Friday, February 3, 2012

FINALLY - Vindicated!

Today, I have to tell you I finally feel vindicated.  "And by whom," you ask?  None other than Wells Fargo Bank.

Nearly four years ago, and in an ongoing dialogue, I have been telling you and all my clients that it's going to take a while for this market to get to the place where it can recover. 

Some have said this down market would be over in 6 months, a year, the next quarter, the next reporting cycle, etc, etc, etc.  Those folks looked at me like I was nuts!  What a negative Realtor, they said!

In spite of being called negative, a doom & gloomer, and who know's what else (?), I stuck to my guns and research, telling my clients we probably won't see a recovery until about 2022 - 2025.

There.....I said it again.  And guess who else is saying it.....Yes, Wells Fargo Bank.  Their prediction; 2021.  I think that's close enough for me.

So why have I hung on to those far distant years?  Because; we have about 49 months of shadow inventory to clean up, our unemployment has not significantly changed (we need to drop about 4 points there), and most importantly because we are in the middle of a down cycle in our population.

As many of you have heard me say, we Baby Boomers (all 84 million of us) have aged out of our primary consumption years.  We don't care about the latest cars, clothes, new floor plans, or restaurants.  And coming right behind us would be Generation X, with a whopping population count of 42 million!  That's right - one half the number of all of us who invented the Mini-mansion.  So, who would we be selling all those houses with stairs to?.......The Echo Boomers, Gen Y or the Millenials, 'cause after all, there's about 75 million of them - nearly a replacement of us, the Baby Boomers.

But here's the challenge; the Echo Boomers are not the Baby Boomers.  They are taking longer to finish school.  They want to be passionate about their work, so they tend to be more patient waiting for the right career (think Masters Degree selling coffee at Starbucks), they don't necessarily even like our big box houses and would prefer a more urban lifestyle with less square footage and a smaller carbon footprint.

All that means, delay, delay, delay the recovery.  I know, I hate the news myself.

But here's my philosophy; you can't plan properly if you don't know.  So rather than call me a Negative Ninny, or a Doom and Gloomer, I hope you'll take this information and plan accordingly.  And if you don't believe me......will you listen to all those high paid economists at Wells Fargo?

Until next time......

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