but at this rate, my children may still be alive when Eagle's Landing finally sells out. Good Job over there guys. Bringing it in below the 100 year saturation cutoff.

And if there's one thing I'm pretty sure of, it's that if you can't sell out a STD development in under 100 years, you got problems. Yarrow & IronHorse? See, they got problems cuz they are pushing the 100 year cutoff.

You can force your kids to sell real estate, and maybe the grandkids. But the great grandkids? That's getting pretty dicey. For historical perspective, if you look BACK 100 years, you notice that the aero-pod & velocipede had recently been invented in 1908. Selling Yarrow & IronHorse in 2108 just seems like it's a bit long in tooth on the business plan side of things.

That's just me, though.

Oh right... Brucey... Bruce also pointed out that Blogger has gone to paginating comments, when they reach 200. Just be aware that you can click "newer" and "newest" links near the top & bottom of the comments area.

On to the markets...

I usually don't talk about the stock market, cuz I suck so bad at predicting it. But I always thought that somehow the meltdown in housing/credit would ultimately negatively impact stocks.

DJIA, 6 months

Notice that we've been down 4 months in a row now, but the mind-numbing losses I would have expected have not really materialized. Why?

My own (craptacular) theory? Well, imagine you got Big Money, and I mean BIG. Many, many millions, or billions. What do you do?

Seems like subprime, SIV, and CMO shenanigans have poisoned every debt issue in sight. Unless you are buying government paper, you STILL don't really know what you're getting. Whether it's dollar denominated or not, non-govt debt has gone toxic.

This leaves stocks, and weird shit like commodities. And Oil at $100/bbl, and gold near $1,000/oz don't hurt, either.

So for TRILLIONS in US retirement money, that leaves Big Stocks, US & Foreign. With the dollar going into the shitter, that really makes foreign stocks appealing.

Well, no. These issues will suffer, cuz the tsunami will wash over everything & strip it to bare metal. But it by default leaves stocks, and they have really barely moved in 8 years, and the NASDAQ is still way down from March 2000.

DJIA, 10 years

Since March 2000, we've gone from just below 12,000 on the DJIA, to 12,266 today. That's what I call a horrendous Opportunity Cost Bear Market.

Is the market up since then? Yes, but it is Far Below where you'd be had you bought zero-risk treasuries.

The P/E on the DJIA is currently 14.9, or an earnings yield of 6.7%. Greenspan frequently postulated that the 10 year treasury yield should be approximately equal to the DJIA earnings yield. The 10 year yields 4.55% now, and an equivalent earnings yield on the DJIA would put us at 18,130 on the Dow.

That summarizes my feelings about stocks. We ARE in a bear market. I think we're about to take a Hard earnings hit, but still stocks are the last bastion for Huge Money. That & treasuries. What is toxic in individual industries? Hmmmm....

Cascade Bancorp, 5 year chart

Right, right, right, right, right... Good old CACB came within striking distance of single digits, getting CRUSHED down to $10.11/sh this week.

Interestingly, no sooner do mega-bears like myself & BEM make horrendous downside predictions on this dog, and it swiftly exceeds them to the downside. CACB is probably the sort of small, RE-overexposed bank Bernanke was talking about this week:

"There will probably be some bank failures," Bernanke told Congress Thursday. "There are some small and in many cases de novo [new] banks that have heavily invested in real estate in locales where prices have fallen. Among the largest banks, the capital ratios remain good and I don't expect any serious problems among the larger banks."

Bernanke should really stop speaking. He's like the Bizarro World Opposite of Teflon Al Greespan. Everytime Al opened his pie-hole we got 100pts to the upside. Helicopter Ben sneezes, and we get killed. Poor Bastard. Besides he's Dead Wrong about "larger banks" having no serious problems. Here's some more Bernanke-izing:

From The Times

February 29, 2008

Ben Bernanke triggers dollar’s fall to new low

Gary Duncan, Economics Editor

The dollar plummeted to record lows and shares tumbled in New York and across Europe yesterday after Ben Bernanke, the Chairman of the Federal Reserve, spooked markets with a prediction of US bank failures and fresh warnings over a grim outlook for America’s economy.

In its third day of heavy losses, the embattled dollar slumped across the board on foreign exchanges after Mr Bernanke gave what economists said was a “green light” to markets to step up their assault on the US currency.

The dollar fell to a new record low against the euro, which soared to levels above $1.52 for the first time, while the dollar’s overall value on its trade-weighted index also hit a record low for a third consecutive day.

The greenback’s heavy losses combined with the latest dose of bleak US figures, with confirmation that the US economy came close to stagnating in the fourth quarter, to spark another fear-fuelled sell-off on Wall Street.

Now, we're definitely fucked. But almost none of it is this poor bastards fault.

For a look at the other publicly traded Bend-area issues, the news is not good.

Clear Choice Health Plans, 3 years

Clear Choice has suffered losses on par with CACB. I don't have insight into the problems here, but they are taking this one out to the barn for a shooting. This is largely owned by local doctors though... and these are the same people COBA is targeting to buy up their remaining 3-4,000 homes to finally absorb 650% of local disposable income.

Some good news? Yes.

Prineville Bancorp, 3yr chart

Maybe Prineville is semi-immune to the local market rout, maybe it's behind the curve even farther than Bend, maybe it's just so illiquid that no one ever trades it, or maybe this issue was just ridiculously undervalued in the single digits.

Whatever the reason, PNVL has held up relatively well. It last traded at $10.50/sh, and a P/E of about 14. Is it bound for a beating? I don't know, but PNVL has held up far better than any other local publicly traded issue.

I would have included Micro-Semi here, but it's my understanding they were bought a few years back, and the mothership is not really a Bend-based business.

Finally, local RE... The Rout Continues

mstucker (marge?) posted this in the comments:

Marge said...

I posted this at Bendbb.

Feb sold stats as of 3/1/08.

Bend Residential homes on less than an acre:
45 Sold @ median of $322,500
Bend all types of residential
58 Sold @ median of $327,500
Current active listings are 1876.
Hopefully a few more sales will be reported next week as brokers catch up with reporting to MLS.
There seems to be more homes going pending the past 60 days though.

In 2007 the numbers were:
Bend all types res
169 Sold @ $335k
in 2006 it was 190 Sold @$336k
I looked all the way back to 1997 and can't find a Feb. with such low sales. In 97 it was 101 sold @ a median of 118k. Might have to go back to 1987 to get that low. MLS only goes back to 97.

Whoa. Read & re-read folks. This is just death. Here is my response to Tim's question about figures post back on March 20:

IHateToBurstYourBubble said...

So Paul, how many years of inventory will we have at the end of February?

Well, last Feb David Foster recorded 132 sales, and 1,168 homes for sale at the end of that month. That's about 8.9 months of inventory.

Jan 08 was 13% higher inventory than Jan 07, and Feb 07 was 1,173, so if Feb is 13% higher than last Feb, that yields 1,326 homes.

If we sell 50 homes, that's 26.5 months. 40 homes is 33.15 months. 30 homes (Armaggedon), yields 44.2 months.

We're going to have to really bust it out to hit 50 homes by the end of the month. 30 homes seems to horrible to consider. I'm guessing 30 months for Feb 08, or 2 1/2 years.

That's GAME OVER for soooooo many people around here. That's Hasson, Remax & Morris shutting down shop in The Old Mill & leasing 1,000sf next to a consignment shop, or something. These people cannot make their lease/mtg payments at that level of sales, much less anything else.

I think a lot of brokerage will go "boutique" in the next few years. Big franchises will exit. Lots of little 4-5 man shops. And of course the rise of cut-rate, limited service shops. Bye-bye 6%.

Well, now we know. a CORE site search on "Bend Residential" today, yields 1,336 homes. 45 solds rounds up to 30 months inventory. That excludes condo's, acreage properties, manufactured's, etc.

OK, what I've kept track of with Doug Fosters data is all Bend residential. The news here is worse. There are 1,883 units of all residential types for sale in Bend, and marge's pre-lim figure of 58 solds (bound to be revised up, mind you) yields 32.5 months inventory.

Months Inventory, Bend Oregon, all residential types, May 2006 to Feb 2008.

There it is. I've said it before, and I'll say it again... and again... and again.

"Months of Inventory is The Most Important Indicator Of Central Oregon's Economic Health."

And maybe you've spotted a subtle trend in this number... yeah, it's headed up. Just a bit. I think several area Realtors suggested 6 months is a "normal" figure.

Anyone remember when such RE sages as Pam Lester said things were "so low, they could not go lower"? Just point to the area on the graph... as I recall it was Aug 22 of last year:

Prices still sliding, sales still slowing

If prices drop further, losses may be in store for industry
By David Fisher / The Bulletin
Published: August 22. 2007 4:00AM PST

In the meantime, though, things have gotten to the point in the local markets, especially for home builders on recently purchased land, where prices can’t sink much further without inviting losses, Redmond-based Century 21 Gold Country agent Pam Lester said.

“I don’t expect prices to go anywhere but up from here,” Lester said, “because they can’t go any lower.”

Can't argue with that. That there is airtight logic.

I like Fishers subtitle on this one:

If prices drop further, losses may be in store for industry

Read further in the piece, and you see the stats for last July:

In Bend, 109 single-family homes on less than an acre of land sold in July, down 27.8 percent from June’s sales, according to the Central Oregon Multiple Listing Service. The median price — the price at which half sold for more and half for less — stood at $340,000, 4.5 percent less than the median price of homes sold in July 2006.

Monthly sales figures in Redmond, Crook County and Jefferson County also fell to their lowest levels in five years, according to the MLS, while median sale prices dipped below prices in the same month a year ago.

In Redmond, 40 non-acreage homes sold in July, down 45.2 percent from July 2006. Median prices also slipped to $247,000, down 5.7 percent from the same month last year.

In Crook County, 11 homes sold — half of the July 2006 number — while median sales prices slid to $190,000, off 13.5 percent from homes sold in July 2006.

In Jefferson County, eight homes sold — a third of the July 2006 volume — while median sales prices dipped 4.9 percent from July 2006 to $173,250.

So.... according to marge, medians HAVE dropped. But what's truly imploded is volume.

Where's the Bulletin story on THE LOSSES? Hmmm... maybe it's on it's way, right BEM?

BendBB statistical goodness...

And finally BendBB has come out with his monthly statistical goodness. God bless that crazy fucker.

Anyway, there are some trends of note:

First, Desert Skeeze continues to prove The Old Adage, "Don't buy shit in Desert Skeeze." OK, maybe a more generic adage is "People don't like buying jumbo STD's built to 3rd World Standards within whispering distance of their neighbors".

At $315K, and 3,390/sf, this $93/sf STD jumbo-crapper is STILL the Cheapest Shithole in town. This badboy started out at $399,900, and has suffered 4 markdowns totalling 21.23%, not counting prior listings, which there may have been.

Hell, it's only been a few weeks since this turd busted the $100/sf barrier. I talked about a run to the 60's. This thing has already dropped another 7%, and still no takers.

A confirmed 6 figure short sale is this Pollock-fueled nightmare in Forum Meadows:

Forum Meadows Coyote Ugliness

The owner of this barf bucket periodically begs to be put out of his misery on craigslist. He claims to have bought this snotpile in the mid 400's, and it's now clear down to $249K, and still no takers. It's 2,517sf, so it's busted below $100/sf as well... but the bottom continues to rush away.

We're headed for $60/sf.

What really jumped out this month was the BRUTAL 1-SHOT price drops on bare land. And not shit, out East STD-2-Be crap. The Good Stuff.

The Reserve at Broken Top had several lots take a near 40% beating. This one got spanked for 42.3% in 1 reduction. That is serious shit. Luckily the listing Realtor has got some hotness.

"Hi, I'm Ashley Erickson. My hobbies include being hot, skiing, and spanking bare land listings for 40%"

Here's a rundown on some YoY PPSF price trends on big subdiv's:

DRW: Feb 2007, AVG(PPSF): $215.40. Now $181.43
Northwest Xing: $283.46 a year ago, now $251.46
RiverRim: $224.10, now $221.54.
Broken Top: $325.53 last year, now $316.05.
Awbrey Butte: $319.52, now $280.96
Parks at Broken Top: $259.48, now $224.10

And just for you, Timmy:

Skyliner Summit was $208.00/sf, and is now $202.90.

So PPSF figures that used to be mixed, and not really definitive, are now pretty universally down YoY. But still not Down Hard.

What is really Down Hard is your ability to actually sell at your ask. No one is selling anything. Look at that Months Of Inventory graph. That's The End. Bye bye Morris and Hasson. Bye bye Amerititle. Bye bye 80+% of all mortgage brokers... or more. Bye bye Old Mill RE leaches.

30 months of Inventory is the End of our local economy. Notice the layoffs occurring? Again, NOT A COINCIDENCE. And this is certainly Not the End of them. And like The Unlisted Dark Matter, these layoffs are like an iceberg: You're only hearing about 10% of them. The Big Boys who can't hide it, cuz the laid off will make sure the press hears about it.

Knife River, Brightwood, the entire town of Gilchrist, Deschutes County, Seaswirl, Oregon Woodworking and a litany of others are in the first stages of culling their ranks or flat out shutting down. Most income hits are being taken by "RE free lancers", off the books. That shadow sector has been gutted already. These are the fuckers that kept Merenda & the local Hummer dealer alive.

The Good News? Well, Deschutes County traditionally "bottoms" in February. Things usually get better from here, for about the next 6-8 months. Sales will pick up, things will be declared "OK", and such.

But if you really need to sell, realize that this yearly game of musical chairs ends as predictably as it starts, and if you Need Out, this is Your Time.

Mark It DOWN. Not a little, A LOT. 40-50%. You MIGHT be able to sell. But this is IT. Don't buy into the "The Sun Will Come Out Tomorrow" Bull Shit. This is a temporary respite, and I do mean TEMPORARY. We're in the LONG WAVE DOWN. Decades Down. We just happen to be starting a meager, half-hearted, but predictable yearly wave up. It'll end soon, and that's IF it really gets going, which it may not.

If you've been "waiting", now is your time. But it's still going to hurt like hell. But I guarantee you'll be happy you take the hit today, rather than enduring death by a thousand cuts. If you suffer a brain hemorrhage cuz you are getting lowballed, you'd better buck up & take it. It will NEVER get better than RIGHT NOW.

Sellers have taken a total of 3,781 price cuts in BendBB's data, banging the cumulative value of that RE from $967.8 million, down to $852.7 million. And the price cutting still has So Far to go, you won't believe it when it's over. This place is FLOODED with square footage, both residential & commercial. We are in the beginning stages of an economic tsunami here.

But in the next 3-4 months, you can actually take advantage of a small seasonal respite & actually sell, but you will have to accept that you will be ravaged monetarily. That's it. My Lord, "dunc" just posted on BendBB that foreclosures here outnumber sales:

Feb., 08 Notice of Defaults: 109
Feb., 08 Houses Sold: 58

Look at the Months Inventory graph. Look at THAT foreclosure data. That AIN'T RIGHT. That is SERIOUSLY WRONG. Foreclosures outnumber Sales? In Bend? NEVER!

Well, it's happening. It's Armageddon. But you have a tiny window, right now. Bail Out, Mark it down... or You Will NEVER SELL. EVER. They will carry you out.