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  • From: Gene GeRue <genegerue AT ruralize.com>
  • To: homestead AT lists.ibiblio.org
  • Subject: Re: [Homestead] Rural Land Prices and Conditions
  • Date: Thu, 24 Jan 2008 10:16:54 -0700


On Jan 24, 2008, at 9:02 AM, Clansgian AT wmconnect.com wrote:

"“Houston-area home sales fell 4 percent last year, but 2007 stillmarked the
second-best year on record after sales peaked in 2006. The largest piece of
the market, homes priced between $80,000 and $150,000,were the hardest hit last
year, falling 11.6 percent."

This seems to be a common trend: total sales are fewer, upper-priced homes are selling good, lower-priced homes are selling below normal. Again, understand the dynamics of our shifting economic classes.

As to land prices, we have just barely begun a housing slump that many say
could last ten to twenty years. People (you know some) are in denial. Most of
the ASKING price for land around here is not much different than it was at the
fevered peak in '05, but nobody is buying any of it.

Local conditions. You are fortunate to have your land in a place that most people do not want. I chose Heartwood with undesirability in mind and recommend it highly. Other than buying huge acreage, it is the best way to ensure peace and quiet.

Bubble mentatity goes on for a while after bubbles burst.


Sigh. I suspect I will always have a negative reaction to the term "bubble" when used to describe a waxing or waning economic condition. As you write, "bubbles burst." Exactly. A bubble, dammit, deflates all the way when popped, down to flat, just a memory of its former bulgy self. A bubble does not deflate five or ten or twenty percent and then hold there shivering and waiting for more helium or ballast.

Always expect change but always also expect certain things to continue as before. People must have shelter. New boys and girls are making new babies each day. They start out in parents' homes or humble apartments. When the family grows, they seek more room. The ubiquitous American Dream causes the majority to buy a house as soon as they can. The family grows and their incomes grow (although that may well be changing and if the lower class continues to grow while the middle class shrinks then it's a new demographic and economic ballgame) and they sell the small house and buy a bigger house. They keep doing this until they reach a comfort level, a balance between the need for space, the desire for good schools, etc., and financial reality.

One of the good things I expect from this real estate slowdown is builders will build more small homes. While the affluent who feel the need to impress will continue to build mansions, the eco-conscious and the lower economic class alike will seek smaller homes that cost less and operate with lower energy inputs that lower family overhead.

Current conditions are creating a growing demand. The population is rising. No more land is being found. Builders are leaving town. Rental prices will increase. Eventually, it will again be as cheap to own as to rent. Then the pendulum swings the other way.

Optimists say it will take a year or two. Pessimists say it could last for decades. Nobody, repeat, nobody knows the timing. Some make money acting as experts. Writers make money by writing. All of us do the best we can.

This is a blip on the chart. Any open look at real estate history reveals ever-rising prices over the long term.





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