Bend housing rebounding?

The local daily newspaper, in its customary role as head cheerleader for development, pulled out the pom-poms today with a headline that screamed: “Housing inventory plummets in Bend.”

Read story here: http://www.bendbulletin.com/apps/pbcs.dll/article?AID=/20091112/BIZ0102/911120373/1041&nav_category=

While, theoretically, this is good news that housing inventory is approximately 50 percent off its peak, as the story claims, there are some caveats in the article such as : “banks have generally been slow to list foreclosure properties, and that may account for some of Bend’s decline in inventory. More than 3,000 notices of default — a filing that initiates foreclosure proceedings — have been filed in Deschutes County this year.”

Nowhere in the story is the other reason for the drop in housing inventory: homeowners have simply taken their homes off the market after the summer selling season yielded little success.

There is no evidence of an influx of citizens to account for increase demand for housing. Rather, it appears that speculators are once again entering the marketplace sensing that the bottom has been reached.

With real unemployment around 20 percent in the region, it’s hard to make the case that the housing market is heading upward. This winter should reveal a new, deeper round of foreclosures, not only in single-family homes, but also in the commercial sector. This will further depress the local economy.

Ironically, the story appeared on the same day the newspaper inserted the thinning, real estate monthly: Picture Your Home.

Sadly, the newspaper, which helped fuel the crisis with its pom-pom-waving antics, is now trying to hype another bubble. It would be more helpful if the newspaper would promote other ways the city could diversify its economic portfolio. But, no.

The area has always been wedded to putting all its eggs in one basket, be it the timber industry, tourism or housing.

The housing boom of the aughties bore no relationship to demand. It was largely fueled by speculators.

The downside for Central Oregon is that property tax collections are also seeing record defaults. The Sisters School District is already projecting a $1 million shortfall next school year, meaning teacher layoffs and higher class sizes. Other school districts will face similar dilemmas.

Meanwhile, tax breaks continue for the housing industry, be it buyers or developers. This may spur false demand, but in the long run it will lead exactly to another recession in which we’re currently mired.

But, hey, now’s the time to buy.