The Hangover Isn't Over Yet | The Wandering Eye | Bend | The Source Weekly - Bend, Oregon
The Source Weekly’s reporting is made possible by the power of your support. Be a part of it!
Pin It

The Hangover Isn't Over Yet 

Bad news for anybody betting on a quick real estate rebound: The Commerce Department announced yesterday that new home sales fell to a 50-year low in January.

In news that surprised the so-called experts, purchases of new homes dropped 11.2% from December to January, to a pathetic seasonally adjusted annual rate of just 309,000.

One factor behind the dismal numbers, according to a Washington Post story, is the glut of homes already built: "Builders ... continue to struggle with competition from previously owned homes, most notably the foreclosures that are on the market at fire-sale prices."

Meanwhile, Bend investor, financial adviser and blogger Jesse Felder has an "In My View" piece in today's Bulletin that throws cold water on the optimistic advice economist Alan Beaulieu gave during a recent appearance in Bend.

Beaulieu, "along with most investors today, is overlooking some major potential pitfalls for the economy and financial markets including the real estate market over the next few years," according to Felder.

Felder notes that "the credit crunch is still on and shows no signs of improving," with banks reluctant to lend and consumers and businesses reluctant to borrow. "Ultimately, the past two decades of fiscal debauchery by both businesses and consumers have caused an economic hangover that can only be healed with time and increased fiscal conservatism," he writes. "Over the long term this process of putting our financial affairs in order is healthy for the economy. Over the short term, though, it can be very dangerous."

Felder foresees a long process of "deleveraging" - getting rid of debt - that could lead to a prolonged recession like the one Japan has been experiencing since the early 1990s. Under those circumstances, he continues, Beaulieu's advice to invest in real estate in the expectation of rising prices "represents precisely the attitude that created the financial mess we now find ourselves in and ... there is a very real possibility this advice will have disastrous consequences for those that follow it."

Props to The Bulletin for having the guts to print Felder's piece (it couldn't have made the local realtors happy) although for some reason the editors changed his original headline - "Have We Learned Nothing from the Real Estate Bubble?" - to the much less punchy "Continued economic weakness is a very real possibility."

Now there's a masterpiece of understatement.

Why the headline change? Maybe The Bulletin has developed a severe allergy to the B-word.

UPDATE: We're Number One again! The Federal Housing Finance Agency announced Thursday that Bend led the nation in declining home prices over the past year, with prices at the end of 2009 almost 21% lower than they were at the beginning. Nationwide, home prices fell only 1.2 % over the year.

Even more depressing news: Over the past five years, Bend home prices haven't appreciated at all -- in fact, they actually fell by about seven-tenths of a percent. If anybody needs more proof that the real estate boom here was artificially inflated by speculation rather than being driven by Bend's supposedly unique wonderfulness as a place to live, there it is.

Pin It

Comments (2)

Showing 1-2 of 2

Add a comment

Subscribe to this thread:
Showing 1-2 of 2

Add a comment

Today | Wed | Thu | Fri | Sat | Sun | Mon
Live at the Vineyard: Heller Highwater Band

Live at the Vineyard: Heller Highwater Band - Faith Hope & Charity Vineyards

Thu., June 30, 5-8 p.m.
Submitting an event is free and easy.

Newsletter Signup

Get Central Oregon daily news
directly in your inbox

Get Social

Latest in The Wandering Eye

  • Moonshine Magic in Bend Still on the Down Low

    • Aug 9, 2012
    Get ready for our great close-up on the home distilling community out next week in our "Best of" issue. We interviewed a mixed bag of legal and anarchist distillers in Bend to find out why distilling is so very, very against the law in one's home. More »
  • The Eye Wanders Off Into the Sunset

    • Dec 26, 2010
    I’m really sorry to break the bad news to them during this season of peace and goodwill, but after this week the right-wingers in Bend and vicinity won’t have The Wandering Eye to kick around anymore. The decision to stop writing this blog was my own, and it was prompted by several factors. More »
  • DADT, Gay-Bashing and the "Icky-ness" Factor

    • Dec 19, 2010
    For the past week or so, “Zeo” of the NW Republican blog has had his jock strap in a knot over the prospect of Congress repealing the military’s “Don’t Ask Don’t Tell” rule. To hear Zeo tell it, if DADT is repealed and gays are allowed to serve openly in the US military it will mean the end not only of our armed forces but of America, its economic system and civilization in general. More »
  • More »

More by The Source Staff

Want to advertise with us?

For info on print and digital advertising, >> Click Here

© 2022 LAY IT OUT INC | 704 NW GEORGIA AVE, BEND, OREGON 97703  |   Privacy Policy

Website powered by Foundation