The Bulletin has been on a bit of an investigative tear lately, what with the John Doe OLCC guy and this morning with the "Buying Up Bend" article.
This is another one of those times when I wish the old bubblebloggers were still around to comment. I'm just not familiar enough with the financial details of real estate to dig too deep. Maybe some of youse guys can give your insights.
I'll give it a go.
First of all, despite the "Big-time Investors" label, I'm not sure that I feel $6 million is all that significant in the overall scheme of things. It would seem like chump change to "big-time" investors. A signifier, perhaps. An Omen. A Harbinger of future investment.
They mentioned several other "investors" of unbuilt subdivisions; so it does seem to be a trend.
I'm not sure that picking up distressed properties at such low prices signifies the overall bottom of the market; maybe the bottom of those properties; it's possible, I guess, that we may be near the bottom.
Then again, we can bump along the bottom for a long time....
When you look at the time-line, again it's not all that surprising: "Crowell said he expects to wait two to four years for real estate prices to reach values where he would want to sell."
That doesn't seem unreasonable. If they get a 20% increase in value over a four year period, that's not much of a return, but probably not a loss. A 50% upside increase in two to four years would be a great return.
But I remember pointing out that when you look at historic local housing price drops, (California, Texas) there seems to be about a 7 year time line between the beginning of the drop back up to square one. If you think the Great Recession started in fall of 2007, like I do, we're already 2 and a half years into the cycle. It would make sense that at least some properties have reached a price bottom by now.
Unlike some of the other bubblebloggers, I've always thought Bend would come back from this. I do buy into the concept that Bend is just too attractive to retiring baby boomers to sink into the eternal abyss.
What that signifies to the overall health of the economy is that we will continue to probably be a minimum wage retirement and resort community; but as those communities go, a pretty healthy one.
2 days ago