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Thread: Oil prices and real estate

  1. #21

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    Would that larger force be the free market by any chance lol. I think its ironic that people like you cry free market free market but when the free market dictates 100k for a nice single family home now its suddenly evil large forces. Save it dude.

    Quote Originally Posted by BluNosDav View Post
    I didn't ask you to feel sorry for me. But, I do feel sorry for you. You're just a bitter little man, who for whatever reason, never "got" what you think you deserved. I'm sure it wasn't your fault (roll eyes), and now you want some larger force to "give" it to you. Good luck, Troll.

  2. #22

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    So why is it wrong and evil of me to pay market prices when the market collapses? It is still market price, no? Speaking of socialist programs have you heard of cook inlet housing? Also in looking into real estate I have been reading articles that it is incredibly difficult for employers and small business owners to attract people to the anchorage area because we are something like top 10 in the nation for housing prices and most of the places are not all that nice. So commercial real estate owners who need employees might not agree with you.

    On a side bar, I find it odd that anyone would move to an area like anchorage or the north Dakota oil boom area without guaranteed housing for them and their family. Its only good money if its going in your savings account.

    Quote Originally Posted by KantishnaCabin View Post
    Again, the rental market is a free market. Fortunately here in Alaska we do not support socialist programs that force landlords to rent at rates lower than what the market will bare. Rent control is for cities like New York not Anchorage. I have been a landlord, I hated it 364 days a year. I just wasn't cut out for it. But, when I was a landlord I certainly did not "fleece" anyone. Typically rental properties barely cover their fixed expenses. The real benefit of owning a rental is that 365th day that comes ever April 15th and allows you to shelter earned income from the tax man. The long term payout is hopefully in property value appreciation. And in a market like ours with less than a 2% vacancy rate a landlord can and should charge as much as the market will pay. I want people that are offering a service to make a profit.

  3. #23

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    Lay offs and market corrections are part of the free market, do you disagree with this?

    Quote Originally Posted by BluNosDav View Post
    I didn't ask you to feel sorry for me. But, I do feel sorry for you. You're just a bitter little man, who for whatever reason, never "got" what you think you deserved. I'm sure it wasn't your fault (roll eyes), and now you want some larger force to "give" it to you. Good luck, Troll.

  4. #24

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    Quote Originally Posted by rppearso View Post
    I am a long time Alaskan and while I was a very small child in 85/86 I have heard stories of being able to buy nice condos in south anchorage for around 20k (nickles on the dollar). As oil prices tank and the lay offs have been on going I am barely seeing a dent in various real estate prices. I have heard that the crash in 85/86 was extremely abrupt, prices crashed from full blown fleece to reasonable prices within a 3 month period. Was that because everyone was laid off enmass in one month where as now it seems like the lay offs are trickling out over more than a year so we are not seeing a huge glut of properties hit the market yet?

    Do oil prices have to drop even lower? Adjusted for inflation we are not far away from mid 80's 10$ a barrel oil. I am hoping we have another year or 2 so I can keep saving up to buy a nice single family home with a cashiers check but I kind of thought with the lay offs we have already seen and the base down sizing that it would start being reflected a little in the market but there is no shortage of grossly over priced single family homes still.
    I think the big difference is that back then, there was little else going on up here, so the oil industry was a much larger percentage of the work force. It is still a big part, but not to the scale it was before. You lay off half the oil company workers and it is a much smaller percentage of the overall workforce, so the impact isn't as large. There's more tourism industry things, more fishing/guiding industry activities, along with other careers.

    On top of that, I think there is both a lag in when the impacts would set in from a serious downturn because there are some other things a lot of people can do in the meantime to mitigate the problem (spouses working their jobs in other career lines, etc...) but also people are still hoping that this is only temporary. Even being a few years long, people hope they can cover the gap without having to immediately run away to another state to put food on their tables. The longer the downturn lasts, the more people you will see leaving, but it will be much more gradual than in past times.

  5. #25

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    Hello,

    I think you are spot on. I will disagree with you on one point, I think you over estimate the extent of how diversified Alaska really is, sure there are other jobs that are not directly tied to oil but how many of those jobs will go away shortly after the oil jobs go away, most of the high paying jobs are in oil and those are the people that keep other businesses in business, not someone living in cook inlet housing or selling trinkets to tourists. How much govt contract work do you think there will be as the states revenue drys up? Sure there will be federal work, the rail road is not going anywhere (but may experience lay offs) and oil is not going to completely disappear but I think a lot of people are down playing the possible consequences. No, it is not likely to be 85/86 again with 10-15k nice condos but I completely expect to see decent east anchorage homes going for less than 100k

    This down turn could be what smart young couples need to establish themselves as Alaskans without being under a horrendous mortgage that limits their life activities. Or outrageous rent that consumes 30-40% of their net income just to stay out of the ghettos. I don't feel sorry for land lords or some of the slimy owners who are trying to put lip stick on a pig and sell it for a huge profit. My hope is that the market corrects to keep people honest and not just sitting on a home for a few years putting in a few counter tops and marking the price up 30 grand just because the inventory is tighter when really they have not done anything significant to add value. Sure if you gut an old home down to the studs and put in all new nice finshes then sure add 40k but that's not what happens unless its a total loss fire job which is rare.

    Quote Originally Posted by anchskier View Post
    I think the big difference is that back then, there was little else going on up here, so the oil industry was a much larger percentage of the work force. It is still a big part, but not to the scale it was before. You lay off half the oil company workers and it is a much smaller percentage of the overall workforce, so the impact isn't as large. There's more tourism industry things, more fishing/guiding industry activities, along with other careers.

    On top of that, I think there is both a lag in when the impacts would set in from a serious downturn because there are some other things a lot of people can do in the meantime to mitigate the problem (spouses working their jobs in other career lines, etc...) but also people are still hoping that this is only temporary. Even being a few years long, people hope they can cover the gap without having to immediately run away to another state to put food on their tables. The longer the downturn lasts, the more people you will see leaving, but it will be much more gradual than in past times.

  6. #26
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    Quote Originally Posted by BluNosDav View Post
    I didn't ask you to feel sorry for me. But, I do feel sorry for you. You're just a bitter little man, who for whatever reason, never "got" what you think you deserved. I'm sure it wasn't your fault (roll eyes), and now you want some larger force to "give" it to you. Good luck, Troll.
    He's hoping a bunch of families and businesses will suffer so he can finally stab a fat hog in the ass.
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  7. #27

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    Quote Originally Posted by rppearso View Post
    Hello,

    I think you are spot on. I will disagree with you on one point, I think you over estimate the extent of how diversified Alaska really is, sure there are other jobs that are not directly tied to oil but how many of those jobs will go away shortly after the oil jobs go away, most of the high paying jobs are in oil and those are the people that keep other businesses in business, not someone living in cook inlet housing or selling trinkets to tourists. How much govt contract work do you think there will be as the states revenue drys up? Sure there will be federal work, the rail road is not going anywhere (but may experience lay offs) and oil is not going to completely disappear but I think a lot of people are down playing the possible consequences. No, it is not likely to be 85/86 again with 10-15k nice condos but I completely expect to see decent east anchorage homes going for less than 100k

    This down turn could be what smart young couples need to establish themselves as Alaskans without being under a horrendous mortgage that limits their life activities. Or outrageous rent that consumes 30-40% of their net income just to stay out of the ghettos. I don't feel sorry for land lords or some of the slimy owners who are trying to put lip stick on a pig and sell it for a huge profit. My hope is that the market corrects to keep people honest and not just sitting on a home for a few years putting in a few counter tops and marking the price up 30 grand just because the inventory is tighter when really they have not done anything significant to add value. Sure if you gut an old home down to the studs and put in all new nice finshes then sure add 40k but that's not what happens unless its a total loss fire job which is rare.
    What I think is that there are a lot more people potentially in the same position as you appear to be, looking for the reduced prices and willing and able to make the purchases. What that results in is a higher demand for those properties which in turn keeps the prices up through competition. Before, there were very few people capable of capitalizing on a big downturn in the market, so little to no competition even at reduced prices. Now, people from across the country are waiting just for this to snatch up property and end up competing between each other, artificially inflating the prices right back to where they were.

  8. #28

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    Do you think investors would bid each other up to today's inflated prices, typically people spending cash are looking for good deals not bidding wars. I agree it won't hit 1985 prices but there is a lot of room between today's inflated prices and a condo going for 15k.

    Quote Originally Posted by anchskier View Post
    What I think is that there are a lot more people potentially in the same position as you appear to be, looking for the reduced prices and willing and able to make the purchases. What that results in is a higher demand for those properties which in turn keeps the prices up through competition. Before, there were very few people capable of capitalizing on a big downturn in the market, so little to no competition even at reduced prices. Now, people from across the country are waiting just for this to snatch up property and end up competing between each other, artificially inflating the prices right back to where they were.

  9. #29

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    Quote Originally Posted by rppearso View Post
    Do you think investors would bid each other up to today's inflated prices, typically people spending cash are looking for good deals not bidding wars. I agree it won't hit 1985 prices but there is a lot of room between today's inflated prices and a condo going for 15k.
    Not to today's prices, but not nearly as low as you think they might go, at least in my opinion. With a lot more investors, there is almost always one of them willing to pay a little more to make the deal. You have to work through all of those before prices will drop too much.

  10. #30

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    The people I know that buy these over priced homes are heavily tied to school zones. Investors don't care about school zones as much as a couple with kids desperately trying to keep there kids out of undesirable schools. I suppose you could let the dumb ones go broke over paying then start bidding after they are out of money. If a truely high roller wanted to swoop in they could do it right now, a 20k price decrease is not going to attract anyone. I guess if people want to blow their whole was on a 10-20% decline then it's not the right time. Also if lending gets tight and it's cashiers check only deals I think there are a lot less people than you think who are capable of producing a 60k cashiers check.

    but I could be wrong and you may be right in which case I will have to re-evaluate.

    Quote Originally Posted by anchskier View Post
    Not to today's prices, but not nearly as low as you think they might go, at least in my opinion. With a lot more investors, there is almost always one of them willing to pay a little more to make the deal. You have to work through all of those before prices will drop too much.

  11. #31
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    I sure hope that there are never again single family homes going for $100K. A drastic market move in my opinion would be around 20%, and even that would be extremely painful for everyone. The nice thing about a free market is that you can choose to participate. If you think that prices are too high then you shouldn't buy. Rentals again are what the market will bare. If you don't want to live in fairview then pay to live on hillside. If enough buyers/renters believe as you do then the market will adjust and prices/rents will come down. But, the sky is not falling. Just because the market is down and oil prices are low currently doesn't mean that owners need to sell for less than they feel the market will pay. And my point is being proven every day in Anchorage, the rental market is still tight and values are steady.

    Rent control is significantly different than publicly supported low income housing like Cook Inlet Housing. CIH does not set rents in the market, they subsidize the tennant so they can afford to rent in this market.

  12. #32

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    Forced participation in the market through lay offs and forclosures is the only way good deals will be had, if everyone owned out right then companies would have to subsidize new workers rental costs otherwise the economy would stagnate (absent something like building the bridge with the bridge project buying out the land over there prior to construction so that tax payers are not subsidizing real estate speculators). I know if everyone owned out right and I were being squeezed I would seek a raise or a new job, either here or else where. But that's far from the situation because there always tons of people willing to leverage themselves out for 30 years at half the net family income.

    Quote Originally Posted by KantishnaCabin View Post
    I sure hope that there are never again single family homes going for $100K. A drastic market move in my opinion would be around 20%, and even that would be extremely painful for everyone. The nice thing about a free market is that you can choose to participate. If you think that prices are too high then you shouldn't buy. Rentals again are what the market will bare. If you don't want to live in fairview then pay to live on hillside. If enough buyers/renters believe as you do then the market will adjust and prices/rents will come down. But, the sky is not falling. Just because the market is down and oil prices are low currently doesn't mean that owners need to sell for less than they feel the market will pay. And my point is being proven every day in Anchorage, the rental market is still tight and values are steady.

    Rent control is significantly different than publicly supported low income housing like Cook Inlet Housing. CIH does not set rents in the market, they subsidize the tennant so they can afford to rent in this market.

  13. #33

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    Also if rent keeps staying out of control buisness will petition the govt and prices of goods will go up due to wages going up to get people here, under the assumption that the sky is not falling. If the state/city is forced to buy up land at tax payer expense to put in high density housing (potentially through eminent domain) to keep costs in control then the land owners are bringing on the socialism themselves. I have read numerous articles about the rental crisis in Anchorage and land lords want to get top dollar while putting nothing into the properties. I think the city should be getting hard core with the slightest code violations and then forcing expensive remodels to regain compliance.

    All kinds of knobs the people and govt can turn if land owners want to get rude and inflexible, which they are doing.

    Quote Originally Posted by rppearso View Post
    Forced participation in the market through lay offs and forclosures is the only way good deals will be had, if everyone owned out right then companies would have to subsidize new workers rental costs otherwise the economy would stagnate (absent something like building the bridge with the bridge project buying out the land over there prior to construction so that tax payers are not subsidizing real estate speculators). I know if everyone owned out right and I were being squeezed I would seek a raise or a new job, either here or else where. But that's far from the situation because there always tons of people willing to leverage themselves out for 30 years at half the net family income.

  14. #34
    Premium Member kasilofchrisn's Avatar
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    OK so I have been reading this from my phone on the slope but now that I am home and have access to my computer I decided to comment.
    It saddens me (OK I'm pizzed) as an oilfield worker in Alaska that there are those here salivating at buying my home for nickles on the dollar.
    I have been earning a living from the oil and gas industry for over 16 years. I worked steady for the last 12 years. 2 for a small company and 10 for the one they bought out. Then I got laid off in April.
    10+ years in the same oilfield camp and bam your done. That hurts for sure. no warning or anything just a phone call.
    So now I am working another job for less money and a worse schedule. Plus it's a new construction job that will likely only last until this project is completed.
    Then I have to read this garbage about how cheap my home will get and who can pick it up for the cheapest when my family is thrown out on the street! ( I'm not even close to that in any way shape or form)
    Seriously you didn't expect that to offend a few of us who's livelihoods depend on oilfield jobs?
    I also don't see how a landlord charging fair market value(or more/less) for his rentals has anything to do with my private home and/or it's value?
    They are not me nor I them and it isn't right to compare us as I own no rentals and do not intend to at this time.
    So the go pound sand comment is mild compared to what I am thinking as I read this.
    I know quite a few people who do not benefit much if at all from tourism. Same for commercial fishing.
    Yet I know of no one not receiving some benefits from the oil industry and have not met anyone refusing to cash their PFD check each fall.
    So chalk another one up to the not at all excited over home prices dropping crowd.
    "The closer I get to nature the farther I am from idiots"

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  15. #35

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    Part of it is rental rates but the other part is over all purchase price, who the hell wants to pay 300-400 grand for a house that I can reach out and touch my neighbors house. But people are doing it and it seems like the only behavior modification is lay offs, I wish people just collectivly stood up and said we are not going to take the fleecing (while keeping their jobs) but thats not what is happening. The only reason people can get away with listing these outragious prices on the MLS is because people keep paying it.

    I dont want anyone to loose their jobs but I am also tired of being stuck between having to get fleeced myself or keep my life in a holding pattern, sorry man since people keep paying the jacked up prices the only thing left is hoping they loose their ability to keep paying for it.

    I am learning that the only way to not be the a hole is to pander and appologize but then you take it in the shorts financially, this whole real estate thing is antagonistic by its very nature. You would love to be able to sell your place for a 50k profit and live it up while the couple that bought it struggles but wanted a good school for their kids, but then someone like me comes along in bad finacial times and im the a hole lol.

    Quote Originally Posted by kasilofchrisn View Post
    OK so I have been reading this from my phone on the slope but now that I am home and have access to my computer I decided to comment.
    It saddens me (OK I'm pizzed) as an oilfield worker in Alaska that there are those here salivating at buying my home for nickles on the dollar.
    I have been earning a living from the oil and gas industry for over 16 years. I worked steady for the last 12 years. 2 for a small company and 10 for the one they bought out. Then I got laid off in April.
    10+ years in the same oilfield camp and bam your done. That hurts for sure. no warning or anything just a phone call.
    So now I am working another job for less money and a worse schedule. Plus it's a new construction job that will likely only last until this project is completed.
    Then I have to read this garbage about how cheap my home will get and who can pick it up for the cheapest when my family is thrown out on the street! ( I'm not even close to that in any way shape or form)
    Seriously you didn't expect that to offend a few of us who's livelihoods depend on oilfield jobs?
    I also don't see how a landlord charging fair market value(or more/less) for his rentals has anything to do with my private home and/or it's value?
    They are not me nor I them and it isn't right to compare us as I own no rentals and do not intend to at this time.
    So the go pound sand comment is mild compared to what I am thinking as I read this.
    I know quite a few people who do not benefit much if at all from tourism. Same for commercial fishing.
    Yet I know of no one not receiving some benefits from the oil industry and have not met anyone refusing to cash their PFD check each fall.
    So chalk another one up to the not at all excited over home prices dropping crowd.

  16. #36
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    Yep! If you don't like the prices move to some place[state] cheaper.
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  17. #37
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    rrpearso, what do you want? What is the purpose of your *****ing?

    Do you want price controls? Why do you keep complaining? What is your solution?
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  18. #38
    Premium Member kasilofchrisn's Avatar
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    Quote Originally Posted by rppearso View Post
    Part of it is rental rates but the other part is over all purchase price, who the hell wants to pay 300-400 grand for a house that I can reach out and touch my neighbors house. But people are doing it and it seems like the only behavior modification is lay offs, I wish people just collectivly stood up and said we are not going to take the fleecing (while keeping their jobs) but thats not what is happening. The only reason people can get away with listing these outragious prices on the MLS is because people keep paying it.

    I dont want anyone to loose their jobs but I am also tired of being stuck between having to get fleeced myself or keep my life in a holding pattern, sorry man since people keep paying the jacked up prices the only thing left is hoping they loose their ability to keep paying for it.

    I am learning that the only way to not be the a hole is to pander and appologize but then you take it in the shorts financially, this whole real estate thing is antagonistic by its very nature. You would love to be able to sell your place for a 50k profit and live it up while the couple that bought it struggles but wanted a good school for their kids, but then someone like me comes along in bad finacial times and im the a hole lol.
    I know guy who moved to Kentucky. You should see the house he got for just over 300K Place is huge with some acreage if I remember correctly.
    He could have gotten a decent single family home for much much less but had the budget for the bigger house.
    I hate to say it but Alaska isn't for everybody. If you can't afford it well then...... there's always cheaper places in the USA to live.
    I don't believe a pickup truck should cost $60K+ but that's the nationwide price for a new 1 ton diesel truck. I would also like to see people refuse to pay that much but don't really expect it to happen.
    there are also cheaper places to buy an Alaskan home than Anchorage. Mine n the Soldotna area was nowhere near 400K in fact I paid less than 250K with over an acre for a 3 bedroom 2 bath house. On a nice lot that doesn't allow me to see any neighbors from my windows.
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  19. #39
    Premium Member kasilofchrisn's Avatar
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    Quote Originally Posted by Akheloce View Post
    rrpearso, what do you want? What is the purpose of your *****ing?

    Do you want price controls? Why do you keep complaining? What is your solution?
    I believe his solution is half this state being unemployed and the other half being not far from it as well with families living on the street so he can snatch up their foreclosed homes for nickles on the dollar.
    He wants our homes for cheap at whatever cost or whatever grievance it brings the rest of us so long as he gets his for nickles on the dollar.
    At least that's what I read from his posts and the way he wrote them.
    Had he worded it so as not to sound happy for those facing the loss of their home it may not have upset me so much.
    "The closer I get to nature the farther I am from idiots"

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  20. #40

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    For information ONLY........I have no dog in this fight. But I lost $963,000.00 in the Great Alaska Depression (1983 to 1993), and I would never want anyone to have to endure what I suffered for eight years. Just for information: https://finance.yahoo.com/news/why-t...212143907.html
    "Life Is Either a Daring Adventure or Nothing" - Helen Keller

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