Friday Open Thread
This is your open thread for today. Please post random links and off-topic discussions here.
Off-topic comment? Interesting link?
Head over to the forums, or click here for open threads.
Head over to the forums, or click here for open threads.
8 comments:
Synthetik,
I agree with your overall assessment, but why not in the sexy, hip-n-trendy, uber-chic, see-and-be-seen, aren't-I-the-smartest-thing-you-have-ever-seen, parts of the country?
Does it have to do with the expectations of those areas? The Eastern half of the bubble is the Boston-NYC-DC corridor, and their retirement haven of Florida.
The Western half is California and the echo-bubble of the rest of the West.
NY and California have always been expensive, and that is where a disproportionately large segment of the Boomers live. Those are also the financial services capitols of America, and financial services is just about the only industry left in the USA.
When you live in San Francisco, you expect homes to be expensive and rise in price. When you live in Dallas, you don't.
I think this is a case of a bubble begetting a bubble. Flyover Country just doesn't have the expectation of rising home prices, as the portions of the country that are home to the self-proclaimed "creative class."
You need expectations to create a bubble.
Synthetik raises an excellent point about the fragility of real-estate markets in "fly-over" country. My view is that the ENTIRE United States has been in a massive real-estate bubble, not just the coastal areas that get so much attention.
Sure, some remote regions might not have seen double-digit appreciation in the last few years, but many of these places might well have had outright real-estate BUSTS if it wasn't due to the easy credit inflating real-estate throughout the nation. I think it is mis-leading to just look at the places with the greatest appreciation and assume that they will be the only ones hit in a downturn, or even suffer the most.
Sure, I expect that places that have experienced phenomenal price appreciation (Seattle anyone?) will feel a lot of pain in the coming downturn, but many other out-of-the-way spots will hurt enormously too.
I have to take exception with the smug references to Colorado as "flyover country"...it may be in the middle, but having lived there for years, it has a lot in common with Washington (which is mostly "flyover country" too, you know....)
In particular, Denver and Seattle are demographically quite similar. Both have high education levels, fit, urban professionals, and relatively high median incomes (not to mention some of the most gorgeous natural scenery in the world!)
The biggest differences between Seattle and Denver, are that Denver has more room to sprawl, and less waterfront property. These factors may tend to put downward pressure on prices there, but my gut instinct is that Denver was just ahead of the housing bubble curve -- desirable neighborhoods were dramatically inflating in price during the late 90s, along with the usual gentrification, condo-ification, and yupp-ification that goes along with rising home prices. Very much like what's going on here, now, actually.
mikhail,
I would not put forth the idea that Flyover Country is immune from the aftermath of the bubble. It will get hit, as people did lever up to extend their standard of living beyond what they could afford.
I just think the coastal areas will get hit harder, as there is much more "potential energy" in those markets.
Mr. Bubble,
Flyover Country is a smug term. I use it to highlight that very fact. I have lived in Dallas, and if you have ever travelled on American Airlines, it is the very definition of Flyover Country.
I find the smugness of the coastal areas to be quite fatiguing. The fact that someone lives here seems to confer, at least in their own opinion, some form of higher order intelligence or self-worth.
That is one reason I anxiously await the impending housing crash. Humble pie is exactly what we need.
I'll try to...be more kind to Jesusland.
Har. Say whatever you like about that country. In my view, Colorado is much more an example of Huntinshootinspittinland than it is an example of Jesusland.*
*with the notable exception of Colorado Sprintgs, which is downright creepy.
The link: Latest home-sales numbers show definite slowdown
Shocking to see those words above an article written by Ms. Rhodes.
I am a Republican, but this cheerleading the economy is downright embarassing. Rush Limbaugh, Mike Medved, Sean Hannity and the like are all telling us that our perceptions are wrong.
Just because ONE FREAKING INDEX makes a new high (on extremely weak breadth, while all others are 40 to 60% off their highs) does not mean that people can't feel the pinch of inflation, stagnating wages and shorts-soiling terror of their house losing value.
Al.com has an uncanny ability to get it wrong at every inflection point, with the exception of the inflection points he controlled.
It is going to be a big, fugly mess.
did shugy's funding get cut now that Rhodes is openly admitting to the market cooling down?
Or did I miss something
Post a Comment