Posted by Mike on November 21, 2000 at 22:23:21:
I live in Prince George, BC. This is a city of 80,000 whose local economy is dominated by the forest industry. Resource based industries are cyclical in nature, meaning that there upturns and downturns in the market place for lumber and pulp. I read the paper and listen to the local news where mill closures and temporary shut downs are front page news.
In the mid to late 80’s, a friend of mine was a realtor and real estate investor in the Tuscon area. I was visiting him one time and we went to a couple of his properties. He said that prices had dropped and the market was flat as IBM had restructured and many jobs were lost. He also said the military had down sized their air force base and that many servicemen were transferred out of the area.
So when major employers are laying off, shutting down and restructuring, then real estate prices will flatten out, even drop. But when new industries set up and new jobs are created, then real estate prices will rise. A case of supply and demand. The smaller the city, the more dramatic the impact of major employers fortunes. In large cities with a more diversified economy, the impact will be felt far less.
In addition to keeping aware of local economy issues, I also try to determine trends in prices. I read the real estate flyers, and I read reports prepared by the local president of the Prince George Real Estate Board. I watch the listings for houses, and I especially watch what houses were sold for. The sale prices are a matter of public record as they form the basis for tax assessments and can be obtained from a local realtor or by going to city hall. If prices are dropping, I hold off buying until a sustained trend of increasing prices appears.