Take off the Beer Goggles, and Start ta Chewin'

Addendum:

Bend Median and Average Price per square foot drops to lowest level in 2 years:

Prices drop below $200/sf, first time in almost 2 years, down 18% from June 2006 all-time high.

Damn! Another week where the desperation meter on the housing market seemed to redline all week! The fear was palpable, and was best manifested in the absolute plummet in Cascade Bancorp shares. CACB lost 25% in the last 9 trading days, and 50% in the past 3 months. Here's a 3 year chart:

If I had to choose some sort of "leading indicator" of Bend's economy, this would be my #2 choice. The tentacles of CACB's financial grip on this area make its share price a pretty damn good indicator of the area's financial health, in my mind.

"What's the most important indicator of Bend's financial health?", you ask? Well, I'm glad you asked, and if you'll just shut up for 2 seconds, I'll answer. It's this:

Months Inventory, Bend OR. Y-axis Inverted

Anybody who is even a remotely regular visitor to this blog, should know well that I consider Months Of Inventory to be THE primary indicator of RE health in the area, and further that RE Health = =~ Total Economic Health, at least in the Bend area.

And I inverted the axis, mainly because "rising" graphs are most easily associated with "Good Times", and falling with "Bad". Now, the final data point in December 2007, are estimations: the data won't be finalized until later this month. But I used 1,275 actives, and 74 sales to make the computation. I got the 74 solds from a post on BendBB, and the 1,275 is a low-ball estimate from my own "vague recollection" of running a query on COR, and getting a number in the 1,320's. So I lowballed my own estimate by about 50 homes.

And look at that leading plummet in Months-of-Inventory vs that CACB chart: It's like that baby had eyes! Months of Inventory led the stock markets own best guess about the financial health of CACB, arguably one of the most important companies in Central Oregon, and one hell of a bellweather.

If you compare that plot of Months of Inventory vs home prices, you see an almost pathological correlation: Prices ain't moving, while inventory is skyrocketing! If this was a store, it would be a ghost town with inventory piled up in the aisles. And you might wonder WHY the collective behavior of a group of people could be so oblivious to such an obviously rapidly deteriorating condition?

You need look no farther than the recent editions of The Bulletin, as usual. The Jan 4 Business headline, "Why relocate to Central Oregon? Companies cite region's quality of life, relatively low cost of doing business".

Wow! Whoa! We're finally going to get some nice, rock-solid reasons that the Big Boys have shrugged off the clearly wrongheaded advice of this blog, and are running headlong into Central Oregon, right?

Huh. See, you'd think that, given the title of the article. But it's funny. Seems David Fisher named the article FIRST, and did interviews SECOND. Cuz when you actually READ THE ARTICLE, you read quotes by execs from Integrated Environmental Technologies, saying things like:

"... currently Bend is comparable to other places, but I don't think I would characterize it as overly favorable."

Whoa! Talk about your ringing endorsement! What's next?

"I am indifferent between relocating my company to Bend and the smoking caldera of a volcano."

And with a name like Integrated Environmental Technologies, you'd think we are hitting the Big Time, right? Ummmm, no. IET, it seems, makes garbage cans where they burn garbage. OK, fine, they make real kick-ass garbage incinerators that burn the hell outta garbage, sort of what I did when I was a kid when I threw aerosol cans into burning garbage cans. Except they charge millions, and got "scientists" studying this stuff. It's companies like this that make me feel smart, cuz they pay big money to guys to figure out the scientific niceties of the aftermath of pyromaniacs like myself.

So, we have this company that rates Bend about a "4" on the business scale, why are they moving some of their office operations here?

"... the ability to recruit."

Whoa! Again, we have found a braintrust that has clearly done their homework. The ability NOT to recruit in Bend has been hashed over ad nauseum in this blog, so I won't do it again, but if you are moving to Bend because of the favorable recruiting atmosphere, you are an idiot.

Then later in the article we get this nugg, courtesy of Roger "Bait-and-Switch" Lee, EDCO muckety-much:

"EDCO gave IET's board a sales pitch on the advantages of Oregon's tax structure and utility rates, Lee said. Other than that, the company's (sic) executives toured the area on their own and made the call to move here. "We didn't have a chance to sell them on the community at all, " Lee said."They went shopping and sold themselves on it."


Ahhhhhhhhh. These geniuses "went shopping" to figure out whether to relocate here, or not. See, I wanna know where they went, in their quest to figure out whether to relocate their company here. Victoria's Secret? Safeway? Wal-Mart? Where?

Now, I'm not saying you should do this, but when IET does their IPO, I might not buy shares. Because if you make business decisions on where you're going to relocate your company based on a visit to Home Depot, you aren't going to get any slice of Paul-doh's humble retirement pie.

OK, OK. So maybe IET is a statistical outlier. They are barely making any sales of their kickass garbage cans, and figure a visit to an adult bookstore in Bend will hold the answers. Clearly David Fisher winnowed out some Real Winners that are picking up & making the important decision to move their operations, logistical, manufacturing, marketing, and finance divisions to Bend, right?

You're damn right! The Bulletin is all about brass tacks reporting, and giving it to us straight, and there IS a company that is moving it's considerable bulk to Central Oregon, and frankly I don't know why it wasn't picked up by the Wall Street Journal. I don't want to steal Fishers thunder, so I'll just quote the piece:

"That was pretty much the case with Kristen Smith Ehlers, who moved her designer dog wear business, Beau Neuveau, from St. Petersburg, FL, to to Redmond last year.

Ehlers shopped for locations along the West Coast last year partly to save on shipping costs. Her products are manufactured in China, then shipped to her warehouse to be distributed to her customers thoughout the World.

... The cost of doing business in Central Oregon, compared to other places on her list (with California crossed out) was "about a wash", she said, which left her to be sold on Central Oregon's beauty and recreation.

It's been tough to assemble even a small staff of reliable employees, Ehlers said -- the biggest downside she's found in the region -- and she's renting a home in Bend, rather than buying in what she considers a high-priced housing market."

Now, I quote the word "warehouse" because that's what the piece says, but clearly the correct term is "house". Her warehouse is probably her kitchen, basement, or possibly a 5'X5' storage space, running her $20/mo. And the quote 'Ehlers shopped for locations along the West Coast', entailed this woman submitting rental applications to untold property managers, after telling them she has 2,000 cats & will be running a meth lab out of the thing. Someone in Bend accepted.

Again, we have multiple RINGING ENDORSEMENTS about why a divorcee running a part-time "business" has slapped a restraining order on her stalker husband, threw all her work-in-progress , inventory, bookkeeping records, office supplies, and clothes into 1 cardboard box, threw it in the back of a 1978 Mercury Grand Marquis rust bucket, drove like hell across the country to butt-fuck Egypt and took up residence in a vast rental MANSION in Bend: Because of the difficulty in hiring helper monkies that aren't smoking meth on the job 24/7 and sky high home prices.

And true to form, she characterized Bends cost of doing business as ON PAR with California, a place she immediately CROSSED OFF her list. It was "a wash", so she busted out a dartboard, threw a dart, chose Oregon, and probably aborted a hysterical pregnancy while she was at it.

Again, when her leather dog collar business starts issuing shares, I will probably NOT go all in.

Yes, David Fisher has put together yet another ROCK SOLID piece on why the vast hordes of this countries business behemoths are flocking to Central Oregon: Our costs are on par with the highest cost state in America (California), and hiring meth-smokers is dead easy.

Now, there is another piece, this time by Jeff McDonald in he Jan 2 Bulletin, that really shows why you should relocate here, "PV Powered seeks room to grow. Solar company would like to stay in Bend, but time, location pose challenge".

You should know IMMEDIATELY what is going on, simply by reading the title: PV Powered execs have begun to BLACKMAIL Bend city councilors, and are threatening to move if their operation are not subsidized ad infinitum. That's all.

They simply have observed that whenever ANYONE presents Bend City Council with some sort of ultimatum, be it BAT buses, Les Schwab's hostile takeover of Juniper Ridge, or mob-style extortion by Knife River for 1,000% markup gimp-ramps, that City Council folds like Grama on laundry day. That's ALL you have to do to have local government offer to GIVE YOU LAND (Lava Court Apartments), or waive all taxes until the year 3000 (everyone else).

That's all this piece is: straight blackmail against borderline retards. Now you might think that PV Powered put together some elaborate scheme to pull one over on the city. Hell no! They are actually putting it out there that they are looking at the old Workensport location, possibly the stupidest location in Central Oregon you could possibly move an industrial company. Again, we find EDCO at the source of this small-scale ripoff:

"Economic Development for Central Oregon, whose mission includes recruiting new businesses to the area and retaining existing ones, has been working with the Oregon Economic and Community Development Department and the city of Bend to keep PV Powered in Central Oregon."

Again, this is straight extortion, and it will most likely succeed. Our city is run by retards who have no problem spending $1,000,000 to keep a single unskilled minimum wage job in Bend. All you have to do is threaten to leave within earshot of Roger Lee, and they will practically dump money on your doorstep.

Unbelievable.

These "flowery" pieces, jammed packed with lies and ludicrious headlines, make me wonder if there is not ENORMOUS pressure being put on the Bulletin to produce ALL IS WELL IN CENTRAL OREGON news pieces. Look at the graphs above. Things ARE NOT WELL. Things are imploding, and are already at levels that can only evince EXTREME ALARM. 74 sales in December? My God, you'd have to go back to the Stone Age to find monthly sales that low. And that's exactly what they said about Novembers number, which was 91.

Folks, these are PUMP-N-DUMP pieces. The Big Boys KNOW it's over & are pumping every idiot in sight to get them to buy their imploding dogs. That's what these & many other pieces are about.

If you DID NOT buy into the out-of-control Ponzi Scheme that was Central Oregon real estate for the past 3 years, and acted responsibly, then now is the time to bask in the horror. It may get close to as good as it got in the past 3 years (about 30 years from now), but it will NEVER get as bad as it is going to get in the next 5-10 years. We are RIGHT NOW in the teeth of a cascading implosion that will change the face of this place FOREVER.

If you DID buy into the insanity and doubled down on red for the 13th time & lost, then it is Coyote Ugly Time. It's time to remove the beer goggles, focus, and look over at the mega-skank that is lying on your arm.

Bend Housing Market, as seen through Beer Goggles, circa 2005

Yeah, it's time to start ta chewing your arm off. See, what looked like this in 2005 when you bought it...

Your 2nd, 3rd, 4th, and 5th home in Bend, circa 2005

... now, in 2008 without your financial beer goggles, looks like this:

Same homes, circa 2008

What you got to do now, is clear: Start ta chewin'.

You think that skank is going to get better with age? She ain't. You made the sad, sad mistake of putting on the real estate beer goggles, against the onslaught of advice by those that advised VIGOROUSLY AGAINST IT, but you had to do it anyway, and now you got a beer-goggled skank, but probably more like 5 or 6 coyote uglies lying on your arm. Now, I have every right to lambast you, say I told you so, and give you detailed instructions on what you gotta do, but a picture is worth 1,000 words:

Bend home flipper chews his way out of 4-way with meth shacks bought with $0 down & $0 income

Bitch, it is time to start chewin'! You gotta drop price till at least 2 limbs fall plum off. Seriously. When have you ever woke up to Coyote Ass Ugly, and things got BETTER over time? When? NEVER, that's when. This is NOT going to get better. It is getting worse geometrically AS WE SPEAK. The time to get out with your diginity intact is long gone. It is time to face facts. You got your motherfuckin arm caught in the corn thresher cuz you a greedy-ass bitch who can't think for themself, and now your stupid ass has to start chewin', and ain't nobody going to feel bad for you who DID NOT put their greedy ass arm in the corn thresher.

YOU JUST STUPID, OK? Now you gotta pay. So shut the fuck up, and drop price until you get some sort of low-grade brain damage, cuz it's either going to happen now, or later. And it sure as hell ain't going to get better.

EVER.

The Bulletin is a prime conspirator in Boss Hogg's little pump-n-dump scheme, but sadly it is too late for that, as the idiotic RiverWild "auction" proved. NO ONE is buying the Kool-Aid anymore. The ass-ugly imploding nature of Bend's RE market is clearly visible in high-relief for all to see, and no amount of bullshit shoveled into the locals gullets will change that. They've done it a million times before to good effect, and the Bulletin still believes that we can "market our way out of anything", but obviously we cannot. IT IS OVER.

Keep your eye on Months Of Inventory: THAT will tell you when it's over. When we get a 3 month average below 6, IT IS OVER & YOU CAN BUY. Until then, the carnage will continue, and if you own one or more meth-cracker ass cracker shacks, ain't nothing going to stop the pain, UNTIL YOU START TA CHEWING, and roll your stupid ass away from them coyote ugly bitches you call homes.