A Little Perspective…
There’s been urgency in the news lately, panic even, regarding the changes in the national housing market. News organizations, economists, and politicians have been maintaining ‘hyper-focus’ on it and have been quick to throw their two cents into the mix of opinions.
So, it’s easy for everyone listening to those voices to get carried away in the rush of negative perspectives regarding the national housing market. But what does it all really mean? Haven’t we heard all of this before? How will this drama play out and when will it end? Isn’t a little perspective in order?
I thought it would be fitting to let someone that’s been close to the real estate business for decades give us all a little perspective on the situation…
Commentary by the founder of QuantumDigital, Inc.
We are hearing a lot of gloom and doom about residential real estate these days. This will be an attempt to put it into some degree of prospective as I see it based on observations from many years of living and a fairly long association with the residential real estate industry.
I wonder, would we ever have heard of ‘Chicken Little’ if he did not proclaim, “The sky is falling”? Although his claim is highly unlikely, the truth is that bad news sells and those who are most proficient at proclaiming bad news get the most attention. How much attention would today’s oracles of gloom and doom get if they were to say that the crisis is probably temporary and that the market will begin to recover when housing prices are perceived as a good value by prospective buyers?
And, by the way, who are the oracles of gloom and doom in the real estate industry? Is it possible that many of them have little or no appreciation of the value that the average American places on home ownership? Many of the voices we have been hearing are coming from individuals who are mostly interested and knowledgeable about traditional financial securities where value is determined exclusively by how much financial gain, measured in dollars and cents, one can expect from a particular investment. They may not understand that for many of us, other rewards are equally valuable like owning and living in the home of our dreams. As a matter of fact, I suspect that many of these voices are from people who may have never owned a home, or at least a traditional one. They probably live in the apartments and condominiums of New York or some other financial center where their residence is just a place to live and can easily be replaced by another, if that represents the best alternative measured purely in dollars and cents. And, again, just look at all of the attention I can get by forecasting disaster.
The truth is that I don’t know what will happen to the residential real estate market in the next year or so any better than they do. But, I suspect that six months or so from now they will be talking about the amazing recovery that has taken place in real estate. I once worked with someone who was fond of saying, “When things are good, they really aren’t as good as you think they are. And when things are bad, they really aren’t as bad as you think they are either.” Sage advice for this or any other time disaster is proclaimed.
– Jim Damman
Until next week, take care.
Steve