The major media and financial news press did there job to sell copy. It has induced fear among Americans about potential recession possibilities that are now almost self fulfilled by that fear.
A real estate market author, David Reed, mentioned recently that he read a headline claiming that inflation is at its highest point for the last seventeen years. In fact, consumer pricing is about 4.1%. Hardly alarming, as the Fed is most happy at a target inflation of 1% to 3% percent.
Currently the core inflation rate (not including energy or food) is about 2.2 %. Not even in the vicinity of 12 % inflation which we suffered in the decade of the “70”s. (When real estate prices accelerated BTW)
It’s amazing how swayed we are by sensational press. Our political system is riddled with it. People seemed to have lost the ability to think for themselves. Probably a result of our declining educational system, but I digress. Sensationalized fear is a great media seller. The boring reality is that we are not even close to our worst case of inflation and recession the press would have us all believe.
But fear can make us all stop spending. Not necessarily a bad thing. People then return to the basics, not just what they can pay for later because of a low introductory interest rate.
And those basics are housing, food, and energy. All else becomes more of a non-essential. That is how a real economist will identify recession conditions.
What America has become is unbalanced in economic terms. We consume far greater than we produce. Much of that consumption is excessive. American consumers drive about 72% percent of our economy. That cannot last forever as so unbalanced. We have to contribute to the production of something, even if it’s at the intellectual production level. (Read paragraph 4 again for conjecture on that possibility). We really need to have more innovation in manufacturing and the commensurate jobs associated with that, here in what used to be the greatest innovation producer on earth, the good old United States of America. Switch the TV off “American Idle” and “Dancing with the Stars” and consider “The Big Idea”, or “American Invention”. Get Inspired to contribute to American Society, not scoring a free ride off of it. Make this country great again, and make yourself feel good about doing it. And I belive America is again poised to do just that, being weary of professional politicians and opinion pool surfing.
But the real culprit of our recent economic deterioration has little to do with actual housing, but rather the consumer, betting on an ability to support more product consumption than they can realistically afford. Lenders exacerbated the situation by allowing high risk borrowers easy access to lending. Those high risk borrowers have now done what made them high risks in the first place, they’ve burnt up funds beyond their abilities to pay them back. That is what got so many of the rest of us in panic mode, except of course for the smart investors and consumers. They will find opportunity in other people’s fool heartiness and panic. They are now buying good properties for less. (Remember Mr. Potter in “It’s a Wonderful Life”. He was buying when the masses were selling in panic. George Bailey ended up with lots of friends. Mr. Potter ended up making a killing in real estate.)
If you’re a smart consumer or investor, you like those scary headlines and want more of them. If you’re selling, you want the long term reality of a steadily appreciating asset to be the overall consumer focus, which is destine to return soon enough, but after the smart money grabs the very best deals.
As of this writing, we are fully engaged with our smartest consumers and investors in the Santa Barbara real estate market place. These are clients that have demonstrated over many years, that they know how and when to buy Santa Barbara real estate. Every single one of them is actively looking to buy right now! Interest rates are fantastic and the smart money is most definitely on the prowl.
We always say that if we had a time machine and could go back 10 to 15 years, we would buy as many properties as we could, with little regard for “then” pricing, because we know what we know today; values have grown substantially. We are equally confident in our determination that if we could go forward 10 to 15 years in our time machine, that today’s real estate price points will seem just as great a bargain. Some even better than others, and can be identified now with the right guidance.
We publish this today for future reference, that we believe now is a great time to find and buy what will be considered tomorrows great acquisitions.
The Santa Barbara real estate and unique signature property market requires well informed and invloved local expertise that is essential for the finding, successful acquisition, sale, and value analysis of rare estate properties. Custom searches of Santa Barbara beach properties, estates, Montecito homes for sale or Hope Ranch real estate information are available at http://www.RareEstates.com, a fine home sale transaction network, having specialized local resources and knowledge of unadvertised luxury properties and qualified estate property investors searching for properties.