Tilted Forum Project Discussion Community - View Single Post - 1992 Redux: Will "it's the economy, stupid", Be The Big Campaign Issue?

The_Jazz · 03-04-2007, 07:41 AM

Host, thanks for the well-thought out responses. While I certainly agree that there are a whole bunch of markets either in the process of or long overdue for a bubble burst, I am again going to point out that all real estate is local.

First, let me define my terms. In my world, a "bubble burst" means that housing stock is either stagnant or depreciating in value. With that in mind, I think that the very first sign that a specific market is in trouble is an inability to sell new units (almost always condos) in smaller metropolitan areas. Your North Bergen, NJ example is a prime example. It is outside of NYC and doesn't have the traditional drawing power of Manhatten.

To elaborate on my "local" thoughts, the flip side is the Las Vegas Strip, which is something that I'm involved in at work literally every day. The new Trump Tower that's going up there sold out in 2 weeks, which is a record. Every other condo/mixed use tower that's broken ground there is at least 85% sold (from what I've heard). I will caution you that I'm working from information provided by my clients, and it's not always accurate.

I saw your stats on Las Vegas, and honestly I've seen them before. I even know why they say what they say. However, I still think that you're looking at too large of a picture. The reason that I specifically said "The Las Vegas Strip" in my original post was that I meant that exact location - not the rest of Las Vegas. I think that I can successfully argue that The Strip is bubble-proof. There are always going to be people looking to buy into those buildings barring any major recession. The rest of Las Vegas is a group of individual neighborhoods - and that's what I mean by "local". While it's painfully obvious that national trends can affect local ones (lending rates being cheif among those), the fact is that there are and always will be certain neighborhoods that will always have high housing prices that will appreciate. The Gold Coast in Chicago or South Beach in Miami immediately spring to mind as other examples.

Then there's the troubling case of Southern California, which has had a housing stock shortage for the past 20 years. There literally aren't enough homes for people who want to buy them. The big problem is that there's a lot of substandard housing being built there (and several other venues), but that's not going to slow the market down. However, I do want to make that point, since I have a feeling that it's going to be very relavent in the next 4 years, especially for non-California construction (oddly enough). I make this point since I know that as soon as the economy turns there will be a huge wave of construction defect lawsuit filed around the country for substandard construction.

03-04-2007, 07:41 AM	#7 (permalink)
The_Jazz Asshole Administrator Location: Chicago	Host, thanks for the well-thought out responses. While I certainly agree that there are a whole bunch of markets either in the process of or long overdue for a bubble burst, I am again going to point out that all real estate is local. First, let me define my terms. In my world, a "bubble burst" means that housing stock is either stagnant or depreciating in value. With that in mind, I think that the very first sign that a specific market is in trouble is an inability to sell new units (almost always condos) in smaller metropolitan areas. Your North Bergen, NJ example is a prime example. It is outside of NYC and doesn't have the traditional drawing power of Manhatten. To elaborate on my "local" thoughts, the flip side is the Las Vegas Strip, which is something that I'm involved in at work literally every day. The new Trump Tower that's going up there sold out in 2 weeks, which is a record. Every other condo/mixed use tower that's broken ground there is at least 85% sold (from what I've heard). I will caution you that I'm working from information provided by my clients, and it's not always accurate. I saw your stats on Las Vegas, and honestly I've seen them before. I even know why they say what they say. However, I still think that you're looking at too large of a picture. The reason that I specifically said "The Las Vegas Strip" in my original post was that I meant that exact location - not the rest of Las Vegas. I think that I can successfully argue that The Strip is bubble-proof. There are always going to be people looking to buy into those buildings barring any major recession. The rest of Las Vegas is a group of individual neighborhoods - and that's what I mean by "local". While it's painfully obvious that national trends can affect local ones (lending rates being cheif among those), the fact is that there are and always will be certain neighborhoods that will always have high housing prices that will appreciate. The Gold Coast in Chicago or South Beach in Miami immediately spring to mind as other examples. Then there's the troubling case of Southern California, which has had a housing stock shortage for the past 20 years. There literally aren't enough homes for people who want to buy them. The big problem is that there's a lot of substandard housing being built there (and several other venues), but that's not going to slow the market down. However, I do want to make that point, since I have a feeling that it's going to be very relavent in the next 4 years, especially for non-California construction (oddly enough). I make this point since I know that as soon as the economy turns there will be a huge wave of construction defect lawsuit filed around the country for substandard construction. __________________ "They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." - B. Franklin "There ought to be limits to freedom." - George W. Bush "We have met the enemy and he is us." - Pogo