Mike Ault's thoughts on various topics, Oracle related and not. Note: I reserve the right to delete comments that are not contributing to the overall theme of the BLOG or are insulting or demeaning to anyone. The posts on this blog are provided “as is” with no warranties and confer no rights. The opinions expressed on this site are mine and mine alone, and do not necessarily represent those of my employer.

Friday, November 10, 2006

The Housing Market

Mike Ault, copyright 2006

I read how the home market is imploding, the bubble has burst, home prices have peaked. It seems to me the home industry really shot themselves in the foot. Have you looked at what they call a home these days? There was a time when a home meant a yard, a garage you could park in (maybe twice) and enough room to move around a bit once you got inside. It wasn’t a re-labeled apartment, it wasn’t within arms length of its neighbor and prices made sense.

Call them town homes, condo’s or whatever else, they are still apartments. You can still hear the person beside you, under you or over you. In these re-labeled apartments you can’t run a router in your living room if you want or knock out a wall and add a room. Yet at least here in Atlanta they want to charge you for the privilege of living in these ant farms at the same rate as if you where in a real house. Less than a mile from my house (on a corner lot, about a quarter acre, two and half car garage and 2700 square foot of space) they want to charge you the same price as for my house for an apartment.

Even when they build a house they now all build them what I call “California” style, seven to an acre. One right up next to another the 300K houses line up all in a row. Again, if I wanted to be that close to my neighbor I would invite them to live with me.

It seems here they prepare the land by raping it down to the bare soil, planting a few small trees and running sod over the exposed red clay (the sold all the top soil when they cleared the land.) I guess I am old fashioned, I like a tree to be a tree before I am ready to retire, not long afterwards.

I guess what I am trying to say with all the above is that if they were really giving people what they wanted, then they probably wouldn’t have had a bubble, but a nice steady growth. People are waking up to the fact that they are spending more and getting less. The builders will need to get smart and go back to what really makes a house a home.

5 comments:

Noons said...

too true...
and it's not just Stateside.
Here we got precisely the same problem!

Mike said...

It is the old reduce benefits until people refuse to pay inflated costs for deflated value, then "rediscover" the right way...

Ben Prusinski said...

It is sad especially here in southern California where I currently live that one cannot afford a real decent home even on a six figure Oracle salary! I do not want to pay 300 grand for a glorified apartment. Hmm.. maybe I need to move to a place like South Carolina, Oklahoma, Texas or Nebraska to buy a place!

Mike said...

Of course compared to SO. CAl (or any Cal for that matter) priced here are cheap. A house equivilent to mine is going for about 260-300K depending on location.

Mike

Joel Garry said...

Well, you can blame the gummint. Monetary and tax policies drive a lot of the bubbling.

In my case, I take responsibility for my actions and profit by it.

Over the past 27 years about 10% of my net worth has derived from tax-deferred savings related to database worth, while 90% is from real estate, with approximately the same amount invested.

I'd be a lot better off if I hadn't bought fancy cars and travelled and so on, but there you go.

The hard part is to be contrarian - buy now during the plateau.

word: odhrmako