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.
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.
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.