Economic crash in Oregon boomtown

The BBC filed this report and produced a couple of short videos after a brief visit to our new home town of Bend, Oregon, a place they quite correctly characterize as a 21st century American boomtown that has gone bust (hat tip D, GN, KD, and PG).

Click to play in new window

If the video could have been embedded, it would have been, but it couldn't, so it isn't.

We've only been here a few months and, generally, we like the area quite a bit though we haven't made any final decision as to whether we'll stay.

The details of their report just add to the growing list of pluses and minuses that we'll have a look at sometime early next year when the expiration of our lease draws near.

It is a beautiful place, in the high desert of central Oregon, amid mountains.

The sunshine is warm, the air crisp and filled with the scent of bitterbrush and pine.
...
Between 2001 and 2005, the median value of a home in Bend rose by 80%.

By 2005, work was getting underway on 700 new homes each month. Some of the developments are stunning: houses filled with mountain light clinging to craggy hillsides.

More than 17% of the workforce was employed in construction - far higher than the national average.

In what had once been an isolated lumber and mill town, high-end restaurants and brewhouses opened. Shops selling expensive bric-a-brac bloomed. Massage therapists and hairdressers proliferated.

Downtown Bend looks like a shrine to post-millenial bijou: pricey shoes, scented candles, fancy coffee. There is even a shop specialising in beachwear - despite Bend's location in the high desert.

But when the US slumped, Bend crashed. The value of a home fell 40% in under two years.

And unemployment nearly quadrupled from around 4% two years ago to 15% in the summer of 2009.

"Everything that Bend produced relied on the credit market", says Carolyn Eagan, an economist with the Oregon Department of Employment.

"Construction materials, doors and fittings, recreational vehicles: everything depended on people being able to consume more than they could use."

Now the credit has dried up, and the building of Bend has stopped.

There are a few human interest stories in there that are quite compelling and a bit sad, the Bethlehem Inn being located just down the hill from where we currently call home.

I remember reading somewhere that, in one month recently, the city did not issue a single building permit - quite a fall from 700 new homes a month being built a few years back.

Lastly, the local paper reported (reg. req.) yesterday that Central Oregon is now ranked number six in homelessness nationwide.

ooo

This week's cartoon from The Economist: