| Bilbo in Bend 2007-05-20, 3:25 am |
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This report will deal with the working folk - the sub-contractors, and
the Mexicans. Eventually I would like to do a whole report on the
mexicans, in fact to be honest I think there should be a whole blog on
Mexican Workers in Central Oregon. Before I begin let me just mention
my favorite quote "When in Mexico they ask you how many children you
have, When in the USA they ask what you do, what you drive". Latin
American people have a heart and their hard working folk. So if your
trying to read bad stuff about these people you'll not hear it from
me.
ISSUE-1 The Status of Sub- Contractor's in Bend
These are the working folk, the dry-wallers, finish-carpenters,
electricians, ... the folks that work 6-7 days a week building. One
common theme that I have found from all that I have talked with over
the past few weeks, is that they're getting out of Central-Oregon as
soon as they can sell their house. They still think that they can out
of their house what they paid. They feel great pain for their bosses
who have 'BLEEDING' of the worst kind sitting on million dollar homes
on Awbrey now for over a year, everyone is waiting. I haven't seen any
that concur that if you want to sell you must reduce your price. The
common theme is that just one more article in "Outside Magazine", just
one more "Inc." Best city in USA, will cause everyone to want to buy
again. ASAP
What I found MOST interesting with the SUB's is that their pain
started last year. Most were averaging $45/hr until last summer, then
it dropped to $25/hr, and now its ALL piece work. Many have told me
that the piece work yields about $15/hr. This reminds of our computer
business, where programmers have gone from 60/hr to 15/hr competing
with Indians and Chinese in just a few years. The SUB's I talked with,
and NOTE the great majority of folks I interviewed are the TOP SUB's
at North-West Crossing's, these folks are already lining up Renovation
work, they're good. This notion of leaving Central-Oregon is the MOST
consistent theme I have heard. To date I have not found a single SUB
or GENERAL that intends to stay here. I find this amazing, and note
they average time these folks have been here is ten years, these are
not folks that just go here in the last five years.
There isn't much anger about the drop in hourly pay, as they know the
General's { I'll be referring to the developer/ builder as a
general } are struggling with their bleeding on the SPEC house's they
cannot sell.
Like I mentioned in the BUILDER's report earlier this week, sure
everyone is busy-busy, but the SUBS are busy because they're having
to work harder for less, and they have NO CHOICE. I did not find one
that was willing to seriously reduce the value of their home to get
out of here. The consistent plan is "I must sell my 2500 sqft
mcMansion for $750K to get out enough cash to start anew in Hawaii,
Maine, ...anywhere but Central-Oregon"
The BLEEDING here is massive, as a hard-core XXXXXXX-BASTARD
businessman the first maxim is 'cut-your-losses', and let your profits
run. Its one thing for wacko's to have lost their life saving's on the
DOT-NET/DOT-COM 2000 stock market crash, but here we have folks that
are continually dumping thousands of dollars a month into a
depreciating asset. THIS IS NOT BUSINESS. Folks in Bend didn't buy
their home for a place to live, its ALL speculation, and now they'll
keep feeding the monster "bleeding" as they call it. This all reminds
me of the other-guy has it worse phenomenon, the SUB's are bleeding a
few thousand a month in mcMansion they don't need, and the General's
are bleeding ten-thousand++ a month on Spec-Homes they cannot sell at
last years high price. Thus the Sub's don't think they have it bad,
because they know people that have it worse. This is a syndrome
normally seen in concentration camps.
My mission here is not to wallow in the pain of my fellow man. My
mission is find out what the hell is going on, and as you ALL know,
your not going to find out on your local media, because 'FEEL-GOOD' is
what our entire USA economy is about, and on TV and the Main Stream
media your only going to hear things that make you feel-good. This is
because of advertising, it is a psychological fact that good-news
makes you shop at fred-meyer, and bad news makes you not shop, and
freddy's is the biggest advertiser in Oregon, ergo good news for ALL.
Shop until you drop, remember what dubya said after 911, "Go
Shopping:".
In every instance I feel for these guys, and MY advice is sell and get
out, and don't keep bleeding. My MOST optimistic estimate for recovery
is three years, and this only if the building stops, and the inventory
is absorbed. We all know that niether of these is even close to
happening. My conservative estimate is ten years for Bend to reduce
the inventory. Note, that Oregon has NOT had a serious correction
since 1983, and that took three years to work out. The difference then
was $80k homes went to $30k, now its $750k going to $250k. The scale
is the same, but the debt obligation is horrendous, note that if you
were honest in 1985, you could work off your loss in one working year,
as some folks did make $40k, today the obligation will be $500k, and
that's ten years of income. This is a WHOLE new ballgame, working this
one off could take years, also the PAIN may make 1/2 the population
NEVER come back to Real-Estate for a generation. ... Study you
history, we're going to need a BIG-WAR to pull ourselves out of this
one.
The SUB's I talked with never dreamed that the Bend construction boom
would stop, two years ago everyone at NorthWest Crossing had a brand-
new BIG TRUCK, with toys in it - wave-runner in the summer, and dirt-
bikes in the winter, sometime last year the toys disappeared "they
sold them", and right now folks are trying to trade in their BIG
trucks. Right now nobody is showing off their toys, they're long gone,
everyone is to busy trying to pay their house payments so they can
wait for the recovery. Again, the common feeling is just one more
positive Outside Magazine ranking like the one last week about Bend
being Better than Moab for mtn-biking. I'm a mtn-biker, I love bend
and moab. All the restraurants in moab suck, and bend these days is
only about yuppy food. I only eat at Bend Mexican places: long-board,
rigobertos, and super-burrrito. Moab has way better trails and stuff
outside of town, in town their is nothing to do, except drink 3%
mormon beer. Bend is ONLY about shopping at the Old-MIll. Of course
Outside-Magazine is ONLY about advertising and selling its
advertisters products which can all be found in Bend. This is NOT
going to save Bend, besides the kind of people that are need to
rescue these folks is NOT the kind of people who will buy $750k homes
when they move to Bend. The common thing I see now is if these folks
could do it over they would have got a 1100 sqft house, NOT a 2600 sq-
ft mcMansion. Everyone that made the greed move from 1,000-sqft to
3,000-sq-ft realizes they made a tragic mistake.
So there we have it our SUB's are waiting for 1,000's of folks that
want to buy $750k home in Bend to move here, and the general's that
hire them are waiting for folks to buy their one million dollar home's
that have been sitting empty for over a year.
This is classic depression, I'm talking 1930's, it was the BIG homes
that went empty, and nobody bought because of upkeep and burn-rate,
the little homes are the homes of people and they held up well. Like I
have been saying since I started this blog, the avg Bend income is
$60k/yr, that means the avg home should be $240k, stay in that
ballpark and you'll survive the storm.
What everybody in BEND did is buy a mcMansion with the idea that the
1/2 million home would go to one million, and that is why they want to
sell for $750k, problem is there are NO buyers. Also Jumbo-Loans are
pretty much dead now, a jumbo is over $350k, if you have 20% down, and
buy a nice house low-ball in Bend for $280k, you can get financed, but
if you try and by one of these 3,000 sqft $750k mcMansions with 5%
down you'll get no-where. This is why the stuff ain't selling, and
NOBODY has the cash.
In summary on this issue "cut your losses", your home is not a
business, treat it as a business, BLEEDING 1,000's of dollars a month
for years is NOT a business tactic. To lose your life-saving's is one
thing, but to lose your future income is insane.
ISSUE-2 THE MEXICAN { Sincere apology latin brother, I know very few
brown-skins are from Mexico ... Note, I consider myself white-trash
amigo }
I have talked a lot about folks average white guys with NO education
that came to Bend bought a little house, and SOLD it and then bought
$750k home up on Awbrey, so WHO bought the little homes?? This is
where our Mexican comes in ...
The mexican's in Central Oregon are our Sub-Prime Support system,
they're buying the homes that our white trash has been selling. Thus
they are the foundation or the leg's of the entire Central-Oregon
Ponzi Scheme. For the past ten years groups of mexicans have been
buying the under $300k homes in Madras, Redmond, Bend and this is what
allowed the white-kids to get into the mc-mansions on the hill. What
is very interesting is that if just for a moment that DUBYA actually
enforced the ILLEGAL-STATUS they would in effect completely destroy
central oregon real-estate as that is our foundation.
In the 70's large tracts exactly like nw-crossings were built in
Tustin/Irvine in California, these were the upper middle class places,
today they're all lived in by Mexicans. This is a good thing,
otherwise the home would have been bulldozed. Basically what happened
is that LARGE expensive homes got built, and then an area fell out of
favor with the high-income economic group. This is exactly what has
happened to Bend.
The Mexicans do the yards in Bend, they build the homes, the current
USA statistic is 3% agriculture, 30% construction, and 65% service. If
you eat out anywhere in Bend, the odd's are your mexican brother
washes your dishes.
A few weeks ago I talked with some very prominent builders of the
area, and they had an interesting theory. That the ENTIRE Bend boom
would have never happened if it were NOT for the Mexicans, they bought
the little dumps that white folk would NOT live in, and they fixed
them up. Then the white folk that could-would NEVER have moved up
decided they could play the rich mans game, so they bought a $500k
3,000sqft mcMansion, again this would NOT have happened if the Mexican
had NOT bought their shack.
The point is that if Bend area actually did something hostile towards
its Mexicans the AREA real-estate biz would fall like a house of
cards. This politically is a VERY important point.
Gated community's like highlands at broken-top, will NOT allow
mexicans entry in their cars, but they come in by the busload to do
roofs and drywall, ditto for anything 'morrisette'
Like I said A WHOLE BLOG needs to be dedicated to the BEND Brown-Skin
folk. I speak spanish, so in the coming months my desire is to start
interviewing some Mexican home-owner's and sub's, one of the questions
I'm interested in is are they moving are staying. Like I have said not
a one white-sub or white-builder I have talked with plans to stay.
COMMENT: I came to Bend forty years ago because I loved the nature,
there is NOT a single damn thing that white folk have brought to Bend
in the last forty years that I couldn't do without. Note, I didn't
come here to MAKE-MONEY, I came here to live, the life-style, but
EVERY DAMN builder and SUB I have talked to clearly has stated they
came to build and make a buck, and when the game was over to move-on.
That said SHOULD we have crocodile tears for these folks? Given that
inherently the VAST MAJORITY of folk that have moved to Bend since
1980's really only came here to play the gold-rush. Life is NOT fair,
nobody is entitled to wealth. I have already written how to obtain
wealth, and it doesn't happen quick. What everybody in Bend did was
the same stupid thing, they started in a little mill-house, and then
sold and bought up in the highlands, they weren't happy that there
little $80k shack went to $300k, they had to have a $500k mcMansion go
to a Million, now 1,000's and 1,000's and have 1,000's of SHEEP in
Bend are stuck with the mcMansions.
What will come of it?? I'll tell you as I know exactly, they'll be
bought and occupied by the Mexicans ten to a house, and they'll make
them homes, and someday you'll drive through NW-Crossing and on sunday
every garage door will be open and folks will selling tacos. This is
what Irvine is like today, not thirty years ago it was the same game.
White trash in orange-county sold their anaheim house, and bought in
Irvine with the idea of becoming millionaires ALL these homes were
sold on auction where you had to pay lottery just for the right to
buy, and where are they today?? Its little mexico.
SUMMARY:
In the last article I covered the BUILDER, and this article the SUB,
and then the SUB-SUB { mexican }
I don't know how many years our Builders, Subs, can continue bleeding.
Given that in 6 months the ONLY construction will be remodeling there
simply will NOT be enough work for all to stay, and thus there will be
foreclosures, and most of these folks did the nothing-down game, and
so they have NO wiggle room to reduce the price.
There seems to be a general feeling that "Juniper Ridge" is the savior
if we could just get it going faster, then all the manufacturer's
would come, and Bend could become a Gary-Indiana over night, and all
would be good. It's quite amazing how growth for the sake of growth
takes on, its quite like cancer. It would NOT take too much nasty
manufacturing on Juniper Ridge to pollute everything to the North.
Redmond and Madras will be Love-Canal, does anyone care? Not if it
means I can sell my house for $750k and get the hell out of Central
Oregon.
It seems to me as someone who had another twenty and plans to die in
Bend, that the folks who are running the show aren't in here for the
long-term. How in hell did this happen? Does anyone give a shit? Of
course not the corporations have been doing this since the 1980's
replacing pensions with IOU's just read the Bartlett&Steel book
"American what went wrong" { 1986 } The USA corporate leaders have
been buying haciendas in Spain and Italy, everybody plans on cashing
out and retiring somewhere else. Thus everything is disposable,
nothing is sacred, everything is temporal. Everything is NOW, I want
it NOW.
My only comment is that perhaps like minded people can raise to the
occasion and save that which has NOT already been destroyed in Bend.
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