Headed for a crash out west?

[Skylark]

I'm wondering about some of the areas out west where the economy seems to be based on home construction and service industry. And the economic base seems to be retirement money.

See:

http://www.dallasnews.com/sharedcon...umns/2004/stories/042504dnbusburns.902d0.html

For someone thinking of relocating from the rust belt to this type of an area, and who still has 10 to 15 years of work before retiring, what does mean for the future in the sunny southwest? Is this growth sustainable? Will property values collapse?

 

[wabmester]

It's sort of a law of the universe that fast growth is never sustainable.   Something always gives.   Call it boom and bust, reversion to the mean, tendency towards equilibrium, or whatever you want -- it's bound to happen.

Probably the closest analogy to present-day Nevada is Texas of the 80's.   Huge boom.   Huge bust.   The bust is often a good time to buy since eventually whatever attracted people there originally is still valid, and the place usually has more sensible growth and a more diversified economy the next cycle.

I was in Vegas just last week.   The traffic was horrible.   Construction was going on everywhere.  
Too many people just about anywhere you went.  Yech.

 

[Nords]

Re:  Gee, Skylark, I thought you were asking...

... about Hawaii in 1991.

The state's three biggest employers are the military, the state govt, and the visitor/convention industry. A top-five is the home construction industry.

When Iraq invaded Kuwait and the Japanese real-estate bubble burst, it got ugly. The tourism industry contracted by 30% and didn't recover for over five years. Judging by our home's value, real estate dropped by nearly 50% over the next five years and didn't really recover until, well, last year.

The military's post-DESERT STORM drawdown piled insult on injury by removing a big part of the rental-housing customers and then clamping off all those military construction $$$ hoses.

Somehow the state's bureaucracy managed to survive, but pressure was so severe that civil-service reform almost broke the govt employee's union. The legacy of the state's cost-cutting years led to 2001's bitter three-week teacher's strike (Hawaii's teachers are govt employees) that still has litigation aftershocks.

I guess the moral of the story is that you have to bring your job with you. CPAs, doctors, nurses, EMTs, firefighters, police, vital appliance maintenance & repair workers all survived. It was a very bad time to be a hotel maid, a luau organizer, or a tour-bus driver. Scott Burns' "entertainment service" providers managed to keep going somehow too, although there were a lot fewer customers.

But, gee, things are MUCH better now, especially if you can afford a median home price of $450K or a median condo of $225K. I toured the MGM's residences and they make Hawaii real estate look like bargains.

OTOH it's probably the casino equivalent of the "joke" about the elderly full-care facility at Howard Johnson's. If MGM will finance your residence's mortgage and an occasional home nursing visit, surely they wouldn't throw out a Scott Burns geezer who spent the equivalent of long-term care prices every year!

 

[unclemick]

I have relatives in greater Reno - the 'boom' seems to be continiung there also. I remember the 'wonderful' view of the winter smog in the late 90's - very similar to 'Denver' in the early 70's. In both places I suspect the 'foothills' are the preferred location.

 

[Skylark]

My strategy is to look for work in a small to medium sized city near a popular national park out west. I work in city government and will probably be looking for a city manager position.

Right now I am afraid of what will happen in Michigan. The factory rat ghetto was was a tough town when manufacturing was booming. I'm afraid to find out what it will be like with the mass layoffs that are happening. Maybe US manufacturing will come back, but I'm concerned and thinking that its time for this rat to desert the sinking ship.

I don't care much for hot-hot-hot weather so I probably will avoid southern areas. I'm am considering MT, WY, UT, ID, ND, SD. But I haven't been to some of those areas yet so its just dreaming now. The Frau will make the final decision anyway so I can chat all I want and it don't really matter what I think. When the final compromise comes down, it will be all her decision.

 

[John Galt]

Hello Skylark. In your deliberations, you can skip ND.
I've been all over most of the other western areas you
are considering. Personally, if I didn't hate the cold/snow, all of them would have appeal.

John Galt

 

[cute fuzzy bunny]

Actually I've been to all of those states and didnt like even driving through them.

Wyoming or Montana, I forget which, has about the lowest retirement costs in the country though. Perfect I guess if you dont like people, like lots of cheap land, dont like people, dont mind cool summers and snowy winters, dont like people, and want to live cheaply or have a big ranch.

Although if you like cheap and land there are some places in nevada, texas and alabama (depending on how much heat and humidity you like) that fill the bill.

 

[Whakamole]

There are chunks of Oregon that are cheap (on both sides of the mountains, depending on whether you like it dry or wet.)

I'm not sure what Skylark does for a living, since that could put a crimp into finding a job.

 

[unclemick]

Shades of 1993 - the newspapers were picking on Cal. 'refuge's' back then taking their cashed out equity and driving up home prices. I gave them a big thumbs up since I was selling my mom's house 45 miles outside of Portland (WA side of Columbia). Californian's probably take it all in with a grain of salt.

 

[Whakamole]

OR-EE-GON?! -- Isn't that where they keep the refugees from the Peoples Republic of Cal-EE-fornee-ahhh??!!

Really depends. There are places that the Californians don't like that are perfectly nice places to live.

I hate em myself, all they do is drive up property prices ("wow, a house that only costs $300K! What a bargain!") and whine about high gas prices for their SUV.

 

[Ol_Rancher]

I recently moved from my home in a small inner-suburb town called Rollingwood, partially surounded by Austin, Texas. During the late 80's bust, property was cheap. That 2300 sq. ft home cost me $135,000 in 1990. I sold it in March within 3 days for $325,000.

The gains were enough to pay for 13 hilltop acres 60 miles west, in the heart of Texas hill country with enough left to build a new 1100 sq ft ranch home, barn, and guest cabin. I am now in negotiations for an additional 12 acres which will use up the remainder of those gains.

Austin has become Californicated by the tech industry. The traffic is unbearable, the cost of living there is about the highest in the state,and most of the schools are facing typical urban ghetto problems.

Now, I live mortgage free, with a commanding view in all directions. My main activity is to read sitting on the wrap- around porch and watch over the longhorns, bison, emus, antelope, llamas, horse and wild game. I lease out grazing rights to maintain an agricultural tax exemption.

I feel that I got out of Austin and found this place in the nick of time. With the market moving sideways, international uncertainy, a shakey recovery, and a dubious future for those entering or reentering the workforce; my plan is to remain right where I am. My cost of living here is 45% less and the weather is cooler and dryer because I am 1500 ft higher than Austin with nearly constant wind coming up the draws and canyon.

My advise is to sell out now while you can get a good price, find good land near a small town where lthe cost of living is less. Don't wait too long. The boomers my age (born in '46) are starting to search for such land and prices are beginning to head up.

 

[BusyMom]

How about a correction out east? Just returned from family reunion where VA sibling-in-law reported friend recently purchasing a $750K home with a 15 yr. interest-ony mortgage!! yikes.

 

[Zipper]

Just a thought, Ol_Rancher? How far are you from top-notch medical facilities?

 

[Ol_Rancher]

Zipper,
My place is 4hrs to MD Anderson Cancer Center in Houston and less than an hour from San Antonio airport and hospitals. I take my wife, a cancer survivor, to MD Anderson for a couple of days each 3 months for evaluation.
She receives some treatments with cooperating oncologists in Austin (once every 3 weeks at present).
I need to investigate medicine in San Antonio for details. San Antonio has a good reputation but we know Austin well.