In July 2006, in response to a US ‘Housing Bubble Blog’ post ‘Realistically, how overvalued are Phoenix home prices? 5%? 10%? 20%? 50%?‘ [housingpanic 21 July 2006], Greg Swann, a Realtor from Phoenix, wrote ‘21 reasons to bank on the Phoenix real estate market…‘ [bloodhoundrealty.com 21 Jul 2006].
Excerpts from Swann’s post:
“Obviously, I consider this a profoundly silly question, but to lurk among the BubbleBloggers and their seething commentariat is to acquire an education in a slice of America invisible from this side of the sewer gratings. Notwithstanding the idiotic economic analysis, which is really no worse than the static-market fallacies paraded as profundities in the pages of the Arizona Republic, these sites — and not just HousingPanic — are infested with a cult-like fever to inflict suffering — at second hand, to be sure — on people who are in fact guilty of nothing except failing to have drunk the BubbleBlogger KoolAde.”
“Will prices drop by the huge amounts HousingPanic and his flying monkeys seem to yearn for? This seems very unlikely.
What seems much more likely is that Phoenix will recover from the hangover of last year’s buying binge and get back to a steady rate of growth — historically 6% a year. The reason this should happen is very simple: Population growth.
Metropolitan Phoenix is a unique real estate market. While other cities experience static — or even negative — population change, The Valley of the Sun routinely adds 100,000 new residents every year. There is no reason to think this will stop — not now and not soon. The carrying capacity of Greater Phoenix is eight million souls, about 266% our present population. We will hit that number — but not until 2040 or after.”
Forgive us if we had to pinch ourselves reading this. Does this argument remind one of anything we’ve heard here recently?: “Unique” (yawn); “5% p.a. price increases”; “40,000 new residents per year”; “steady immigration growth until 2050″. Why, it’s the “ Limitless Demand Argument For Ongoing Market Strength” that we hear proposed repeatedly by Vancouver RE bulls.
Anyway, that was then, and this is now: see the ‘Bull Hubris‘ sidebar for an ongoing collection of made-in-Vancouver puffery.
[with hat-tip to Gord]