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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Neeka who wrote (10842)	5/28/2003 4:35:03 PM
From: Les H	Read Replies (1) \| Respond to of 306849

Kauai’s housing price boom brings mixed blessings starbulletin.com

To: Neeka who wrote (10842)	5/28/2003 5:10:22 PM
From: Mr. Sunshine	Read Replies (1) \| Respond to of 306849

<<And overall, it seems that over time, values have just go up, up, up.>> That kind of thinking is what causes bubbles! <<Could you give examples of when/why property values go down please?>> Values can go down due to the economy, political events, social migration away from the area, the popping of a bubble, or any other factor which could increase supply or decrease demand in the local area. Specific examples? Here are a few that I can come up with off the top of my head: California 1990-1998 due to recession. Of course that is over and prices have increased dramatically, but it was painful while it was happening! New England late 80's, same reasons as California. Texas during every oil price bust. What would happen if some technology came along that completely replaced Texas crude? Texas real estate might not recover for generations. Hawaii mid 90's to present. Much of the Hawaii real estate market was driven by the booming Japanese economy of the 80's. With Japan in a decade long recession with no end in sight, who knows when Hawaii real estate will recover. (Note: It has been a few years since I have been to Hawaii, so maybe things have recovered now. You seem to be familiar with Kauai, but I do not think that was affected as much by the Japanese.) MidWest - Many rural areas are losing population. Homes, already cheap, are being abandoned for lack of buyers. Countless other examples in foreign countries I am sure. Also watch out for climate changes. What happens if the polar ice melts (as happens every few thousand years, due to man made global warming or not) and the coastal areas are drowned? What if the constant droughts in the SouthWest extend for decades instead of years?