Should you buy a home in a boom town? In the 1800’s a lot of mining towns were founded out West, where gold was discovered and people moved in rapidly. Rapidly, stores, saloons, and houses were set up, often commanding staggering prices. And as quickly just, they were abandoned, the mines provided out once.

Today, many are picturesque “ghost towns” and are often tourist attractions. Is this a phenomenon of the 1800’s just? That type of thing cannot happen in today’s world Surely, right? Wrong. It continues to happen still, over the years, which is poised to happen again today. MY BUDDY wrote articles for the Colorado Rocky Mountain News once, about Parachute Colorado. An identical article appears here. Ronald Reagan ran on the platform of ridiculing government works, and the oil-shale task was one in his sights particularly.

As soon as he was elected, he canned the project, and everyone was let go. What occurred to Parachute? Well, through the boom times, when everyone was hiring there, people bought homes or committed to the town. After the project was canceled, many strolled away from mortgage loans and obligations just.

There was no way these properties would be worthy of what they covered them – not for many years. Boom cities exist – even today. This is not a 19th Century phenomenon. Today in the news headlines, Elko Nevada is making headlines as you place in the united states where there’s a housing shortage – because of the increase business in precious metal mining. And we are hearing similar stories in Montana and North Dakota – as oil increase cities spring up overnight.

Wages ‘re going through the roofing, as are casing prices, to both buy and rent. One story recounts how folks are residing in RVs in the Wal Mart Parking lot. The narrative of the story is how awful this is. I disagree. Those will be the smart people. Because all booms go bust, eventually.

Once the essential oil is discovered, the number of workers needed to maintain an oil field will go down. And prices shall stabilize as our old nemesis, Supply, and Demand kicks in, and housing prices drop. And in the precious metal mining cities, things can go very badly in a very big be quick if gold drops in cost – beyond it already has.

800 an ounce, mines will close and people shall be let go – and whole cities will disappear from the map. It happened to mining towns in the 1800’s. It can happen today. 80-a-barrel oil due to these oil boom towns? Or lower prices even? Sounds far-fetched today, but it offers happened before – with regularity. The laws of supply and demand dictate that prices are not within our control.

Sure, the long-term development is toward higher and higher oil prices. You could visit a decade of price declines – and that might be enough to sink the mortgage on your overpriced house in Boom Town USA (or Canada – for all you oil sands supporters). That had not been so back long, was it?

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And with each piece of very good news for the overall economy – unemployment heading down, housing bust recovering, manufacturing hiring increasing, world-personal debt crises being solved – the price tag on platinum shall get hammered, quietly, a little bit at the right time. And perhaps the price tag on oil as well. Should you move to a boom town for a high-paying job? Sure, if you need a working job. But BANK that money and don’t fall for the notion that somehow a boom town is a permanent thing.

Once, the price of oil – or precious metal – drops, mines and essential oil areas in a rush to close. Think hard before plunking down money and borrowing more to get a homely house in a Boom Town. The temptation is strong, in the end, you will hear stories about people “doubling their money overnight” in local Real Estate.