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DavidSkelton's comments:

on Worse Before Better: The Central Oregon Economy

I am a Real Estate Appraiser. I have worked as a Realtor, Loan Officer and Real Estate Appraiser here in Central Oregon since 1995. I've heard your program before and I must commend you on presenting topics without the thunder of partisanship politics.

Family Wage Jobs-
The Central Oregon area has some special challenges that occur in other areas of the country (Aspen, Durango, Lake Tahoe come to mind). Unfortunately, we have a number of groups which have formed political alliances to maintain the status quo. The number one priority of our local government should be in obtaining family wage jobs. The status quo group of Realtors, Politicos, Developers and the Bend Bulletin believe that we should be building additional resorts. While tourism brings needed dollars and businesses to our area, the minimum wage jobs these industries spawn does nothing to raise the standard of living for the majority of Central Oregonians. The developing of our land, for resort use, benefits those at the top of our economic food chain with very little dribble down to the majority of Central Oregonians. The time, effort and money wasted by our local government spent in kowtowing to this cartel would be much better spent in wooing businesses to the area with tax breaks and/or other benefits.

The Local Housing Market-
I said at the beginning of this year, that I believed our local housing market was going to get worse. The bad news is that we have not hit bottom yet. This makes the March 2008 prediction of recovery by Dana Bratton, one of our local appraisers, look that much more ridiculous. Home pricing will continue to spiral downward as credit tightens - it's a horrible snowball that is still gaining strength as it rolls down the hill. Check out Kevin Phillips book - Bad money : reckless finance, failed politics, and the global crisis of American capitalism. This gives a glimpse of how short sighted politicians have allowed greed to ruin our economy. Locally, foreclosures are increasing and driving the median home pricing down. This will continue to snowball as local businesses begin to fail and thereby force more pressure on homeowners already struggling to pay their monthly mortgage. This financial pressure has tragically manifested itself through a number of suicides and a rise in divorce filings. The financial strain of our declining real estate market takes a very real toll on the personal lives of all Central Oregonians.

Local Arts Scene-
Thankfully, the Bend market is a relatively decent market for musicians and artists. This is mainly due to the influx of tourism. One of the many benefits of tourism. However, family wage jobs are not one of the benefits of the tourism industry.

Of course, Central Oregon is still a great place to live and work. I am heartened by the responses posted here to date. It shows that citizens of Bend care deeply about this place. I moved here for the lifestyle and I have not been disappointed, those who moved here to "get rich" can't help but be disappointed.

If I can respond to some of the posters in this forum:

Gadwall - I noticed about four years ago that 40% of my appraisal assignments were for out of town buyers. I knew then that Central Oregon was going to experience a bubble. Outside investment in real estate is one of the surest signs that a market may be undervalued; however, that outside investment tends to create problems of it's own. Namely, it creates an artificial market that is not based on economic realities (jobs, income, community, economic growth, etc)... rather speculation runs rampant and a false market is created. I'm sorry you got caught up in that house of cards. I began warning my "spec builder" clients in late 2005 to get out of the market as I sensed a pyramid scheme in the making. Sadly, very few of them listened as they were caught up in the "get rich quick" frenzy of that market period.

Elmer F - You make a great point about our lack of leadership in local government. I had a conversation with the city manager and his assistant in 1998 in which they commented that Central Oregon had enough water for the next 25 years of growth. This comment was later repeated at a community meeting. Sometimes the arrogance of government employees is hard to fathom.

Joanman - Bless you... I love Central Oregon too and it is a great place to raise a family.

mtullis - The real estate market is not going to come back anytime soon. If you look at other countries (Japan for one) that have gone through a similar financial upheaval you'll find that real estate prices will flat line for many years. I'm afraid that the overall national economy will suppress real estate pricing for many years to come. Plus, we have not hit bottom yet. My heart goes out to those of you who purchased homes in the 2005- early 2007 period as it will be many, many years until those prices are seen again. Also, I agree with you about Realtors; however, the final resting place for responsibility always lands on the investor. Suffice it to say that the majority of Realtors do not have the education or foresight to render any intelligent comment on the future of a specific market. Realtors are salespeople... plain and simple. I would never buy a car without performing hours of research into that vehicle; likewise, when purchasing a home, the buyer needs to research that home and market diligently. Please note I said the majority of Realtors, I do not wish to paint their qualifications with too wide a brush as I have found a few in Central Oregon who are capable of thinking outside the box.

Jane W - I believe you used to be a realtor back in the day. Good to see you here... I agree heartily with you.

Thank you for allowing me to post here,

David Skelton
Appraiser

posted 4 years, 8 months ago
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