I had the opportunity to spend a few days visiting God, high in the mountains of Colorado. His creations welcomed me, from hummingbirds to scavenger birds, to animals of every mischief, sizing me up. Wonder-filled clouds stuttered the sky, sharpening my imagination with their magic. Lightning pierced the afternoon skies animating my senses, while thunder demanded my attention.
Real estate was perhaps far from my mind. After all, I was trying to give my brain some rest from questions of why, how long and where -- until my eyes sent a message to my brain -- a small headline told of lenders willing to give home buyers loans so that they could buy homes for money down. I thought of past experiences with such times, when people were buying homes that they could never have afforded otherwise, and could not afford now -- even with no down payment. So I am afraid, for I know what is happening.
When people have no equity, when they buy at the height of the overheated market, adding to the heat, there is no perspective -- just a rush to get it done. The lenders -- with safes loaded with liquidity -- are floating over the joy of almost uncountable refinancing, which people can't wait to spend on larger cars, bigger vacations, more expensive doo-dahs of every kind. But the beasts of speculation are loose again and the ending becomes too clear. These lenders should know better. The greater fool theory is gathering momentum and can ruin the marketplace; not all of it, but that which doesn't have any criteria other than being able to buy a home with no cash down.
People fly around in large cars, with large gas tanks, churning up over-filled roads with mostly empty cars. The reason has always been that the auto makers sell for a little cash down, along with stretched out monthly payments that lure otherwise smart consumers into mobbing their dealerships. A home is different; it takes up a greater proportion of a family's income -- with no liquidity until it's sold at a higher price. However, when that becomes a crap-shoot it is no longer wise or timely. It becomes foolish and can wreck the financial stability of the buyer.
In Colorado I also spent the week with the beneficent Annie Casey Foundation, which was awarding community nonprofits that had achieved local miracles in the face of real deprivation, in neighborhoods which were almost third-world in their lack of jobs, infrastructure and little chance for home ownership or even a decent rental. I recognized each "hero" or executive director as flying in the face of impossibility and political indifference, and I wondered in which sphere did reality really dwell?
I have served many a wealthy, successful entrepreneur, none of whom contained the nobility of these community leaders. They were used to being ignored, but they never lost their faith in their God, even when their youth never had the chance to see the sky, the trees, the animals and birds, the beauty that charmed my senses.
But I trusted that I was sharing a room with real people who are the mucilage that hold my world together -- and yours too -- no matter where you live, what you drive and how large your home might be.
I am sorry that you could not be in that room, astride Aspen's magnificence, sharing those moments of the best of human nature. I shall not allow this memory to drift from my action plan ever.
Goodkin is president of Ackman-Ziff-Goodkin, an international real estate adviser and strategist, and has been a housing analyst since 1956. He can be reached at email@example.com.