Mr. Castro Responds

Jimmy Castro, via Realty Times, has posted a direct response to yesterday's article. He also may be responding to a post/comments at a much bigger fish, The Housing Bubble blog. (Out at the Peak also has a permanent link for Mr. Castro on the right under "Housing Heads.")

Here is Mr. Castro's response in full (as his articles tend to change quite rapidly). If anyone cares to respond to any of Mr. Castro's points, please hit the "comments" link below.

It looks like I have captured a bit of attention concerning my thoughts on the market here in Sacramento. My article has made it on a blog called Sacramentolanding.blogspot.com.

Here is the bottom line - Sacramento is one of the fastest growing areas in the state. The Sacramento area has been named one of the Top 10 most desirable places to live in the United States and provides ample employment opportunities, great weather, low crime rates and a mix of established and newly developed communities. The area includes a wide variety of housing and commercial developments, including both newer planned communities like Folsom and older neighborhoods undergoing economic restructuring such as Del Paso Heights. The schools in the Sacramento Region are among the best in California and many institutions of higher education are nearby, including community colleges, technical schools and California State University, Sacramento.

The real estate bubble naysayers whine about the "bubble" as if the whole national real estate market were nothing more than another over-inflated stock exchange -- it's not. Real estate is local and I wish people scaring the buyers with quotes from stock market experts would just stop what they're doing and consider some real facts.

Fact: The top hot real estate markets in the U.S. are also the top hot job markets.

Fact: Houses are where the jobs go at night.

Fact: Without enough houses in a hot job market, your housing inventory will escalate in price.

Fact: Unlike the stock market -- you have to live somewhere. Whether renting or buying, there is an automatic necessity for the ownership of real estate -- either by a homeowner or an investor.

There is no built-in necessity for owning stocks, thus all comparisons between the two products is moot.

In the midst of the hot markets across the country (where the squealing is the loudest and most piercing) citizens of those jurisdictions must look to the local economy to determine their risks.

Here in California, where the big bubble bursting boom is supposed to bang the loudest, there aren't enough homes to go around.

For the past half decade, the shortage has been compounded each year by a shortfall of 50,000 housing starts, according to the California Building Industries Association.

Imagine if the shortage continues for the next two decades when the Golden State is expected to grow in population by 10 million people.

That's a forecast from experts at the Public Policy Institute of California who, along with other experts, recently testified before a state Assembly committee.

Population booms -- which typically don't come with busts -- are expected to swell the state's Inland Empire, San Joaquin Valley and Sacramento areas by 45 percent and coastal regions by 17 percent.

By 2030, the number of seniors will double and one in every six Californians will be over age 65.

In the next six years, Latinos will be the state's largest racial group.

And by 2011, public universities and colleges could run out of money to add on facilities required to meet the demand for college-educated workers.

They will all have to live somewhere!

Jimmy Castro, RE/MAX GoldTeam Leader/Owner JC& Associates