Mid-Week Open Thread (2011-11-23)

Here is your open thread for the mid-week on November 23rd, 2011. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.

Be sure to also check out the forums, and get your word in the user-driven discussions there!

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

6 comments:

  1. 1
    Bingo says:

    Interesting to see the national home builders moving into the Puget Sound area. Toll Brothers buys Camwest. MDC Holdings (aka Richmond American) buys SDC Homes. Newland buys the MPC fka Cascadia. Pulte buys the final 900 lots at Snoqualmie Ridge. DR Horton is already in the Puget Sound area. It must certainly help that having bought about 10 yrs worth of lots, they can take a long term outlook on the market. I would assume they foresee some sort of bottom within the next 2 years.

    I guess we’ll see in the next couple of years how smart the “smart money” is?

  2. 2
    David Losh says:

    RE: Bingo @ 1

    They have the ability to average lot prices nationally. A national builder also has greater buying power for materials, they get better financing options, or put up cash. That cash can also buy a lot of temporary labor. They will build profitable housing units that are still selling here where they aren’t selling any more in other parts of the country.

    It’s not predictive of a bottom, it’s a simple cash flow decision.

  3. 3
    David S says:

    RE: Bingo @ 1 – Is it possible for instance on the DR Horton plat off 272nd just east of Covington, that they purchased the plat as a foreclosure and are planning to flip the plat? Is plat flipping common? They seemed to have finished the site development (poorly) and then disappeared months ago.

  4. 4

    RE: Bingo @ 1
    Almost All New Construction Now is Apartments, Not SFHs

    Watch for rents to go down as the supply increases.

    Also, the big construction companies build on a 70% learning curve for cookie cutter construction (i.e., apartments)….meaning every time they double the units they just built, the learning curve chops another 30% off their future building costs.

  5. 5
    Natalia Orino says:

    RE: Bingo @ 1

    Here in the California Central Valley home prices have dropped about 60% from peak. Many of the weaker builders lost their lot inventory in bankruptcy. The healthier builders then stepped in and bought many of these lots at 90% lower cost than they were priced previously.

  6. 6

    RE: Natalia Orino @ 5

    Yes Natalia

    A central Califiornia News report in part earlier this year:

    “….“Another type of declining city may also be emerging — places that grew substantially during the housing boom and are now experiencing unprecedented declines in house prices and increases in foreclosures.”

    The report especially focuses on Stockton, California, which is a particularly striking case of a city that at first flourished then collapsed as a result of the housing boom and bust.

    “Stockton… had been among the fastest growing areas in the United States until the Great Recession and now it is among those areas particularly hard-hit by the crisis,” the study noted.

    Indeed, the median house price in Stockton grew by 230 percent from 1980 to 2006, but is now just nine percent higher today than it was in 1980 and about equal to the median house price in Detroit, the study noted. Otherwise, Stockton and Detroit share little else in common.

    Between 2006-2009, housing prices are estimated to have plunged 75 percent in Stockton.

    Many more “Stocktons” will likely dot the U.S. map in the years to come….”

    http://www.ibtimes.com/articles/98260/20110106/ghost-towns-housing-collapse-will-result-in-new-types-of-declining-cities.htm

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