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I think the biggest issue that will affect prices that everyone is missing is the rising interest rates. The interest rates have more of an impact on actual costs than the home price itself in many cases. We have not seen 5.5% in a couple of months and I am starting to think we will not for some time. Looks like the best time to buy may have passed, if the interest rates trend upward.
^^They aren't making more land. People have been choosing between Holly Springs/FV/etc and the convenience of Cary for some time. Cary real estate has done very well during that time.
I don't see that what's happened in Southern CA is all that relevant to a discussion of the desirability of Cary compared to towns that are further away from employment centers and amenities.
Comparing a town that is close to a job center to an entire region (that is larger than the State of NC) seems rather silly. Desirable locations in SoCal still outperform undesirable ones. The bubble in California really doesn't change that.
I don't see that what's happened in Southern CA is all that relevant to a discussion of the desirability of Cary compared to towns that are further away from employment centers and amenities.
The relevance is that the same "they're not making any more land" argument was used for lots of places around the country, and it didn't make any more sense in those areas that it does here. It's a weak sound-byte that ignores the other important part of the equation - demand. Sure, Cary might be more in demand than areas further out, but in an absolute sense that demand can go down just as easily as it can in any other location, dragging prices down with it.
The relevance is that the same "they're not making any more land" argument was used for lots of places around the country, and it didn't make any more sense in those areas that it does here. It's a weak sound-byte that ignores the other important part of the equation - demand. Sure, Cary might be more in demand than areas further out, but in an absolute sense that demand can go down just as easily as it can in any other location, dragging prices down with it.
Frankly, your comment about Southern CA comes across as a weak soundbite as well when using it in a discussion about the Triangle. I also don't see how you can say that "they're not making any more land" doesn't take into account demand - it mostly certainly does. Certain areas will always be more in demand due to their location, and if those areas are built out, you can't magically make more land appear. If overall demand in an area trends down, then yes, demand may go down even in previously highly desired areas. However, I think the effect will be felt less in those highly desired areas. This is why it's very important to take location into account when buying a house.
Frankly, your comment about Southern CA comes across as a weak soundbite as well when using it in a discussion about the Triangle.
I don't see how it was weak - people actually said this about Southern CA, they in fact did not make any more land, and yet prices did drop there. Lots of people there thought that area was unique, special, and immune from basic concepts of supply and demand, just like lots of people here do. I don't think the end result here will be anywhere near the same magnitude as it is there, but the similarities in rationalization are interesting to me.
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I also don't see how you can say that "they're not making any more land" doesn't take into account demand - it mostly certainly does. Certain areas will always be more in demand due to their location, and if those areas are built out, you can't magically make more land appear. If overall demand in an area trends down, then yes, demand may go down even in previously highly desired areas. However, I think the effect will be felt less in those highly desired areas. This is why it's very important to take location into account when buying a house.
None of these nuances are captured by "they're not making any more land." You even agree that if demand goes away, prices will go down, even though "they're not making any more land" is just as true then as it was when the area was in demand.
But I think we agree more than disagree. I think, barring any major shifts in the viability of RTP employers, that Cary is going to do much better than say, FV or Clayton (which are going to get crushed by rising gas prices as well as foreclosures). I am worried that the bubble-induced glut of higher end houses in Cary is going to push prices down across the board, but still I think that the average $250K house in Cary is going to drop less in price than the average $250K Clayton house.
I am worried that the bubble-induced glut of higher end houses in Cary is going to push prices down across the board, but still I think that the average $250K house in Cary is going to drop less in price than the average $250K Clayton house.
The house I just purchased for $213K in a desirable location in Cary has appreciated an average of 3.2% per year since 2001. A neighbor who has lived in their house for 20 years (since it was new) has seen just about the same appreciation per year over those 20 years. I'm curious - just how far do you expect the price of my house to fall?
And, also out of curiosity, by what percent did housing prices rise in Southern CA from 2001 to when the bubble started to burst?
Last edited by adlnc07; 07-10-2008 at 08:18 AM..
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