Happiness is… Living In/Leaving a Boom Town

There are three factors in our life that most influence our daily rhythm and happiness:

  1. Where we live
  2. Who we live with
  3. What we do with our time

My hope for everyone is that you have found a rewarding way to spend your time, and special, meaningful people to work and live with.

But what about the other factor: Where we live? What’s going on in the world that affects your ability to maximize your happiness on that factor?

Today in our local news in Denver the Governor of Colorado (and former mayor of Denver) said in a radio interview (about 2:30 in, if you listen) that the Denver Metro area is a “victim of its own success” when acknowledging that the city has an ‘affordability’ problem. Like many of our country’s other successful cities that he mentions (San Francisco, Boston, New York…) , when the economy is thriving, and jobs are available, people are even more attracted to the place, and then it becomes too expensive to move to, or even stay in, due to the increased demand for, but steady supply of, housing.

I spent a lot of time in Austin, TX the last couple of years, and it’s one of the worst cases of a city being victimized by its own success. Not only is it hard to afford to rent or buy a house there, it’s nearly impossible to drive anywhere at rush hour because the growth has clearly out-paced the build-out of infrastructure like public transit or highways. And so, the very success leads to its subsequent decline… people start to leave, or stop coming.

Like all things, these matters have a way of working themselves out – often with a boom & bust cycle, unfortunately. For some, these inevitable cycles mean opportunity, but for others it means also becoming a victim… by making big financial bets in the wrong way at the wrong time – like buying a house at the peak of a boom, or needing to sell one at the trough of a bust.

This is why we at REOT so frequently discuss the entire economy and housing markets, and not just the specifics of you buying your house. Understanding how the whole market works means you’re more likely to benefit from either a boom or a bust when they happen (and there will be more – there always is).

To help you understand what many growing cities like Denver and Austin are going through, here’s an interesting lesson:

Today, Governor Hickenlooper made the point that the government can incentive private-sector builders to create more condos in central Denver. This is not just because more such living spaces are needed so people can buy, but also because of the downstream impact that more urban housing units will have on lowering apartment rents – which are skyrocketing out of the affordable range. Pent-up demand for condominiums / living units that can be bought will actually make a difference in what those who remain renters have to pay in rent.

So, if you live in a place where the situation is similar (or would like to), you probably want to pay attention to whether the ‘stock’ of housing units is about to increase…

If you own and are considering moving, maybe now is a great opportunity to sell before new supply decreases prices.

If you want to buy, maybe your best opportunities will arrive if you wait another 9 to 12 months, for when the new supplies begin to show up and put downward pressure on prices.

I’m guessing you’ll maximize your ‘happiness factor’ with where you live by using this understanding to buy or sell (or rent)

  • Where you want to be AND
  • with a Financially sound decision that you’re happy to live with!

Here’s to you recognizing an opportunity to buy or sell a good home, and doing it WELL!

Leave A Response