In doing advance research about foreclosures in Bend, Oregon, I happened across local news coverage of a most absurd housing development. A planned community with Old World architectural detailing designed to resemble a Lord of the Rings hobbit village, the Shire represents a prime example of irrational excesses that an untrammeled housing market can nurture. I intended to take pictures of the now bankrupt and foreclosed development so I could write a post ridiculing those behind its creation, until I learned one of them had committed suicide.
The Recession Roadtrip charted a course through Bend in central Oregon specifically because of the community's unusually high rate of foreclosure. At around 4 percent, Deschutes County's per capita foreclosure rate is half that of Vegas, but still two to three times any other county in Oregon. As I wrote last week, the fairly pervasive role of mortgage fraud throughout the local real estate market's expansion sets up the community for a steep fall.
Developer Ron Meyers originated the concept of building a community inspired by medieval fantasy and Old World architecture. He partnered with former emergency room doctor Lynn McDonald to secure financing for the project. Lynn and his wife Janet signed for a $3.4 million loan from Umpqua Bank in December 2004, and building began in fall 2005.