Crash, what crash?
Some folks continue to look for a silver lining, or at least a light at the end of the tunnel, for the local residential real estate market. Witness the industry folks who say prices are holding steady even as sales volume has plummeted. (And even that is up for debate as one broker told Upfront, pointing out that the median sales price is down 13 percent for the first six months of 2008 versus the same period last year.) And despite the industry’s loud proclamations that Bend’s market is unique and unlike any other place in the country, immune to the storms that have nearly sunk the industry, the reality is that Bend and Central Oregon’s real estate is tied to the health of larger markets – particularly Southern California as well as Seattle and Portland. And the prognosis for those markets isn’t good. More importantly the overall economic picture for the nation has yet to brighten. According to the New York Times unemployment is at four year high and the manufacturing sector, particularly the automobile industry continues to tank with GM posting the worst year in the history of the automobile industry – the entire industry – with losses of $38.7 billion.
On the housing front, industry insiders are predicting that the mortgage crisis will only worsen as the collapse in the subprime market spreads to prime loans and near prime loans. According to the Times, evidence of the looming crises is already amassing. Delinquencies in alternative prime loans, which usually include a mix of adjustable rates and interest only components, quadrupled between April 2007 and April 2008. Meanwhile defaults for prime loans doubled during that same period as buyers struggled to keep pace with the mortgage payments amidst the softening economy and tightening credit market that has prevented homeowners from refinancing to more favorable terms.
On the home front, nearly 800 mortgage holders in Deschutes country slipped into default between July 1, 2007 and July 2008. And almost 600 of those notices were filed between January and June 2008. That’s enough to put Deschutes at the top of another real estate list: Number 1 in the state for home foreclosures.
Making nice with locals?Mt. B
Toward the end of last season Upfront sat in a meeting at the Source with then Mt. Bachelor President Matt Janney and heard how the economics of the ski industry simply wouldn’t allow the mountain to reduce season passes while maintaining a minimum level of service. My how things have changed.
Mt. B announced this past week that is slashing its top tier season pass price by $120 for next season, a roughly 14 percent decrease. It’s also cutting its young adult passes for skiers and riders between the ages of 19 and 23 in half, from $700 to $350.
The moves are an acknowledgment of the criticism that the mountain has faced from locals who felt the sting of ticket price increases, a constricted ski season, limited lift operations and nagging maintenance issues. The mountain’s owner, Powdr Corp., first indicated that it was seeking a change of course when it fired several of its top tier managers this past spring, including Janney. The rocky times at Bachelor have come amidst near record snowfalls when other Northwest resorts are posting banner years. No word yet on whether the mountain will take the same approach with daily lift ticket prices, which management said it plans to announce at a later date. Season passes go on sale Sept. 1. For more information go to mtbachelor.com.
Cash To Burn
The Bend City Council race is shaping up to be a costly and potentially bare-knuckled affair. While one councilor told Upfront doesn’t expect an overly contentious campaign, the numbers tell another story. The Central Oregon Builders Association PAC, for instance, has raised more than $55,000 in cash this year- not all of it designated for Bend races. It had another $28,000 on hand at the start of the year, according to the Secretary of States Office.
Candidates, particularly those supported by the building industry, like local attorney Jeff Eager, began filling their war chests before they were able to formally announce. Eager, who filed his paperwork along with several other candidates last week, has raised about $15,000, more than double what any other candidate has raised so far in the race. Eager’s biggest backer is the Central Oregon Association of Realtors, which dropped $6,500 into the former Greg Walden staffer’s coffer. Eager told the Bend Bulletin that we shouldn’t read anything into those numbers, though. “I can assure that I won’t be beholden to the building community or any other particular constituency,” he told the paper.
Uh huh.
The good news for Eager’s opponent, Jodi Barram, is that money doesn’t always carry the day. The building and real estate industry poured a record amount into Clint Chick’s 2006 council campaign, for example, only to see him defeated after a late push by then mayor Bill Friedman.
This article appears in Jul 31 – Aug 6, 2008.
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Tomorrow’s Bend will 100% lawyers, today that is who COBA/EDCO is financing for future Bend leadership. It’s clear that COBA/EDCO knows that they’ll need the best legal minds working on their behalf at taxpayer expense, to protect themselves as the Bend-Bubble continues to deflate.
Bend is going to become hell on earth.
The Republicans of Bend are a joke, they have taken ‘socialize risk/loss, privatize profit’ to the extreme.
In Bend its ‘socialize all costs’, and ‘privatize all revenue’. This is the real Bend of today.
1.) Low SDC’s to enrich Billions of dollars to Brooks Resources is now deferred to nil. In a town where infrastructure cost was $60k, the builder’s cried about paying $12k, now they’re going to pay zero. Billions of dollars of SDC revenue were lost, which can found at Brooks as profit. That of course was lost on risky gambling on 20-30 year inventory developments up near Prineville & Madras.
2.) City Taxpayer revenue is used to PR&MARKET condo sales to witless tourists.
3.) Virtually everyone elected at city-hall is a HOA fee collector for condo’s, or some variance of such.
4.) The entire purpose of Bend city government is to development Siberian Tract Housing at taxpayer expense, and maximize profits for owners of the one-company town.
5.) Juniper Ridge is being developed so that Billions of excavation dollars can be passed to Knife River ( was Hap-Taylor, another good old boy ).
There is a word for this style of Fascism, and Hitler called it “National Socialism” or Nazi-ism, where those that ran the government, used government money to finance chosen industry.
‘Socialize all Costs’, and ‘Privatize all revenue’. This is the real Bend of today.
Lastly, there is the trickle down philosophy of the republican party to which all the voters of Bend buy into, that is if the good-old boyz, aka boss-hoggs get rich, so will all else. It hasn’t worked in the past, and in all likelihood will not work in the future, but myths are the stuff that Bend is made of.
No question Bend, Redmond and surrounding areas are flooded with homes. There is enough inventory to last another ten years or more at this pace. With the baby boomers retiring in Cali and other high priced areas and realizing now that their nest egg has shrunk by as much as half , they are going to be looking into areas that are much cheaper. Bend has no self sustaining economy to support the prices currently of the homes. People move here to live and enjoy, not to have six jobs and be stressed out working for companies that pay nothing. Most decent jobs here have no benefits, yet business owners live in mansions and have a life style that is rich. Try this attitude in a bigger city and go broke. Until this economy can support the prices of homes, this town will dry up more as people are moving out in droves to gain employment in other areas where they can live and enjoy life. This market needs to correct downwards by as much as another 30% and the economy needs to stabilize before people can and will buy homes here. If there are no jobs, then the price of homes means nothing. Oregon has for decades been the hillbilly state of the West Coast turning away big businesses like Microsoft and others as the current employers in Oregon did not want to lose their employees to companies that paid a living wage. Microsoft was originally plotted for Beaverton area and the County did not want to offer the same tax breaks to Gates as to the existing big Oregon companies, DOH.
We do not need more homes and do not need to keep treating the builders as victims. They made their own bed and now let them sleep in it. We need public money to go to inviting in real jobs, jobs that pay 20 plus dollars an hour, but with republicans like Gordon Smith and Geo Bush running the show and shipping jobs offshore, this is a sinking ship. The mortgage industry is not to blame at all as it was not their fault this market collapsed. Bush had us all fooled with this housing boom, deregulation of Fannie Mae which they spent 640 million dollars to do in lobby costs to keep the government out of the mix and now we get to bail them out, all of us are paying for this in tax dollars. in the meanwhile Bush started his own private war and hid behind lies and allowed his buddies to charge whatever they wanted to as it is all of us that are paying. And if we were smart, when Bush is out of office we can refer the Chinese Government to Bush, Cheney and all of the oil companies to pay back the Trillions we borrowed from China to start this war. Why are we giving social welfare to the oil companies? Bush turned the USA into the biggest socialistic government ever to have existed in terms of hand outs from the government, as long as you have CORP or INC behind your name.