Catch a Wave – Thoughts On Real Estate Market
Clay | December 9, 2008Ok, I hang around Realtors, in fact I am married to one. So I have opinions, but I think less on the emotional side than seems to be the norm out there. Right now, the real estate collapse has exploded into an “Economic Crisis”. There are a lot of opinions on who is to blame, as opposed to understanding and analyzing the real complexities of the situation and how we got here.
People are pushing political agendas, it is a political year, and extreme partisanship, unashamed biasness has infected most of the information outlets. Both mass and new media has lost the willingness to be objective (much less the actual ability to be objective). When everything is this crazy, like a life raft in a stormy ocean you have to cling to something you know that is real. Even though you still might drown.
I prefer a surfboard analogy. The Law of Supply and demand is the underlying force beneath the market. Bay Area Real Estate prices will always go up, because demand will always go up (unless you believe population will go down, in that case quit reading). The simple fact is single Real Estate is a fixed supply (unless you think a volcano will occur in the middle of the bay, and quickly fill up and cool off leaving with concrete, asphalt ad parking, i.e. LA).
There are a lot of variables layered on top of this fundamental though, so many to discuss that this post would become a novel. So many the forest can’t be seen from the trees as they say, oops another metaphor, sorry about that.
Anyway, the so-called bubbles and their implosions that happen within long run trends occur because of these variables, like stormy waves, there are those that drown, and those that come out richer, a lot richer. Catch a wave and your sitting on top of the world. Like Warren Buffet rich. The smart ones like it when everyone is fearful he says.
Yep, the wave you don’t want to catch is the one everyone’s trying to ride, so why wait?….
