Current real estate boom has nothing to do with the shortage of land.....
I would love to see you make such statement in front of a number of builders around many Western States -mainly the Rocky mountains states. When referring to "land” I will qualify and say... "buildable" land (that would mean ground that a permit can be obtained for the desired purpose, commercial or residential.)
So-called Planning Commissions, Design Review Committees, Environmental Regulations, Architectural Boards, and ...you name it bureaucrat groups will aid in the [increasingly larger] shortage of buildable/land. (And increasingly more expensive to build due to idiotic "landscape requirements and wasteful unwarranted set-backs" -I am not opposed to "all set backs, and all landscape requirements, but some really take the cake of idiocy)
Who cares if there is an emotional element (which I admit there is) or not... the point is price of land IS higher. Is it a bubble? Personally, in certain areas and segments of the market = YES, but it is NOT an overall-world-wide bubble.
Why is housing demand so insatiable now? All those people had to have a place to live before; it is not as if they were homeless and now suddenly demand to buy housing.
Not all of them... I do not deny as I stated above, there may be some areas and segments in which your assertion is true, but not everywhere. Real demand is there...
Is it because of a favorable interest rate environment or simply new genuine buyers, or a combination... hard to tell I believe it varies in different degrees in different areas...?
... but with emotion and fear
Partially true, but it is NOT the sole reason.
There is a possibility though that current real estate boom is not a bubble. Maybe it represents the early stages of massive flight from the dollar
Agreed... I have seen this movie before, at least three times... -g and this applies to whatever currency happens to be the currency in question around the globe...
Politicians and social engineers will never learn their lesson. I am certain that many of these characters, in spite of the many scars and lessons supposedly already learned, they would forever continue to apply their ill-fated methods simply because either they buy votes in this fashion, or simply it is in their genes to aid the needy -regardless of the cost it carries, such weaking their respective currency.
I do not understand why is it that economists do not account for these ‘behaviors’. They are part of the so-called 'factors of production' (since they influence relevant economic decisions).
the fact that CPI understates inflation is not a question of if but how much
Ah! Do I hear evil government manipulation? -gg I admit that not all of those militia's statements are untrue... too bad that they are wackos of a different flavor... -g
If there is a shortage of land in certain locales due to its popularity, immigration, population growth etc at some point expensive housing, lower quality services, congestion, taxes, pollution, traffic could make that locale so unbearable to live that immigration contracts, residents move out, uncompetitive businesses move out which causes tax rates to go up which causes even more people to move out which forces more businesses to close etc
EXACTLY !!!
Where do you think these people are moving out TO ???
...and do you think these new places are not experiencing a shortage of land due to this REAL demand? Furthermore... because in the places where they have been moving to for the last 10 (and in some instances 15) years, a very healthy construction boom has been in effect for the same amount of time... IN ADDITION, construction jobs are well-paid jobs, which help these local economies...
My calculation is that this trend will continue... just look at Nevada, Arizona, Utah, Colorado, and others...
NO shortage of buildable land?
You bet there is, I see this every day and it has nothing to do with a bubble.
As for interest rates... well we may have had the bottom, but are they gong to zoom up in a short span of time? I doubt it, not so long the overall labor market is as soft as it seems to be...
Once the emotion is removed( desire to profit, fear of being priced out) the pressure to buy on the part of the buyer suddenly disappears and the shortages disappear.
LOL ! Yeah well... and if the sun would stop rising in the morning we will all freeze... You see that is precisely what I mean, it is economists that LIVE IN A BUBBLE -LOL- emotions will NOT disappear, they will merely shift their focus and attention to the next.... vehicle of greed, but you will NEVER be rid of the emotional element, greed, fear, whatever....
For the time being... -generally speaking- real estate is NOT in a bubble, there is a real demand and utility for it; it is reflecting the price as per the market. The fact that it is becoming a more usable form of hedge against inflation (as opposed to gold) also helps explaining its strength.
when you move from strictly a residential market to a commercial (industrial, retail, and so on) you have a more stringent element of measure, this being the capitalization rates applied...
In this arena, you can see that such market has little room for emotion... take the office market for example...
Buyer be aware....
nreionline.com
Suddenly there are sellers everywhere and no buyers.
As I said... sellers become buyers elsewhere, particularly when you have a motivating tax law that encourages you to remain in the market thanks to the 'tax deferred exchange laws'...
EXCEPTION: oceanfront and coastal properties
Of course, I knew that and I have been preaching it...
buy, hold and never sell... -gggg |
