Sales in April 2008 were off 24% from the year prior, but activity in the low end continues to improve. The under $300K range decreased to 12 months of inventory with another big jump in pendings from 370 to 490. The $300K-500K range came down to just over 12 months of inventory showing improved activity once again. The $500K-1 million category had a slight uptick in activity but still favors the buyer with well over two years of inventory. Over $1 million is slow, with 4-5 years of inventory. If you’ve been waiting for the bottom in the low end, this may be it, as current pendings, sales and activity will probably result in a further reduction of inventory next month. Full report.
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GreenNV
Cool. New stat – “740 pendings (from 605). Of all pendings, 205 are short sales.” That’s about 28% of pendings, and who knows how many of these will close. And if REO sales are really about 55% of sales (couldn’t work out a short sale), what hope is there for any 2005 (or late 04 for that matter) buyer wishing or needing to exit the market? The losers are the market!
Brian Copeland
And as we know, just when you think it’s hit the bottom, is the day it’s already started to go up. Lesson…buy now!
Hey Diane! I’m not making Inman SF this year 🙁
Reno Ignoramus
Out of 336 sales last month, only 29 were above $500,000. The houses that sold between $500K and $1 million (24) comprised 7% of all sales. In the rapidly disappearing (sorry Allen) segement over $1 million the 5 sales comprised 1.5% of all sales.
The upper end is, as reported to me by many realtors from many offices, dying on the vine. Damn interesting to see what kind of buyers we have around here now that the Voodoo juice has been cut off and buyers have to actually demonstrate they can repay a loan.
Gail
Putting together the data supplied by Guy in his last post with this post, it appears that over 90% of all sales last month were below $500,000. Almost 70% were below $300,000.
This trend has been holding for several months now. Where are all the $300,000 sellers going? It sure does not appear that they are “moving up” into the higher end, because sales there are scarce. Are they becoming renters?
I’m really glad I’m not trying to sell an $800,000 house today.
Ralston
Gail, if 55% of all sales are foreclosures (thanks GreenNV)we know that half of these former “owners” are already renters by the time of sale by the bank. That leaves 45%. Probably half of them are short sellers with zilch equity and no ability to move up. Now we are down to about 20% of remaining sellers. Probably half of them have zilch equity after they pay off the HELOC in escrow. Now we are down to 10% of the sellers who may actually get a check from the escrow company at closing. Still wondering why the upper end is starving to death?
Luongo
Yes Ralston, and add to that the fact that the median household income in Reno is about $55K. Now that lenders are imposing limits to how much they will loan based upon a borrowers verified income, the median household can borrow at most about $200,000 with good credit. And a down payment. It’s not a mystery why the high end is languishing.
SkrapGuy
It’s been said here before…….there just ain’t enough cardiologists in town to support the sea of overpriced houses at the upper end.
It is amusing how so much attention is devoted on this blog to expensive houses at the upper end of the market when, in reality, almost all the sales activity is at the lower end. I guess maybe that the computer literate leisure class that frequents this blog has time to pontificate while the only people who are actually out there buying anything must be at work.
Genex Sceptic
Interesting threads here, both from Diane and Guy,
My thoughts – not unique but perhaps worth stating. My understanding is that the low end of the market is usually the first to decline AND the first to recover in a downswing such as we are in. The higher up the price spectrum we go, the longer the initial hit in pricing takes, followed by a longer and slower recovery.
If this logic is true (Which it is IMO) then I suspect we have hit bottom in the sub 300K market, but are still months away from in the 500-1M category, and could be years from the bottom in the 1M+. Complicate this theory with price reductions that drive additional inventory into each category.
This is a hypothesis, but so much of the thread is “the bottom” when in fact using this logic I suspect each segment will see an independent and marked bottom. So perhaps Smarten, Derrick, and all of the others are right.
Maybe we have seen the first of SEVERAL EXPECTED bottoms.
Just me thinking out loud.
DERRICK
the median has already hit bottom. I have been saying this for a month now. sorry guys UNDER 240k median Isn’t going to happen..
looks like may is shaping up to be another GREAT month.
smarten
So DERRICk I repeat:
If “the median has already hit bottom;” and, an “UNDER 240K median isn’t going to happen;” why aren’t you willing to put your money where your mouth is [insofar as that January 11, 2009 dinner for 10 at the Lone Eagle Grille is concerned]?
And given your real estate portfolio of ONE [which you’ve given no indication you intend to sell anytime in the immediate future]; what exactly makes May’s shape so GREAT insofar as you’re concerned?
Tom
The bank executives are telling me that despite continued reduction in the cost of funds to them, this is not translating into increased available funds for mortgage lending. While on the surface the mortgage rates appear to have declined, in fact there is not a significant supply of fresh funds for new mortgage lending for jumbos (over $729k in southern California). The banks are taking down the funds, but are not interested in writing new business as much as they are in holding onto the cash for their own reserve purposes. They tell us they feel they have more losses coming, because not all their loans were securitized and sold. Many were retained, and to the extent that those houses are now valued less than the principal balance, customers are likely to walk. So the banks are requiring conservative appraisals and prefering new business with 20% to 25% down, plus fully documented income and a 3.5 to 1 monthly debt service capability, plus first tier credit. The smaller loans are viewed as less risky than the larger ones, as there are more potential buyers if the customer defaults. This means that buyers who get financing will either be the lower-end buyers, OR they will be highly-paid earners with prime credit and who can meet the current strict debt service criteria. Neither alternative is great for sellers of million dollar homes, unless your house is in a community where those high earners work and live.
Luongo
That’s exactly what I was talking about Tom. 20-25% down, fully documented income, and no more than a 3.5:1 debt service ratio. In a city where the median household income is $55,000 that’s a $192,500 loan.
So unless there are a bunch of people who have $807,500 to put down, a million house is not going to happen.
The upper end of the market in Reno is toast. Total toast.
SmartMoney
And once we hit bottom in the real-estate market it will begin appreciating at the typical Reno historical 5% per year rate? Wow. That will be exciting. Gee, hope we all don’t miss the bottom.
Sully
SmartMoney you’re being quite generous with a 5% yearly appreciation rate. Pre-bubble Reno was more like 3.25%.
Doug B. Cooper
IMO, for single young individuals, housing is a horrible investment if you aren’t in a rush to buy. If you have 20% down for a house, you’d be better off investing it in the stock market.
For example, if you would have bought $50,000 worth of Visa, back in March during its IPO at around $60… you would have made an extra $20,000 (40+%) in less than 2 months. That’s a heck of a lot better that what a house gives you, and the commision is only 10-20 bucks per trade!!
Anyhow, that’s what I’m doing. When the market does hit bottom, Newsweek will probabaly have “Now is the worst time to buy a home” on its cover. By then, that 20% down payment will look more like a 100% if invested right.
DonC
Doug — Houses aren’t invenstments in the conventional sense. You buy them to live in them, raise a family, and so on. We may not see housing prices rebound for a decade or more, and that’s a long time to wait to move on with your life.
And while stocks may be a decent invenstment, US stocks still hasn’t made it back to the highs of 2000. It’s not a slam dunk.
downtownjunkie
I agree with Tom. The federal rate reductions will hardly translate into eased pain/new lending for the borrowers. The banks are using this cheap cash for their own liquidity.
DERRICK
hey doug nice return on your visa investment.. I bought apple (aapl) back when it was 11.00/share..
Doug B. Cooper
Don C, I was implying single young individuals, but I agree with you. Houses shouldn’t be thought of as an investment, but more of an asset that shouldn’t lose value… at the least. Unfortunately, in the last few years, people tended to treat houses as if they were stocks… The sad thing, most were playing with the banks money, not theirs. In which case, they got burned.
“And while stocks may be a decent investment, US stocks still haven’t made it back to the highs of 2000. It’s not a slam dunk.”
Actually, it all depends on what you’re buying. There is always a Bull market somewhere… look at what happened to commodity stocks since 2000…. HUGE GAIN!! Good example… look at the ticker BHP, it’s the largest mining company in the world (AUSTRAILIA traded on different exchanges). Its value has surged since 2000, all thanks to China and India. The price of metals such as copper has almost quadrupled since then. GAS, WHEAT, CORN, WATER, COFFEE, and on and on. Someone is making a profit out there… You just have to find out who.
You think Americans are consumers??? Wait till you see China and India. It’s just a matter of time.
Derrick, that wasn’t my true investment, just an example, but thanks. Anyhow, good play on the Apple back in ’97 or ’98…
IMO:
House values went up 100-150% in Reno from 2000… but the majority of individual’s paychecks didn’t… Catch my drift.
Bob
I thought you were dead DB Cooper ?
DERRICK
I didn’t buy apple back in 98′, or 99′ , but rather late 2003.
Bought 500 shares @ 9/share, and another 500 @ 13/share.
Lets just say I was able to sock a nice junk of retirement away lol
Investment_Help
Derrick,
I’ve been reading this blog for a long time now and have noticed how successful you are with your investments. Could you post some transactions you’re about to do and then perhaps I can make a little money too?
bondstevenbond
One of the most reliable cyclicals in the whole financial world is the seasonality of home prices – they peak in the summer and trough around January. This is not the bottom. It is, at the very best, a “dead cat bounce”.
Sellers, put some ice in your wine and hum another refrain of “Lucy in the Sky with Diamonds”
DERRICK
investment_help .. A while back I was trying to tell everyone to SHORT the home builders.. and sure enough history proves that I was MORe than right..
Also I made a call on pmi and Ori, to which the next day went up 35%.
but others here will tell you that I am full of it.. unfortunately for them I have the post and profits to prove it.
But you said that you wanted a play? I will give you 1 for free.. short oil at 125-130 down to 90. ok? Or you can play the dollars bounce from all time lows against the euro.. ( it has already started)
playtonium
I agree with you Doug Cooper, I have never thought of my home as a quick way to make an investment, rather, I look look at it as a way to not pay rent or mortgage once I hit retirement age. My only goal is to have my house paid off by the time I hit retirement in 35 years or so, and to maybe have an additional rental income property that’s paid off as well for extra retirement income.
The truth is not everyone buys a home as a short term investment. Here is perfect proof right here; On Apr 30, the first RESALE of a Palladio Condo appeared in the County file. A 12th floor unit sold for $780,000. The original buyer paid $544,740 when he closed in 2007. The highest sale (per square foot) of ANY of the 66 builder sales was $503/sf while this 1536sf resale apparently sold for $508/sf. The unit faces both South and West (nearly ideal) and the owner might have made some great upgrades or sold it fully furnished or who knows what – BUT STILL, this price is pretty amazing given the current real estate market weakness. To compare – the most recent builder sale went for $303/sf. Clearly, this person didn’t buy this unit as a short term or even mid-term investment, they bought it because they love downtown, love urban life, probably loved the Palladio itself, and wanted that unit regardless of price. I’ve heard from 3 Palladio residents and a realtor now that the Palladio’s sold units are about 60% occupied with full-time residents, with most of the remaining using it as second home, and then a few who are trying (and failing) to use them as rental income.
Perhaps if more people bought a home as a LONG TERM investment, and not as something to flip and make an easy $100,000 off of, we wouldn’t be in the real estate situation we’re in right now. I agree with Suze Orman; to be mortgage/rent free as I enter retirement is a HUGE benefit. That’s my main reason for purchasing a home.
John Newell
Diane,
My only question on inventory is how the 187 TDs from April will impact it. Conventional wisdom (which may be out to lunch) is that most of the TDs hitting the market will be in the low end. Will the market continue to be able to absorb between 100 and 200 TDs every month?
smarten
Derrick states, “others here will tell you that I am full of it..unfortunately for them I have the post and profits to prove it.”
Well thanks for the invitation Derrick, and let me be the first to say you’re full of it.
First of all, may I remind you this is a REAL ESTATE BLOG. Get back on subject or find another blog.
Second Investment_Help, here’s all you need to know about the Oracle. He has admitted he’s NOT rich [so why listen to him?]; he’s a 27 year old kid [and pround of it]; he and his wife both work for a living and have a combined annual earned income of roughly $75K [why are they both working for wages when Derrick can make more on a weekend sitting at home on his computer?]; and, they own their $329K Spanish Springs charmer [probably worth about $249K by now (only because of $50K worth of sweat equity upgrades)] free and clear.
Ask yourself: if you could make the kind of money Derrick suggests he makes gambling on the market [and that’s exactly what you do when you sell short, invest in options and play commodities], why would you leave $260K of unnecessary equity in your home on the table?
But of course don’t listen to me. I’m the stupid one [according to Derrick] who came to Washoe County 10 months ago and decided to rent versus buy.
Selling oil or currencies short when they’ve had massive run ups is about as clairvoyant as predicting long term mortgage rates will increase when the federal cost of funds rate is sitting at [an historically low] 1%.
Doug B. Cooper
Playtonium, you took the words out of my mouth. Thanks.
smarten, keep on renting and saving up!! I’m really sorry if the stock talk is making you so upset. Saving up for a down payment on a house was the reason I brought it up in the first place… just in case you didn’t get that in my post above.
Derrick, I think it’s great you invest in the market, but IMO, it’s not classy to boast of your achievements. Only novices do that. Instead, try giving advice and follow through with examples. It’s the best way to get respect and remain credible. 🙂
I love Reno!!
DERRICK
Smarten hate me or love me.. I’m 27, successful, Own my home, 5-7 years from retirement.
I have helped create a new standard in wireless transmission (802.11) Been recognized by the IEEE. the technology I helped develop AND sell is now used in laptops,tv’s,cell phones,cars,etc…
yet I am only 27.. your right smarten I have no idea what I am doing lol
Allen Murray
Hey Derrick, this is off subject, but I just got a new laptop with wireless “n” capabilities. I understand it is way faster than “g” and travels farther. Are all “n” routers the same, or is Linksys the way to go?
Phil
playtonium,
I agree 100%!
Derrick,
Oil was $126 barrel today! Your bet about oil at 90 is a bit off. With the world demand I doubt we see $100 oil anytime soon. World wide recession? maybe.
relocating buyer
we are not intimately familiar with the town of reno, but surprised to see a foreclosure on delacroix road. guess montreux is not immune from short sales. appreciate all the advise thanks
just bob...
playtonium,
You are right on as far as sizing up the Palladio. The units with good views and decent floorplans were snatched up early and those owners DO have huge equity even in this market. Whats left are either really small units with little/no views or large 3/bed with little views.
The unit that sold on the 12th had no upgrades and actually faced east/south. I would say it ranked in the top 10 as far as desirable units at the Palladio.
I heard the the couple who bought the south penthouse in the Palladio paid 900K! Today its probaly worth 2.25Mil easy.
Renting the units would not pencil for a long time. People who bought at the Palladio want the urban lifestyle/or a great retreat and see that Reno could potentially have a great downtown.
MikeZ
Been recognized by the IEEE. the technology I helped develop AND sell is now
I’m a member of the IEEE.
How come I can’t find “Derrick” in my IEEE searches?
BanteringBear
Investment_Help is quite obviously not serious in asking Derrick for investment help. Nobody, and I mean nobody, who has read this blog for any length of time would ever ask the stucco oracle for advice. He’s more full of BS than a cattle ranch. I’m sure the post was just a ploy to induce more of his signature foot in mouth disease.
Transplant
Could you all lose the OFF TOPIC discussion and get back ON the topic of rich dickweeds debating the investment possibilities of Mountaingrate vs. Arrowcrack?
Genex Sceptic
Stucco Oracle – I LOVE IT!
Derrick sure knows how to make friends. It’s probably a sad state of being that I come to RRB for comedic relief!
Hah!
Dave
I’m no expert on the Reno real estate market, but I know that significant turmoil still remains in the financial markets. The repricing of risk will take quite some time.
In addition, the change in lending standards will also take time to fully bear out.
One thing I think no one here has factored in, is that Reno is one of those cities that’s success depends on the health of the travel industry. As oil prices continue to rise, the local economy of Reno will continue to act sluggish. I fully agree with Goldman Sucks estimate that oil will hit $200 a barrel with in the next 2-4 years. (I’ve been saying that far before they ever did).
As a result, more and more people from California & else where will just stay locally to get their gambling fix. That’s if they even have the $$ to support it.
Those ripples will take time to factor into the Reno economy and while prices may look like they’ve stabilized for now, I highly doubt it.
Of course, I’m talking in real / inflation adjust terms.
—-
To the guy who said short Oil @ $126-127 a barrel: Do you like standing in front of freight trains?
If you are somehow right and Oil does reach $90 again, I’ll be buying hand over fist. $100 is now Major support and its going to take something significant to breach that level to the downside.
BanteringBear
Dave:
I was totally on board with you until you posted:
“I fully agree with Goldman Sucks estimate that oil will hit $200 a barrel with in the next 2-4 years. (I’ve been saying that far before they ever did)…If [Oil] does reach $90 again, I’ll be buying hand over fist. $100 is now Major support and its going to take something significant to breach that level to the downside.”
Out of curiosity, where do you get your information. Hunches? I firmly believe that oil, and the commodities market in general, is amidst a massive speculative bubble which will burst, although it’s quite hard to say when.
I was surprised by the legs that housing had, but I don’t think oil can go as far. It’s totally detached from fundamentals. The exuberance you exude is one key element which is required in the formation of bubbles. Gambling on crude, are you? Have a look at the following article. Personally, I would bet on $70 oil before I would on $200 oil.
http://www.cnbc.com/id/24542629/for/cnbc
smarten
I have to agree with BB about future oil prices. Of course I’m no expert but my understanding is that world oil prices are pegged to the U.S. Dollar. Therefore as the Dollar devalues against other currencies, the cost of oil [in U.S. Dollars] increases. In fact I was listening to Forbes on Fox this morning and he stated that 50% of the run up in oil prices is directly related to the devaluation in the Dollar. Thus he concludes that if the Dollar rebounds, the price of oil can easily drop by 50%.
Given the stucco oracle [the guy who likes to stand in front of freight trains] has told us all to short the U.S. Dollar [because it’s about to appreciate in value versus most other currencies], according to Forbes, the price of oil should drop.
Thus Dave’s Reno housing analysis may be more gloomy in the short run than what actually occurs.
DonC
I’m less than an expert about oil prices — I have absolutey no idea about them.
I do know howerver that oil production increases from Russia made up for all the new demand from India and China during the last decade. But now Russian output seems to be declining so further demand will result in increasing prices unless there is more supply from somewhere else, which doesn’t seem possible. (The Saudis could do it but they don’t seem inclined).
I wouldn’t pay too much attention to Steve Forbes. A politician rather than an economist, he’s more sound bite than substance. (He probably thinks a gas tax holiday is a great idea). The currency argument seems specious for a couple of reasons. First is that the while the nominal exchange rate has changed the effective rate hasn’t (I think the Economist used to call this the McDonald’s rate). In addition, the price of oil doesn’t follow the US dollar more than any other currency. http://europe.theoildrum.com/node/3106
But I wouldnn’t really argue about it.
Dave
Sorry to disagree BB, but crude oil isn’t and never will be a bubble. Prices may have gotten ahead of themselves for a bit, but that’s all you can really say.
You can’t create more crude. Sure there maybe some oil sands, etc, but that will never satiate the demand in the long term as supply continues to deteriorate.
I’ve been a LONG time crude bull. I’ve been long crude since ~$60 a barrel, and I’m a firm believer in peak oil, which I believe we’ve already hit.
Production of major oil supplying countries like Russia and Mexico has already started to fall off. Theres turmoil in Nigeria (the 3rd largest supplier to the US), and we still havent had any major supply disruptions.
What’s the difference between crude and the other recent and historical bubbles? You can’t create more crude.
You can always build more houses, create more useless non profitable tech companies, grow more tulips, etc etc. You can’t simply create more crude and its the one thing the entire world depends on. It’s literally black oxygen. With out crude, the entire US and many economies around the world could grind to a halt.
Prices of crude will continue to go higher for quite some time.
You can tell me about all the promising technology that we have on the horizon, but you are forgetting how slow people (especially us Americans are) to adopt new technology. Hybrid cars have been around and mainstream for 7-8 years now and many people still refuse to drive them. There are also plenty of people who insist on driving their SUVs / gas guzzling trucks, despite the price of oil.
People tend to question the fundamentals of something more when the price is going against them. Far more people are questioning the rise in crude now, as compared to prices on the stock market in the 90s or housing prices b/t 02-06/07.
Crude isn’t and never will be a bubble.
If you’re a really sophisticated investor, you’ll know what I mean when I say commodities in general are in a secular bull market (in laymans terms, think about how the stock market ran up between 1982-2000).
This baby’s still got a long way to run.
Dave
Oh and about the dollar… would you rather believe Steve Forbes or Warren Buffet?
I’d take Buffets side and heres why:
– our fiscal and monetary policies are an absolute disaster
– Americans and our government continue to spend far more money than they have, resulting in massive trade and budgetary deficits, that only continues to put downward pressure on the dollar.
We may get a near term bounce or so, but until the behavior and spending habits of our government and fellow Americans dramatically improves, we won’t get a sustained meaningful rally in the dollar.
Speaking of the oil being pegged to the dollar, we should be lucky that oil producing nations still accept dollars. At some point they’re going to switch their currency standard to a basket of currencies or the Euro.
I mean, how long would you put up with accepting an asset that continues to decline, and even if it stabilizes… how many dollars do they actually need?
They basically continue to accept our debt when we have shown little to no desire to start being responsible about it and start paying that debt back.
I’ve seen some predictions from economists saying that World War III could possibly erupt over the fight for oil. I certainly hope it doesn’t come to that.
BanteringBear
That was quite a rant Dave. I do think you have a rather distorted perception of things, but that’s just my opinion.
You posted:
“…crude oil isn’t and never will be a bubble. Prices may have gotten ahead of themselves for a bit, but that’s all you can really say.”
Again, I wholeheartedly disagree with you. What’s this “prices may have gotten ahead of themselves for a bit” business? If it looks like a duck, and quacks like a duck, well, you know what I’m getting at. Oil is in a speculative bubble right now. Because it is traded on the open market, it is subject to mass speculation just like any other commodity or asset.
You write:
“You can’t create more crude. Sure there maybe some oil sands, etc, but that will never satiate the demand in the long term as supply continues to deteriorate.”
Oh yes you can. Crude is being created as I type. It is a fossil fuel. It will always be around. Sure, we may be using it faster than it’s rate of creation, but the earth will continue to produce it long after you and I are gone. And please don’t tell me you believe we have identified every last reserve on the planet. Hell, there are plants and animals going extinct which we never even knew existed. We humans are not all knowing so don’t give us too much credit.
You further state:
“You can always build more houses, create more useless non profitable tech companies, grow more tulips, etc etc. You can’t simply create more crude and its the one thing the entire world depends on. It’s literally black oxygen. With out crude, the entire US and many economies around the world could grind to a halt.”
Uh, no you can’t always build more houses. Houses require land and trees and other natural resources which are finite. So again, how is it that you can have a housing bubble, but not an oil bubble?
You say:
“…you are forgetting how slow people (especially us Americans are) to adopt new technology. Hybrid cars have been around and mainstream for 7-8 years now and many people still refuse to drive them. There are also plenty of people who insist on driving their SUVs / gas guzzling trucks, despite the price of oil.”
I don’t know where you live, Dave, but I live in a rural area in the Pacific northwest. I cannot tell you how many trucks and SUV’s are sitting on the side of the road with for sale signs, while the local Toyota dealership cannot keep Prius’ on the lot. As these many individuals consume less oil, yes less, this leads to an increase in supply.
Further:
“I’ve been a LONG time crude bull. I’ve been long crude since ~$60 a barrel, and I’m a firm believer in peak oil, which I believe we’ve already hit. Crude isn’t and never will be a bubble. If you’re a really sophisticated investor, you’ll know what I mean when I say commodities in general are in a secular bull market (in laymans terms, think about how the stock market ran up between 1982-2000). This baby’s still got a long way to run.”
After reading this paragraph, I’m reminded of one of my favorite phrases by Upton Sinclair. He wrote “It is difficult to get a man to understand something, when his salary depends upon his not understanding it”. Clearly your own financial interests are the driving force behind your beliefs. You’re not much different than all of the real estate permabulls of 2005 who shouted “real estate only goes up”. We all know what happened to that theory.
Dave
BB,
I’m just sharing my personal opinion and you’re more than welcome to disagree with me.
While it’s not my primary job, I often trade the financial markets as a hobby, and have a very good understanding of how money flow works in that sector.
There is a fair bit of $$ invested in oil right now, because its IMO the safest place to be, or at least was before the last week or 2.
And yes, you are right, more crude does get created, but the rate of creation is very slow. But I would like to point out 1 thing that you mentioned. Sure there are undiscovered oil fields and other known fields which we haven’t started drilling from, but to set those fields up for oil extraction, processing, refining, etc — takes a significant amount of resources and time (the main problem). From what I know it takes on average 6 years to setup a new drilling project.
Re: the housing comment, there is a far greater supply of lumber and land. You know what I meant 🙂 In addition, in 2005-2006 the home ownership rate in the US was ~69%. That’s the highest rate on record from what I know. There wasn’t anyone left to buy a house. Everyone that wanted or could afford a house was basically given one.
I’m glad to see behavior Re: driving is changing. I wish people (where I live in CA) were as smart as they are where you are at in the Northwest. I still see plenty of brand new SUVs everyday. I also probably see a greater % of SUVs on the road than any other vehicle type.
For the record, I currently have no financial stake in oil. I personally started liquidating my position about $15-20 ago. That was obviously foolish of me 🙂
I think another key difference between crude and housing, is that I see very few people predicting higher crude prices down the line. We still haven’t seen the kind of mania we saw towards housing.
I’ll be happy to wager a drink on it. I think crude goes much higher over the next several years.
I love this country. At the end of the day, nothing would make me happier than us weaning our dependence on foreign oil and adopting more sensible spending habits.
Cheers.
MikeZ
Sorry to disagree BB, but crude oil isn’t and never will be a bubble
Preposterous.
smarten
Dave said “You can always build more houses, create more useless non profitable tech companies, grow more tulips, etc, etc. [But] you can’t simply create more crude.”
For what it’s worth, sounds an awful lot to me [how about you?] like those agents who proclaim real estate always goes up in value because they’re not making any more of it.
Claude
Maybe Diane ought to change the name of the blog to the Reno Oil Blog. J/K.
If I may add to the further distraction of the blog’s subject, let’s realize oil was at $60 a year ago. It has doubled in a year. Much like houses in Las Vegas in 2004.
Need we say any more?
Maybe Diane needs to put a up a new thread to get the discusion back to……real estate?
doofus
Catch Diane’s column in the RGJ today? Check out the flamefest of comments http://www.rgj.com/apps/pbcs.dll/article?AID=/20080511/BIZ/805110337/1388 She could probably use a good hug (or a Scotch old enough to date) right now. Come on RRB posters, let’s rally ’round and defend the Queen on the RGJ site.
MikeZ
Diane in the RGJ: “Bordering the golf course with tumbleweeds growing rampant, I’m sure they all wanted to know who owned the eyesore on hole number nine.”
Small world! I was just there this Friday, at the 7th hole (IIRC) assessing a coworker’s EQ damage. Next time I’m there (in a few weeks), I’ll go hunting for the 9th – and look for the tumbleweeds.