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*

What is your definition of a “desirable area?” Do environmental/natural disasters impact your thinking when you look for a place to live? Where do you think your “happy home” will be found?''

Back on topic for a moment, I'd say that overall climate/quality of the local environment (clean air, water, having greenery, open space, having a not-insane commute to work, truly "affordable" housing, etc.) will have a big impact on where my wife and I end up buying. The overall level of education and openness to secularism/reason will also have a big impact (there's no way I could live anywhere deep in the Bible Belt). CA has this of course, but the hypocritical NIMBY & anti-development bias, high population density --particluarly from ever-growing masses of poor illegal immigrants (sorry if this offends some, but it DOES impact the overall quality of life here) and high levels of pollution all combine to make CA less than desirable in my book.

As far as natural disasters go, I wouldn't say this would be a prime consideration, because as Kent says, you can never completely eliminate all risk, but of course I wouldn't buy/build on a floodplain, earthquake faultline, avalanche zone, or any place built on rubble and sand (just had to get one last dig in at MP ;-) ). No matter where you live, you pretty much have to pick your poison and do your best to mitigate the local risks.

Where will I find my Shangri-La? Don't know, but the Pacific NW has always had a powerful draw, as it meets all the big desireables that I'm looking for. New Zealand would be extremely nice, but I understand their immigration laws make it almost impossible to go there. (Wow, a country that actually ENFORCES its immigration laws, what a concept!).

It is not really that hard to immigrate to New Zealand. The main requirement is that you have to have either a job offer or skills in a subject that they feel like they are in short supply, be relatively young, be in good health and speak English fluently.

You get points for all those things and you have to get 100 points total. You can also qualify by investing $2M NZ or starting a business in New Zealand.

For example: If you are a 40 year old with a BS in Computer Science and 10+ years experience in a tech field, you have 115 points and you can apply. Apparently, they take from the top, so it would help if you had a job offer before you went. Then you would have 165 points. If you had spent a year there already on a work visa, you would then actually be at 180. And so forth.

It is not just IT people that are in short supply, so are pretty much all medical jobs, Carpenter, college teacher and social worker.

Can you tell that I have already researched this? :-)

Oh, the other way to immigrate to New Zealand is to start a business that employs five people or to invest $2M NZ for at least five years. But I can't quality for that, so I didn't investigate it too much.

I just remember it being highly publicized that the multi-million dollar homes falling down the hill were uninsured.

Information regarding SactoQT's statement: tinyurl.com/bf5k7

From that article, per Pete Moraga, communications specialist for the Insurance Information Network of California....

"Moraga said that the landslide is not really an insurance issue because the standard homeowners policy does not cover land movement and landslide insurance is virtually nonexistent in California.

"The coverage that is available is very expensive. Traditionally it carries a 2 and a half percent deductible and is not available in areas that have a prior history of landslide. I doubt that any of these homeowners think that they have coverage for landslides because the policies are very specific. They typically exclude any type of land movement, whether it's a landslide, mudslide or an earthquake. Because Laguna has an extensive history of landslide, chances are that most of these homes wouldn't have any coverage," he added.

The same area is said to have suffered from a similar landslide in October 1978, when 24 families lost their homes. All but about six rebuilt there, the Times reported. Moraga said that there have been more landslides since that time."

So it is QUITE interesting that people can hear/read about the history of these areas, information has been disclosed to them before purchasing, yet will buy/build there anyway...for millions of dollars.

Go figure....

BayQT~

Jimbo,

Thanks for all the info on immigrating to NZ. The wife & I are going there soon, so maybe we'll check it out.

As I see it, this will give justification to push up oil near 80/barrel, driving gas over $3/gal and forcing the cash crunch to severely impact the marketplace. Thus a return to sound economic fundamentals will have to be reinstituted and enforced.

I have been thinking for awhile that it isn't going to take higher interest rates to drive down home prices, but that the oil prices were going to end up doing the job as they drive up the costs on most consumer goods. With this hurricane it looks like a sure bet that gas will go even higher and push prices up that much faster.

"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."

A bit infuriating isn't it?

In sacramento they are currently building out huge developments on flood-plains that were underwater a mere 20 years ago.

Cheers,
prat

I know we're nowhere near done with this thread, but after I read statements made by David Lereah in the LA Times today, I just couldn't help myself: "Is David Lereah going to Hell?"

Everyone, please keep posting on both --I think this one's great and still has plenty of room to grow.

Harm, I think you will be happy in Portland and surrounding areas. I've been doing a lot of reading about that section of the Pacific NW and I think that area aptly described the perfect place for you. The only thing ... can you do rain? Lots of rain? That is the question...

What is your definition of a “desirable area?” Do environmental/natural disasters impact your thinking when you look for a place to live? Where do you think your “happy home” will be found?

I've always considered the environment/natural setting an important part of life, even with inherent risks. Living on the coast, and a short distance from Mt Rainier, we had hazards from sea-borne storms tearing out 50 ft. alder trees. Meanwhile, we were never sure of our local volcano, and whether its majestic backdrop held ominous overtones for our community. And, only recently they've discovered housing tracts were built directly over lahar flows (volcanic mudflow), prompting towns make evacuation contingencies.
Personally, I think whether you choose to live on the gulf coast or in the mountains, you have to accept the risks of nature with the benefits. Natural beauty seems borne from cataclysmic events, whether it's glaciers, fault action, or volcanic eruptions. I'm willing to accept both sides of the equation, but within reason. I'll live amongst nature any day--while prepared for a few risks--than slowly become like a neatly clipped shrub in a planned suburban community.

The only thing … can you do rain? Lots of rain? That is the question…

Karrie, I agree - I think I'd love it too.
I lived in Atlanta for 2 years, which has almost identical average rainfall as Portland. One July it rained every day almost without letup --a whole month without seeing the sun-- np. Besides, I love rain (my friends think I'm kind of weird that way). Love the way it cleans and freshens the air and makes everything lush & green. Now, only problem is I need a job there...

@Karrie, HARM:

I looked long and hard into the Portland area.. I don't mind the rain, but I'll tell ya that the PacNW is not like other rainy places I've been. You can't measure it directly in accumulation..

The NWS says Portland has 137 sunny days/yr...Atlanta has 219. Portland actually has less rain than Atlanta -- 38" vs. Atlanta's 50". Portlanders claim that they want people to keep believing the weaher myths and stay away. I'm afraid they're true!

I was in SF for La Niña, 1997/98...that's the closest I can compare Portland to: always chilly, usually overcast, and frequently raining. Still, I was ready to move there a few months ago. I decided to head toward hurricane country instead, but I feel kind of relieved to avoid the greyness.

New Orleans was a candidate too. I thought about the dangers and disregarded them -- the city has been standing for 300 years, what is the likelihood that disaster will strike as soon as I arrive? (Same logic for my move to SF ten years ago...) And there's sooo many really fantastic buildings there.. But the city has lots of problems and almost no economy, so I abandoned that idea. Everything I'm reading about Katrina looks like the worst of NOLA's nightmares...my thoughts are with them tonight.

"C'mon sunshine, baby". - Katrina & The Waves.

I hope that will be funny tomorrow.

All in all though, I don't think environmental events like this affect climatic desireability.

Some people will be scared off, for sure, but others will take their place. People will avoid specific properties due to specific problems (we looked at a house in Berkeley, a half mile from the fault line, that seemed to be clinging for dear life to the side of the hill. My wife overruled my sense of adventure).

Earthquakes haven't kept people out of the Bay Area. I know people in New England who wouldn't ever move here, and I know people here who would never move to New England. (They have BLIZZARDS there?!?!). Cf hurricanes, tornadoes, volcanoes, tsunami, floods, etc. People are adaptable, though the folks in Pompeii might have (had) different thoughts (however briefly).

...with all that said, though...

I don't think an increasingly volatile climate will be good for the economy. If there's serious damage in NOLA tomorrow, it could be catastrophic for the region and for insurance companies. That part of the country is very very poor. A half million poor, displaced people would be difficult to absorb. There were 9 deaths and up to $2B of property damage from the Cat1 Katrina last week. We've been talking about trigger events, tipping points, etc. I hope for everyone's sake that Katrina isn't one.

I don’t think an increasingly volatile climate will be good for the economy. If there’s serious damage in NOLA tomorrow, it could be catastrophic for the region and for insurance companies...We’ve been talking about trigger events, tipping points, etc. I hope for everyone’s sake that Katrina isn’t one.

quesera,
Oil futures have already moved above $70/barrel. When (sadly it's not "if" anymore) the NOLA-gulf oil terminal is knocked out of action, this could have very grave consequences for the economy indeed.

When it comes to location in regard to natural/environmental factors it comes down to avoiding the obvious ones and trying the plan for the rest. There is no way I would buy on the Florida coast, I just don't see the logic in buying when you know the area gets hit by hurricanes. And why on earth would someone buy in a place called 'tornado alley?' I'm also not likely to ever buy a house built on stilts, I would constantly live in fear and who needs that drain on one's nerves?

California is funny though. We all know there are faults running across the whole state, not to mention it's mostly flood plain, but we live here anyway. I think the weather is a big factor in why a lot of us stay, though the heat in Sac makes this area less desireable than the BA and L.A for that reason. But I've lived in the Sac region for 20 years with very good luck and I hope it will continue to hold. And frankly, I'd rather risk the odd earthquake that hits every decade or so over hurricanes and tornado's that are a yearly occurrence.

And frankly, I’d rather risk the odd earthquake that hits every decade or so over hurricanes and tornado’s that are a yearly occurrence.

I thought Sacto is seismically stable (relatively speaking)...

I thought Sacto is seismically stable (relatively speaking)…

So far it has been extremely stable. *knocking wood furiously*
I was speaking in general terms of living in Ca.

I've already posted this in other active threads, but I think it bears repeating here:

The improvement on the quality of posts and volume of participation post-MP has exceeded my expectations. If I had known the impact would be this great, I would have banned him a long time ago –even without a vote.