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Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: HoodBuilder who wrote (48330)	10/23/2003 7:37:10 PM
From: X Y Zebra	Respond to of 57110

The biggest problem builders are having is the inability to get land through the approval process, hence a limited supply of developable lots. In the west... The permit process away from larger metropolitan centers, primarily the coast, is not as onerous, [obnoxious is a better word], still demand for housing is strong. In my estimation, this is caused by a continuing stream of people moving away from these large populated centers. In the large coastal cities the continuing stealth growth of the immigrant population maintains a healthy demand for housing. In turn, causing the exodus from these large cities to the inland towns, (see above), which by the way, are experiencing continued and maintained economic growth, not seen before with such "continuity" --as opposed to larger booms and busts cycles--, and regardless of what goes on in the larger cities. As an aside, these immigrants are increasingly becoming more meaningful as to what happens economically and politically in these larger coastal cities. As far as being a bubble... well, maybe, or maybe not. These homes are largely NOT "speculative"; people buy them and live in them. Indeed in some areas, the demand is primarily for lower income homes. Even if the bubble were to burst, (whatever that may mean), not many of these homes will be dumped "for sale", which would add to the selling pressure in a possible "bear market on residential real estae". Interest rates are the main motor since it is allowing people to "qualify" to buy homes... will the rates go up ? possibly, I am not so sure, --better, I have no idea; if they do, I believe they will increase modestly. The powers that be are in up to their neck in liabilities to allow the market do its thing on its own... so I am convinced the untold goal of the fed --the real seat of power-- will be to maintain rates as low as possible, for as long as possible. --regardless of what particular brand of crook is at the chair of El Presidente. What could be scary is if the next Greenspan is some dogmatic freak that on his own believes that interest rates should be higher... The system, I assume would purge such character. I am not advocating, (or necessarily agreeing with) these policies, but I just do not see the government letting the economy fall into a 30's style depression. They have a lot of power and a lot of tools and technology to keep this scenario going for a while... In which case, I am beginning to believe that people will have the time to figure a way to increase the use of technology to create new "type" of service jobs that somehow will maintain them alive and most importantly, productive. If they achieve this, the scenario that many have described as a financial chaos will only occur in their own apocalyptic minds. Lastly, real estate is a hard asset, even in the event of an apocalyptic event, which I personally doubt, or the effect of a "cycle" (a more probable scenario), would cause values to go lower, this will be temporary since the environment in which we are entering will favor hard assets more so than paper assets. This tells me that although the value of the home builders and/or real estate related stocks may actually lose value considerably --given their current valuations-- that does not necessarily translate in an equal loss of value in the actual real estate. ...build it, and they will come...