You make your bet, I'll make mine.

My bet is that Bend is in for a long downturn.

Let's talk turkey. Too many houses, too few people able to sell their houses elsewhere to move here, too few well-paying jobs, too high priced.

But all of that is almost beside the point. The number I've always thought most significant for me and my business is the building permit numbers. And they're as low as can be. A drop from the 400's just a few years ago to an average monthly rate of 27.

27 building permits per month.

These are jobs disappearing, whether they're showing up on the statistics or not. The other stuff, the overhanging inventory, the shadow inventory, and whether credit loosens up and prices drop enough for people to start winnowing down that inventory -- that all has to happen before building permits are likely to pick up. At the end of the process.

So houses could start selling tomorrow, and I still think it would be a year or two before builders would start ramping up again.

But I see no signs of that happening. Whatsoever.

So...that 7 year building cycle looks awfully likely now, and we're only a year or at most a year and 1/2 into it. It is no longer a matter of waiting to see what happens. Because of the time lag, we already know what it's going to be like for the next year or two minimum. The damage has already been done.

27 building permits!!!.

Again, I'm looking at new money and jobs: all the people who sold houses, who build houses, who furnished houses. All the money is disappearing. And many of those people have been my customers.

Just as a thought experiment, think about all the people involved in building just one house.

The original raw material. The transporting of material. The building of foundations and infrastructure, the electrical, plumbing, landscaping, painting. The raw material for the furnishing of a house, the transportation and building of furnishing, the salesmen of everything involved in the house, the financial underpinnings, banks, mortgages, agents, trusts, etc. etc.

Ask yourself how many people in Bend are involved in those industries? How many own houses? How many opened businesses catering to that trade?

What do they do now? Twiddle their thumbs? I've thought before that there was a chance that we'd actually have out-migration. So far, there still seem to be enough retirees and equity refugees to keep that from happening. But I know a fair number of construction people who are leaving town to find work.

I suspect this fall and winter is going to be much worse than I expected, because while there has been decent tourism, my regular customers seem to be a bit more scarce than usual. Maybe they're off enjoying themselves, or held hostage by the Olympics, or -- like my cat -- paralyzed by the heat. But I'm very curious what the numbers will be when the tourists are gone.

And as I've mentioned before, the Commercial Real Estate building, which was a bit of a lifeline for the last year or so, is coming to a screeching halt. Nationally, the reaction has been -- if anything -- quicker and stronger.

Even 6 months ago, I knew people who could sell their house. Now, we have a friend who really wants to get out of here who can't.

So I'm guessing that retail sales are going to be down in Bend for quite awhile. I'd be surprised if we don't drop overall at least 25% -- remember, Bend had a bigger building boom than most.

The big boys will be O.K. locally, unless they collapse nationally. For the little guys, it's really going to matter whether they're willing to struggle with not one, not two, not three bad years but perhaps up to 4 or 5 years. There'll be exceptions, of course. Even in my store, a product suddenly getting hot could easily erase a 20% downturn overnight.

But that's not where I'm laying my bet.

27 building permits.

I'm going to keep trying to stay ahead of the curve.