Yes, 2010 is winding down very quickly and when asked the question, where are we now? The answer by many is simply “Somewhere”. I asked the question to a group of Real Estate Brokers recently who answered quite simply “We are at the end of our Rope!
Considering the headlines, news groups, political scandals, panels and pundits, it’s a small wonder we’re not all blithering crazy. Reports range from the latest unemployment figures hovering over 10% (if you count the people who have given up looking it is more like 17%); stock prices are either falling or bouncing around like a yo yo; the explosion of millions of foreclosures now plague the nation at a viral rate and to top it all off, government bail outs and mortgage fraud is rampant. When you add all this to the din of roaring printing presses in Washington signaling inflation just around the corner and the tax increases looming on January 1, 2011, it’s not hard to believe the validity of the question, “Where are we now, and What shall we do?” No wonder the answer coming from the cash flow specialist, real estate or a loan broker; builder, Exchangor or investor is simply: “Hey, we’re over here dangling in mid air…We are at the end of the rope”.
If History is a telescope to the future, we try to reach back to the 1920’s and 1930’s to recollect through reading and documentary to see if there has ever been an economic landscape that even mildly resembles the current political, economic, social and financial picture standing on the premise that history repeats itself, and thereby getting some kind of a clue. No such luck. The answer to the question of “Where we are we now” given the state of financial health of our country appears to be universal and that is: “Somewhere”. We know the economy is in tatters and most of our investments and those of our clients are worthless. There is no doubt; we cannot depend upon business as usual. “Somewhere”, unfortunately, is the best answer I can offer as well.
Almost over night, banks and private lenders and brokers have gone from “almost no regulation” to “massive over regulation”. With the SAFE Act no law, regulation has even reached down to restrictions on seller financing. Over 150 new government bureaucratic agencies are being established as we speak, for the purpose of establishing, publishing and distributing rules and regulations to oversee the financial, economic and social laws oozing out of congress on a daily basis. Yet, new politicians appear every week, stumbling over themselves to get into the game of getting elected into office (to make a change) while those in office find themselves in a stew of ethics violations and allegations of fraud.
We do know Real Estate is a leveraged investment with built in tax benefits. It makes sense then without equity all the formula used by the Real Estate Professional is blown away. Declining values has wiped out the equity required for sales, leasing, exchanging or financing. Liquidity has dried up with banks refusing to lend, private investors have taken the “wait and see” approach and are stashing their cash under the mattress. The affordability required for end buyers to purchase is virtually wiped out based on unemployment and high taxes and now it appears the tax benefits will soon be history and the increase in inheritance taxes give us another reason to try to keep on living.
How we got here is not totally subjective with opinions flying around at high speed over the airways and internet on forums, films, blogs, face book and twitter. As an individual, most don’t have a clue where they are except in concept; but the feeling is universal: We know we are in trouble. But then maybe I am wrong. I do after all recall a documentary film in the mid 1990’s entitled, “What the Bleep do we Know”.
I was encouraged by one answer found recently in a Post on www.creonline.com posted by David Butler, President and founder of Nascent Equity and Hotspur Investments. To many of us in the business, David has been a friend, but also an astute business man, author, presenter and mentor for the cash flow industry. The post is rather lengthy but worth every minute you invest in the reading. It gives us all at least one viable answers to the penetrating question of “What can we Do Now”. The post is entitled “Sound and Fury” Posted by David Butler on November 19, 2010 at 18:38:43: http://www.creonline.com/wwwboard/messages/95938.html
In the meantime, one thing we know for sure is “the only way to move through this unprecedented economic fog and era of uncertainty is to keep moving. “Hang in There Baby, and don’t let go!
