The Real State of Bend Real Estate
Presented by: William Valentine, CFA May 2017
“WHO THE HELL IS BILL VALENTINE (AND WHY AM I LISTENING TO HIM)???”
President of Valentine Ventures, LLC Analyst, Economist, Capital Market Behaviorist The “Real Estate Contrarian” o 3/19/06: o 3/26/06: o Fall 2006: o 2/19/09: o 11/21/11:
‘Buy my house!’ KBND Bend Bulletin article Bend housing peak RE Forecast Breakfast Bulletin: ‘Buys back in…’
Also known as…
“WHERE ARE WE IN THE REAL ESTATE CYCLE?”
WHICH BEGS THE QUESTION: “ARE WE IN ANOTHER BUBBLE IN BEND???”
BILL VALENTINE’S ‘FIVE SIGNS OF AN ASSET BUBBLE’: 1)
Massive, unusual price appreciation o
2)
Residential Real Estate Historical Appreciation: 4%
Ubiquity o
3)
Everybody’s talking about it, doing it, and is an expert
New Paradigm o
4)
“This time it’s different” - “They’re not making any more of it”
Diminishing Yield o
5)
Declining cap rates, lack of rental income
Access (credit) o
Internet: online trading, margin | Housing: Subprime, CDOs
MR. HOUSING BUBBLE…
THE ‘REAL ESTATE CONTRARIAN’…
IS HERE TO TELL YOU…
(WAIT FOR IT……….)
“WE ARE NOT IN ANOTHER BUBBLE!”
THE MOST IMPORTANT REASON: CREDIT
“SO DOES THAT MEAN IT’S ALL UP FROM HERE?”
NO...
PRICES/ACTIVITY WILL OCCASIONALLY SLOW, OR REVERT, BASED ON CHANGES IN THE ECONOMY (RECESSIONS) AND RISING INTEREST RATES…
BUT THE FORESEEABLE FUTURE LOOKS GOOD!
THE ECONOMY IS SOLID - A RECESSION IS A WAYS OFF
RISING RATES WILL SLOW REAL ESTATE—BUT RATES AREN’T COMING UP AS FAST AS YOU THINK
“WHAT DOES THE FUTURE HOLD FOR OUR PROPERTY VALUES IN BEND?”
PRICES ARE HEADED HIGHER BECAUSE: There are more people that want to (and can) move into Bend--from cities with loftier prices than ours— than the future supply of homes can keep up with. If you want to see where we’re headed, look to other exclusive mountain towns.
HERE’S WHERE THEY’RE COMING FROM…
HERE’S WHERE WE’RE PROBABLY HEADED…
IS THAT GOOD OR BAD? I’LL LET YOU DECIDE. CLOSING THOUGHTS… I could be wrong about some or all of this… “Affordable Housing” will not materialize in Bend City leadership continues to be in over their waders Remember the lessons from the last time around: o Don’t be crooked. Plenty of money to be made. o Don’t listen to the “experts” o If you’re excellent, it won’t matter what happens o Don’t take your clients for granted--work hard & be responsive to calls & emails. In other words:
THANK YOU & QUESTIONS
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