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Thread: Maybe I should have held out for a bit longer in Denver.

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    Cyburbia Administrator Dan's avatar
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    Maybe I should have held out for a bit longer in Denver.

    Just surfin' around, I found this.

    http://www.recolorado.com/PropSearch...rop_type=OTHER

    Two houses down from my old house. This is a junky house, too.

    Just a couple blocks down the street, there's this.

    http://www.recolorado.com/PropSearch...rop_type=OTHER

    The economy is flat, but the housing bubble is still growing. What's going on?
    Growth for growth's sake is the ideology of the cancer cell. -- Edward Abbey

  2. #2

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    Geez!

    I didn't know the real estate market in Denver was so hot!

    I've been asking myself the same question: how has the housing market continued to expand at inflated values when the rest of the economy sucks?

    I don't know how, but I know one thing -- if (when) the housing bubble does burst, it won't be pretty.

  3. #3
    Cyburbian Cardinal's avatar
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    Low interest rates.
    Secondary markets.
    First-time home buyer programs.
    Increasing number of lifestyle movers (boomers).
    Disintegrating stock market.
    Over-extended buyers.

    I would expects an adjustment to come, perhaps in 12-18 months. Will it just be a slow-down or will it be a real crash? Will it impact all sectors of the market or will some be spared?

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          Downtown's avatar
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    One of the builders in our town has a subdivision that they're selling lots for. They just had a feature on the news where people are spending the night in their cars to wait in line to sign up for one of these lots. You don't get to pick what kind or style of house you get, or even really which lot. You sign up, they call you and say "here's what you're getting: Lot X with House X. Do you want it?" and if you say no, you're off the list. minimum price: $330K. insane!

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    Cyburbian Emeritus Chet's avatar
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    Originally posted by Michael Stumpf

    I would expects an adjustment to come, perhaps in 12-18 months. Will it just be a slow-down or will it be a real crash? Will it impact all sectors of the market or will some be spared?
    That seems a bit quick. I think the adjustment will be in 6-8 years when baby boomers start the end of their housing cycle, and the Echo boomers are not yet ready for home ownership at the level of the baby boomers. I don't beleive the adjustment will be across all market segments. The McMansions and exurban estate homes will likely be the ones to suffer.

  6. #6
    Cyburbian Cardinal's avatar
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    My assessment is based on two factors: 1) the decline in the stock market; and 2) a weak economy.

    As people begin to realize stock market losses they will be less inclined to purchase new homes. Simultaneously, those who over-extended themselves to purchase homes based on an assumption of stock performance may consider selling as a means to generate more liquid capital. I already see a slowdown in many parts of the higher-priced housing market.

    Much of the strength in the current housing market can be attributed to low interest rates, but buyers are still only going to buy with reasonable confidence in their ability to finance a mortgage (i.e., a steady job). Consumer confidence is ebbing, with business scandals and falling stocks likely to continue to make people less certain. I am concerned that while we have been pulling out of the recession, these factors could negate the recovery.

    In summary, I am looking for a "hiccup" in the housing market in the short term. You are very right, however, in pointing to a major adjustment due to demographic changes as the boomers retire.

  7. #7
    Cyburbian Emeritus Chet's avatar
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    Thanks, I understand your point better, and I agree with you 100%.

    And, as someone that just sold a house, I'm glad the deal closed when it did!

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