Perspective on Real Estate

 

November 3, 2004

 


A moving experience

So it's over. I am on my way back after a week in Manhattan listening to the finest economists, analysts and political experts, like former President Bill Clinton.

This was the Fall '04 Urban Land Institute event bringing several thousand people into town. Anticipation of who would win and how this might play on the economy and real estate -- especially housing -- kept our minds preoccupied as we were satisfied with the rest of Mother Nature -- as volatile as political nature, these days.

Wall Street investment bankers knew that the stock market played well under either party, but more so the Democrats (a well-kept surprise).

The main difference would be that the U.S. Housing and Urban Development Department would become much more action-oriented under Kerry while the inhibitions would transcend political parties in two cases; continuing divisiveness and the reality of the huge deficit, not to mention the post election release of news about the human and fiscal cost of Iraq and the stupidity or the brilliance of getting it resolved with no large erosion of confidence.

Getting anything passed through a divided Congress would be difficult. Especially interesting to me would be consumer confidence as it will be measured in the 12 months beyond the election.

It would be unwise to ignore that cutting the deficit would badly injure any expansion of business.

The growth of jobs would also be beyond either winner as fundamental structural change has come to the nuanced economy. It has really become global in every way, with the "butterfly wings" of China felt all over the world.

There is no such thing anymore of "splendid isolation." That will have morphed into "discretionary insulation," meaning that those with the will and the money to move to an environment which they consider safer, will do so.

New Zealand and Australia will become one "safe haven," partially replacing the exodus to Nevada and Arizona which the middle class and retirees will continue to select.

Where they will live will be more important as to their discovery of trusted and affordable medical help, as well as their children's convenience in making visits.

The changing nature of where to live, where to feel safe, how to keep in touch with one's job are all intertwined in real estate.

The Internet has created a powerful communicative tool to gather information to answer any question (its collection of guesses and data are more trusted than any other existing kind).

The decision-making process should be just that, a process. Make certain you and your significant others thinks carefully about the following in deciding where and when to move. Since this is an escape hatch, concentrate on where you are escaping to as opposed to from. Get all the information you can about the place you are considering.

I have always been a believer in testing the place, such as on a vacation, so that you at least have a feel for it. But vacationing in a place can be very different from living there.

Differentiate between your reasons for fear or unhappiness so that you do not expect either heaven or paradise; it may be a bad marriage, your health, your age, your general disappointment with your life.

Factor your extra-curricular activities into your decision, including cultural activities, friends, and some institutions of the potential place, including comfort with the local language.

Privacy and feeling like a stranger in a strange land can induce loneliness and more fear. Think about the business sacrifice you might be making, including your own career path, e.g., are you isolating yourself from true economic success to feel safer?


Goodkin has been a business ethicist and housing analyst since 1956. He may be reached at sanford.goodkin@sddt.com.


 

November 3, 2004