Ok, I may be jumping the gun here a little, but with the majority of real estate people I talk to starting to get positive about the upward trends in real estate prices, the lack of building might, in the not too distant future, be a problem. Housing starts have just about stopped.
The reality is that the lack of new construction in the past few years may cause a shortage of housing in the future. Of course, there is a supply of listings the market has to get through before we have a proper shortage, but the quality of those homes are typically quite different from the new homes that are more universally desirable. Our foreclosures tend toward the lower end, are not centrally located, older and more cheaply built residences. Being a destination resort, many of these are homes that owner let go before they would their primary residence. We are already seeing those properties being snapped up, at least the ones in good locations like Mountain Square. The older ones are languishing and are still available at low prices.
So what happens with the lack of new construction, and how does this correlate to Manhattan real estate? As prices stabilize and even rise (due to the shortage of new construction) people may be content to stay in their current residence and add a second home in a resort market. If you can be financially comfortable in your home, why not splurge on a second home in an area that hasn't seen the uptick quite yet? Actually, there are a number of higher end, nicely finished homes here in Crested Butte available at relatively low prices compared to the peak of the market. Our market and town is so small that once these residences are purchased, we may also experience the shortage in quality homes available that the big cities are experiencing. We still have lots of buyers looking for a specific property that does not currently exist, be it new construction, a smaller footprint or more energy efficient. Additionally, our town council is debating insisting that any new annexations into town comprise 70% local residents. All this means that there won't be any more annexation into town, further increasing existing home prices.
The primary point I am making is that the lack of new construction will have the long term effect of raising prices. Undoubtedly, once the existing properties are sold, we will see a boon in new construction, and lot represent a very good value right now.
The reality is that the lack of new construction in the past few years may cause a shortage of housing in the future. Of course, there is a supply of listings the market has to get through before we have a proper shortage, but the quality of those homes are typically quite different from the new homes that are more universally desirable. Our foreclosures tend toward the lower end, are not centrally located, older and more cheaply built residences. Being a destination resort, many of these are homes that owner let go before they would their primary residence. We are already seeing those properties being snapped up, at least the ones in good locations like Mountain Square. The older ones are languishing and are still available at low prices.
So what happens with the lack of new construction, and how does this correlate to Manhattan real estate? As prices stabilize and even rise (due to the shortage of new construction) people may be content to stay in their current residence and add a second home in a resort market. If you can be financially comfortable in your home, why not splurge on a second home in an area that hasn't seen the uptick quite yet? Actually, there are a number of higher end, nicely finished homes here in Crested Butte available at relatively low prices compared to the peak of the market. Our market and town is so small that once these residences are purchased, we may also experience the shortage in quality homes available that the big cities are experiencing. We still have lots of buyers looking for a specific property that does not currently exist, be it new construction, a smaller footprint or more energy efficient. Additionally, our town council is debating insisting that any new annexations into town comprise 70% local residents. All this means that there won't be any more annexation into town, further increasing existing home prices.
The primary point I am making is that the lack of new construction will have the long term effect of raising prices. Undoubtedly, once the existing properties are sold, we will see a boon in new construction, and lot represent a very good value right now.
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