So last night I received a message asking why the home I posted in the last post went up so fast in just a couple years and hasn’t dropped as it did here in Sidney after COVID. Easy answer…..
What keeps an area growing and stable and what we look for as an investor is “housing starts”. So here I took a photo from my driveway 2 weeks before I sold the house in Pennsylvania. We loved that house. We bought it added an additional 2,400 sq ft. to it and set it up as our retirement home. We had 110 acres of corn in the front and 150 acres of protected forest behind us, and very few neighbors. But look at all the new homes in the photos. You can even see a new one just getting its roof. This is during COVID.
We were 2 hours from Washington DC. 3 hours from New York. During COVID those people left the cities and we just happened to be the place they wanted to go. Our local home builders there always watched the business side of it. They always balanced the inventory, never over or underbuilt to keep the market strong. It always went up.
This is one reason why we sold. It is not what we wanted, but it was amazing for the value of our home. When they started those homes as you can see from the graph I posted yesterday, our home appreciated 100K in value in 2 years. Amazing value jump. Because they increased supply, people looked for it as a place to relocate. They had lots of choices and that drove up the prices astronomically in just a few years. Our Realtor told us as most homes were selling for 15% above the asking price. Yes, the average selling time of a home in 2021 in that area was 2 hours. And people bid for a chance to buy them. They would get 40 to 60 bids on each home within 2 hours.
Home values are directly proportionate to the inventory available. Too much or too little and the prices go down. Sidney will continue to decline this next year as interest rates are going to rise through the first part of 2023. It can come back though. We can bring it back. I will put a link to some articles about “housing starts” and just how important they are to the economic health of an area.
One of the factors we need to discuss is getting Sidney on its feet is housing. We can not continue on this course without new homes. Look at it this way. We spent too much money on the government last year. When we attended the commissioner’s meeting where they discussed the budget audit, a couple months ago, we learned we fell 1 million short in money. The county spent too much. Of course, we bought buildings, paved roads, and did things that should not have been done in the current economy. Poor choices by our leaders. The county ran 1 million short. Too much spending.
So what do you do? Since you are out of housing inventory, and businesses left, you raise taxes. Everyone had their taxes and values raised to cover the excessive spending. Just not the thing to do during a COVID bubble, terrible. Just makes it worse.
So, to correct this, we need to quit spending money like Cabela’s is here. We need to control the budgets. All areas need to control the budget. We need to replace Cabela’s tax contribution part of the budget. This means new businesses or new homes, best if BOTH. We don’t have enough homes in Sidney to replace Cabela’s part of the taxes. There are only 16 homes for sale in Sidney right now. So we need new healthy housing starts. We can never cover what we are spending with our current business and home inventories. It is not possible.
We can fix this pretty easily. We all need to get on the same page and start though. New ideas, new homes, new businesses. This lowers tax rates and makes your homes more valuable and also increases investment in our area. Simple economics.
Step one is to control the budget. Stop spending excessive amounts of money and do your “due diligence”.
Step 2 is to get rid of the conditions that hamper businesses from locating here. We have had several that tried. Correct why they didn’t.
Step 3 is to make a community plan for growth and investment. Push for a few new homes. Make it happen. We just don’t have enough home inventory to cover what we are spending.
https://www.investopedia.com/terms/h/housingstarts.asp
https://www.thestreet.com/dictionary/h/housing-starts…
https://www.housingwire.com/…/housing-starts-slide-but…/