Real Estate Forums

HHI Golf Guy · 06-25-2008, 09:10 AM

I have been seeing that some financial pundits are predicting that oil prices will collapse the same way that housing prices have collapsed. I'm not to sure about that, although they do have one thing in common - artificially inflated prices.

Let's face it - housing prices were inflated because lenders loosened their standards, and that created the artificial demand. I say "artificial" because a great many of these people could not really afford the home in the first place. Many others are just scraping by.

If you listen to 10 different financial analysts they give you 10 different reasons why oil and gas prices are so high. Sure, demand is up. But there is still plenty of supply. Refinery production is taxed (for gasoline) but still manageable.

I think the answer to rising gas prices is simple. Investors and speculators will continue to drive up the price (and reap the profits) until demand crashes. A demand drop won't reduce the prices. The demand needs to crash. And while pricing could cause that crash, I'm beginning to think that the only way for that crash to occur is if we have a viable, mass produced fuel alternative to gasoline for our cars. How many years are we away from that? 5? 10? 20?

My guess is we won't see a huge drop in our gasoline consumption until gas prices in the U.S. reach $7-$9 a gallon. Gas is already $4 a gallon and I still see a ton of cars on the road every day. Driving a car is such a big part of the daily U.S. routine that I believe most people will cut back on other items before they find alternatives to driving.

Bigtoe · 06-26-2008, 06:30 AM

Most Americans don't have a choice but to drive. Our homes, work and everyday life have been planned for us in the days of cheap fuel. When suburban sprawl was the rage no one gave a thought to the cost of driving.

There are not many people located where they can walk to a store even if there were sidewalks to use. Where I live there is no public transportation, no sidewalks and the commercial district is spread out over 20 miles of our main road frontage.

For us to stop driving they need to bring back the downtown commercial centers, make the roads pedestrian and bicycle safe, and improve public transportation.

lasvegasrealestate4u · 07-11-2008, 11:16 AM

The real travesty is the $700 Billion leaving the country every year for oil. You might want to check out PickensPlan for somebody significant actually trying to do something about it and has an interesting plan.

Sign up as a member and while you are at it, join Real Estate Agents for The Pickens Plan.

I got wind of this a couple of months ago when I found out that land prices were going up in this region of Texas and some of the older towns that were falling apart started coming back to life. There are some amazing advancements taking place -- just needs more investment to really get it going.

It would be nice to get some SEO experts in the group to promote the plan and push alternative energy. If you really want the economy back on track so people can afford homes again... keep the money in the United States and create some high paying jobs. Throwing money at bailing out lenders and institutional investors or rebate checks really is not going to help out too much.

Bama-Homer · 07-14-2008, 04:48 AM

Quote:

Originally Posted by HHI Golf Guy

My guess is we won't see a huge drop in our gasoline consumption until gas prices in the U.S. reach $7-$9 a gallon. Gas is already $4 a gallon and I still see a ton of cars on the road every day. Driving a car is such a big part of the daily U.S. routine that I believe most people will cut back on other items before they find alternatives to driving.

I would agree.

I was at my association office the other day and noted how many of my fellow REALTORs® were driving full sized SUVs. In fact, there were more Suburbans and Expeditions in the parking lot than sedans. Apparently the $130/tank isn't painful enough.

San Diego Real Estate · 07-16-2008, 08:03 AM

I agree guys all great points and we have not made it to the final chapter.

Our economy is going through some major adjustments and the list of those contributing factors is truly amazing to me. I don't think I have ever seen anything quite like it in my lifetime.

I have the blessing of working from two markets both Tulsa where gas has just hit the $4 mark and San Diego where it is just crossing the $5 mark. While I can see a major shift in both areas such as a lot less High-Way congestion. It seems like a lot more conservation in San Diego than in Tulsa. I guess the difference between the $4-5 per gallon is most significant if nothing else from a mental aspect.

What really worries me more than all of this is what I'm starting to refer to as the "Obama Effect" I really think that has a much larger impact than most realize how about you guys?

Bama-Homer · 07-18-2008, 05:20 AM

Quote:

Originally Posted by San Diego Real Estate

What really worries me more than all of this is what I'm starting to refer to as the "Obama Effect" I really think that has a much larger impact than most realize how about you guys?

Ok, I'll bite. Please elaborate on the "Obama Effect", curious to know what it encompasses.

San Diego Real Estate · 07-18-2008, 06:28 AM

Great question Ed,

The "Obama Effect" consists of most of our small and large businesses (other than the Oil Industry of course) putting most things on hold and really tightening their budgets because they are concerned that he might actually get elected. This is not only from the Top level management down but also effects the families every day spending as well. Because a lot of those R&D projects are now on hold until after the election and needless to say the hiring slow down and expansions that have been paused.

So the "Obama Effect" coupled with the escalating fuel prices and the lending nightmare our government has allowed to happen should be a concern for us all. IMHO

HHI Golf Guy · 07-18-2008, 11:46 AM

Quote:

Originally Posted by San Diego Real Estate

The "Obama Effect" consists of most of our small and large businesses (other than the Oil Industry of course) putting most things on hold and really tightening their budgets because they are concerned that he might actually get elected.

I'm definitely not a fan of Obama, but I think this happens with most candidates around election time. Maybe there is a bit more hesitancy with Obama because all he does is talk about "change, change, change" although he never defines what those changes will be. Sure, there is an occasional soundbyte, but never any substance to his words.

Frankly, because he knows how to spin the dynamic, charismatic rhetoric it does make him a strong candidate for election. Most Americans are so fed up and disinterested with politics these charismatic soundbytes go a long way.

I remember when Bill Clinton was first running for office and during one debate he was asked if he would raise taxes. His answer was, "I will not raise taxes to support any of my new programs." I remember screaming at the TV for the moderator to follow up. Clinton did not say he would not raise taxes (which was the question). His answered stated there would be no new taxes to directly support his initiatives.

It was then I knew Clinton was a slick character and a liar. Instead of facing questions head on he always took an angle ("I did not have sex with that woman"). Now, most politicians take that same tact. Obama seems to be that way.

BTW, there's a new Jib Jab video about the 2008 election. I especially like the part where Obama is singing about change: JibJab - Funny eCards, Birthday Cards, and More at JibJab