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Thoughts, comments...for the locals in these areas and others...what do you think...do any of these places hold water. I am not sure..but where do you guys think NY fits in? Is now the time we should think about that florida retirment condo (LOL).
Interesting report. Thanks for passing that along. You know there are so many contributing factors as to whether a market will decline or appreciate, and I'm not sure this report takes them all into consideration. It seemed to be more a matter of "what goes up must come down". Personally I don't think that's a good basis for assessment and here's why:
#1 - Jobs and growth rate. (Since I live in AZ, I zeroed in on Phoenix in the report. Phoenix is ranked #2 for potential decline.) Phoenix, (and AZ in general), is one of the fastest growing metro areas in the nation, if not the fastest. Phoenix has JOBS, and that's a huge reason for it's growth. As long as new builds don't continue to outpace the growth rate, the excess inventory will start to get bought up, and Phoenix will gradually return to a more normal market.
#2 - Investors. Investors drove the home prices up very rapidly in 2004 and 2005. Phoenix was a "cheap" market compared to many parts of the country. Investors put their AZ homes for sale in 2006 (held out just a little too long and paid the price) and have now moved on the the NM and TX markets. Once the excess inventory caused by investors dumping their houses gets bought up, again the market should become more normal. The important thing here is that we're not seeing an increase in these types of homes hit the market.
#3 New construction. It's important that tract home builders put the brakes on new construction, which it appears they are. For some reason it's taken new home subdivisions a long time to react to the housing slowdown. They seem to have finally slowed construction the past 6 months. In my opinion, they should have reacted much more quickly 1-1/2 years ago. Again, there's an excess of new home availability. However, it's slowing and we should see an equalization within the next year or so.
#4 - Subprime lending and foreclosures. This is the main area that could really trigger a drop in prices. If the market becomes glutted with homes that are being sold out of desperation or are foreclosures, it will definitely effect prices downward. This could get ugly.
I've been amazed over the past couple of years that parts of the country that were predicted to have huge double-digit declines actually had modest appreciation. And other areas of the country that never experienced big price run-ups in 2004/2005 (such as in the midwest) actually had some pretty significant declines. I think the overall economy of any given area and the rate of growth is a huge factor that is not being considered by many of these predictors.
Location: Moved to town. Miss 'my' woods and critters.
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Very good points Gretchen B. In a county next to St. Louis, which has experience a continuing rapid growth for the past few years in new home construction, is now suffering drastically. Our broker reported to us at yesterday's meeting that the county in question was reportedly having 1 home out of every 26 in foreclosure. This situation is astounding.
Our little town of 2500 has quite a different problem. The local governments of our town and 2 of the nearby communities have had negative press. City halls in these towns have had some shake-ups. Prices of city owned utilities have sky rocketed. Discussions around here in the local coffee shops centers on any manufacturing companies future interest in locating here or nearby.
Crime, so far, is not a major problem. Have the meth labs out in the boondocks. Some mailbox damage. (Now that's the summer fun for teenagers with nothing constructive to occupy their time or brains.);(
Older homes, very little upgrades. A few in-town little subdivisions as well as a few areas of building tracts set aside for future development.
Young people leave the area after HS graduation for college life or to seek employment elsewhere. Which, in the course of time, leads to the seniors that are attempting to sell their homes to cultivate that trait of patience. Our market is stagnating at best. In the past we could look forward to big city buyers coming our way looking for future retirement, weekend living or investment properties. Not so at this point.
The lending institutions, stock market, world peace, or lack thereof, plays a small part in the overall picture here. But, as it eventually does, what occurs on the east coast, then the west coast, works it sometimes, ugly little head, in our direction, for the good or for the bad.
I do derive much information from your posts as well as a few other informed souls. Keep it coming. I am leaning something new on this forum every single day. Thanks so much to all.
Northwoods Voyager - I can really identify with your post. I spent most of my life in Kansas/Nebraska, and it's so sad to see the rural towns slowly dying. What was once the Heartland of America is quietly fading away. The larger, college towns continue to grow, and with our more mobile society, it's no longer a trip to "town" on Saturday, culminating in friends gathering at the local eateries, but instead it's a trip to the nearest shopping area 60 - 90 miles away. And anymore it's no longer a choice, as Main Street is pretty much boarded up.
Very few rural towns seem to be surviving. Was it the shortsightedness of the politicians? Was it Walmart driving out the local mom & pop's? Or was it each one of us choosing to shop elsewhere or moving to where the grass is greener?
Location: Moved to town. Miss 'my' woods and critters.
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Quote:
Originally Posted by Gretchen B
Northwoods Voyager - I can really identify with your post. I spent most of my life in Kansas/Nebraska, and it's so sad to see the rural towns slowly dying. What was once the Heartland of America is quietly fading away. The larger, college towns continue to grow, and with our more mobile society, it's no longer a trip to "town" on Saturday, culminating in friends gathering at the local eateries, but instead it's a trip to the nearest shopping area 60 - 90 miles away. And anymore it's no longer a choice, as Main Street is pretty much boarded up.
Very few rural towns seem to be surviving. Was it the shortsightedness of the politicians? Was it Walmart driving out the local mom & pop's? Or was it each one of us choosing to shop elsewhere or moving to where the grass is greener?
Glad to see you're hanging in there in Missouri!
When Wal-Mart first opened, so many of our Main Street stores closed. Owners were given the 'kiss of death' by the dramatically lower prices of everyday items in particular. Then the larger, seasonal items became the target, later the larger, home furnishings, and on and on.
At the time this first occurred I was working part-time at our local library. When any item needed to be replaced, such as tissues, toilet paper, you name it, I had to make my purchases on my lunch break. Instead of being able to just walk to the 5 and 10 store, local mom & pop grocery, I now had to drive somewhere to do this little chore. for a few years, much of our downtown was literally deserted. No more theatre, no more being able to pick up a few pork steaks for a last minute barbeque. And on and on.
Finally, someone had the guts and courage to reopen a store here and there.
So now we do have a 'Super' Wal-mart, provides employment to many folks. Whooppee
Our manufacturing companies have attempted to expand. No new industries as of yet. For a short time in the mid-90's land prices 'soared' from $500/acre for larger (read 50 or more acres) tracts to almost $2K. Smaller ones went from $250/acre to well over $3500. Those days are gone.
I am not discouraged so much as unhappy about this turn here in our wonderful area of Missouri. It is an area that many have made their home and come back to after 'going' away. It is just taking a LOT longer to get the job done and for a price that is competitive and satisfying to most or all.
I'll hang in there. My husband has retired from R.E. due to health issues and I may not be far behind him. No retirement fund when you are a Realtor. Just what you can save over the years.
Guess when that day comes, I can shop at MY Wally World and save big BUCKS
Didn't mean to sound defeatist or such here. Just letting you know what the world is like in the boonies. Not so bad most of the time nowadays, just vastly different from the late '80s and early '90s. Whew
We must not be looking at the same site. The one your link goes to shows plenty of movement. 233 sales in one month, with an average sold price of $561,974, and that the average sale price as a percentage of the average list price is 96.5%. This does not sound like bad news to me, for flippers or anybody else.
I've been amazed over the past couple of years that parts of the country that were predicted to have huge double-digit declines actually had modest appreciation. And other areas of the country that never experienced big price run-ups in 2004/2005 (such as in the midwest) actually had some pretty significant declines. I think the overall economy of any given area and the rate of growth is a huge factor that is not being considered by many of these predictors.
These doomsday prophets give me a pain. They are wrong at least as often as they are right. And you make the salient point in all of this: the things they consider when they come up with their prophecies are often inadequate, and not universally accepted as important by any means.
They do have their usefulness however. They scare people away from some of the most profitable investments in the country, driving the price down. Smart people ignore the prophets, scoop them up, and enjoy a rate of return you can only dream about in the stock market.
Ahh KMC both I and my progeny pray you are correct...
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Good Article
