Is now the time to buy?

The Bridge Boys wondered the other night whether it was time for investors to jump into the Bend real estate market that is still reeling from defaults and foreclosures.

There are reasons why the timing is right and why it is wrong for investors.

First the positive reasons: We've reached a nadir of defaults. We can only go up, the thinking goes. Also, with people spending and consuming more, productivity is on the rise. And, the Dow topped 11,000 this week, which returns to pre-2008 crash levels. Stimulus spending is starting to reach second gear, which will further galvanize the economy. We may have reached the absolute low in mortgage interest rates. The median price of a home as dropped from nearly $400,000 to about $180,000. Buys are out there all over town.

Now the negative news: The defaults just keep on coming. My postman has noticed another wave of them recently, which suggests we're far from bottom. Unemployment nationally is high (just under 10 percent), but it is higher in Bend and Central Oregon at around 15 percent.

Bend's previous boom was fueled in large measure by equity-rich Californians cashing out and buying up in Bend. But, if it's hard to conventional loans now, it is even more difficult to secure jumbo loans, which one would need to buy a home in most areas of California. So, if people can't sell in California, they can't buy in in Bend.

A perennial negative for Bend is the lack of an economic engine. There are no lumber mills left in town. Some companies here are shifting production to Mexico. We have the largest medical establishment between the Cascades and Boise, Idaho, but that doesn't really drive the economy. If people don't have much money, they aren't likely to go to a doctor or dentist or optician.

Major public works projects like the Parkway in Bend and the bypass in Redmond are completed. Yes, work on the new high school is beginning in Redmond and that should help.

Bend is projecting a $21 million deficit over the next few years. It won't have money to fix roads or the sewer system which are in desperate need of upgrades. The state is facing billions in deficits so it can't be asked to assist in our local economy.

For those with cash, now is as good as any to jump into the market here, but that is for owner-occupied homes. With joblessness so high in Bend, though, and no clear prospects on the horizon for economic growth, short-term investors could still get burned in Bend. Those taking the long view of 10 years or more may have a better shot at making a profit.

That being said, investors are already swooping in and gobbling up unbuilt subdivisions for less than half the asking prices. Also, if guys playing bridge wonder if now is the time to buy, perhaps that time has already passed.

No offense to my bridge partners, of course.