Own Some Middle Earth!

Gawker alerted us to what could be the most bizarre casualty of the slumping housing market yet: the owners of a Lord of the Rings-themed, 31-unit housing development in Bend, Ore., have defaulted on a $3.4 million dollar loan for the property.

Founder Ron Meyer sold “The Shire”—named for a fictional area of Middle Earth inhabited exclusively by hobbits in the J.R.R Tolkien novels—to Jan McDonald in June, after attracting a lot of media attention and tourists, but only one buyer since 2006.

The 6-acre community is built in an “English Country Village architectural style around contemporary floor plans," according to The Shire Web site; is governed by a set of bylaws called the “Declaration of Interdependence”; has a central area called the "Ring Bearer's Court"; and has homes like the 3,200-square-foot "Butterfly Cottage," complete with a “hobbit hole” in the backyard to store garden supplies, listed for $899,900.

Mr. McDonald is trying to sell The Shire's 14 developed lots, one house, and additional land before the bank puts them on the auction block in December.