The Donald Trump/Bend urban legend

I just heard about this at work today, people claiming that Donald Trump said the number one place to invest in/develop/buy/smoke real estate is Bend, Oregon. One guy—a local land engineer even—claims that Trump said this on Larry King Live. He may even be developing something here!

Folks, it just ain’t true. Someone’s blowing smoke up your ass. It’s a rumor someone started to get people talking about Bend real estate. There’s no information online alluding to this, and even the transcripts of the Larry King Live episode in question don’t bear it out. Bend is not even on Trump’s radar.

Let’s move on now, m’kay?

63 thoughts on “The Donald Trump/Bend urban legend”

  1. To "me in Bend": no one is denying that Bend is fast-growing. And it’s clear that Bend’s huge leaps in real estate values are largely due to that growth. The point is this: is Bend’s economy a "boomtown" economy that depends on a constant influx of newcomers to keep afloat its real estate agents, real estate developers, contractors, home-improvement stores, landscapers and other related businesses, or will it be able to sustain itself at the same level if and when the inflow of people slows or stops?

    A boomtown is dependent on the mobility of people who will bring money in. Unless the town has an economy that has a net inflow of revenue from sales of products or services, if for some reason people can’t or won’t move into the town with spendable assets, the economy will suffer. It’s true what people say about real estate being a good long-term investment — if property values stay flat or drop, you can live in your house until they rise again, which they will inevitably do. That is, of course, as long as you have an income and can make your mortgage payment. Bend’s boomtown economy means that if people in California or elsewhere can’t afford to move, the large number of Bendites engaged in building and selling houses to each other will have to find something else to do.

    I think that the situation is not necessarily so precarious if Bend can succeed in attracting some major employers (like a four-year college) to lessen its dependence on a constant influx of newcomers. High-tech industries like programming and non-location-specific fields like consulting would be a good fit, because Bend’s remote location and poor transportation connections limit Bend’s ability to export goods. In severe weather (not a rare occurrence), Bend sometimes becomes cut off from major population centers and in today’s world of "just-in-time" delivery, that is not a good thing.

    A limiting factor here, however, is Bend’s inability to retain its best and brightest young people, its low wages, and competition from areas that are closer to world-class educational and research facilities and financial markets. A consulting company in Bend will find it increasingly difficult to compete with others who have easier access to a major airport, networking opportunities with players in large markets, and an easier time attracting talent from top universities. On the last point, attracting talent, Bend is better positioned than towns of similar size and similar remoteness because it can make up for its lower wages with the promise of greater recreational opportunities. However, when you pay a lower wage and sell the recreation angle, it’s difficult to get your employees to work the 80-hour weeks that those in competing markets are glad to work. This reduces the competitiveness of Bend companies and serves as an explanation of why you don’t see many high-powered manufacturers, consulting firms or software companies based in mountain resort towns located three hours away from a town of even 100,000 people.

    In the ’80s, Bend promoters tried a different angle – turning Bend into a destination resort playground for the rich along the lines of Vail, Aspen or Sun Valley. This is unattractive for a few reasons. First, Bend is still a place where a family making less than 6 figures can live in a nice house, own an SUV and still afford a ski pass. The affordability of Bend relative to other resort areas is part of the town’s appeal. If an Aspen/Vail/Sun Valley model of development is successful, many of Bend’s townspeople would end up priced out, living in Prineville. However, that model is not feasible for Bend – have you been to Aspen or Vail? They have daily flights from major money/population centers and their mountains are steep and well-developed, with slopeside condos and ski-in commercial zones at the bottom of the slopes. Mt. Bachelor, unlike other resorts, is built on government land. Not even night skiing is allowed. Barring a major change in Forest Service policy, Bachelor will always be a half-hour drive each way from lodging and services.

  2. I used to live in Mammoth in the 1970’s. At that time you could buy a condo for $15,000. Then they had a drought and everyone left town. There was even a sign as you left town towards 395 that said "will the last one leaving please turn out the lights". It was very sad to all of us who just wanted to live in a nice place and ski have to leave.

    Within the next few years all of the people who had made their money from Los Angeles came up and bought everything they could find to buy and the property values shot up. Those same condos were now going to $50,000.

    For all of us that were weathering out the storm for the next skiable season we were shoved by the wayside and Mammoth became a spandex, bleach blond, guys with gold chains nightmare.

    Keep in mind, these were all the baby boomers the swore that they were never going to be plastic, love everyone and peace.

    They became what they hated and a nice little town like Mammoth became a high priced boutique shop, heavily advertised to get your money L.A. town.

    There used to be logs lining the roads, they removed them, too corny. There used to be great places to go a with your friends at night and dance, they removed them. They didn’t make enough money. Anyone remember the V.I. Saloon, now an outlet mall. The Continental just gone. The "ghetto" where most of the ski school people lived". Now all the illegal aliens live there that work on the mountain and don’t even want a ski pass.

    Does any of this sound familiar. Well put on your seatbelts. When they are through squeezing every penny out of your town just be prepared to pick up the pieces pretty quickly, don’t wait for the bottom to hit, buy those houses that you could not afford and make Bend back to the Bend that I remember. A kick those contractors to the curb. Are they permanent residents? Or do they just fly where the wind blows. Some change is good, but not this much. Collectively you have to fight for your town.

    Thanks for letting me get this out.

    If you whine and complain after it is given back to you and you are in a recession you will lose again.

  3. Tina, you said it well. I am not from Bend, so I guess I am lucky not to have to see this happen to my little town,But I guess what saddens me the most is the rudeness of alot of the new commers here, I do remmember when Bend was a nice little community and everyone was friendly, but thats times gone by, I cannot help but think they must be very unhappy, and you know who you are. I suppose the big investers will not slow down till there is not one more nickle to squezze out of here.I was told again this week that Trump bought property out by sisters, rummers I am sure but sure keeps everyone spending. Bend is a city of strangers. Like I said before nobody really cares anymore, its just more money more money more money. Buy the way did anyone read the paper today. Guess who is going to be working at the ski resort this winter? 10/19 edition. Tina you are so right.

  4. Sorry for all those errors, I guess I should have read my message back before I sent it. Please forgive them and understand the message.

    Thanks.

  5. We’ve all heard the rumors that drive these real estate prices up, but this much is true: There is currently a tremendous drive by developers to create as many new destination resorts as possible. These resorts inflate property values on land otherwise undevelopable by fitting criteria established in 1992 to drive the tourist industry. Huge golf course resorts and man made lakes are proposed to inflate lot prices, and they will squander our prescious water resources. Laws like measure 37 and the water mitigation laws are being batted around the courts, but corporations from outside the area are throwing BIG money at exploiting the appeal of our area.

    All of us need to become involved in local planning and need to step up and be vigilant about the current zoning changes proposed in Deschutes County. Just last Thursday there was a meeting to propose EXPANDING the destination resort zoning. The Destination Resorts will cater to gated communities for part time residents who will expect fully maintained golf courses, using 1 million gallons of water a day and dumping maintenance chemicals into our auquifer.Each golf course will cater to a couple hundred homes that will be owned by part time residents.

    The gist of this is that Bend will be exploited by developers looking to make a quick buck selling lots, and then they’ll move on to the next "Trump Tip of the Week".

    Please, please show up at county meetings and have your head counted as someone who cares. Bend is fantastic and deserves to grow responsibly.

  6. When, and where are these meetings? Can a difference be made buy a single group apposed to this land rapeing ect? There is big money involved here. A few years ago there was a water shortage here, at least that is what the city claimed to be true, watering was restricted, now they seem to think there is lots of water, what happened that now we have and endless supply for golf courses, lush green yards ect. Water here seems to come and go depending on developement.

  7. The meetings are frequently posted as articles in the Bulletin, but are sometimes disguised, as the Bulletin is quite pro development. However, the County and other government agencies are required by law to solicit public input for land use changes. I stay as informed as I can, and we send out notices to interested people via email. Send me your email to mfellner@mindspring.com and I would be happy to include everyone who has concerns to our list.

    We have been activly challenging the Thornburgh Resorts proposed for the Cline Buttes/Tumalo area. The reason that they think that they have all of the water that they need is because of the current water mitigation laws, which take current ground water irrigation rights, spin them around, exchange them for mitigation credits, crunch some numbers that claim to put a percentage of the water back into the aquifer and thereby "puts it back into the Deschutes". There is great controversy about whether this theory holds up scientifically and environmentally, but the developers and politicians love it, as it enables resorts to drill huge wells and pump multimillions of gallons per day. These laws will bite us in the long run and are being challenged by Waterwatch and those that aspire to protect the Deschutes and fish habitat.

  8. Check out the Bulletin story linked below from the 10/27 paper – "Northwest Crossing Construction Plans Accelerated." Translation: "if we don’t finish these houses and unload them in the next few months, we know we’ll never sell them in 2006 at 2005 prices." This kind of frenzied get-out-while-you-can mentality is only going to make it worse when the housing bubble in Bend, Oregon bursts, folks…

    http://www.bendbulletin.com/apps/pbcs.dll/article?AID=/20051027/BIZ0102/510270317/1011&nav_category=&template=print

  9. Also, I quote this from that 10/27 Bulletin story:

    "The least-expensive home currently available in NorthWest Crossing is a three-bedroom, 3 1/2-bath house for $488,000, according to the project Web site."

    With a 10% down payment of $48,800, the monthly payment on a 30-year fixed-rate mortgage at 6% on the remaining $439,200 would be $2,633.23.

    This is for a 3-bedroom house – the least-expensive in the development! Are people in Bend really making that kind of money? Does that reflect the market value of housing in Bend? The answer to both of these is no.

    Federal guidelines recommend spending no more than 30% of gross income on housing. Following this, and disregarding heat, electricity, maintenance and other costs that are also part of "housing," a household would need to be pulling in $78,996.90 to be STRETCHING to buy that home. According to the US Census Bureau, the median gross household income in Deschutes County was $41,847 in 1999. Granted, Bend is the richest part of Deschutes County and the Westside is the richest part of Bend. But still, the fact that the cheapest house in the development is $488,800 is a big hint that the use of exotic mortgage products is rampant in Bend.

    However, given that the mortgage payment of about $2600 on the cheapest house in NorthWest Crossing is nearly double the rent on a house of the same size in the same neighborhood, it seems that this pricing doesn’t reflect what the actual market value of a roof over your head in Bend is worth. This classified ad is from the same day’s Bulletin:

    "3 bdrm., 2.5 bath, w/dbl. garage in NW Crossing. Office, laundry room, corner lot, fenced backyard. $1400/mo. W/G paid. 541-330-xxxx."

    Naturally, probably Joe & Jane Bendite looking to buy that house are not planning on paying $2600 per month because they are going to get an interest-only or negative-amortization loan, and that is really sad because Joe and Jane are going to end up with ruined credit and no house in a couple years.

    But let’s assume again that the buyers secure a reasonable 30-year fixed mortgage. Why should the "privilege of ownership" cost twice as much per month? It’s because some people in Bend, for some reason, think that $488,800 house is going to be worth $1,000,000 in 10 years. Sorry, but unless everyone on the Westside wins the lottery, that is just not going to happen. Bend’s real estate market is reaching the limits of its affordability, if it hasn’t gone beyond those limits already.

    Newcomers to Bend, do yourselves a favor: rent for a year or so and let this all shake out.

  10. Going back to the original theme of the thread, the Donald Trump hoax, it turns out it’s not just being used to prop up the housing market! OSU is using it to justify the OSU-Cascades campus:

    "The growth of the OSU-Cascades Campus mirrors that of the central Oregon region, according to Casbon [Jay Casbon, campus executive officer for Oregon State University’s Bend branch]. On a recent episode of CNN’s Larry King Live, Bend was touted as a great place in which to invest by business titan Donald Trump. The city is on pace to double in population in just 15 years. And it ranks eighth in the nation in entrepreneurs per capita."

    Click Here.

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