Property Markets Are Linked
The RE experts are quick to point out the home market is local and that lower prices in one area can't spread. This Mercury News story on "flipping" houses includes some information that may challenge that axiom.
"Bay Area residents have invested heavily in property outside the area, especially in places like Las Vegas, Sacramento suburbs and Phoenix. In the first eight months of 2004, Bay Area buyers purchased more than 13,700 homes outside the region and somewhere in western states."
5 Comments:
goleta,
Good post and I agree. The bubble is a disaster, not a bonanza.
I live in the suburbs of Washington D.C. There's an interesting post about that at the WSJ Blog, btw. http://discussions.realestatejournal.com/WebX?14@523.6YOhaKqjs7c.2@.ee8c067!skip=0
Yesterday in the Washington Post Real Estate chat section, the hostess Daniela Deane was talking about how 70K new residents moved to the greater D.C. area and how Loudoun County was the 3rd fastest growing county in the U.S. and why housing is an issue of supply and demand, jobs, etc. etc.
But the above person's post made me wonder. I've been looking at the available homes for sale and rent for a few months now. Right now in Fairfax County there are 1366 homes for sale (not many, really) and 1146 homes for rent. The rental numbers don't move a whole lot.
Loudoun has 858 homes for sale and 340 for rent. Not very much inventory there.
"about how 70K new residents moved to the greater D.C. area"
First of all, I highly doubt that number. (70K)
Secondly, 70K people need about 23,000 houses, and I'll bet that way more than that were built in the area.
Next, if 70K people moved to DC, then the market is going to crash where they came from. Ie some areas just lost 23,000 home owners.
Finally: what jobs were created that 70K people moved to DC ? Is the economy that hot there ? For 70K people to move there would require 35K good positions. Who is hiring ?
(what jobs were created that 70K people moved to DC ? Is the economy that hot there ?)
Homeland security, etc. The federal government has been on a keynsian quest to prevent a recession since 2000 and I don't doubt that Wash. has seen in-migration. Doesn't mean it is sustainable, though. Thanks for the comment.
http://www.washingtonpost.com/wp-dyn/articles/A52779-2005Apr14.html
"Census figures released yesterday show that the Washington area added 75,000 residents last year, bringing the population to 5.9 million in a region that extends from the western shore of the Chesapeake Bay to Northern Virginia horse country. The sharpest increases occurred in the outer ring of suburbs."
I don't know how scientific this is, but I checked the Census Bureau for 2003 to 2004 and Fairfax County, for example, added an estimated 6,363 newcomers from July 2004 to July 2004. I checked home sales from the MRIS database for Fairfax County. There were about 26,000 properties market contract or contingent during those 12 months.
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