Housing Bubble Bursting?

[Mike Simpson]

"I'll bite - lets see an employment forecast that talks about the kind of employment increases that justify the increases you are now seeing your own area. Do you have one?"

Yes I do! I even have information regarding studies of how many jobs it takes to create demand for one dwelling unit. I've posted this information before (granted, not in the form of a pretty graph), and written about it in the past. I've also written about the lack of listings for quite sometime now.

I don't know how to scan things into a post. I haven't the time to want to learn...it would probably just result in a lengthy, consuming debate that would just end back at square one. You can either teach me how to scan things in, and wait (as I've got a lot to do), or you can contact our State's Chief Demographer for yourself. Perhaps a Land Use Economics Firm? How bout the NAR's Chief Economist (oh yeah...gloomers don't trust the NAR).

For now...we've nearly 200 properties in various stages of construction...from raw land to nearly finished units (I've that to contend with). I'm also driving quite a distance to one of our states resort towns Fri-Sat-Sun to have a look around (the states booming economy is resulting in slosh over...yet again). I've got retirement accounts to set up before the 30th & a lot of work to accomplish before the 10th (due to looming software changes).

In the meantime...you might want to do the research yourself? You could probably get a doomsday soothsayer or two to assist you in digging up negative news stories. Every boomtown...every bull market always has it's share of neurotic disaster prophesiers. Some of them have even written an article or two that might support a dreary future prognostication.

-Mike

 

[Mike Simpson]

How to make friends & influence people.

"I just happened along and was trying to figure out what was up with you and Randolph."

I think he likes me :blush:

 

[George Hatch]

Well here's a start. And I ask these questions not to antagonize you but to get a cogent forecast about the direction and the span of the price increases that are currently underway in your own market.

According to your local employment development council, the population in your area is growing by just under 1% per year over the last few years. How do you correlate that to your pricing trends? Do you have any ideas where the those newcomers who are buyers are coming from? How well does your local wage structure support the price increases? Median household income was a bit under $43,000 a couple years ago. At what price point will those wages no longer be sufficient? The PNW was pretty late to the party when compared to most other metro areas in the nation. Some of those areas (Denver, Arizona, Miami, Las Vegas, etc) have already passed over the hump and already showing some declines - what distinguishes the PNW from these other areas? Why is it different this time and why should these pricing increases be considered more or less permanent?

 

[Mike Simpson]

"And I ask these questions not to antagonize you but to get a cogent forecast about the direction and the span of the price increases that are currently underway in your own market."

Good...that would be a breath of fresh air.

"Do you have any ideas where the those newcomers who are buyers are coming from?"

Yes...40% of our states current in-migration is coming from CA. The remainder from all over the globe judging by my prospect list. Some of our clients are from Singapore, Myanmar, Japan, Russia, Ukraine, Korea, China, Mexico/Columbia, as well as many other states in the U.S. We've also noted a significant number of East Indians moving within a reasonable commute of the Microsoft Campus (30 mile radius).

There's also a lot of military moving to this region, and they're coming in from all over the globe as well. Boeing also has been hiring of late.

Some of your numbers are dated, and I'll get you more accurate figures when we get back. I'd get them to you now, but I've got a computer gliche going on w/my Word documents :blush: and can't open the e-articles I've written till I get to another computer.

It may take me sometime (lots to do), but if the thread dies...I'll bring it back to life and give you some facts & figures to chew on when I get the chance.

-Mike

 

[Big ole Boy]

Lake City MLS

Lake City MLS has three different kinds of closing dates - and the reason is very complicated;

.... I think a lot of MLS systems are being massaged; I trust no one anymore .......

Market cut off date:
Sales date:
Closing date:

From year to year Lake City is down to 58 sales not 10 as I stated previously and their are a lot of stragglers who have not reported yet; the market is down in Lake City; but not as I had previously thought.

my apology

 

[George Hatch]

I'll forego your "breath of fresh air" crack and stick to the subject. Please try and do the same, okay?

With respect to your out of state buyers, would it be accurate to say that some of the price gains in your area can be tied to money that has been earned out of state? The reason I ask is because I commonly hear comments from appraisers in other areas about out of state buyers coming in with lots of cash and how imported money sometimes isn't spent very judiciously. California buyers are notorious for being rather free with their cash. Not to mention bringing their crappy attitudes with them, but that's another subject for another day.

Anyways, do you think the out of state money is having an effect on your region's pricing? And if so, is the effect very much or is it just noticable?

 

[Mike Simpson]

"Not to mention bringing their crappy attitudes with them, but that's another subject for another day."

AHHH...HAAAA...HAHA..hehe...ha...ha...ha

You're from where? (Sorry, couldn't resist :blush

Actually, we just had some clients arrive from CA bout an hour ago...they closed today, and they've been the most enjoyable people we've had the pleasure of meeting in a very long time (and that's saying something).

"Anyways, do you think the out of state money is having an effect on your region's pricing? And if so, is the effect very much or is it just noticable?"

It's been a perfect storm. Lack of existing product for quite sometime now...cautious builders not overbuilding...in-migration due to our recovering job markets. Somewhere in the neighborhood of a million people are expected to move here in the coming decade. If you know the area...we're limited as to where we can build. Large Rivers, lotsa water...flood plains aplenty...we've got to build up on the hillsides. Land prices have been climbing like nobody's business.

Again...gotta run...I'll get you some stats when I get back (maybe a week & a couple days)...toodle-oooh!

-Mike

 

[Karl]

Mike I been reading all this Housing Crap. & I wonder have you ever been involved in Real Estate in a downward trend market. YES!! Mike there is such a thing. Reason I'm asking is everything I ever learned of importance I've learned from those older than myself. Having experienced a massive & to many a very surprising Downward market in an area where MANY said would NEVER happen. I am extremely interested in exactly where it is you live, ( I thought you were in Washington State) Cause from all the contacts that I have built up over the years, that have a very impressive track record of financial security, none seem to have the enthusiasm toward Real Estate that you appear to have at this time. Now just Maybe your on to something that many that I hold in high regard could possibly be missing.

Problem I have is if you have a million Californians, Pinal County AZ has a Million, Maricopa County has a Million, Rest of AZ has another Million Florida has a Million, Nevada has a million., Arkansas has a Million & New Mexico has a million. Maybe just maybe some of the news articles MAY need to be confirmed. Cause with this much supposed exiting, wouldn't California be the place to buy?? Thes California buyers with nothing out of pocket making all these purchases Isn't someone going to want thier money back eventually?? Cause these "Investors" are going to run outr of "Investors" & are going to NEED to find actual "Buyers" That when the Downward Market begins.

 

[The Warrior Monk]

Many people here are arguing about an overall market bubble...Mike is attempting to demonstrate that this does not exist because he is making money in certain specific markets, then projecting the specific to disprove the general.

Mike's a smart guy and of course is very aware that there are plenty of bad markets out there...I doubt you sell him investing in Florida condos anytime soon.

 

[Steve Owen]

And, add to that that Mike is in an area that has had a nearly "perfect storm" on the positive side for development. I can remember as far back is 1980 people in Seattle complaining that too many Californians were coming in and that was causing real estate prices to rise. From what little I know, it would seem like that part of the country is poised for continued increases in overall economic growth.

But, of course, that doesn't say anything about markets in Florida, California, New York, or even Missouri. Although some economic trends (such as unemployment or stagflation) can affect housing markets nationwide, they are still basically local markets.