A little over a year ago Warren Buffet told the shareholders of Berkshire Hathaway Inc. that he had confidence in the housing market slump coming to end sometime in 2011. The latest postulations are that the housing market won’t make a full recovery until 2014. This is an estimate provided by a study jointly initiated by foreclosure listing site RealityTrac.com and Trulia.com, a real estate listing site. Their last such study back in December indicated 2012 was the year we’d see a recovery in the housing sector.
My point is that if the numero uno financial guru in America, industry experts, and countless other analytical opinions can’t offer anything but speculative guesswork on the fate of the house market, we need to simply stop listening to these people. The fact of the matter is that as long as construction is down, mortgage options limited, and record numbers of houses sit unoccupied or on the verge of foreclosure, real estate franchises, home owners, and aspiring home owners will continue to suffer. But more important to note, is that all these factors feed into one another’s reasons for being so ineffectual. Without some sort of unforeseeable outside factor coming to the rescue, IE the overall economy improves to such a degree that more people can buy homes, the real estate market is simply going to remain at a standstill.
So when you hear folks like Buffet and other experts predicting a turnaround in the present real estate turmoil, what you’re really hearing is them making a prediction on the housing market that’s grounded in whatever reasoning they have to justify a belief that the overall economy is going to improve. If it was 2011 it was because Buffet thought the overall economy would be better by then. If it was 2012 that studies surveying those most involved in the process indicate as the comeback year, it’s only because those surveyed calculated their opinions based on their guesses on when the Great Recession can officially be called as behind us.
Somewhere out there some expert is saying exactly the right thing. There’s an argument written in an Op-Ed or a formula lauded by an economics professor that in a decade will be looked back on and seen as the savior of our housing crisis. But that will be an example of a postdiction, not a prediction. Unfortunately there’s simply no way of knowing when the housing market will rebound, and those who will one day be proven right were only so out of luck. It’s in human nature to abhor any idea that things as important as economic stability and the overall financial future are wily and for the most part out of anybody’s control. But they are. The only way you can conceivably control your real estate future against the backdrop of the foreclosure crisis is to accept what you do not have power over, obsess over what you do have an influence in, and hang on for dear life, because the storm isn’t going to be over for quite awhile.