Over the holiday season I had the opportunity to speak with many people about the state of the real estate market here in South Florida, and also about the state of our nation and the world. On reflection I have decided to devote all my SFGN columns in the coming year to the theme of community.
This is a perfect topic regardless of one’s political persuasion. For example, if you happen to have been pleased with the election results, you are probably interested in seeing the Federal government do (relatively) less and seeing state and local governments do (relatively) more. Contrariwise, if you have, well, “concerns” about the imminent changes, then building strong communities and taking action at the local level can be an effective antidote.
Of course, this also extends into considerations of real estate, investment decisions, buy versus rent calculations, picking a location in which to live, and even thinking about the appropriate role (if any) for the real estate professional of today, and the hypothetical real estate professional of the future.
There is an awful lot of pessimism and fear out there. But as I said in a recent column, I am actually very optimistic, certainly in the longer run. And one of the reasons for that is because of the sense of community that always forms, in some way, and sees us through.
The first sentence of the preamble of the National Association of Realtors Code of Ethics is, “Under all is the land.” In non-virtual communities anyway, that is definitely the case. Without the land, you have nothing. It is what we do with that land that makes all the difference.
Now, what has been done on the land in many places here in South Florida and elsewhere, is that single family homes have been built. Traditionally, these homes have been considered “investments” in addition to places to live. But this conventional wisdom has come into some question. The self-help writer and blogger Grant Cardone (who has more Twitter followers than I do), is well on his way to becoming the bete noire of NAR and every Realtor in America, saying several times a week what a bad idea it is to buy a home. Moreover, I recently read a book by a retired bank CEO (rumored to have been on the short list for Treasury Secretary) where he argued that a single family home was not only not an investment, but was a consumption item!
Well, I have never been a bank CEO (yet) nor have I (yet) been considered for SecTreas. But I do know that as long as the land and community are there, a single family family home will not be a consumption item. And I have a lot of statistics to share on that.
But it is time for some straight (or if you prefer, gaily forward) talk about how good an investment a single family home can be. For the fact is, I believe it is possible to do a disservice to make unsupported claims about the future based on the past, especially if you assume that certain government policies will always continue.
The role of the real estate professional is going to change. The good news is, it is going to change, ultimately, in ways that will build community and enhance the professionalism and reputation of the industry. The bad news is, there is going to be a shakeout and considerable denial, in part around the issue of “home as investment”.
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