I used to hear that all the time, even though it was never true. (The first housing bubble in the US was in 1837.) You don’t hear that much since the implosion of 2007. However, we should be coming up on the limit of the collective memory anytime now, so I thought a refresher would be in order. And by some measures we’re already in another real estate bubble.
In a housing crisis that somehow hasn’t been blamed on President Trump, there are about 55,000 homes in Connecticut that have concrete foundations that are disintegrating. Replacement costs start at about $100,000 and go up, depending on the size of the house. Plumbing and electrical must be disconnected, The house jacked up on piers, the old foundation removed, and new basement walls poured. It is actually a fairly straight-forward process, but you expect to have to do things like this to 100-year-old structures, not homes built since 1980.
Pre-2007, people would talk to me about “the way real estate traditionally works,” and then give me a rundown on market conditions since Jimmy Carter was in office, which to my way of thinking isn’t indicative of the traditional real estate market. And real estate discussions from that era had all too much in common with the discussions I had during the dot com insanity of the mid-to-late 1990s, about how of course companies like Pets.com, which had the revenue stream of your average dry cleaner, could have a market capitalization approaching Ford. Or whatever the situation was. Because, this time, things were different. See the classic text, Extraordinary Delusions and the Madness of Crowds, by Charles Mackay. It was written in 1841. (I will dust off some of the quotes from that book in the future.)
But back to the topic at hand.
Less than 10 minutes away, four homes are on stilts on Eliot Drive.
“Every piece of concrete that’s here is gone,” said General Contractor Don Childree.
Childree is replacing full foundations. Each home averages about eight weeks and more than $200,000. Childree has done about 80 foundations across the state.
And this is filed under “Your Tax Dollars at Work” because funds for low-interest loans have been made available, and the state is still trying to get federal dollars out of FEMA (or some part of disaster relief). And that is because insurance isn’t paying to cover shoddy construction.