Here’s a visual depiction of what I was talking about during Wednesday’s blog post.
This short video shows both the gorgeous, sprawling community of Redstone, as well as the thousands of acres of farm land right next door…
There are several hundred houses in the Redstone community, as well as a large gated entranceway made of stone that leads to the “Main Street” area of a completely fabricated little town.
It’s been over ten years since I’d driven down this stretch of highway, and the last time I did, all of this land was nothing but greenery. These houses, stores, restaurants – none of this was here.
I’m not doubting that these are beautiful homes, nor am I doubting that the residents are happy.
But from a real estate valuation perspective, I’m not sure how the owners never saw the bubble about to burst. It won’t be long before somebody builds another 400 homes in the vacant land right next door, but first, the existing over-supply of homes would need to be absorbed.
I don’t believe there are several hundred acres of vacant land right next door to Forest Hill in Toronto, and thus I can’t see any way in which over-valued real estate in places like Park City, Scottsdale, Fort Lauderdale and the like can be compared to that of Toronto.
I know hindsight is 20/20, but I guess when you’re dealing with a frenzied real estate craze, nobody is seeing straight…