Sometimes, I think this link is obscured by the tourism element of retail. But, insofar as it affects the local economy, I think tourism only keeps us afloat. We are going to need for the housing market to recover before the Bend economy will.
And that seems to be a long ways away.
This article (The Housing - Retail Link) is about the Australian economy, but it applies to all of us (and I've substituted WE and OUR for Australian):
"Wealth effect - the process of rising (falling) asset prices leading to rising (falling) consumer confidence, borrowing, household expenditure and employment."
".... consumer spending and employment growth appears to have stalled now that house prices have flat-lined. (We) ".... have, instead, begun reducing consumption and repaying debt…
The golden era for retailing that was 2000 to 2008 is now over and the age of frugality has begun."
I especially like the following statement, because it points out a problem with the premise I see in most news stories about a possible recovery-- that increased spending will increase employment. To me, it's obvious the opposite is happening and will continue to happen:
"It’s easy to dismiss the common misconception that unemployment would need to rise before home values would fall. Rather, ... (falling) home prices tends to lead ...(increases) in unemployment simply because of the wealth effects described above. Put simply, as long as..." (our) "... housing values remain stagnant or falling, consumption expenditure, credit growth and job creation will remain subdued..."
I'll repeat that: "falling home prices tends to lead to increases in unemployment."
In other words, we can't "spend" our way out of trouble. We need housing to stabilize first. And even then, I think we'll have along, long lag before it affects our bottomline.
We'll probably see a recovery about the same time as we've given up looking for a recovery.