Monday, March 3, 2008

It's different in ___________ because ________

Atlanta of course is different because:

“People who would have relocated to Atlanta have not because of trouble selling homes,” said Eugene James, of Metrostudy, a firm that monitors housing starts in metro Atlanta and across the country. “Atlanta has a stable market place from a price appreciation stand point—these other hot markets are cooling off. It is creating demand issues.”

and because

we have slowed down to about sixty, but we are still moving ahead at a “normal” pace. This is a mere tap on the breaks on GA-400. Job growth and job prospects are both positive and consumer confidence remains remarkably strong.

Hmmm. Job growth, an influx of new residents and "undervalued" properties will lead to a never ending stream of real estate appreciation in Atlanta which is different from everywhere else. That we're different argument...where have I heard that argument before? Oh yeah I remember now. Everywhere else.

It was different nationally because:

"Most of the country is certainly not in a bubble if you define a bubble as prices far above fundamentals," said Gary Smith, who is the Fletcher Jones Professor of Economics at Pomona College. "The average person in the U.S. is still better off buying than renting. Perhaps housing prices were too low in the past and recent prices have brought market prices more in line with fundamentals,"

It was different in Washington DC because:

(1) This is a government, defense, and high-tech center. I believe we have either the 3rd or 2nd-worst traffic in the country. Everyone wants to be here, because this is where the jobs are. That puts upwards pressure on house prices, and it isn't going away any time soon.

(2) There is a TON of money running around this town. It's clearly shown by the fact that people can handle $3500-4500/month mortgage payments. And because of the level of incomes here, that's not going to change any time soon, either. As my dad said, this is as close to a recession-proof town as you'll find.

(3) Shortage of land. Every bit of unbuilt land - even small plots that are only big enough for 10-20 houses - is being gobbled up by eager builders who sell half their houses when the houses don't even exist, and will not be built until 6 months after they're sold!

It was different in Las Vegas because:

Las Vegas is still a "mecca" for Californians in search of a good deal on a home

and because

Sullivan said Las Vegas can't have a housing bubble with this kind of job growth and in-migration and when land is hard to find and there's not much housing inventory. Any talk of a housing bubble is probably coming from outside the market, he said.

and because

Las Vegas home prices, like many parts of the country, have continued to rise strongly. There has been widespread media coverage on the possibility of a housing market bust. However there have not been many statistics to support his theory. In fact the statistics reveal that there is very little danger of a housing bubble bust. In fact the latest report released by the Research Division of the National Association of Realtors shows that the local housing market is in excellent shape.

It was different in Miami because:

There is no housing bubble, according to other sectors of the real estate market. If we only scrutinize available data points and analyze the situation, there really is no housing bubble. The strength of the housing market was due to multiple factors fueled by genuine economic conditions. Each of the following factors has contributed to rising home prices: buyer’s earning power outlook and increase in purchasing power, local job growth, low interest rates, buyer’s emotional attachment for his home, and of course, contributions from family members, specially from the parents.

and because

400,000 ppl moved to Florida in the past year! The demographics are there, as a result we see this tremendous amount of building. More specifically, Miami saw a net migration of over 30,000 ppl. Therefore, the 60,000 condos coming to the miami market in the next 2 years will surely be absorbed.

and because

The inventory is lowest ever and demand is highest ever - due primarily to the increase in permanent population. Things will level out a bit but Look for healthy growth to continue for the next decade or so.

It was different in Phoenix because:

the Valley's relative affordability compared with California and the East Coast, along with projections for Arizona's continued population growth, should help homeowners sustain recent gains.

and because

The 3 year job growth outlook for the Phoenix Metro area is a strong 4.8%, compared to the national average of 2.4%, making a strong argument that home prices will not fall.

It was different in San Diego because:

The housing bubble is an economic myth, particularly in North San Diego County, where demand for housing has long outstripped supply. Continuing confidence in the viability of San Diego County and the fact that more people want and need to live here is the best evidence there is to disprove any housing bubble.

and because

It implies no widespread financial overstretching to purchase a home in our region.

and because

the San Diego real estate market is not experiencing a bubble. Instead, the price appreciation in San Diego is driven by the low supply of housing...

And now it is different in Dallas, and different in Charlotte and different in Denver and different in Houson and different in, well everywhere. Every city is a unique snowflake immune to the laws of supply and demand. Every city is different because everyone wants to live there. Every city is different because it is home to XYZ industry. Every city is different because XYZ company is based there. Every city is different because so and so predicted such and such will happen over the next decade. Every city is different because, well it's just different.

Just like Phoenix, Las Vegas, Miami, DC and San Diego were special and different.

Market fundamentals don't care that the weather is nice in San Diego. Supply and demand curves don't alter themselves because Las Vegas has nice golf courses. P/E ratios (or price to rent rations in r/e) don't disappear because Atlanta is home to UPS, Home Depot and Coke. And people making $40K a year cannot afford $600K homes in Phoenix, no matter how close it is to California.

1 comment:

Anonymous said...

Almost sounds like an Obama slogan campaign speech. We are different because we are different and being different is different.