Are we due for another real estate meltdown? Yes, in a different way!

By
Industry Observer with Paratex

Hi all: As an outsider, I've been thinking about if we're due for another real estate meltdown. I would say yes but in a different way.

The last meltdown was due to easy money and too much new inventory. Although lenders have tried to ease their lending criteria, it's still pretty tough to get a loan as compared to 2006, for example. Also, there is really no housing inventory to speak of. It may look like builders are building anew but not to the scope of earlier.

The one thing I am seeing is an overbuilding of mutifamily. Rents are already flattening or slightly on the decline here. Housing prices are expensive here in Seattle. I wouldn't be surprised if these moderate a bit too.

In sum, I could see a bubble on the commercial real estate side and a moderation of pricing on the residential side. This would be a meltdown of a different order. Corrections do happen every 8 years or so.

What say you?  I'm interested in your thoughts. And thanks for reading!

Posted by

Paul McFadden

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Rainmaker
3,062,097
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Paul McFadden Thanks for the very interesting analogy and helpful report on real estate.

Apr 06, 2016 10:06 AM #1
Rainmaker
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Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

Paul, We have a good supply of inventory in Williamsburg, Virginia, so I don't think we are going to have a meltdown any time soon.

Apr 06, 2016 11:09 AM #2
Rainmaker
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Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co. Notary Services, retired Realtor

Paul McFadden that is pretty much the way things are playiong out here However we are on the downside of the oil boom and they really overbuilt the rental market.

Apr 06, 2016 11:56 AM #3
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Robert Vegas Bob Swetz
Las Vegas, NV

Hello Paul ...

Interesting post and I have written about this subject quite often, and when I do people come across with a answer like this.

The real estate industry is always in a bubble and we really don't know for sure when that bubble will pop?

The bubble that we are in now is going crazy again but I really don't think it will peak out and or pop for 2-3-4 years.

If we were to have a major war and or if terrorist's were to create problems similar to before then the bubble would pop faster.

I know that oil prices are creating problems in the country and it's just the Middle East once again trying to control our economy, and prices will rise again.

Apr 06, 2016 05:49 PM #4
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Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

Bob: Thanks. Good thoughts. Bubbles come and go. We're due for one at some point!

Bob: Interesting where you are. North Dakota has become a boom or bust economy!

Sybil: Good for you. Slow and steady is nice to hear.

John: You're welcome! Any time.

 

Apr 07, 2016 07:24 AM #5
Rainmaker
2,004,962
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

Every market in real estate, in life on any commodity or service rises and falls in it's own hokey pokey sort of way. Hey. That's what it is all about right? One temperature for the country does not work, one market set of conditions does not either. Like I said every market in real estate rock and rolls differently. List, market, sell (repeat) and adjust your says to whatever you have to work with for pay dirt, results.

Apr 07, 2016 11:19 PM #6
Rainmaker
2,203,148
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Hi Paul - I am not directly in the business but I know it is local.  We are not overbuilding in this area.  These is a lot of office space, however.

Apr 08, 2016 01:20 PM #7
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Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

Grant: Thanksfor the reportfrom your area!

Andrew: Very true. I wish you well in Moose country!

 

Apr 08, 2016 11:28 PM #8
Rainmaker
1,680,239
Larry Johnston
Broker, Friends & Neighbors Real Estate and Elkhart County Subdivisions, LLC - Elkhart, IN
Broker,Friends & Neighbors Real Estate, Elkhart,IN

Hi Paul McFadden ,  If you check with any home builder in our area, the answer is busy, busy, busy!  Most are not taking any new construction jobs this year, while home listings are scarce.  It appears those with homes are staying put and those new home buyers are building.

Apr 18, 2016 11:43 AM #9
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Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

That's true here as well Larry. Thanks!

Apr 18, 2016 11:55 PM #10
Rainmaker
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Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Everything goes in cycles. I have a friend who grew up in the Seattle area and she told me about the crash that happend in (I think) the 70's. She said there was all sorts of building going on and then one day - all of those projects were halted. For a long time after she was driving past half-built homes and apartment buildings. 

Apr 19, 2016 09:20 AM #11
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Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

Marte: I believe that coincided with the Boeing bust. Dark times for
Seattle then. Have a great day!

Apr 19, 2016 11:56 PM #12
Rainmaker
2,560,472
Rebecca Gaujot, Realtor®
Vision Quest Realty - Lewisburg, WV
Lewisburg WV, the go to agent for all real estate

With the coal industry, we are seeing small towns evaporate as people are leaving them. In Lewisburg, real estate is still strong and busy.

Oct 27, 2016 03:45 AM #13
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Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

Rebecca: It's a sad commentary that many of our small towns are not what they used to be. I'm glad to hear real estate is strong.

Oct 29, 2016 10:21 AM #14
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