Wednesday, March 5, 2008

I'm beginning to realize that the people of Bend, en masse really don't know what's about to hit them. What's sad is that we've had plenty of fair warning.

I thought for a long time that the real estate people were just using cynical ploys to squeeze one last bit of money out of the unwary. But I really think they believe what's happening in California and Florida isn't going to happen to us. The real news is in the paper every day, underneath the cheery headlines and booster features. Fair warning.

California has been having big troubles for a couple of years now, Florida troubles have been going on for a year, and maybe six months in Arizona. If we want to know what's going to happen to us, we need merely look at the Housing Bubble Blog and read what's happening in those states. Fair warning.

We really seem to believe it isn't going to happen to us, and we pick up any crumb or morsel of good news. We may possibly even get a bit of a dead cat bounce this spring. These little extinction bursts aren't a reason to dive in, but a fair warning.

One last, final chance to get prepared.

What I think I'm seeing is a negotiation phase -- in the sense that most of Bend business seem to believe they can talk the situation away. They can scare away the downturn with smoke and loud noises and sticking their fingers in their ears and closing their eyes tight, and repeating, nahahnhahnahanhahahanahahah. I had a good month in sales in February, but I don't take that as a sign that things are improving. I think that may have been one final burst of good business. Fair warning.

Reality is a rude bastard. He just comes up and slaps you in the face. He's just busy slapping other people first.

Downtown Bend is still in denial, and restaurants and stores are still going up in the Old Mill, and those places, but these are just latecomers to a dying party. But it seems like every time I drive home on Greenwood, yet another location goes up for sale or lease. Fair warning.

This happens in my business all the time, the central strong stores don't feel a thing and scoff at the smaller, less strong stores when they begin to struggle. Instead of seeing it as a warning, they see it as a sign of their superiority. But it's fair warning, as if the water is drying up on the edge of the pond. The big frogs just keep on partying. Fair warning.

I don't look to Portland and Seattle or the midwest, or the northeast, of even most of the country to see parallels to Bend. I look for places that saw the same sort of run up in prices, like California, the same sort of 'we're special' attitudes like Florida and Arizona, the same sort of overbuilding. We're lucky that it's happening to them first, because it gives us....fair warning.

Last spring I mentioned that there was still a period of grace. Sell your house now, don't be too demanding, and you might just get away with it. This spring, I'd say get your affairs in order, because by this time next year, there won't be much you can do. Fair warning.

Hey, if I'm wrong, you've squared yourself away for the next upswing. But if I'm right, you may just survive.

When I write one of these dire entries, I always feel like I need to add: I wouldn't mind in the slightest if I'm wrong. My pride can take it, and my pocketbook would love it. But fair warning means taking an extra coat; you can always take it off if it doesn't snow.


Anonymous said...

Dunc the only the 60% can do is walk,

Let's look at the number's say 60k real souls. Now 10k real jobs, thats 1 in 6, or 16% with decent jobs with benefits,

The 60% of 60k, is 36k, these people MUST leave, but will they? Hard to say, probably not until the welfare runs out. THe other 24K, probably 1/2 is my 10k above, good jobs, but NOTE these good jobs is largely HEALTH, as even NOW with the demise of HELOC and almost all surgery in BEND elective, the health folk are going down, ... So what will we end up with 2k or 5k good jobs in Bend??

How many real rich in Bend, I'm sure no more than a 1,000 with real money, lets say there are 10k retirees, most I know counted on their BEND RE to be the holy grail that was going to get them through the golden years, most of these folks are under water, will they wait this out 10-15 years? Thats how long to get back above water.

Dunc, I'm an optimist, because I know its coming back, but folks just don't have any idea, that 36k MUST leave this place, because the State of Oregon doesn't have enough welfare. Note to date we have 5,000 known Homeless it will be 10,000 this summer, and 20,000 next year if incentives to get the fuck out of here aren't delivered, or perhaps they'll create a giant tent city out at Juniper-Ridge and send them here, our City-Hall is so fucking insane, I wouldn't be surprised that they take other homeless as an opportunity to unload crap-shacks, but then that just makes this place even MORE un-desirable, ...

They can't SELL, they can't get a job, and they can't pay for health-care, CRIME, CRIME pay's, and your going to see a lot of it. Hire someone to stand by the door at your biz and do full body scans, ... This is the future of Bend.

RE is going down, 60% of this town are going to be under-water, and un-employed, and 401K empty, ... its going to get ugly, the smart ones were those that cleared out early with their 401k intact, Jingle-Mail looks like the right decision more&more everyday, ...

Big difference between 1983 and now is that then we saw $70k to down to $30k big fucking deal on net-loss, now we're going to see $750k go down to $200k or less ( shevlin, ... ) That's an average loss of 1/2M for most people, and those that attempt to pay it back @ retirement are fucked for life.

Do anyone you have any scope of how many retiree's are going to get wiped out here??

Then there's the people in the HIGH Broken-Top $2M or more, ... and there shit is going to be down 1/2M or lower for years, many of these people paid cash around 2004, and were assuming a guaranteed $4M by 2008. Now instead they have LOST all their principal, a lot of these people were TOLD by their bankers to do this, as you couldn't lose MONEY in BEND RE in 2004.

Does anybody even have a concept of the scale of loss coming to this fucking town???

Anonymous said...

Todays, BULL finally reported on the BEND being 70% over-valued, below are facts for those who read.


The actual report in PDF

Metro Area 2007 Q3 Home Price Overvaluation
Bend, Oregon $320,100 70.0%

People should read the report for themselves, and the backup documentation that validated the death sentence for Bend, Oregon.

House Prices in America combines a statistical model originally developed at National City Corporation ( with data largely developed at Global Insight. More information on Global Insight's housing valuation analysis is available at

What it means?? All valuations in Bend need a 70% haircut when estimating appraisal.

Banks have QUIT hiring appraisers, the way it works now is they use the county tax records, and apply the haircut factor. Which is HPI which right now is exactly 1/2 of 70%, or 35%. That means if your bend crap-shack has a $400k valuation, the bank will only loan you 80% of $250k. It makes things safe for investors.

Have a nice day.