Friday, January 30, 2009

Homes are up, homes are down, homes are everywhere to be found.

I know the news outlets report the news for each day, but I do wish they could put some of this news into perspective.

Last week, it was announced that home sales had gone up.

This week, it was announced the "new" home sales had gone down.

But there was little effort to tie the two events together, or to explain them.

And they did that little thing that has driven me crazy for the last two years of blogging. They told us new home sales were down 14.4%.

But that refers to the previous month. If you compare new home sales for the same month the previous year -- a much more accurate gauge of health -- new home sales were down a whopping 44.9%!

Scratch under the surface, and you realize that home sales went up mostly because of foreclosures and short sales.

Meanwhile, there is almost no point in building new houses as long as the bottom has fallen out, and as long as there is so much inventory on the market.

To my reckoning, the more important statistic for Bend is the "new" home sales figure. Because this is where the bulk of the jobs have been. Just this morning, I read the article on the stay at home Mom's -- and sure enough, the husbands all worked in the building trade and talked of the stress of finding enough work.

Combine that with the 9 building permits issued in December, and the average of 25 building permits over the last year, and that's where Bend is really going to suffer.

Just over the horizon, I believe, is the Commercial Real Estate bubble here in Bend. Banks like Banks of the Cascades, which are already falling through the floor, are really going to be hammered when that starts to take effect.

I don't even want to think about the credit card debt that is out there.

But Bendites still seem a little oblivious to the possible ramifications. I think most of them think it's all be over soon, and we'll be back to where we were.

I suppose, as a business owner, I ought to encourage them in those beliefs.

1 comment:

BENDBUST said...

Years ago I traveled all over Africa as a 'private safaris with some buddys', and every village was the same, lots of boys with arms or legs missing.

After awhile I begged the question? Well it turns out that tribes and villages rob each other continually, but what they do is they want to come back the following year and take young girls of age and food. If you kill all the males then there are neither food nor females in the future, so you raid a village, and leave the males in a state where they can grow food and raise livestock but can't fight.

Bend is much the same, you as a vendor could in theory pillage your customers today, but it really is in your interest that they're employed and continue to be just healthy enough to crawl to your store, but not so healthy to drive to neighboring village say Redmond and buy comics or books.

Everything has to be in equilibrium.

I see it also, in my principal business its been absolute ZERO since May of 2007, I saw it coming, and was prepared. But my customer is CORPORATE, your customer is individual. The layoffs are only now happening and with a vengeance just this week Caterpillar the best company in the world 25% 'fired' and thats the word they used, not laid off, not furloughed but FIRED.

Thus the pain that the villagers of BEND will soon endure in the coming years will be mind boggling, but remember as hungry as the merchant wolf is, its in your interest to leave the males with at least one limb intact.

The rule used to be six months of cash to survive, today I suggest two years, if you aren't ready to live two years and subsidize your lifestyle get the fuck out of BEND.

One last comment from my heart, upon reading the distribution of the OBAMA stimulus majority of 'infrastructure' is going to the northern-midwest, probably not a bad idea, with homes $50k, and many roadless areas that will be the next BOOM. Bend will fall into a horrible black-hole, but there will always be new places that are booming.

Oregon ($6B) is getting very little of the $800B stimulus, and Bend
is going get almost zilch, there is no magic coming to Bend to rescue the economy, its every savage for themselves.