Not every boom is followed by a bust although extreme economic boom cycles usually are followed by recalibration and rebalancing. Countries, neighborhoods, towns, cities and states around the US have experienced booms over the past decades, and almost all of them have also come with some downside. No, not everything is rosy in a boom cycle forever. Think Dubai: now booming again, it has experienced a severe down-cycle too.

Booms always deliver beneficiaries, sometimes those with significantly larger gains than others. And sometimes booms leave some decimated. The 2008/9 economic crisis made billions for some, while others lost their homes and declared bankruptcy. Bankers were saved: homeowners, not-so-much! Boom towns are seeing this happen around the globe. For instance, a local renter who experiences massive growth and demand in their area, is more than likely going to experience higher localized inflation, aside from housing costs, and rising rents. When things boom, infrastructure and a whole host of other things require massive, time-consuming investment to meet the new demand.

Most times these areas are unprepared for this and the 'locals' suffer the consequences, especially those that do not own hard assets. That suffering is eased if you are a beneficiary of the boom, mostly real estate owners and those who benefit via business. Yes, jobs and wage growth impact sentiment too, but lots depends on what those additional dollars buy. If your income is not rising to meet the rising costs of everything else, you are certain to feel the pinch. NIMBY-ism (Not In My back Yard) has often been a big driver of rising costs. Often these well intentioned policies wish to maintain the flavor of their neighborhoods, yet also often want all the benefits of economic and population growth: can you have both? Probably, but it can take time, many years, not months, to get the balance right.

In some areas around the US, housing has become so unaffordable that the wealthy inhabitants are struggling to find workers who can afford to live close enough and do the jobs essential to a wealthy lifestyle (police, firemen, teachers, restaurant workers, etc). If they cannot afford housing, food, transportation, education and healthcare, they will be compelled to move. We have seen this in many booming parts where sharply higher costs and stagnating wages simply drive people out.

It's perfect nowhere. What is cheap today, may not be that cheap a few years from now, making those on fixed incomes especially vulnerable. Moving to a Boom town area and being an active participant in that booming usually works best, but it almost always comes with risks and unexpected/unintended consequences. Booming over an extended period is possible, but there will always be bumps along the way. Planning for those bumps is critically important, akin to buying insurance well before a fire breaks out.