Things change - Housing trends

It is easy to look around and think that things have always been the way things are now. It is easy to overlook the fact that hollow, empty, crime and poverty stricken cities of the 70s were not the way things were in the 50. Or that many cites are much better off now than they were in the 70s.

The middle class dream of a single-family home on a half acre of land and miles and miles of suburbs was a new thing in the late 40s. In the 20s there were cities and rural farming areas with very little in between.

Nothing stays the same.

http://www.theatlantic.com/doc/200803/subprime

The more things change, the more they become insane.

(Yes, I know that's not exactly the right quotation, but it's how I think it is.)

Sue

Glad I moved to an old neighborhood. (For CA at least!)

Conversely, there are many cities that are worse off now than they were in the 70s as well. I believe the demographics just shift over time from one set of locations to others.

The deciding factor in suburban sprawl was transportation. Mass transit and a robust highway system spawned a commuter culture. Now that most of the viable commuter living space has been developed around the metro areas, there's not much else left.

Someone had a theory that traffic congestion simply rises until it is intolerable. If you add another lane to a highway, for instance, the traffic eases momentarily until people start taking advantage of the improvement to accept jobs that are farther away. I guess it could be called a variation on the "Peter Principle"

If metro areas are now saturated, it seems that the time is ripe for some brand new cities to spring up. A large manufacturing company could make a killing by buying up a bunch of land in the middle of nowhere and building a plant in the middle of it. People start moving into the area to work in the plant and next thing you know they're complaining about the traffic

Then the company could start selling off the property to the gas stations and big box stores...

Shhhhhh!!! Don't give them ideas!!!

-Blast

They are already doing that, seen that ad for Kia lately where they built an all new plant? Companies like Kia, Hyundai, Honda, Toyota go into rural areas and let the local .gov try to get them to choose their location by offering incentives such as no property taxes for x years. Then they built their plant and hired on anyone living in that area. Thats all good as long as that company never goes out of business or closes that plant, then you have a bunch of smaller Detroits.

Yeah, well good luck with the environmental regs, the code enforcement, the urban growth restrictions, and the financing, to name a few obstacles to incorporating undeveloped areas. Many of the local rural governments are run by farmers and ranchers who really don't want to see another urban eyesore in their area jacking up property values and driving them out of business. At least that's what I've seen.

I hear there are some pretty good deals in Las Vegas right now.

Not only is it probably the capital of neon, recently #1 in growth, and now they're #1 in home foreclosures. About 200 miles of sand in every direction.

Sue

A house is only worth what it pays you to live there.

Just give a bit of thought to how many ghost towns there are in spite of population growth and it becomes clear.

There were all sorts of towns built all over America, Canada, Mexico and South America to serve a single industry or exploit a single resource.
Old farming centers on the prairies, mining towns in the desert, abandoned mill towns in the north east.
When the industry failed or the resource was depleted then the people left.
The industry might have failed because the technology changed and it became obsolete. It might have failed because of trade or tariff changes. No difference
The process is still going on.
It goes on even when the general economy is booming.

Some towns are fortunate enough to be able to change their business and find new sources of income, but far too many just close and decay.
It is not just in the Americas either. You find ghost towns in ruins all over the world.

So a house is only worth what it pays you to live there.

If I recall my history correctly, this was basically done in the U.S. during the 19th century by the railroads in their expansion west. The government gave the railroad a land grant of one mile on each side of the new track they laid. Then, the railroad would sell off the land; it had increased in value dramatically by being near the railroad. It seemed to work, even though a lot of small railroad companies went broke, a lot or rail got put down and a lot of money was made.

You have almost described what many big box warehouse operations, and manufacturers do already.

They just plop a big facility on the edge of a small community near good transportation infrastructure, and "bring jobs" to said community. Albeit at a labor rate that is half what would be paid in a major community.
The towns people are glad for the jobs, the city wishes the facility was inside the community for the property tax, but is willing to only get the increased sales tax within the town from increased resident spending (due to new jobs), and the company gets cheap labor (with little or no benefit costs) and little or no city taxes.
Once the residents spend more time in the area they work, the new company starts selling "excess" land to folks who want to cater to the employees coming and going to the facility.

There is also the 'head fake'. A major corporation mentions that they are planning on expanding. This could be part of the plot or entirely independent of it. Using what might be a minor footnote in a press release as indirect reference people jack up the price of land.

This can be as simple as a land owner posting a 4' by 8' sign announcing the 'future home of ____'. The more official and fancier the sign the better it works. Also helps if get a local bulldozer owner to knock down a few trees and clear some brush. Follow by hammering in some stakes with orange tape on them.

A popular tactic is to send around a guy in a fancy car and suit to ask about buying properties in the area and implying that prices will be multiplying. That always gets people talking. Work an area by deception and inference and you can jack up land prices. Then you turn around and sell your land and make a profit.

If your good you can pull out making money and people will spend themselves into a hole based on the assumption that there will be a large development. Then, once their finances are exhausted and loans come due, people get desperate for cash. At which point you show up and buy their property for less than they wanted before you jacked up the price.

If your really good you can buy up the guys property and add a few thousand so he tells everyone he sold out as part of the fictional original development. Done well the would-be developer sells the original plot for a huge profit and end up owning all the surrounding land.

Wash, rinse, repeat.