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The Coming Real Estate Crash

Discussions about the economic and financial ramifications of PEAK OIL

The Coming Real Estate Crash

Unread postby Plantagenet » Sat 02 Nov 2019, 11:29:53

Its been obvious for years now that the coast is toast. Rising sea levels are first going to make many low lying areas unpleasant to live in and then will make them impossible to live in. A few real estate owners are already selling out of coastal real estate....for instance I sold a tiny cabin accessible only by a hiking trail on a beach in Washington state a few years ago, and I believe Ibon sold a portfolio of coastal real estate in the Miami Beach area earlier this year (pardon me if I got that wrong, ibon).

Rising sea levels are going to crash the value of coastal real estate across this country.

But the effect of climate change on the real estate is much bigger then that. We are going to see a giant real estate crash in many parts of this country due to climate change.

Just consider California. There are billions of dollars of real-estate....ranging from mobile homes to mega-mansions.....built on hillsides and forests all along the coast of California and up into the mountains that are mis-priced. People think these homes valuable.....and maybe they once were.....but now they are mis-priced. What is the value of a home where forest fires rip through the neighborhood every few years? What is the value of a home that can turn into a pile of ash and rubble at any time?

Climate change is going to crash the California housing market.

Or consider areas prone to flooding. Now that we are seeing hundred-year-size floods every few years or so in some areas, some houses are being flooded again and again and again, and the value of that house is much lower then it used to be.

Climate change is going to crash the housing market along many rivers in this country.

There is a real estate crash coming......and its going to be caused by climate change.

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Lets look on Zillow and find out the value of this fine piece of real estate.......

Cheers!
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Re: The Coming Real Estate Crash

Unread postby Newfie » Sat 02 Nov 2019, 11:58:21

That may occur in isolated communities, but even there l think the time frame is longer than you think.

Outside those regions I see real estate as a good hedge. For quite a while now I’ve been seeing investors buying into the real estate market. At leas lt one agent I know sees the same thing. People with intangible wealth are looking for ways to buy tangible assets that can throw off some profit. I see that as a hedge against the stock market.

Miami is still booming with SA expats looking to off shore some wealth.

Time will tell.
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Re: The Coming Real Estate Crash

Unread postby Ibon » Sat 02 Nov 2019, 12:32:48

Plantagenet wrote:, and I believe Ibon sold a portfolio of coastal real estate in the Miami Beach area earlier this year (pardon me if I got that wrong, ibon).


Two homes, our last real estate in Florida, were sold in the last 36 months. The last property we just sold 8 weeks ago. Both properties were 2 miles from the coast but bordering directly the New River which will rise as part of the storm surge due to hurricanes.

Just to add a couple point to Plant's introduction. Banks will not issue mortgages without hurricane insurance in coastal areas affected by these storms, and I can imagine in California banks also will not issue mortgages without fire insurance. Municipalities affected by climate change consequences are already taking some mitigation steps (whether they are futile is another topic) that result in property taxes going way up. This is the case in South Florida where sea walls and elaborate big volume pumps are being installed to mitigate rising sea levels.

Both insurance and property taxes have risen astronomically in the past 30 years and they will continue to do so as major hurricanes and fires impact insurance rates and property taxes.

What this all means is that the market will send the signal of declining housing prices before the climate change events in the affordability of housing in these areas. Imagine a first time home owner purchasing coastal property where the hurricane insurance and property taxes annually are between $ 20,000 and $ 30,000 us for a modest home.

We will see the beginning of this real estate crash following major events (hurricanes,fires, flooding) that force communities and insurance companies to again make major increases.

On the flip side there might be a housing boom as well as displaced home owners need housing in safer areas. So we might see the construction industry experience a bit of a boom in new housing starts as a result.

I mentioned in another post that the market sends the signal long before the seas actually rise or the fires burn down your home.

I agree we are close to seeing this. That is the reason we sold . I have proceeds now that are in fixed income and money markets and I do not want to put more eggs in the Panama basket and I am looking still in the US for some real estate opportunities, also keeping in mind that I am 62 and my late stage retirement may take me back to the US if my old bones cant negotatiate this 4WD road any longer here in our resort.

I have a few areas in mind. Actually, my wife and I visited Logan Utah on our last trip up to the USA> We like this small town. Might nibble on some real estate there in the next 24 months.
Last edited by Ibon on Sat 02 Nov 2019, 12:57:37, edited 1 time in total.
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Re: The Coming Real Estate Crash

Unread postby Cog » Sat 02 Nov 2019, 12:46:34

Maga land is full. Sorry, we don't need any lefties bringing their progessive values with them.
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Re: The Coming Real Estate Crash

Unread postby Newfie » Sat 02 Nov 2019, 12:48:15

Funny. I keep thinking about where to retire when we retire from sailing. USA does not appeal to me.

Ibon - I sent you an email about another gentleman we know in common who has a place in Vulcan. I think about checking that out as an option.
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Re: The Coming Real Estate Crash

Unread postby EnergyUnlimited » Sat 02 Nov 2019, 13:29:16

Newfie wrote:Ibon - I sent you an email about another gentleman we know in common who has a place in Vulcan. I think about checking that out as an option.

Spock?
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Re: The Coming Real Estate Crash

Unread postby Ibon » Sat 02 Nov 2019, 13:31:02

EnergyUnlimited wrote:
Newfie wrote:Ibon - I sent you an email about another gentleman we know in common who has a place in Vulcan. I think about checking that out as an option.

Spock?


That's funny. The town is Volcan but it is amazing how many folks in the beginning make the same mistake Newfie made..... and its always the older baby boomers who were raised on Star Trek. :)
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Re: The Coming Real Estate Crash

Unread postby Newfie » Sat 02 Nov 2019, 13:35:44

“Older baby boomer” ha! agisim!

Now you gotta remember that only a few of us vintage folks associate “Star Trek” with “James T Kirk” (Cook?) and Spock. Most were not born yet.
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Re: The Coming Real Estate Crash

Unread postby Plantagenet » Sat 02 Nov 2019, 16:53:36

Newfie wrote:That may occur in isolated communities, but even there l think the time frame is longer than you think.

Outside those regions I see real estate as a good hedge. .


I take your point, but on the other hand California is not an isolated area, and a majority of California is now being affected by PG & E shutdowns and fire and fire danger. There are big fires in northern, southern, coastal, and mountain California.
Image
And its only going to get worse in California, and surrounding states will also be affected. Southern Oregon is already a tinderbox, and towns like Ashland, Medford and Grants Pass are choked in smoke much of the summer.

Even if the general public is too dim to figure out that fire danger is increasing and they should be cautious about buying homes in areas that will go up in flames, the insurance companies will quickly figure it out. And the housing market will be hit hard as home insurance rates for wildfire damage explode to the high side, or are no longer offered at all by the insurance companies.

californians-could-lose-home-insurance-after-wildfires

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Re: The Coming Real Estate Crash

Unread postby Newfie » Sat 02 Nov 2019, 23:20:58

Yes California is a separate issue.

Then again California is already grossly overpopulated based on water availability. Eventually something is going to hit them hard.
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Re: The Coming Real Estate Crash

Unread postby EnergyUnlimited » Sun 03 Nov 2019, 01:47:06

Newfie wrote:Yes California is a separate issue.

Then again California is already grossly overpopulated based on water availability. Eventually something is going to hit them hard.

And when it finally go down the drain Liberals, rats and bubonic plague will burst out and infest all other states.
The era of califocalypse will begin.
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Re: The Coming Real Estate Crash

Unread postby Cog » Sun 03 Nov 2019, 03:12:09

The leftists that migrated from California have spread their screwed up ideas to Nevada, Washington, and Oregon. Of course those liberals vote for the same high taxes and government programs that ruined California to begin with.

I'm keeping Missouri a secret from this horde of locusts.
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Re: The Coming Real Estate Crash

Unread postby EnergyUnlimited » Sun 03 Nov 2019, 03:49:09

Cog wrote:The leftists that migrated from California have spread their screwed up ideas to Nevada, Washington, and Oregon. Of course those liberals vote for the same high taxes and government programs that ruined California to begin with.

I'm keeping Missouri a secret from this horde of locusts.

I am not living in California but I have few friends who migrated there.
Base on limited information what I have about the place I wish to proceed to assertion that now, as we speak, California is experiencing dystopian hard crash, all despite how well Google or Facebook might be doing.

So here is a challenge to Outcast Searcher and others who refuse to recognize possibility of hard crash on US territories in foreseable future:

You are *deniers*, very much like AGW deniers.
You are witnessing a hard crash of formerly most prosperous US state and you are blatantly denying it.
You are denying hard crash even if zombie hordes are already living on the streets of Californian cities, defecating there and dropping dead like flies fron drug overdose, transmissible disease and homicide.
You are denying that California is an electricity deprived, burning Third World hellhole run by corrupt politicians and foreign human traffickers and drug cartels.
And that is how hard crash is looking.
Last edited by EnergyUnlimited on Sun 03 Nov 2019, 04:06:50, edited 1 time in total.
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Re: The Coming Real Estate Crash

Unread postby Cog » Sun 03 Nov 2019, 03:59:30

California Democrats are a real life version of the novel Atlas Shrugged in action.
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Re: The Coming Real Estate Crash

Unread postby Newfie » Sun 03 Nov 2019, 05:46:25

I always have a different take on Atlas Shrugged than others. There is the common view but in my reading what came across more was that it was against bureaucracy. At the time I read it I had merely herd vague references so I was not pre-biased. I had a friend with a similar experience.

The point is I don’t see AS as supporting either party. I see it as against the suppression of individual creativity, and making the most capable of folks especially responsible for the welfare of all.

And this is where we are falling down, those folks who should naturally rise to the top as leaders have somehow been suppressed. Note I’m making the distinction between “leaders” and “entrepreneurs”. The later may be technically clever and market savvy do not always have the public good in mind. The Leaders would be a different class I find hard to name, perhaps because it’s suppressed. They would have the skills of empathy, systemic thinking, capable a long and disinterested view. They would be people of words and letters who could engage the public imagination. As a kid I listened to the Buckley/Vidal debates. I tended to side with Vidal but loved Buckley’s mastery of the language. It was heady stuff for a youngster. I wonder if I could find them in line and if they would stand up to my recollection?

While there must be others the only current personality who approximates this is Bill Barr. There is much I disagree with but his arguments are well founded.

Are there others out there that fit that mold?

I ask because clearly that is what Cali and the rest of the USA (world?) is missing, adult leadership. Not simply to tell us what to do, but to convince of us that is right and necessary.
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Re: The Coming Real Estate Crash

Unread postby Ibon » Sun 03 Nov 2019, 07:41:25

Newfie wrote:
Ibon - I sent you an email about another gentleman we know in common who has a place in Vulcan. I think about checking that out as an option.



Hi Newfie

I did not get any email you mentioned. I sent you a PM with my current emails.
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Re: The Coming Real Estate Crash

Unread postby Ibon » Sun 03 Nov 2019, 07:51:20

Newfie wrote:
Cali and the rest of the USA (world?) is missing, adult leadership. Not simply to tell us what to do, but to convince of us that is right and necessary.


This is a huge topic and could be a thread worth exploring and the reasons for this lack of moral leadership I think is many fold.

Loss of credibility in institutions due to corruption. Think of the sex scandals in the catholic church, the self serving nature of politicians, the rigged economic system. It's like all the pillars of civilization are tarnished with corruption. The corruption was always there of course it is just that it was hidden from the common citizen who believed that there was goodness virtue at large and at heart in these institutions. That there was just a few bad apples maybe. Ignorance was bliss until we all learned the truth... and then we became disillusioned and cynical and then vulnerable to listening to messages of hate and racism and nationalism and tribalism. And so here we are today.

Add to that the democracy of stupidity which is what social media is and the way it is being manipulated.

A virtuous intelligent moral leader's voice is drowned out by the democracy of the internet and the sheer volume of stupid mediocrity.

How does a moral virtuous leader rise out of this immense pile of shit information flowing around and available 24/7 for constant consumption by a dumbed down citizenry?

A leader requires an audience with an appetite for truth. Today the audience wants entertainment at its most primitive and stupid.
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Re: The Coming Real Estate Crash

Unread postby EnergyUnlimited » Sun 03 Nov 2019, 10:32:27

Ibon wrote:
Newfie wrote:
Cali and the rest of the USA (world?) is missing, adult leadership. Not simply to tell us what to do, but to convince of us that is right and necessary.


This is a huge topic and could be a thread worth exploring and the reasons for this lack of moral leadership I think is many fold.

Agreed
Loss of credibility in institutions due to corruption. Think of the sex scandals in the catholic church, the self serving nature of politicians, the rigged economic system. It's like all the pillars of civilization are tarnished with corruption.

Importance of so called "sex scandals" is blown out of all proportion by the mob.
These are actually non-events sold to the mob as most important news ever.
In the past sex scandals were everywhere, including in catholic clergy which was banging peasant's daughters and everyone knew it and didn't complain.
People were accepting that they like to bang each other, they undersood very well social ills of it so they made it a great offense, often one which carried capital punishment, to bang someone's wife but otherwise they hardly cared.
And if you got caught banging someones daughter, all what could happen is that in certain circumstances you would have to marry her and in other circumstances not.
And of course lack of efficient contraceptives was making consequences of excessive banging more likely, essentially inevitable, so women were only rarely behaving like sperm toilets what can be seen now on the West.

Add to that the democracy of stupidity which is what social media is and the way it is being manipulated.

Indeed.
In the past rights to vote (if there was any voting system at all) were reserved to those who was making some contributions to society and not to mindless mobs demanding more and more benefits and also demanding to make an Internet access a basic human right.

A virtuous intelligent moral leader's voice is drowned out by the democracy of the internet and the sheer volume of stupid mediocrity.

And even if heard, it is beyond capacity of mob to understand it.

A leader requires an audience with an appetite for truth. Today the audience wants entertainment at its most primitive and stupid.

And in the past mob was not considered to be an audience, so a bit brighter social groups could do whatever deemed necessary without any need to convince majority.
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Re: The Coming Real Estate Crash

Unread postby Newfie » Sun 03 Nov 2019, 11:49:56

What was different about us in he late 18th century that allowed a group of adults to coalesce and write the constitution, twice?

Or am I delusional that there was a difference?

IIRC the selection of participants to the constitutional convention was NOT a democratic process?
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Re: The Coming Real Estate Crash

Unread postby Sweeney » Sun 03 Nov 2019, 12:48:34

They were part of the Enlightenment, they believed in liberty, the power of reason and the value of education.
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