Sometimes, I think this link is obscured by the tourism element of retail. But, insofar as it affects the local economy, I think tourism only keeps us afloat. We are going to need for the housing market to recover before the Bend economy will.
And that seems to be a long ways away.
This article (The Housing - Retail Link) is about the Australian economy, but it applies to all of us (and I've substituted WE and OUR for Australian):
"Wealth effect - the process of rising (falling) asset prices leading to rising (falling) consumer confidence, borrowing, household expenditure and employment."
".... consumer spending and employment growth appears to have stalled now that house prices have flat-lined. (We) ".... have, instead, begun reducing consumption and repaying debt…
The golden era for retailing that was 2000 to 2008 is now over and the age of frugality has begun."
I especially like the following statement, because it points out a problem with the premise I see in most news stories about a possible recovery-- that increased spending will increase employment. To me, it's obvious the opposite is happening and will continue to happen:
"It’s easy to dismiss the common misconception that unemployment would need to rise before home values would fall. Rather, ... (falling) home prices tends to lead ...(increases) in unemployment simply because of the wealth effects described above. Put simply, as long as..." (our) "... housing values remain stagnant or falling, consumption expenditure, credit growth and job creation will remain subdued..."
I'll repeat that: "falling home prices tends to lead to increases in unemployment."
In other words, we can't "spend" our way out of trouble. We need housing to stabilize first. And even then, I think we'll have along, long lag before it affects our bottomline.
We'll probably see a recovery about the same time as we've given up looking for a recovery.
5 comments:
Duncan,
This has nothing to do about your blog (today at least) but I've been missing you at the store. I have a few questions for you and since you're the man in charge, I hope you have answers.
1) Supergirl (current volume) I have collected over the years via my old order online routine, every single variant, printing, etc of the current Supergirl series. Since I am now getting all my comic needs through you is it possible to get variant covers, 2nd printings, etc through you? If so how do we go about that?
2) Comic boxes and resealable bags. I don't know if you can get these specific ones, but if you can I would rather give you my business than the internet.
Boxes: http://goo.gl/umbrs The Black variant, I need 3.
Bags: http://goo.gl/3dBlc Currently need 1 bag of 100.
I believe you have boards at the store.
Let me know if you can get these and at what price. If not I'll revert back to the internet for them.
Sorry about doing this via blogger comment, but I don't have a better way to get ahold of you.
Thanks Duncan.
Kevin Barnum
barnum.kevin@gmail.com
Shelf #49
Well the election sleazon is coming and guess what the RE biz is still in the dumps, but 'who could have guessed' sheet, we all knew the resets wouldn't end until post 2012, and that's just MAX pain, then toss in BEND lag,
Here is Bend is probably the worst where 1,000's of empty foreclosures are kept off the market to 'protect the market'.
CACB is now trading at .07 in years past money, but then then its now selling for 100X, but in all effect it should have been de-listed. But the houses are kept off the market and the banks that are dead are kept alive, ... maybe just maybe in 2014 somebody might come along ...
Like has been said all along here at best now is not even 1932, RE has a long way to go down, and fuel prices haven't even taken effect with the coming inflation of unheard of depreciation of the dollar.
Build an economy 99% dependent on RE they did, but then what else mattered? Who else mattered? Now keep it all alive. Well at least they still have hope of it turning around.
True 'contrarians' say ONLY when everybody is down is the time to buy, and as you can still see many in BEND-LAND(tm) still believe that the better is around the corner, and of course it isn't. The good news is homes in 2 years will be trading in Bend for less than $10k USD.
Sheet maybe I'll come back and buy ten just for the the fuck of it :)
Only when Bend is Bend-Dead and the 99% have walked away from RE, and city-hall has new faces, and DownTown Bend is boarded up, only then will you know that the bottom has arrived.
"The good news is homes in 2 years will be trading in Bend for less than $10k USD."
I don't think it'll get quite THAT bad; even in the depths of the 1980s recession, homes here were selling for more than that. I could see the median price going as low as $150K or $140K, though. (It's already down to $175K.) There's such an excess of supply and so many distressed properties on the market that I don't see any hope of turnaround for four, maybe five more years. Bend is well and truly fucked.
But if your prediction comes true, I'll buy 10 homes too and rent them out to whatever poor delusional schmucks are still living here.
Bend is Detroit HBM, and hopefully you'll be gone by the time I' proven true, and in Detroit you can buy a mansion for $5k.
Kevin, I've been mulling this over and the best thing for you to do is come in on Thursday or Friday, (Tues and Wed can get busy dealing with product.)
I'm here all day on those two days.
Dunc
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