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  #321  
Old Posted Dec 26, 2010, 11:11 AM
Ghost of Econgrad Ghost of Econgrad is offline
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Sacramento County may cut size of land for development
rlewis@sacbee.com
Published Sunday, Dec. 26, 2010


As recently as this fall, Sacramento County officials were moving forward with a proposed general plan update that called for opening 20,000 acres to new development, accommodating 150,000 new units.

The problem? That growth was based on assumptions made during the housing boom. Experts now say the county will need closer to 55,000 new units over the next two decades.


READ THE REST HERE:

http://www.sacbee.com/2010/12/26/328...-cut-size.html
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  #322  
Old Posted Dec 27, 2010, 8:03 PM
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Off topic posts deleted.

This is not the thread to discuss communism or countries in the middle east or other off topic arguments.
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  #323  
Old Posted Dec 27, 2010, 9:35 PM
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Quote:
Originally Posted by KevinFromTexas View Post
Off topic posts deleted.

This is not the thread to discuss communism or countries in the middle east or other off topic arguments.
Aww! I missed the posts! What did someone say about the Middle East???
LOL! And where did that come from? Oh well...

Here is the re-post of the article showing that Sacramento Suburbs are growing faster than the central city. I stated earlier that the suburbs are growing faster than the city because cost of inner-city development in Sacramento is too high because of Gov. enforced regulations (International Special Interests like Environmentalist organizations and International Labor Unions). Since the Admins want us to keep this exactly about Sacramento, lets do this:

Post an actual fact that is indisputable, that gives a reason for higher costs in Sacramento, CA inner-city development VS Suburban. A Sacramento only example. Try to keep it short, with links to back up your facts.
Now, I hope you people know what "Facts" are. Not Thesis, not Theory, FACT.


Here is the article from The Sacramento Bee:


Shift to the suburbs
preese@sacbee.com
Published Monday, Dec. 27, 2010


The last decade saw a shift in population from Sacramento's established urban areas to its newer suburbs, according to census data released this week. Areas like Natomas sprung up from farmland; Rocklin's population boomed and much of Sacramento saw population decline. This chart shows the percentage change in population by census tract from 2000 to the last half of the decade.

Note: The Census Bureau has combined the past five years of its American Community Survey data to generate estimates at the neighborhood level. These data only partially reflect changes that occurred late in the decade.


The Link to the charts:

http://www.sacbee.com/2010/12/27/328...e-suburbs.html


Here are more questions:
Why are people choosing to live in Roseville or Rocklin or Folsom over Sacramento given the choice?

Last edited by Ghost of Econgrad; Dec 27, 2010 at 10:27 PM.
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  #324  
Old Posted Dec 27, 2010, 11:08 PM
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Just stay on topic. Honestly, if you guys want to create a separate thread for that discussion, I won't mind, but this one is for Sacramento.
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  #325  
Old Posted Dec 28, 2010, 2:15 AM
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Apparently my last post about suburban development got cut even though it didn't mention --and apparently we both missed the posts about the Middle East.

Why do people live in the suburbs? Because currently that is the only product they are offered, and they are offered that product because it has so much government subsidy--subsidized highways, subsidized loans, subsidized infrastructure, subsidized cheap gasoline. And because Roseville, Rocklin and Folsom are much whiter than Sacramento, and white flight is still very much a factor in American society and housing choice.

I'd also like to compare that growth chart to the figures of actual population numbers. Sure, it's easy to claim that area A saw a 50% growth rate while area B saw only a 5% growth rate and declare area A more successful. But if Area A's population went from 10 to 15 people (50% growth) and Area B went from 1000 to 1050 people (5 percent growth) it's hard to claim that Area A is more successful at growth, despite the higher growth rate.

Econgrad, apparently property values don't count as facts to you. Property values in Sacramento's downtown are high because the demand for land is high and the supply is limited. You claim that prices are only high because of high development costs--but prices are still high for buildings that are already built, including ones that were built decades ago, when development costs were lower. Why? Supply and demand.


Suburbs get built because there is money to be made building suburbs, as long as it is properly subsidized by government action (transportation, levees, infrastructure, etcetera.) The form of those suburbs is determined by the transportation network, which is more important than zoning to the actual way that suburbs turn out.

Building a suburb is an act of classical capitalism in that it turns raw material into a product of higher value--the raw material is farmland and building materials, the product is suburbs, which can be sold for higher than the original cost of the farmland and building materials. The available subsidies (as mentioned above) make suburbs more profitable, and thus a more attractive product for businesspeople, but the form of subsidy drives the form of the suburb. A suburb where the government subsidizes roads, single-family homes, highways and strip malls will look like a postwar auto suburb. A suburb where the government subsidizes public transit, bike paths, mixed-use projects and higher density will look like a prewar streetcar suburb, in physical form if not in strict architectural idiom. An unsubsidized project...well, we're not sure, because residential development depends very much on the underlying transportation system, which is currently the government's responsibility.

In Sacramento, the growth machine worked very well at making suburbs. It's not hard to show high growth rates in places where nobody used to live, and more difficult to show high growth rates in places that are already the densest parts of a region. And because outward expansion takes development pressure away from central cities, the urban cores didn't have the pressure needed for dramatic increases in population density--it was easier to move outward than build upward.
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  #326  
Old Posted Dec 28, 2010, 2:25 AM
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Here's the graphic in question:


Interesting--it looks like some central city neighborhoods gained population, and others lost. Again, the percentages are interesting but without the actual population numbers (to know whether a 5% increase represents 5, 50, or 500 people) it's kind of hard to establish context.
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  #327  
Old Posted Dec 28, 2010, 4:40 AM
ThatDarnSacramentan ThatDarnSacramentan is offline
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Apparently, sustainability has nothing to do with suburban development.

Wburg, that graphic is interesting (and I also think it's interesting that the loss and gain of population in the city is somewhat random), but like you said, it means nothing without actual population numbers. Sure, it looks like Midtown grew a lot percent-wise, but given its actual population and how much development there's been, I wouldn't expect to see an increase of population over a thousand, maybe two.
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  #328  
Old Posted Dec 28, 2010, 6:27 PM
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Quote:
Originally Posted by Ghost of Econgrad View Post
Now, I hope you people know what "Facts" are. Not Thesis, not Theory, FACT.
LOL, well apparently you don't know that a far fetched hypothesis based on a small amount of data does not count as fact either!
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  #329  
Old Posted Dec 28, 2010, 6:44 PM
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Okay, here's an article link that talks about the need for sprawl repair:

http://www.planetizen.com/node/46481
Quote:
We need sprawl repair because change will not happen on its own. Sprawl is extremely inflexible in its physical form, and will not naturally mature into walkable environments. Without precise design and policy interventions, sprawl might morph somewhat – a strip shopping center might be scrapped and replaced with a lifestyle center when the next owner comes along – but it is unlikely to produce diverse, sustainable urbanism. It is imperative that we repair sprawl consciously and methodically, through design, policy, and incentives.
--
Some of these reasons are economic. For decades, the common wisdom was that exurban residential and commercial development was good for municipalities because of increased property tax revenues. The truth, however, is that municipalities spend much more to expand and maintain suburban infrastructure than they receive in increased revenues. Walkable urbanism, on the other hand, is a much better deal for municipalities. A study in Sarasota, Florida, shows that the county tax yield per acre from an urban mixed-use project is a staggering 3,500 percent more than the tax yield from a suburban mall.

The development industry also has few incentives to continue exurban expansion with lending stalled, property values plummeting, and commuting costs increasing. The market, fortunately, is heading in another direction.

The Baby Boomers and Millenials are creating a major shift in the housing market. Together they represent more than 135 million people, many of them with an orientation toward diverse, compact urbanism.
Suburban sprawl in its current form is not the product of a free market--it is the product of deliberate design. This implies that we can try different designs, ones that are likely to be more economically sustainable. Environmental sustainability is a common side effect of economic sustainability--choices that are cheaper and healthier generally end up being better for the environment--but even if environmental benefits are entirely discounted, there are still economic and social benefits to sprawl repair. Not every experiment will work--but that's the whole point of experimenting, to find out what works. Sticking to the business model that used to work but has now reached the breaking point isn't a practical solution.
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  #330  
Old Posted Dec 28, 2010, 6:48 PM
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And here's an article on the effects of local sprawl on the city of Sacramento, with specific example. Sacramento County's current economic woes are the result of uncontrolled, unplanned sprawl, which has resulted in large areas of the county which are simultaneously entirely built out but economically unviable on their own. As the revenue-generating parts of the county form their own city governments, the county is left with areas that can't pay for their own infrastructure yet are completely built-out suburbs without room for expansion.

http://www.newsreview.com/sacramento...nt?oid=1485438
Quote:
Urban disinvestment is sometimes called the evil twin of suburban sprawl. For Bites, that’s what makes the county’s proposed general plan so maddening.

Under the new plan, the Sacramento County Board of Supervisors would add an additional 20,000 acres of sprawl to the east county landscape. The plan is due to be adopted in October. It’s a blueprint for sprawl, because it’s going in far beyond the existing urban area and because it’s largely unneeded to meet the region’s housing needs for the coming decades.

“I’m very concerned about it. The projected demand for housing does not justify anything near the amount of land this [plan] would make available for greenfield development,” says County Supervisor Roger Dickinson.

Dickinson has been dinged in the press for taking a good chunk of developer money over the years. Many of those developers who helped fund Dickinson’s recent primary victory for state Assembly own a lot of the east county land under consideration.

That said, Dickinson probably understands better than anyone else on the board the dangers of blowing out the east county.

Sprawl makes it extremely difficult to build an effective public transportation system, and it’s too complicated and expensive to provide police and fire and other services to these ever-farther-flung neighborhoods.

And, as Dickinson notes, “There is a strong connection” between development on the edges and the declining health of existing neighborhoods.

He figures the new general plan ought to allow somewhere between one-quarter to one-half of the new land developers are asking for now, with stricter “benchmarks” on when new development should be allowed to proceed.

Bites thinks we could do much better, by limiting development to existing urban areas, including strong preferences for high-density, mixed-use projects, and requiring all new projects to served well by public transit.
Now, the county has most recently addressed some of this issue and turned down the request to develop land in the east county, as mentioned in your article above, and gave some reasons why: continued sprawl results in disinvestment.

Suburbs are a consumer product, and in many industries, consumer products include a measure of planned obsolescence and disposability. Cars, videogame consoles, and many other products are pushed heavily when they first come out, but they are all intended to quickly go to the scrap pile. Suburban housing is often built the same way--it's the hip new development for a while, but if you're a home builder you stop making money if people like their neighborhood so much they stay in it forever. Building new homes at a rate faster than population growth encourages relocation to the hot new development (assuming that there is money and credit to allow people to do so) and encourages abandoning last year's hot new neighborhood, but unlike your obsolete videogame console, you can't just throw a neighborhood in the dumpster. The neighborhood inevitably starts to decay from inattention and the inability of municipalities to take care of existing neighborhoods and new expansions without increasing taxes to meet their new level of expenses. Sacramento County is now stuck in this trap--they can't pay for services they provide anymore because the infrastructure needed for new growth will cost more than the increased revenue from new growth.
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  #331  
Old Posted Dec 28, 2010, 7:36 PM
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As a followup to that Community Survey article re population growth in the region, here's a link to an application that lets you look at the population of cities in graphical form, including race breakdown:

http://projects.nytimes.com/census/2010/explorer?ref=us

Type in "Sacramento, CA" and it shows the whole region--zoom in for a closer look, mouse over census tracts for their population estimate. Note that some of these census tracts are larger than others. Census tracts are supposed to capture about the same number of people per tract, the large tracts are places that had very low populations at the 2000 census while the small ones had high populations, around 3000 per tract. Some areas, primarily new growth areas that were open farmland in 2000, show dramatically higher numbers because there is now a neighborhood where there wasn't one 10 years ago. Meanwhile, already built out areas show little change because there was an already completed neighborhood there a decade ago.

It's also interesting noting the demographics of colored dots--the map seems to get a lot greener as you go northeast, but for the most part Sacramento is a very integrated city and region. Compare us to other cities around the country--in many cities, the ethnic neighborhoods jump out at you, clearly defined, while in Sacramento the lines are much blurrier; there are ethnically distinct areas but not nearly as sharply defined as in many other cities.
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  #332  
Old Posted Dec 29, 2010, 3:00 AM
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Hmm, house in Natomas under 200,000 or condo in downtown over 200,000.
Decisions....
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  #333  
Old Posted Dec 29, 2010, 10:17 PM
Ghost of Econgrad Ghost of Econgrad is offline
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Quote:
Originally Posted by wburg View Post
Apparently my last post about suburban development got cut even though it didn't mention --and apparently we both missed the posts about the Middle East.

Why do people live in the suburbs? Because currently that is the only product they are offered, and they are offered that product because it has so much government subsidy--subsidized highways, subsidized loans, subsidized infrastructure, subsidized cheap gasoline. And because Roseville, Rocklin and Folsom are much whiter than Sacramento, and white flight is still very much a factor in American society and housing choice.
Your words Wburg...

If anyone thinks the suburbs of Sacramento are growing faster than the inner-city because hoards of white folk are leaving mid-town running to El Dorado Hills because too many black folk are moving in is delusional.



Big Labor relies on union-friendly public officials to steer public works contracts to unionized contractors through government-mandated PLAs

http://www.thetruthaboutplas.com/201...play-politics/


Non-union advocates closely watching Sacramento wastewater project
http://www.bizjournals.com/sacrament...e-closely.html

Read a few articles and see how Unions harm poor people by raising costs of construction.
This is an old story, but here is proof, one small example out of thousands how Unions raise costs of construction in Sacramento.
From Sacramento Business Journal:
http://www.bizjournals.com/sacrament...11/story1.html


http://www.cp-dr.com/node/884


Government mandated labor agreements negotiated between government agencies and labor unions erode the competitive bidding process. Such agreements, which are becoming increasingly proposed on local, state and federal public works projects, undermine professionalism in collective bargaining and create an artificial and economically distorted environment for public works construction. They remove the contractor employer from the process of establishing and maintaining his own labor relations and costs. The government becomes the negotiator, perhaps without even understanding that it is assuming this role, of the contractor’s work rules, other terms and conditions and even of who of the employees of the contractor must be. The government is not significantly knowledgeable of the day-to-day construction process to know the practical effects of the cost of the terms it agrees to put in a project agreement. It is simply not involved in the day-to-day efforts of a contractor to produce a quality product at an efficient low cost. The typical government mandated labor agreement requires all participating contractors to recognize building trade craft unions as the sole and exclusive bargaining representatives for all craft employees on the project, and to pay such employees wages and fringe benefits prescribed in local union collective bargaining agreements. Government mandated labor agreements usually require that all employees be hired from local union hiring halls. To entice public agenciesinto using such agreements, the agreements typically include guarantees against strikes and work stoppages,and feature binding procedures for the prompt resolution of grievances.

http://www.agc-ca.org/member.aspx?id=1110

Last edited by Ghost of Econgrad; Dec 29, 2010 at 11:40 PM.
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  #334  
Old Posted Dec 30, 2010, 4:09 PM
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Quote:
Originally Posted by TWAK View Post
Hmm, house in Natomas under 200,000 or condo in downtown over 200,000.
Decisions....
Yup, that is one huge reason why people will prefer the suburbs to downtown
along with better schools. Families will continue to stay out of the city till
urban schools perform better.

WOW wburg, I can't believe you complained to a moderator about having a
debate with Ghost of Econgrad. Econgrad made many valid points and actually
brought some life to this dead forum. The moderators could care less about
what happens here unless someone here complains. Common, it's called a debate.
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  #335  
Old Posted Dec 30, 2010, 8:13 PM
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Originally Posted by innov8 View Post
WOW wburg, I can't believe you complained to a moderator about having a
debate with Ghost of Econgrad. Econgrad made many valid points and actually
brought some life to this dead forum. The moderators could care less about
what happens here unless someone here complains. Common, it's called a debate.
I didn't complain to a moderator, but apparently someone else did--a large number of my posts were also deleted. I too was enjoying talking economic theory with Econgrad, but it seems that others were not enjoying it as much.
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  #336  
Old Posted Jan 3, 2011, 2:26 AM
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Looks like it's not all sunny news in Granite Bay...

http://www.sacbee.com/2011/01/02/329...-high-end.html


Quote:
Foreclosures also hit high end of Sacramento market
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By Phillip Reese and Robert Lewis
preese@sacbee.com
Published: Sunday, Jan. 2, 2011 - 12:00 am | Page 1A
Last Modified: Sunday, Jan. 2, 2011 - 1:04 pm

Within the gates of the exclusive Los Lagos development in Granite Bay, home to business executives and real estate magnates, the postman delivers almost one fresh home loan default notice a month.

Mortgage defaults are not just a problem of the poor. Sacramento's wealthiest residents are defaulting on their recent home loans at least as often as everyone else – and in some posh enclaves, more, according to a Bee analysis of federal mortgage data and figures from Foreclosures.com.

Banks have filed about 550 default notices on local home loans of more than $1 million since 2007. The total value of those loans is roughly $750 million.

Estates on the west side of Folsom Lake form the epicenter of the trend. In this strip of Placer County, banks have filed four default notices for every 10 home loans of more than $1 million issued during 2006 and 2007.

"Everyone always has delusions of grandeur. At some point you have to accept this is what it is," said Folsom resident James Caramazza, who took a hit on his $1.4 million loan following a short sale.

One difference between the poor and the rich: Fewer expensive homes are actually going back to lenders. Instead, short sales abound; currently, there are 95 short sales priced over $600,000 in the region, according to MetroList MLS.

Banks are more likely to approve short sales on big loans because so much cash is at stake; because it's expensive to maintain a mansion; and because wealthy homeowners often have enough money to hire a real estate lawyer to negotiate, several local real estate experts said.

Recent short sale attempts following mortgage defaults include radio personality Tom Sullivan and former Kings basketball stars Kevin Martin and Ron Artest. Martin and Artest could have covered their loans with a portion of their annual, multimillion salaries – a fact that angered some local residents.

"It's not fair and it's not right," said Madelyne Moreno, a Rio Linda resident struggling to get her bank to approve a short sale on a more modest loan. "They can turn around and get another home immediately."

But a lot of the region's largest defaults aren't strategic "walkaways." The recession has hit the wealthy hard, too, and many couldn't afford to keep making payments on their big houses.

The number of local households earning more than $1 million annually fell 20 percent from pre-recession 2006 to midrecession 2008, from 1,434 to 1,135, according to the latest figures from the Franchise Tax Board.

The housing market was largely behind the earlier wealth influx, and its transitory nature.

Many newly flush real estate developers and brokers bought huge homes in the boom and quickly lost them in the bust – like winning a cake in a raffle and then falling into it face first.

'I thought I was real smart'

Leonard Brand, a longtime Tahoe-area real estate agent, said his default wasn't strategic but stupid.

Brand owned his $3 million home in South Lake Tahoe free and clear in 2005 when he decided to take out nearly $1.7 million to invest.

"I thought I was real smart," Brand said.

Those investments tanked and Brand could no longer afford his loan payments.

So he enlisted a colleague in his office to work on a short sale, eventually reaching a bank vice president who approved a deal. The home sold for $1.4 million in April. Since then, Brand has managed to buy another home for $700,000 from someone he knew who helped with the financing.

Caramazza, whose family owned a development company felled by the market collapse, never even got to live in his swank Granite Bay home.

He and his wife took out a $1.4 million construction loan from Countrywide in May 2007 to build a house on 2.3 acres of land on Bella Terra Place in Granite Bay.

When the economy went south, Caramazza tried to sell his home in Folsom and move into the Granite Bay home.

The Folsom home, however, just sat on the market. So Caramazza tried to sell the Granite Bay home. He got some nibbles, but eventually dropped the price from $1.99 million to $1.59 million to $1.49 million.

Finally, he turned to a short sale and unloaded the Granite Bay home for $900,000, losing some equity. He also later sold his Folsom home and bought a smaller, 2,300-square-foot home, also in Folsom.

Caramazza and Brand are two of the dozens of real estate and investment professionals to default on large mortgage loans in the past few years, The Bee review found. The list is dotted with real estate agents, brokers, investment advisers, bankers and some high-profile developers.

Fewer houses priced in millions

During the housing boom, million-dollar home loans were a small, lucrative slice of the market.

In 2006 and 2007, banks approved about 1,400 home loans of $1 million or more in the four-county area, according to federal loan data. Since then, they've filed about 415 default notices on those loans, according to a Bee survey of listings from Foreclosures.com.

That's three default notices for every 10 big loans during that period, about even with the default rate for the rest of the region.

Today, with the market still depressed, there are far fewer houses selling for millions. Banks approved fewer than 150 home loans of $1 million or greater during 2009, an 80 percent drop from 2007.

Contributing to the malaise: tighter rules by lenders.

"You have to come up with a 30 to 35 percent down payment" to take out a jumbo loan, said Nick Sadek, a local real estate broker who specializes in high-end sales.

Sadek and others say homes that once sold for more than $1 million locally are now selling for at least 40 percent less. A large proportion of buyers these days, Sadek said, work in medicine, one of the few sectors still growing.

There's disagreement among real estate experts about how the sale of distressed mansions affects people trying to sell modest homes. Some called expensive homes a niche that operates in its own space. But Patrick Hake, a Placer County Remax Gold broker who sells a broad mix of homes, said everything's connected.

"If you have a home that used to be $1.5 million selling for $800,000, another home that used to be $800,000 will go for something less," Hake said.

Whatever its impact and causes, the million-dollar-home crash is likely not over. During 2010, banks issued about three default notices on $1 million home loans each week, a trend that continued through December.

Warren Adams, a real estate broker who specializes in foreclosures, thinks banks are holding a "shadow inventory" of high-end homes because they don't want to flood the market.

"I've been surprised that I have not seen more of the high-end stuff," he said. "The banks are sitting on them. I keep saying that is going to be our next wave."


Read more: http://www.sacbee.com/2011/01/02/329...#ixzz19w2crXny
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  #337  
Old Posted Jan 3, 2011, 9:50 AM
Ghost of Econgrad Ghost of Econgrad is offline
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Its a good thing, prices will fall and some people who would normally have had a difficult time to invest in a high-end home will now have that opportunity. The market will eventually return to equilibrium (unless we become 100% socialist) and prices will rise again.


Hey Im back... wtf happened??
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  #338  
Old Posted Jan 4, 2011, 5:58 AM
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Apparently someone took offense to our in-depth discussion of economics. I was having fun, except for the parts where you called me a commie dupe.

Anyhow, I see your point regarding the value of homes in Granite Bay--although I would point out that the same thing is happening for downtown condos. The collapse of the housing bubble has resulted in more affordable prices across the board, as a result of foreclosures and short sales.
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  #339  
Old Posted Jan 4, 2011, 6:16 AM
Ghost of Econgrad Ghost of Econgrad is offline
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Quote:
Originally Posted by wburg View Post
Apparently someone took offense to our in-depth discussion of economics. I was having fun, except for the parts where you called me a commie dupe.

Anyhow, I see your point regarding the value of homes in Granite Bay--although I would point out that the same thing is happening for downtown condos. The collapse of the housing bubble has resulted in more affordable prices across the board, as a result of foreclosures and short sales.
I don't remember calling you a "dupe". If I did, then I am a dupe. Anyone can see you have done your research and is well on top of your arguments. I apologize if I offended you. I like to send you jabs now and then on here, but I am never out to hurt any feelings of any kind. If I did, I sincerely did not mean to.

The Downtown Condos:

I hope if the prices drop, that it leads to many more sales in the Downtown Market. Maybe some buyers who were priced out of DT before can now get the opportunity. I also hope, that it does not slow down any plans pr investment to build more Condos downtown because of the price drops (or any type of residence I may add).

Last edited by Ghost of Econgrad; Jan 4, 2011 at 6:27 AM.
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  #340  
Old Posted Jan 4, 2011, 7:21 AM
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Spoken like a true gentleman, sir.

The drop in prices (due in large part to the end of easy lending for home loans etc.) has inevitably slowed down many plans for investment to build both condos downtown and suburbs in greenfield areas. It will take a while for the market to catch up with demand--but now is a pretty good time to make plans, fix up things that need fixing, and focus on infill and other projects of opportunity. We'll get back to the big stuff at some point, it will just take a while.

That being said, new projects in the central city haven't exactly come to a screeching halt, either. More details in the appropriate thread.
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