Is Bend, Oregon In A Bubble?

I grew up in Bend, Oregon and hope to retire there someday soon. I love everything Bend has to offer (if you don’t know Bend, think Boulder or Sun Valley…but better). I have family, friends, and rental properties in Bend.
So when a friend sent me a video with an economist (Bill Valentine) explaining why Bend was not in “a bubble” in mid-2017 and that residential property “prices were virtually permanently headed higher”, I was pleased but simultaneously more than a little curious.
My curiosity stemmed from the fact that since 1985, Bend’s property values have risen in excess of 6x’s. Since 2000, prices are up nearly 3 fold. Subsequent to the financial crisis lows, property values have nearly doubled and prices are now marginally higher than the ’07 peak. The same peak which economists unanimously agreed was an unsustainable speculative “bubble”. But this time is different???
To define our terms, “a bubble” is trade in an asset that strongly exceeds the asset’s intrinsic value. Mr. Valentine explained that Bend’s property values are not in “a bubble” and that “property prices (in Bend) are virtually permanently headed higher” because “more people want to and can move into Bend from cities with loftier property values than the future supply of homes (in Bend) can keep up with”. So, Mr. Valentine’s bet on Bend (or most highly desirable getaway destinations) is a bet on continual property value rises in the larger cities (alongside continued financial asset appreciation…whose ownership is concentrated in the cities). This will allow these “city folk” to ultimately sell high and buy high in relatively cheaper Bend. Plus Bend will be unable or geographically constrained from adding adequate supply of new housing to keep up with demand.

This post was published at Zero Hedge on Oct 15, 2017.