Check out this photo essay, appearing in yesterday's Sunday NY Times:

Ruins of the Second Gilded Age: What the real estate boom has left behind
Photos by Edgar Martins
http://www.nytimes.com/slideshow/2009/07/05/magazine/20090705-gilded-slideshow_index.html

"Last fall, The New York Times Magazine commissioned Edgar Martins, a 32-year-old Portuguese photographer based in London, to capture on film the physical evidence of the real estate bust in the United States . . ."

Portland is relatively lucky. Sure, we have high unemployment and we've seen much softening in home prices, but Porltand avoided this type of rampant speculation (save for SoWa and Pearl) due to the UGB which did a great job of restricting land inventory available to idiot developers.

Seriously, $4.5million condos in downtown Phoenix? What were they thinking?

Same thing they were thinking in the SoWhat district.

When I got to photo 9 I thought for a moment it was The Round at Beaverton...

They are STILL building cheap townhouse-style apartments in the outer east side and Gresham; despite the fact that almost every apartment development in the area has vacancies. One has to wonder who these "smart" developers are. Maybe they assume that all the foreclosed ex-homeowners will fill them up.

Anyone else find it ironic that the Times couldn't find an American photographer to shoot this piece? Not to disrespect Mr. Matins, who is a fine photographer... Oh well, all the US folks must have been taking time off for the holiday.

PD, what the heck does Portland's UGB have to do with avoiding rampant speculation? You're forgetting that we've seen a price reduction of over 22% in home values since the high, 3rd highest in the nation right now. And it is still going down because we were late going into the decline and like always will be one of the last out. Many are projecting over a 30% decline for Portland Metro.

Speculation can occur in a controlled, government sanctioned area just as well as outside of it. Portland's proof of it. In fact I'd argue that Portland's UGB has contributed to more speculation because the decreased inventory of lots, land had developers, builders bidding raw property higher to guarantee their company inventories.

lw, you obviously haven't been to Phoenix, Las Vegas, San Bernadino (or anywhere in southern California, Reno, or Florida where there are endless tracts of vacant lots, vacant homes, and semi-finished spec homes.

Price declines from the latest Case Schiller ended 1Q 09:

-5.5% = Denver
-5.6% = Dallas
-8.0% = Boston
-9.0% = Cleveland
-9.3% = Charlotte
-11.8% = New York
-15.3% = Portland, OR
-15.7% = Atlanta
-16.4% = Seattle
-18.4% = Washington, D.C.
-18.6% = Chicago
-22.0% = Tampa
-22.3% = Los Angeles
-22.4% = Detroit
-22.9% = San Diego
-23.3% = Minneapolis
-28.7% = Miami
-30.1% = San Francisco
-31.2% = Las Vegas
-36.0% = Phoenix

I'm not a huge fan of Metro or of a govenment-controlled anything, but Portland has a lot less standing inventory than almost all of these places, which means that when things do turn around we will come out of the housing mess faster, not more slowly.

To answer your question about the UGB...love it or hate it, it makes it nearly impossible for developers to acquire large tracts of land at cheap prices, so it artificially limits land supply and sprawl. The UGB creates a land premium which has made housing here more expensive than it normally would be which is bad, but this time it did us a favor by making it harder for dumb developers to go hog-wild.

The control of the UGB, limiting supply, either had no effect on speculation or encouraged it. Speculation is more likely when supplies of a desired good are limited, or thought to be limited.

Isaac, certainly. The UGB induces speculation by its nature of restricting supply. It always has. But that's land speculation.

The housing bust is not about speculating in land as much as it was about rampant speculation in the market for finished homes. The UGB's restricted supply of the former made it very, very difficult to speculate in the latter.

PD - you obviously haven't been to Washington County or Clackamas County. Otherwise, you would not
think it is "nearly impossible for developers to acquire large tracts of land at cheap prices."

Take a look at Washington County, in particular. I've watched large tracts of forested land get covered by huge apartment complexes and single family home developments in the past few years.

lw's point, as I understand it, was being made about speculation in the Portland area and contained no references to other areas of the U.S. So, it doesn't matter whether he/she has been to Phoenix, etc., although the knowledge of the real estate market evidenced in that post indicates that he/she is well aware of the Case-Shiller Index
and other statistical arcana of the real estate world.

My own opinion is that Oregon did not have as much of a price boom in residential real estate as the rest of the country because this state is an economic backwater, full of aging hippies and failed and failing green entrepreneurs.

And many Portlanders are happy about that.

I agree that Oregon is an economic backwater, but for different reasons. Good old boys-and girls- have too much control over institutions from local governments to the courts. People outside of Oregon know this and talk about it,while the local press (with occasional exceptions) doesn't, so we become grist for Doonesbury cartoons and other mockery year after year after year.

"Take a look at Washington County, in particular. I've watched large tracts of forested land get covered by huge apartment complexes and single family home developments in the past few years."

Nothing like other places, believe me. We Oregonians complain, to be sure, but the numbers regarding suburban sprawl don't lie. Look at Phoenix, Denver, SoCal...bitch about those apartment complexes and developments in Washington or Clackamas county if you wish, they're nothing on the scale of other cities.

...and Phoenix is pretty "backwater" too.

"Porltand avoided this type of rampant speculation (save for SoWa and Pearl) due to the UGB"

Wait until winter when the inmpact of the 11% unemployment rate hits. We are slower going into a recession, but you haven't seen the real price declines yet. EVen better not one pol has a clue about jobs

PD, sorry, but I do know the Southwest markets-own property in Tucson, have several immediate family members that own properties in Phoenix, Sedona, Las Vegas, Palm Desert, and elsewhere, as well as Tampa Florida; and have family working in management for Pulte Homes in Phoenix.

Your simplified summary of devaluation misses the facts about the kinds of overheating that occurred for each of the cities on your list. Each city is unique and aren't variables aren't well covered in a NY Times piece.

Take for example Phoenix. Phoenix has a wider range of housing types/values and volumes in each segment. They also have a large segment of $500,000 to $1M plus homes compared to Portland. When the bubble burst, the profit margins in the higher priced homes caused a higher percentage of devaluation. Phoenix is the seventh largest metro area in the nation compared to Portland's 25th and has zoning that limits outward growth.

Making the claim that Portland will have less devaluation and will come out of the hole sooner has no basis. And I'll tell my cousin at Pulte that Phoenix is "backwater" too.

"Wait until winter when the inmpact of the 11% unemployment rate hits. We are slower going into a recession.."

Bunk. Portland (and Oregon) has had consistently higher unemployment than the national average throughout (and even before) the recession, so this constant claim that we "were slower going into the recession" is completely false.

I am an ecomomist by trade, and I'm telling you that Portland has fewer unoccupied housing units per unemployed citizen that most other major markets. That's a plus. Is it perfect? No. Does it mean we're better off than everyone else? No. But please, stop the drivel about Phoenix being a higher end market. Pheonix has no greater claim to buyers that can afford $500,000 to $1M homes than Portland does (or did). This is why Phoenix has seen more than double the price deflation than we have. They "overspeculated".

Believe it or not fellow Oregonians, Portland isn't all that bad...even though we like to wallow in our 12%+ unemployment rate; the sky isn't falling. Yet.

RD,as an economist (or otherwise) I wouldn't be bragging that Portland has had

"consistently higher unemployment than the national average throughout (and even before) the recession"

Definitely a sorry way to base an argument.

lw, economics is not always about roses and baskets full of puppies.

It's no secret that Portland and Oregon have often lagged behind the rest of the nation economically. My opion is that it is a result of failed leadership and misguided priorities.

The simple fact is that our unemployment rate has doubled while the rest of the nation's hasn't. Again, bad leadership.

While our unemployment rate has been hit harder, our housing market has not. This is simply because there was not AS MUCH rampant speculation in Portland as there was in other major markets.

Unemployment rates are not always a deterrent to overbuilding and development. Take Montana, for instance. Acres of land taken for wealthy single family estates . . . huge ski and vacation developments for upscale vacationers . . . gated condo communities for wealthy retirees . . . all in a state that many in the rank and file move away from because of economic depression in the cities.

The biggest problem with this overbuilding is that developers are all targeting the deep-pocketed "luxury" market and there are fewer in this demographic willing to pay what developers think they deserve.

I love it when "market rate" self-entitlement turns around and bites these greedy bustards in the ass.