“Some People Have No Confidence in This Country”
July 13th, 2008 Categories: Mortgages & Loans, The Road Less Taken
Summer TV really sucks. It’s a great time to catch up on some really good TV with the On-Demand feature on my cable. Mad Men may be one of the best shows on TV– it’s a retrospect of corporate life in the 1960s– placed in the world of Madison Avenue Advertising.
In one of the episodes the big boss of this ad agency tells a story of the history of one the oldest and wealthiest families in 1960s Manhattan. The current monarchs grandfather once owned everything in Manhattan south of 76th Street, he explained, until he sold it all in the 1934 panic.
“Some people have no confidence in this country,” was his conclusion.
I couldn’t help but apply this to today’s current housing mess. Friday, the federal government seized IndyMac Bankcorp after a run on the bank led to the third largest bank failure in US history. This sparked a lack of confidence in Freddie Mac & Fannie Mae causing their stock to loose even more value on speculation that these companies would be next.
What is causing all this upheaval? It depends on who you talk to. The optimists say not true. While the pessimists say that Freddie and Fannie can’t support what’s coming.
Almost everyday, it seems, I have a conversation with my broker about the current real estate market. If I ever think that this world has gone mad, I just have to talk to my broker who reminds me that it’s all about perception. Even if, in this case, perception is reality.
Because, you see, if you believe in something long enough it becomes true. I’m not saying that this housing recession is a figment of your imagination– don’t get me wrong. But– we did see the housing market detriorate as the media focused on the bad thing that was happening. People who invest in the secondary mortages market ran for the hills. When the secondary mortgage market dries up, there is no new money for new loans, lenders are forced to tighten their belts. (I know its more complicated than that- but these are the basics)
What I see when I talk to people who worry about the market is that they are afraid. They are afraid that the market may go down further, they are afraid they may lose their job and they are afraid they are going to make a wrong decision.
But I also meet people who aren’t afraid. They see this market as an opportunity to buy in a neighborhood they couldn’t a few year ago. They don’t worry about their jobs, they know it will only get better. They follow the basic theory of buy-low, sell-high.
I think that this housing market is a true test of whether you see the glass as half empty or half full. Because you see, back in 1934, things were bad. Really bad. People jumped from windows for gosh sakes. No one knew if things were ever going to get better, yet the people who had confidence in this country brought it back. Many others were poor– unemployment was high. I won’t say they were pessimist– but it was hard for them to put food on the table, let alone buy a home. (I know this, my mother reminded me throughout my life. She was a child of the depression.)
Eventually things began to change. The federal government created jobs– people got back to work. They passed legislation to help Americans afford homes again. And one day at a time, America came out of its depression to went back to work to support a World War. (that’s another story!)
It’s only when we look back through history do we know the answers. We can’t see the end game in the middle of it. But it’s only by going through it do we get out of it.
So the question to ask yourself… How much confidence do you have in the future of America?
I have extreme confidence! My glass is always 3/4 full too. We can and WILL move forward if we choose to. I CHOOSE to move forward and bepositive.
Susan- Seems each day we are tested. But we have to keep putting one foot in front of the other and keep moving forward. Thanks for stopping by
What might be the biggest problem is how many people expect the federal government to take care of them and the media does nothing but fuel that. We have turned into a society of whiners - what’s up with that? We have a higher rate of home ownership than just about any country in the world, we have police, fire and EMS that respond in the case of emergency, we have food in our supermarkets, we don’t have the violence that is seen in so many underdeveloped countries, we have freedom of speech and many other freedoms that many other countries will never have. The press never seems to say anything positive about this country. We have a tiny percent of the world’s population, yet we are the first ones to fight for the rights of people in far away lands. We are the first country to respond with tremendous amounts of aid in the event of a natural disaster. I could go on and on. I am very proud to be an American and am ashamed to see so many of our citizend who do nothing but bitch and complain about our country.
Long & Foster Real Estate has stayed in business – and been successful – for forty years not just by seeing the glass as half full but also staying ahead of the curve with forward-thinking initiatives. For example, the number of Latino homebuyers has only increased over the years, so Long & Foster created the Prosperity Mortgage’s Latino Division. And given how great a role the Internet now plays in home buying and selling, Long & Foster has provided extensive training and resources to make sure that agents are at the forefront of technology. This makes it easier for Long & Foster to weather down markets like the one we’re in now and to stay prepared for when things turn around, as they inevitably will.
How true Mary! It’s really pretty simple - a small handful of geographic pockets are involved, not the entire real estate market in the country. The solution to prevent may be more complex though.
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