Monday, September 26, 2016

A bust in the local housing market?

Casper's real estate market has been rates as one of the ten least healthy in the United States.

No surprise there.

And there's a sense of deja vu there as well.

Along with that, there's the odd nature of depressed real state market denial.  I well remember in the 1980s, when our market was very depressed and a lot of houses went back to the banks, that well into that there were those who simply denied that this was the case until it could no longer be denied.

Having said that, it doesn't seem quite as dramatic as last time. That may be because the bottom simply hasn't fallen out of the real estate market yet.  It's subject, it seems, to sort of a delayed effect.  At first people hesitate to put homes up for sale, and then later they can't due to their being under water, and then perhaps they're forced to.  I don't know that we're to the forced to stage yet.  We could be getting there.

Indeed, over the weekend the Tribune reported on a couple of businesses and how they're doing.  Not well in a couple of instances.  The reports were interesting, however, that in one an older owner (in his 50s) felt that the petroleum sector was never coming back, a young guy in his 20s felt it would.  The difference?  Well, that guy in this 50s, two years younger than me, had no doubt seen this happen before and felt that something about the bust this time is different, and more long lasting, than lat, and that one was pretty darned long.  He could well be right.  I've already reported here on how technology has moved to where the petroleum industry may not need as many employees as it did before and during this boom.  And coal, in my view, will never be what it once was.  The one shop owner had gone from fifteen employees down to just himself.

The reason that I note that is that, somehow, real estate markets are like predator and prey populations. When the rabbit supply increases, the bobcat supply does as well, but there's a gap in it.  The rabbits start crashing before the cat's peak, which is bad for the cats post bust.  I think real estate markets tend to work that way, which if true means that we may be hearing about a declining market more in the future.

And of course this isn't just Casper.  The article claims that the market is staying stable due to retirees coming in.  Maybe, but in a statewide market I wonder.  And for that matter, Casper, of which I'm a native, always strikes me as an odd place for immigrant retirees, unless they like high winds and cold winters, which most do not.

Well, we'll see, of course, how this develops.

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