Monday, May 22, 2017

live like a hobbit

Some things never change.

Take housing bubbles. When the last one popped a decade ago, Bend was one of the hardest hit communities in the country.

Foreclosures soared. People walked away from their dream homes. And the community stopped growing.

There is a housing development not too far from my brother's house that typified what happened ten years ago.

Bend was riding high in the real estate bubble of the early 2000s. Small bungalows that could not be sold in the 1990s started selling for Bentley and Rolls Royce prices.

And, as if often the case when irrational exuberance starts driving prices, people came up with imaginative ways to earn money that would normally be rejected as "you-need-to-take-your-meds" ideas.

In 2004 a developer thought of a doozy. He would build homes in the million dollar range with architecture based on Tolkien's Hobbit village, The Shire.

And that is what he called it. The Shire. The homes would evoke the romanticism of living in a hole in the ground while not having to live underground. It was the type of development that appeals to people who want something different, but who are not encumbered by an excess of taste.

The developer talked a local doctor into signing for a loan. And the building was off and running in 2005. Running is not even close to what happened. Only one house was built, and a second was under construction, when catastrophe hit. The houses did not sell like hot cakes. They did not even sell like elven bread

And then the housing bubble popped in Bend. The Shire was not the only development that Hindenburged. The entire Bend housing market collapsed -- with one of the highest foreclosure rates in the nation. The Shire suffered along with the rest, but it had the disadvantage of being just a bit too fantastic to survive.

There was an additional tragedy. The doctor, who put his good name on the line to obtain the development loan, died. One day, he disappeared. The next day his body was found in the Deschutes River.

As is true with most tragedies of this nature, the small town gossips played out a tapestry of possible death causes. Accidental drowning. Suicide. Foul play. Whatever the cause was, it did not make the story any less Sophoclean.

The story is now a decade old. But the underlying moral is again raising its head. Housing prices in Bend are astronomical. A tiny bungalow in my brother's neighborhood just sold for $300,000.

Bend is currently positioning itself for another housing bubble that will inevitably burst. There are lessons to be learned. But not remembered.

No comments: