patrick.net

Veritas

I hope this is what you had in mind. Anything I forgot, just let me know and I'll add it.

OT: My husband and I have watched the hurricane's hit Florida year after year and wonder how the housing market on the coast manages to keep appreciating. I've seen news stories where folks are bracing for the coming storm, and they haven't even rebuilt from the one from last year.

And after seeing all those houses fall down a slope in Laguna this year, I swear I will never buy a house on a hill. Not to mention most of those homes were uninsured because no insurance co. would cover such an obvious risk. I can't even begin to imagine living in a house that I couldn't insure; you'd have to be nuts or so rich it wouldn't matter. But even so, why would you want to live in a place that could slide down a hill in the middle of the night. If you can't insure it the risk must be very real. There isn't a view in the world that would be worth it.

My business partner and I were having a discussion about the local property values last week. He said “Florida is unique, the prices here won’t drop…they may stabilize but they won’t go down.”

Is your business partner of the opinion that the market is so hot it won't go down, or does he think Florida is too unique to be vulnerable to a housing bust? I can't imagine an area that gets hit several times a year by hurricanes as being immune to falling home values. Personally, I have no desire to live on the Florida coast. I watch the news every year and think "why would anyone want to go through this every year?"

"Not to mention most of those homes were uninsured because no insurance co. would cover such an obvious risk."

Not true.

Most of these houses have insurance through the government. But, because the governement doesn't have a job, let me translate that for you: You pay for the insurance for these places.

Back after Andrew hit Florida, some companies just started pulling up stakes and saying, "forget it. We won't insure anybody who lives in hurricane alley." The government stepped in to preserve property values, because, you are right.

Almost nobody would own a house without insurance, especially the rich. They didn't get rich by assuming unisured million dollar assets.

Yeah, and every place is different. The Bay's different, Florida's different, the Cape is different, Nantucket is different, East Bum F___ is different.
It's like patriotism. It's different because you're from there. People still live in northern Asia where the average temp is below zero centigrade. People can live anywhere. Sure, some places are more desirable than others. If all else were equal, why would you ever live in DC if you could live in San Diego?
But, notwithstanding these obvious differences, stuff sells at its selling price, whether it's high or low. That's it. And, to finish the syllogism, nothing with a price tag is immune from flux. I'd go so far as to say that nothing with a price tag in real estate is going to be significantly more resistant to a drop in prices than any place else, as long as the build up has been proportionally the same.

New Orleans may cease to exist as a major city in 24 hours.

Most of these houses have insurance through the government. But, because the governement doesn’t have a job, let me translate that for you: You pay for the insurance for these places.

I know this is true in Florida. Every year hurricanes tear down many coastal homes, and the government declares a state of emergency and pays to rebuild. As far as the Laguna situation goes, I don't know. I just remember it being highly publicized that the multi-million dollar homes falling down the hill were uninsured. But as I also remember the governator visiting the site, so it may very well have been delcared a disaster zone or whatever necessary delarations are needed to have the government pay to rebuild.

BTW New Orleans is bracing for a category 5 hurricane. According to the news, only 3 category 5's have ever hit land before.

They are in serious trouble out there - New Orleans residents have been dreading this for decades. I hope they get out of there while they can and I hope they have something to return to. By the looks of it, the flooding will eradicate most of the city.

In 89 Loma Prieta major earthquake occured. Soon after, we experienced a housing downturn in CA.

Maybe a coincidence, maybe not.

You can never eliminate risk no matter where you live, only manage it. Most of the tragedies come when people ignore it.

So true. In Ventura (one of the priciest counties in SCAL, which also has one of the state's most vociferous anti-development movements --no cooincidence), there are a number of trailer parks right in the middle of the Ventura Rivers' floodplain. This river experiences major floods every 10-15 years or so during especially wet years, when it spills onto the floodplain, wiping out whatever's in its path. The city has tried to ban development from such high-risk areas (a rare GOOD use of anti-development legislation), but each time they try, they get shouted down residents and the land-owners, who always prevail.

It never ceases to amaze me how some people not only don't learn from history, but willfully resist any lessons their own direct personal experience tries to teach them.

I hope New Orleans pulls through this ok. The wife and I spent some time there two years ago and fell in love with the place --so much flavor, unique architecture and history (and yes, rowdy fun). Hate to see it disappear forever. A lousy place to build a city though --blame the 18th century French for that I guess ;-).

I heard or read a news story recently about how the hurricane activity in Florida in the past hundred years or so has actually been much milder than normal in the course of natural history. There is a theory that the past few years of more active hurricane seasons is actually marking the return to normal weather patterns there.

I have not researched this since I don't have any plans to buy property there, but if it's true I think in another decade or so Florida could be far from prime real estate.

In my college oceanography class, the professor was always pointing out how economically unsound it is (for both owners and the government) to buy property right on the coast, especially on barrier islands and other areas that have no buffer at all from hurricanes. That really stuck in my head, and I've never had a desire to own oceanfront property.

There is a theory that the past few years of more active hurricane seasons is actually marking the return to normal weather patterns there.

If that's the case I wonder how many years of consecutive rebuilding it'll take for people to finally say "You know, I don't think I want to live here anymore." Frankly I'm amazed that people are still living there.

I'll take the odd earthquake every 20 years or so. Actually the Sac region doesn't seem to get hit with quakes like the rest of the state, so far at least. *looking furiously for some wood to knock*