MikeHgl-
Likewise…I’m unfamiliar with your region. I do know it’s been referred to as part of the “Rust Belt” by many Investor’s, and I therefore, haven’t analyzed the demographics, construction permits, or other factors I’d normally consider before investing in a region.
Basically, very basically, I want to know two things; what’s the demand for a region relative to new construction permits. For instance; in the Pacific Northwest; we’ve significant in-migration for our good job markets. Simultaneously; we have significant lack of supply (especially in the more affordable price ranges), and new construction can barely keep pace with the increasing demand.
That’s why the PNW area is said to be, “one of the most underpriced regions on the West Coast.” In fact–the NAR Senior Economist was recently quoted in the Seattle Times as saying, “…the Seattle region (Everett north to Tacoma south) could see 30-40% appreciation the next couple years.”
I guess it all depends on what you consider a “good paying” job.
I know Carlittle…I was thinking the same thing. It’s my understanding that the jobs coming back to the PNW do not pay as well as the jobs lost due to the bursting ‘Tech Bubble.’ However, the statistics I’m hearing & reading about are referring to the nation overall, and they’re from reliable sources in my opinion.
Regardless, and as aak5454 has elluded to; whatever increases in pay people are seeing are undoubtedly being chewed to pieces by their personal inflation index.
“Housing prices in the NW, Florida, and California are outrageous…”
Just wait my friend…I like making predictions (despite having been proven right over a period of months in this thread, and in spite of being called a “naive idiot,”). Prices in the PNW are nowhere near their peaks! The Seattle Times ran an article this morning referring to the fact the median price in King County just ‘hit’ $405k. I say they’re going higher due to an imbalance in Supply vs. continuing Demand.
Here’s somemore predications courtesy of FTN:
We’re beginning to see current indicators of a future turning point; economic growth will begin slowing considerably between now & year end.
Rising rates will begin taking their toll…resulting in tighter credit conditions = slowing home sales & spotty retail sales. Look for tightening mortgage loan standards & coming changes in mortgage regulations to result in further declining sales & prices (prices…in some formerly ‘hot’ regions…i.e., areas of AZ, CA, FL, NV & NY).
Existing home sales have been declining since last July…look for that decline to accelerate in March & April.
Housing alone could cut GDP in half in the next year. Look for GDP Growth to bottom towards the end of this year @ about 1.5%…after which…expect a rebound.
The Fed has been tightening for 2 straight years. However, the housing markets have peaked, borrowing is slowing, and spending will soon slow as the economy slows. Look for the Fed to tighten again 25bp in May & then move into a holding pattern (perhaps I’m I just being optomistic!). Look for them to cut 25bp in the 4th quarter & 50bp in the 1st quarter of ‘07’ (now that is optomistic isn’t it?).
10 yr. bond has little upside left. Look for a fractional decline this quarter followed by a faster drop later this year. Look for the yield to bottom to 4.5% by late 2007.
Synopsis?: No Bubble (Bubble-Heads are finally starting to dissapear after 5 years & counting). The soft-landing scenario is unfolding in some areas of the country & will continue with the biggest declines in prices coming in those areas that saw the greatest speculation the past few years. I look for those markets to begin recovering by mid-late ‘07’…with the possible exceptions of So.Cal & Lost Wages, NV (may take to ‘08’ in those areas due to over-speculation).
-Infowell
