Sunday, August 16, 2015

Quarterly Bend Economic Report.

I love that the Bulletin does this.

Early on, it became obvious to me that Bend's economy is based on tourism and retirement.  Actually, "based" isn't a strong enough word.  It IS the economy.

Nothing since has contradicted that observation.

Housing starts are still way below the peak, though the housing market is supposed to be strong, which just means the housing bubble created such a surplus that we have yet to work through it.

I'm not sure construction jobs are the good strong foundation of an economy anyway -- dependent on the tourism and retirement, right?  And very susceptible to economic downturns.

So get used to it, Bendites.  No point in complaining.  These newcomers and these visitors ARE our economy.

The Great Recession seemed to push back the wave for a short time, but it's up and running again.

Thing is, there is a huge, huge amount of Creative Destruction going on in the tourism and retirement businesses.  The newcomers who don't really have a clue how Bend works, opening businesses that are problematic.

Hasn't been problem for Bend so far, because there always seems to be new people willing to take the leap.

Personally, I just try to ignore the whole spandex/foodie/hipster culture.  I see it every day in the paper, but it doesn't impinge on me, that I can see.

And of course my business thrives from the visitors, so I'm not in a position to dislike it. Go for it, people.

Like I said, this IS Bend. 


Anonymous said...

" the housing bubble created such a surplus that we have yet to work through it"

Dude ..... keep your day job. Having your finger on the pulse of the local real estate market ain't it .....


Duncan McGeary said...

You're probably right. But I have a question, and I'm genuinely curious about this.

Why are building permits still considerably below the level they were at in 1998, well before the boom took off. 168 in 1998, 137 now, 412 at the height.

You'd think from the news reports of housing shortages and rental shortages in the news that the construction industry would be rushing to build new housing.

Why the discrepancy? What am I not seeing?

Duncan McGeary said...

As I said above, what I like about these quarterly reports is that they would seem, on the surface, to be objective standards.

The news stories usually come from the real estate sources, and no offense meant to any real estate people here, but I don't think these stories are always reliable.

The rental shortage? It appears to exist but (again, no offense the real estate people here) I don't trust that this isn't manipulated to raise prices. The real estate boosters lost almost all credibility with me in the last boom and aftermath.

So building starts still being below where they were 15 years(!) ago, would seem to be a more reliable statistic. When that reaches the level it was at before the boom, say around 2003, then I'll be willing to say that the real estate market is fully back.