The Rainbow at the End of the Housing Recession
It is easy to become gloomy about the prospects for real estate -- especially since we are in the 5th year of an epic retracement. In my home state of Arizona, there are communities that experienced price declines of greater than 50%. Some on the order of 75%.
Yet what I want to discuss here is The Rainbow at the End of the Housing Recession. Please understand -- I don't want to make light of the structural problems we have in our economy, such as the choking amount of federal and municipal debt and the high level of unemployment. As a society, we have our work cut out for us.
But I am a contrarian at heart. So as the economic downturn wears on, I want to begin to look at the glass 'half full'.
To do this, it is useful to be a student of history. Think back to all of the other slow growth periods during our Nation's history. We have weathered many of them. Did you know that there was a serious recession during a portion of the 1950's -- a period that most Americans consider a time of spectacular growth?
Of course, there was the Great Depression of the 1930's. But you know what is interesting? If you go back and look at the magazine covers and articles during that period, you realize that Americans didn't spend all their time thinking about how bad things were. It was a rough period, to be sure, and for many they were horrendous times. But did you know that the Empire State Building was constructed and opened during the Depression?
There were people in school; at the movies and plays and concerts; people were playing baseball; they were having picnics and going to the beach. People fell in love, got married and had children. They still went to their house of worship and had family dinners and played cards and wrote letters and enjoyed one another's company.
Sound familiar?
Here's the most important part to remember. Many of our most important companies (and employers) were born during a recession or depression. Innovation and ambition doesn't look at the calendar. The spirit of achievement should not be underestimated.
During the bad economic times of the 1970's, no one realized the incredible growth that was going to spring forth from companies such as Intel, or Microsoft or Apple. Likewise, most of us today can not say with certainty what the major companies or industries of tomorrow will be.
Who knows what will cause the next economic leap forward -- but it is coming. That is the way of the world and of Human Progress. It might relate to biotechnology... it might relate to Space Exploration... it might relate to new developments in energy or 'green' technologies or transportation. I don't know what it will be -- I only know it is coming.
And just as in every other period of our history, those who have the foresight to think ahead and buy assets when they are on sale, will be enriched. In my golden years, I fully expect to be sitting around a pool, or at a card table, and hear a conversation that goes like this: "Remember the depression in Arizona real estate? If only we had bought everything we could get our hands on. Why were we so afraid."
Some things never change.
Is the Rainbow at the End of the Housing Recession upon us? I am honest enough to say "I don't know." But it's coming.
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The author, Eric Crane, is an Arizona Real Estate Agent and Investor (and a fan of Judy Garland and Rainbows). To speak with Eric about real estate investment opportunities in the greater Phoenix metro area, please call him at 602-327-8475 or email him at ericcrane@hotmail.com
* Image of Judy Garland obtained via a Creative Commons License on Flickr.com, through the courtesy of AZRainman. Image of the Empire State Building obtained via a Creative Commons License on Flickr.com, through the courtesy of Swami Stream. June 10, 2011.
The Rainbow at the End of the Housing Recession
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