Housing bubble? What housing bubble?
That bubble done popped.
No, what we got here is a New Business Bubble. Transpose those two charts, the one showing new building starts, and the one showing new businesses, and tell me we don't have a problem in the making. It looks to me as though the madness has just transferred to commercial lending.
Put bluntly, the new business starts are exactly 10x the starts in 1997. We've gone from 41.9 starts in 1997, to a peak of 468, and we are still at 409.
At the same time, building permits have gone from 126 in 1997, to a peak of 392, and now down to 82. Yes, 35% less than 1997.
(I'm still trying to imagine 2000 realters running around trying to sell 82 houses...)
The obvious answer is that this incredible business start statistic is just lagging the housing market. But the end result will probably be the same. Actually, worse. When a house loses value, you can still live in it. When a business starts losing money, you can't do anything but fall behind on payments.
There are going to be a huge, HUGE, numbers of businesses failing over the next 3 or 4 years.
People move to Bend, and they have to open businesses, because there isn't anything else happening here. I'm going to guess a bunch of these businesses are related to building, but many more are dream businesses, retail and restaurants and salons.
One last thing to say about the Bulletin housing article.
Come on. Give us the month to month, dammit! Third Quarter? That includes July and August and Sept. That will really hide the extent of the problem. What we really need to know are the statistics from Sept. and Oct. and Nov.: I guarantee you, those stats are much, much worse.
6 days ago