JULY 2008: AROUND THE STATE
Housing slump continues to pull down projects, sales,
companies
STATEWIDE
It’s become even harder to make the case that Oregon is
immune to the housing crisis, after three high-profile failures
hit the news back-to-back-to-back in June.
The first story, from Portland blogger Jack Bogdanski, involved
the streetcar extension to the towering South Waterfront
project, which was financed on the assumption that
$500-per-square-foot condos were the thing of the future in
Portland. Whoops. Sales have been stagnant, and the Portland
Development Commission was forced to ask for an extension on a
$5.9 million loan to Bank of America to avoid defaulting.
On the following day came the announcement from Street of
Dreams builders that the big show will return this summer
— even though not one of the over-$1 million palaces from
last year’s event has sold. The 2007 show featured the
latest in luxurious design, but agents had difficulty moving
the mansions because of their remote Clackamas County location.
And that was before gas topped $4. Whoops.
The day after that, the Oregonian reported that Matrix
Development dba Legend Homes, one of the state’s largest
homebuilders, had filed for bankruptcy. Legend’s fall
sounds familiar: builder buys too much dirt, notably in Bend,
then can’t sell as the market crumbles. Bank clamps down.
Subcontractors line up to collect. Whoops.
Unfortunately for Oregon’s economy, none of the downward
trends that began accelerating this spring (see “The
Party’s Over”, May issue) are showing any signs
of reversing. Home values are falling, short sales and
foreclosures are stacking up, banks and builders are
scrambling, and the market is bloated with supply. It’ll
take a significant surge in economic activity for things to
change, but the University of Oregon’s Index of Economic
Indicators warns of “persistent weakness…
consistent with at least a mild
recession.”
BEN JACKLET
To comment, email feedback@oregonbusiness.com.
