Seattle Bubble Forum Archive

Wow! There is one major market in the entire nation where during the spring buying months the supply of homes is decreasing. I guess our utter collapse is done. Time to get buying.

/sarcasm

Fairly simple economic concept, this supply and demand.

Less houses ---> Higher demand ---> Higher prices

In Puget Sound

More houses ---> Lower - medium demand ----> Sellers raising list prices and wonder why they're not selling.

But we're special, I know, I know.

The utter complacency in the article as to the prospect of a severe US, or even international, recession is just astounding. You can't look at the Houston market in a vacuum. If the US economy goes off the rails later this year, and the global economy follows (e.g. China exports plummet, Europe suffers from real-estate crash), then I don't see how Texas real-estate is going to do well.

These suggestions to "buy now" only make sense if one really thinks we've already seen the worst of the economic fall-out from the unwinding of the credit bubble.

two words:

Oil bubble

While Houston will do better than the rest of the nation due to an oil economy, take the source with a lot of salt. The Houston Chronicle is our Seattle Times. And the REIC is STRONG and DEEP in this town.

I know people in the construction trades whom tell me some builders have a one year supply already on the ground and are finally scaling back. I don't know what the author's sources are or if he did any real research on the piece, but it does not ring true with the 'boots on the ground' test. Houston's market is soft and that includes new construction.

The northwest side of town has been dubbed the "foreclosure rainbow". Our market was gang buster until Aug. '07 then died over night, much like Puget Sound. Now we are seeing houses on the market for dramatic reductions.

While I can not confirm (peak prices) beyond reproach, I am seeing forecloses listed that are near the 40% reductions from when I return to Houston from Seattle in the summer of '06. $100k-$110k then.....$64k now. If the builders in that area of town have buyer lined up at their door, then they are certainly 'special'. Perhaps they should be in charge of the Fed or run for President.

I will check the builders advertisements in Sunday's paper to see just what incentives they are offering. I suspect they will not reflect the same confidence the author shows in the article.

The good thing about seattle and surrounding areas builders, so far have scaled back 30-40% for the next 12 months. Which should reduce levels of inventory.