[lbo-talk] Re: The Housing Bubble

[Jim Westrich]

I have no great insight into the general bubble phenomenon but based on my own
experience living in and trying to buy a place in the Boston area I have two
smaller observations.  Clearly, the amount of square footage per person is
growing (both social and demographic factors confound the impact of
income--longer hours at work has meant a somewhat paradoxical substitution
effect of more home demanded to make up for less time).  Also, housing is
bought by people outside of the area (i.e., second homes).  In the Boston area,
lots of out of state and international wealthy drive up prices at the high end
(multiple homes appear to be socially chic and justifiable as investment in the
bubble).   They would not show up in any income ranking of the area unless they
were full-time residents. See Cape Cod below as well.

Here is the top 50 MSAs ranked by 5-year housing price index change.

Cape Cod has got everyone beat and exurban California seems rather dramatic as
well. (Apologize in advance for the crazy formatting).

       MSA	             5-Yr % change
Barnstable-Yarmouth, MA	       108.43
Vallejo-Fairfield-Napa, CA	96.54
San Diego, CA	                95.31
San Luis Obispo-Atascadero-Pas	94.6
Santa Barbara-Santa Maria-Lomp	93.18
Salinas, CA	                91.86
Yolo, CA	                88.92
Nassau-Suffolk, NY	        88.35
Brockton, MA	                87.61
Santa Rosa, CA	                84.88
Ventura, CA	                83
Sacramento, CA	                81.48
Modesto, CA	                81.03
Orange County, CA	        80.45
Providence-Fall River-Warwick,	80.29
Merced, CA	                80.28
Oakland, CA	                77.7
Stockton-Lodi, CA	        76.96
Monmouth-Ocean, NJ	        76.85
Chico-Paradise, CA	        76.5
Riverside-San Bernardino, CA	76.34
Manchester, NH	                75.17
Worcester, MA-CT	        74.96
Boston, MA-NH	                74.83
Fitchburg-Leominster, MA	74.66
Fort Lauderdale, FL	        73.39
Lowell, MA-NH	                73.26
Lawrence, MA-NH	                73.15
Los Angeles-Long Beach, CA	72.84
Dutchess County, NY	        71.62
Santa Cruz-Watsonville, CA	71.32
Nashua, NH	                71.15
Portsmouth-Rochester, NH-ME	70.85
West Palm Beach-Boca Raton, FL	70.28
Naples, FL	                69.04
New York, NY	                69
Miami, FL	                68.36
Atlantic-Cape May, NJ	        68.31
Fresno, CA	                67.28
Redding, CA	                66.05
San Francisco, CA	        65.99
Newburgh, NY-PA	                65.95
Fort Pierce-Port St. Lucie, FL	65.63
Washington, DC-MD-VA-WV	        64.97
Punta Gorda, FL	                63.03
Bergen-Passaic, NJ	        62.15
Portland, ME	                62.07
Newark, NJ	                61.03
Middlesex-Somerset-Hunterdon,	60.7

Source: http://www.ofheo.gov/HPIMSA.asp?FormMode=Summary

Jim

Quoting Doug Henwood <dhenwood at panix.com>:


> jimi ayler wrote:
>
> >i don't believe this particular bubble will ever pop,
> >'round these here parts.
>
> Or as our pal Tom Gogola put it at a reading at KGB last night, the
> Long Island housing market has a case of priapism - once it's up, it
> stays up. But as they say on Wall Street, trees don't grow to the sky.

"There's a port on a western bay
And it serves a hundred ships a day
Lonely sailors pass the time away
And talk about their homes

 . . . .
He came on a summer's day
Bringin' gifts from far away
But he made it clear he couldn't stay
No harbor was his home"

        --Eliot Lurie (Looking Glass), "Brandy"