Every once in a while I feel the need to put on my economist hat, and this is one of those times. We all watch very closely, trying to figure out how each bit of political theatre or twitch in the world of finance will affect the way our industry functions. Sometimes we're looking at short term effects, and sometimes we get a glimpse of the long run. And we've all ridden the roller coaster, with our stomachs traveling between our knees and our throats.
I got an excellent view of the long-term last night and I didn't like it much.
Let me preface this by saying that I don't believe that we're the masters of our domain. I don't think real estate drives the economy - to me, it is a derivative activity that depends on jobs, earnings, wealth, economic growth and many other factors. When those are weak, home sales are too, and vice versa. Our personal prosperity is held hostage to all the exterior stimuli that the socio-politico-economic world can throw at us.
You may disagree with this view of the way the world works - I know a lot of you do, and I'm not here to change your mind. But I think you should spend 6 or so minutes watching the video below. It is highly disturbing because it highlights a trend - well-documented - that simply put, bodes very poorly for the long-term ability of people to buy homes. And that is certainly going to have consequences we'll all have to deal with.
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